The start-up of the Stella field remains the main focus for Inc () which today revealed a positive first half of operations in the North Sea.
Production was strong in the six months to June 30 tallied at 9,378 barrels oil equivalent per day, beating guidance for 9,000 boepd. Operating costs reduced too. The company forecasts its ‘pre-Stella’ costs to US$25 per boe which is 17% lower than before.
Stella will eventually see output more than double, with forecasts for 20,000 to 25,000 boepd, while it is expected to bring averages operating costs down below US$20 per boe.
The final countdown is now nearing for Ithaca with the Stella start-up due in November. Key to meeting the deadline is the delivery of the field’s floating production facility, which is now en route to the field by tow from Poland.
Les Thomas, Ithaca chief executive, said the group is moving towards the operational phase of Stella with confidence.
"The business has continued to perform well over the first half of the year,” he said.
“Production is running ahead of guidance, operating costs have been further reduced and we have continued deleveraging the business.”
Thomas added: “We remain focused on getting [Stella] to first production safely and efficiently, whilst ensuring we secure the long term value of the hub through our on-going investment activities."
Ithaca highlighted that it has reduced its indebtedness ahead of Stella’s start-up, down to US$606mln off its peak of US$800mln.
It says it has some US$120mln of funding headroom, and noted what it described as ‘significant commodity price protection’ with 8,200 boepd hedged at a price of US$59 per boe until mid-2017.
The company reported US$82mln of cashflow from operations in the first half.
Revenue amounted to US$68.8mln for the first half, down from US$116.4mln for the corresponding period of 2015 reflecting lower realised oil prices and lower production volumes (down to US$40 per barrel from US$60).
After hedging activities Ithaca generated revenues of US$126.8mln, versus US$226.5mln in the same period of last year.
Half year earnings amounted to US$6.2mln, down from US$13.8mln in 2015.
https://www.proactiveinvestors.co.uk/companies/news/129322/ithaca-energy-reveals-production-boost-ahead-of-stella-start-up-129322.html