Greater Stella Area Schedule Update 25 February 2015 Ithaca Energy Inc. (TSX: IAE; LSE: IAE) ("Ithaca" or the "Company") provides an update regarding the schedule for completion of the "FPF-1" floating production facility modifications programme and start-up of the Greater Stella Area ("GSA") production hub.
The FPF-1 is being modified by Petrofac in the Remontowa yard in Poland for use on the GSA production hub and completion of this work is the critical path item for the delivery of first hydrocarbons from the hub. Although significant progress has been made on the FPF-1 modifications programme in recent months, the rate of progress is insufficient to achieve sail-away of the vessel from the yard in the second quarter of 2015.
Taking full account of actual performance to date and a conservative view on the completion of commissioning activities, sail-away of the FPF-1 is now planned for late in the first quarter of 2016, resulting in first hydrocarbons in the second quarter of the year.
The FPF-1 is in an advanced state of mechanical completion and Petrofac has good visibility of all the remaining workscopes necessary to complete and commission the vessel. Over three quarters of the construction works have been finished and mechanical completion is now scheduled for the third quarter of 2015. The vessel commissioning programme is planned to commence in parallel with completion of construction activities in the middle of the year and is forecast to take approximately six months. The FPF-1 and risers have been designed to enable year round installation, hence sail-away can occur at the earliest available opportunity.
The quality of the work being undertaken in the yard remains high, underpinning the expected strong operational performance of the FPF-1, and this will not be compromised to accelerate a sail-away schedule that could ultimately result in a costly and inefficient offshore commissioning and start-up phase.
The remainder of the GSA development programme is progressing well. The Stella drilling campaign is substantially complete, with the results of the clean-up flow test on the fifth and final well (Stella Ekofisk) anticipated in March 2015. The majority of the subsea infrastructure has already been installed and the remaining elements are scheduled for installation in the second quarter of 2015.
The delayed start-up of the GSA is estimated to result in incremental costs prior to first hydrocarbons of approximately $10 million net to Ithaca. These relate primarily to project management costs for the overall development, as the FPF-1 modification costs are being borne by Petrofac. The Company's peak net drawn debt is forecast to be materially unchanged at approximately $850 million, funded from total debt facilities of $1,010 million ($300 million five year senior unsecured notes, $610 million reserves based lending facility and $100 million corporate facility).
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