Ithaca suspends 14/18b-17 well at AthenaIthaca suspends 14/18b-17 well at Athena
Ithaca Energy Inc(C:IAE)
Shares Issued 111,604,475
Last Close4/21/2008 $2.75
Tuesday April 22 2008 - News Release
Mr. Lawrie Payne reports
OPERATIONS UPDATE
Ithaca Energy Inc. and its wholly owned subsidiary, Ithaca Energy (UK)Ltd., have provided a progress update on its Athena and Jacky prospects.
Athena prospect
Well 14/18b-17 on the company's Athena prospect is currently being suspended pendingevaluation and possible sidetracking for use in the development of the wider Athena project afterfailing to encounter commercial hydrocarbons in the primary horizon. Well 14/18b-17 is thecompany's third well on this prospect, the two previous wells having each successfully tested atrates of approximately 1,300 barrels of oil per day (bopd).
The 14/18-17 well was deviated from the main core of the Athena prospect and drilled to a depthof 9,406 feet total vertical depth subsea, aimed at evaluating a possible southern extension to the oil pool. The wellpenetrated the Lower Cretaceous Leek sands at 8,842 feet, 413 feet above the Athena oil watercontact. However, although the Leek formation was found to be oil-bearing from LWD (logging while drilling) logs, itwas of lower quality than is found in the Athena reservoir and the well has been suspendedpending evaluation and possible sidetracking, and use in the Athena development scheme. Futuredrilling will focus on the core area of the Athena field. The next well proposed will target theLeek sands immediately northeast of the discovery well, 14/18-7, and is likely to be drilled beforethe end of 2008.
Ithaca is operator of the Athena prospect, with 70-per-cent ownership of the asset. Ithaca's partnersinclude EWE Aktiengesellschaft (20 per cent) and Zeus Petroleum Ltd. (10 per cent).
In addition, approval has been received from the regulatory authorities of the environmentalimpact statement to develop the Athena field. This sanction is a precursor to approval of thefield development plan which is currently under review by the government Department ofBusiness, Environment and Regulatory Reform (BERR).
Iain McKendrick, chief operating officer of Ithaca, said: "Although this well did not prove a viable productionlocation we do have more certainty about the size and scope of the Athena field. We believe theresults of the well will not affect the current development plan."
Jacky prospect
The Jacky prospect has seen a number of significant developments, which when taken togetherreaffirms the company's planned schedule for bringing the field onto production later this yearand also moves the wider Beatrice project forward.
Discussions are well advanced to secure a jack-up rig to tie back and complete the initialdevelopment well on the Jacky field. It is anticipated that the rig will commence work shortlyafter the production facility is installed in November this year and is expected to take 20 days tocomplete the activity.
Soils investigations have been completed at the proposed field location and confirm thatconditions are favourable for the planned installation activity, which eliminates the mostsignificant project risk. Construction of the production facility is also well under way at HSMSteel Constructors' yard in Schiedam in Holland.
Finally, the project environmental statement has been issued for public consultation. Sanction ofthis document is a precursor to approval of the field development plan which has been issued inpreliminary form to the BERR.
The Jacky field was discovered in April, 2007, by Ithaca and North Sea Energy in UKCS block12/26c and will be produced through a minimum facilities platform with oil processing andexport through the nearby Beatrice field. The Jacky development is located in the Inner Morayfirth. Ithaca is a 90-per-cent owner and operator of the project with North Sea Energy Inc. holding theremaining 10 per cent.
InNovember, 2007, Ithaca announced agreement in principal with TalismanU.K. to purchase its entire 100-per-cent interest in the Beatriceoffshore oil field and Nigg onshore oil terminal. Thecompanies are working toward completing this transaction by the middleof this year as planned.
John Woods, chief developments officer with Ithaca Energy, said, "These significant steps forthe Jacky development project confirm that Ithaca is on schedule to bring the field intoproduction at the end of his year as part of our greater Beatrice area development plan."
In accordance with AIM guidelines, Lawrie Payne, MA, marinegeology (Alberta and Columbia), and chief executive officer of IthacaEnergy is the qualified person that has reviewed the technicalinformationcontained in this news release.