LONDON, UNITED KINGDOM and CALGARY, ALBERTA--(Marketwire - April 7, 2011) -
NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES
Ithaca Energy Inc. (TSX VENTURE:IAE)(AIM:IAE) announces combined sales for the first quarter totalled 314,340 barrels of oil equivalent ("boe") net to Ithaca.
The Company's sales volumes in Q1 2011 include contributions from the Beatrice and Jacky oil fields and from the Anglia and Topaz gas fields and are summarised as follows:
Average net sales were 3,493 boe per day. As previously notified, this figure is approximately 20% below the net average daily target for Q1 due to mechanical issues with the drilling mud handling system on the contracted rig, the Energy Enhancer, drilling the J03 well, and mechanical failure of a downhole packer in the Beatrice Alpha A28 workover well. As previously announced, drilling of the J03 well has now recommenced. Operations to re-run the A28 completion have progressed; a replacement downhole packer has been successfully 'set' and the final stage of re-commissioning the well is underway.
The average realised price for oil sales in January and February was $107.40 per barrel (prior to hedging and any uplift at point of sale). Deliveries of oil for March are currently being priced.
The average realised price for gas production from Anglia and Topaz was 44.85 pence per therm ($7.56 per thousand standard cubic feet ('mcf')).
In order to benefit from the recent rise in oil price, Ithaca purchased a 'Put Option' with a floor price of $105 per barrel for 804,500 barrels of oil for the period March to December 2011. The 'Put Option' delivers a minimum price on the specified volume of oil and leaves the Company to benefit from any oil price upside above $105 per barrel.
Management anticipates that net sales will be increased in the second quarter by a sequence of operations that are scheduled to complete including an assumed successful Jacky second production well and the completion of workovers at Beatrice Alpha. Management continues to anticipate net average production for 2011 to be between 5,500 to 6,000 boepd net to Ithaca subject to a successful J03 well and Athena start up in November 2011. Further to the recent announcement of the acquisition of assets from Hess Limited, the Company will add production upon completion of that transaction, anticipated in Q3 2011.
Notes to oil and gas disclosure:
In accordance with AIM Guidelines, Hugh Morel, BSc Physics and Geology (Durham), PhD Hydrogeology (London) and senior petroleum engineer at Ithaca Energy is the qualified person that has reviewed the technical information contained in this press release. Dr Morel has 30 years operating experience in the upstream oil industry.
The calculation of barrels of oil equivalent ("boe") is based on a conversion rate of six thousand cubic feet of natural gas ("mcf") to one barrel of crude oil ("bbl"). Barrels of oil equivalent may be misleading, particularly if used in isolation. A boe conversion ratio of 6 mcf: 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.