Third quarter highlights
Ithaca Energy Inc. (TSX: IAE, LSE AIM: IAE) (“Ithaca” or the “Company”) announces its quarterly results for the three months ended 30 September 2013.
Highlights
- Record quarterly cashflow from operations of $77.8 million (Q3 2012: $30.1 million) –cashflow per share $0.25 (Q3 2012: $0.12)
- Record quarterly earnings of $54.1 million (Q3 2012: $4.9 million) – earnings per share $0.17 (Q3 2012 $0.02)
- Continued strong netbacks of over $70 / barrel of oil equivalent (“boe”)
- Revenue of $114.1 million (Q3 2012: $41.6 million)
- Average production during the period of 11,942 boe per day ("boepd"), 96% oil, reflecting the impact of shutdowns during the quarter
- Net drawn debt of $357 million at 30 September 2013
- UK tax allowances pool of $993 million and Norwegian tax receivable of $88 million at 30 September 2013
- Approximately 3.4 million barrels of future 2013-14 oil production hedged at a weighted average price of ~$102/bbl (approximately 30% puts / 70% swaps)
Graham Forbes, Chief Financial Officer commented:
“Continued high netbacks of over $70/boe have enabled us to deliver both record cashflows and earnings during a quarter where annual shutdowns have tempered production. These results, together with the enhanced debt facilities announced in October, provide an excellent financial platform to drive the Company forward”.
Greater Stella Area Development
- Deliverability of the Stella reservoir was confirmed with the successful completion of the Stella "A1" development well during the quarter, with the clean-up test performed on the well resulting in a maximum flow rate of 10,835 boepd. Operations are progressing according to plan on the "A2" development well, with drilling of the horizontal reservoir section scheduled to commence shortly
- Solid progress continues to be made on execution of the "FPF-1" floating production facility modifications programme. The vessel has been re-floated following completion of the dry dock related marine system works and work has commenced on the main topsides processing plant construction and installation activities
- Execution of the 2013 subsea infrastructure installation work programme is nearing completion, with the remaining works now focused on tie-in of the infield flowlines and umbilicals
A new film is available on the Company’s website (www.ithacaenergy.com) providing additional information on the work that has been completed on the development over recent months.
2013 Production Outlook
Total pro-forma production for 2013 is forecast to average approximately 13,000 boepd; this reflects inclusion of full year production from the assets acquired as part of the Valiant Petroleum plc (“Valiant”) acquisition, which completed on April 19, 2013. This is lower than originally anticipated for the year due primarily to production deferrals resulting from the longer than anticipated duration of the shutdowns that impacted the Cook and Causeway Area fields during the second half of the year, and delay to completion of the electrical submersible pump related works on the Taqa-operated host facility for Causeway.
Corporate
The Company has extended and improved its long term senior bank debt financing facilities, increasing its Reserve Based Lending (“RBL”) facility from $430 million to $610 million, and established a new five year $100 million corporate facility.
Further farm-outs of the three UK exploration well commitments transferred as a result of the Valiant acquisition were entered into during the third quarter. When combined with the previously announced farm-outs, on completion, Ithaca will be fully carried for the forecast cost of drilling the wells and in addition will receive over $8 million in cash from the farm-out parties.
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