* F.E. liked the news.
* IAE is a 65% oil / 35% gas asset mix and it will have the lion's share of its 2P 69 mmbo/e in production late next year F.E. and my point of view. Do not believe the mid-2014 case. The use of horizontals and new technologies are making the UKNS is a premiere cash flo generating oil province again. Throw in all of the UK tax incentives and it is a place you want to have some exposure to imo.
The maximum flow rate from the first well is encouraging and is in-line with our expectations. The well has been drilled on schedule. Initial production from four wells is forecast at 30,000 boe/d (16,000 boe/d net to Ithaca) with the Company targeting first production in mid 2014 (we assume a delay to 4Q14 for the purposes of our valuation). - Ithaca announced completion of a successful flow test on the first development well drilled on the Stella field and issued a progress update on the Greater Stella Area development activities.
- The first Stella field development well, 'A1', flowed at a maximum rate of 10,835 boe/d on a 7/8-inch choke, with the full production potential of the well limited by the capacity of the well test equipment on the drilling rig. The maximum rate of 10,835 boe/d corresponds to 6,499 bbl/d of oil and 26 mmcf/d of 'liquids rich' gas.
- The well intersected net pay of 1,312 ft in a 2,499 ft horizontal reservoir section, with reservoir properties in line with previous wells drilled on the field. The oil is of high quality, approximately 42° API.
- Following suspension of the A1 well, the rig will move on to drill the second Stella development well from the same drilling centre location. The capital expenditure guidance and start-up target schedule for the GSA hub remain unchanged from that previously issued.