ABERDEEN, SCOTLAND--(Marketwired - Jan 8, 2014) -
TSX: IAE
Not for Distribution to U.S. Newswire Services or for Dissemination in
the United States
Ithaca Energy Inc.
Successful Stella A2 Well Test Results and GSA Development Update
8 January 2014
Ithaca Energy Inc. (TSX: IAE, LSE AIM: IAE) ("Ithaca" or the "Company")
announces completion of flow test operations on the second development
well on the Stella field and provides an update on Greater Stella Area
("GSA") development activities.
Highlights
* The second Stella field development well, "A2", flowed at a maximum
rate of 10,442 barrels of oil equivalent per day ("boepd") on a
44/64-inch choke, with the full production potential of the well
limited by the capacity of the well test equipment on the drilling
rig.
* The rate of 10,442 boepd comprised 7,281 barrels of oil per day
("bopd") and 19 million standard cubic feet per day ("MMscf/d") of
associated gas. The oil is of high quality, approximately 39 degrees
API.
* The flow test results achieved on the first two Stella development
wells substantially de-risk the initial annualised production
forecast of approximately 30,000 boepd (100%), 16,000 boepd
net to Ithaca, from the four wells planned for start-up of the GSA
hub.
* A2 drilling operations were executed according to plan, with only the
harsh weather conditions that have recently effected operations
across the North Sea slowing the completion of the scheduled flow
test.
* Following suspension of the A2 well, the ENSCO 100 will be moved
approximately three kilometres to the Stella northern drilling centre
location to drill the third and fourth development wells.
* The 2013 subsea infrastructure installation campaign being
executed by Technip UK Limited ("Technip") has been successfully
closed out, with approximately 65% of the overall subsea work
programme having now been completed.
* The forecast duration of the "FPF-1" modifications work, which
is being performed by Petrofac Facilities Management Limited
("Petrofac") under a lump sum incentivised contract, indicates that
first hydrocarbons from the GSA hub is now anticipated to be at the
end of 2014.
* The current focus of the FPF-1 vessel modifications programme is
on preparation of the main deck and construction of the pre-assembled
processing plant units that are scheduled to be lifted on to the
vessel in the first quarter of 2014.
Les Thomas, Chief Executive Officer, commented:"The excellent results of
the A2 well represent another important step
in de-risking the forecast production from the Stella field and
realising the significant shareholder value that lies within the
Greater Stella Area. Whilst the FPF-1 modification works are now
forecast to take longer than initially anticipated, the new processing
facilities being installed on the vessel will ensure that a high
quality production facility is deployed at the centre of the GSA hub."
Further Information
Drilling
Well 30/6a-A2Z ("A2") is the second of four development wells that are
to be drilled on the Stella field prior to the start-up of production.
The well was drilled to a total measured depth subsea of 14,455 feet,
with a 3,123 foot horizontal reservoir section completed in the
Palaeocene Andrew sandstone reservoir, within the targeted oil rim of
the field.
The reservoir quality encountered by the well was in line with previous
appraisal wells drilled on the field. The well intersected a net
reservoir interval of 2,514 feet (81% net pay).
As with the first Stella development well, "A1", a clean-up flow test
has been performed on the A2 well in order to effectively remove the
drilling fluids used to complete the well and gain additional reservoir
data and fluid samples.
The well flowed at a maximum rate of 10,442 boepd on a 44/64-inch
choke, with the full production potential of the well limited by the
capacity of the well test equipment on the drilling rig. Fluid samples
show that the oil is of high quality, approximately 39 degrees API.
The maximum flow rate of 10,442 boepd comprised 7,281 bopd of oil and
19 MMscf/d of associated gas. This compares to the results of the "A1"
well completed in late September 2013, which achieved a maximum flow
rate of 10,835 boepd (6,499 bopd and 26 MMscf/d) on a 56/64-inch
choke. The proportionately higher A2 oil rate is driven by the
location of the well entirely within the oil rim of the field.
The test results achieved on the first two Stella development wells
substantially de-risk the initial annualised production forecast for
the GSA hub of approximately 30,000 boepd (100%), 16,000 boepd net to
Ithaca, which was announced at the time the development concept was
selected in October 2011.
The A2 well is in the process of being suspended. The suspension
configuration is such that the well can be brought on to production
without the requirement for any further well intervention activity once
the FPF-1 is on location and hooked up.
Following completion of the well suspension operations the ENSCO 100
will be moved approximately three kilometres to the Stella northern
drilling centre location to drill the third and fourth development
wells.
A2 drilling operations were executed according to plan, with only the
harsh weather conditions that have recently effected operations across
the North Sea slowing the completion of the scheduled flow test.
The high-spec ENSCO 100 heavy duty jack-up drilling rig that is being
used for the GSA development drilling campaign commenced operations on
the Stella field in June 2013. Management of the drilling and
completion operations is being performed by Applied Drilling Technology
International ("ADTI") under "turnkey" contract arrangements.
Subsea Infrastructure
The 2013 subsea infrastructure installation programme was successfully
closed out in November 2013. The main subsea structures for the
production and export of hydrocarbons (the manifolds and riser bases),
the 60km gas export pipeline and the infield flowlines and umbilicals
have all been installed and the associated diver tie-in works completed
during the 2013 campaign. This means that approximately 65% of the
overall subsea work programme has now being completed; corresponding to
a total of over 220 vessel days in 2013.
Planning for the 2014 subsea infrastructure campaign is well advanced,
with the key workscopes to be completed involving the tie-in of the
wells, installation of the dynamic flexible risers and umbilicals that
will connect the riser bases to the FPF-1, the vessel mooring spread
and the oil export facilities.
Execution of the main subsea infrastructure manufacturing and
installation programme is being completed by Technip under an
integrated Engineering, Procurement, Installation and Construction
contract.
FPF-1 Modification Works
The forecast duration of the FPF-1 modifications work indicates that
first hydrocarbons from the GSA hub is now anticipated to be at the end
of 2014.The extended duration of the works is attributable to the
longer than estimated time required to install the new, rather than
refurbished, oil and gas processing plant on the vessel. While this is
now scheduled to take longer than if the original equipment on the
FPF-1 had been re-used, the new facilities are designed to ensure that
a quality vessel capable of achieving high operational uptime
performance is deployed on the hub.
The current focus on the FPF-1 modifications programme is the
preparation of the main deck and construction of the pre-assembled
processing plant units for lifting on to the vessel in the first
quarter of 2014. The units will contain structural steel, pipework
spools, cable trays and equipment that will make up key elements of the
topsides processing plant on the vessel. All the key long lead pieces
of processing plant equipment that will be installed within and
alongside the units are now on location at the Remontowa yard.
Execution of the FPF-1 modifications work programme is being performed
by Petrofac under the terms of a lump sum incentivised contract with
the GSA co-venturers.
Greater Stella Area Development Strategy
Ithaca's focus on the GSA is driven by the monetisation of reserves
within the existing portfolio and the generation of additional value
via the wider opportunities provided by the range of undeveloped
discoveries surrounding the production hub.
The development involves the creation of a production hub based on
deployment of the FPF-1 floating production facility located over the
Stella field, with onward export of oil and gas. The FPF-1 will serve
as the processing hub for production from the Stella and Harrier
fields, plus potential incremental production from Hurricane and other
tie-back opportunities in the area.
Ithaca's GSA joint venture partners are Dyas UK Limited (25.34%), a
long established privately owned North Sea oil and gas producer, and
Petrofac GSA Limited (20%), a subsidiary of Petrofac plc, the leading
international oil and gas services provider listed in the FTSE 100 in
London.
- ENDS -
Enquiries:
Ithaca Energy
Les Thomas lthomas@ithacaenergy.com +44 (0)1224 650 261
Richard Smith rsmith@ithacaenergy.com +44 (0)1224 652 172
FTI Consulting
Edward Westropp edward.westropp@fticonsulting.com +44 (0)207 269 7230
Georgia Mann georgia.mann@fticonsulting.com +44 (0)207 269 7212
Cenkos Securities
Neil McDonald nmcdonald@cenkos.com +44 (0)131 220 6939
Beth McKiernan bmckiernan@cenkos.com +44 (0)131 220 9778
RBC Capital Markets
Tim Chapman tim.chapman@rbccm.com +44 (0)207 653 4641
Matthew Coakes matthew.coakes@rbccm.com +44 (0)207 653 4871
Notes
In accordance with AIM Guidelines, John Horsburgh, BSc (Hons)
Geophysics (Edinburgh), MSc Petroleum Geology (Aberdeen) and Subsurface
Manager at Ithaca is the qualified person that has reviewed the
technical information contained in this press release. Mr Horsburgh
has over 15 years operating experience in the upstream oil and gas
industry.
References herein to barrels of oil equivalent ("boe") are derived by
converting gas to oil in the ratio of six thousand cubic feet ("Mcf")
of gas to one barrel ("bbl") of oil. Boe may be misleading,
particularly if used in isolation. A boe conversion ratio of 6 Mcf: 1
bbl is based on an energy conversion method primarily applicable at the
burner tip and does not represent a value equivalency at the wellhead.
Given the value ratio based on the current price of crude oil as
compared to natural gas is significantly different from the energy
equivalency of 6 Mcf: 1 bbl, utilising a conversion ratio at 6 Mcf: 1
bbl may be misleading as an indication of value.
The well test results disclosed in this press release represent
short-term results, which may not necessarily be indicative of
long-term well performance or ultimate hydrocarbon recovery therefrom.
About Ithaca Energy
Ithaca Energy Inc. (TSX: IAE, LSE AIM: IAE) is a North Sea oil and gas
operator focused on the delivery of lower risk growth through the
appraisal and development of UK undeveloped discoveries, the
exploitation of its existing UK producing asset portfolio and a
Norwegian exploration and appraisal business targeting the generation
of discoveries capable of monetisation prior to development. Ithaca's
strategy is centred on generating sustainable long term shareholder
value by building a highly profitable 25kboe/d North Sea oil and gas
company. For further information please consult the Company's website
www.ithacaenergy.com .
Not for Distribution to U.S. Newswire Services or for Dissemination in
the United States
Forward-looking statements
Some of the statements and information in this press release are
forward-looking. Forward-looking statements and forward-looking
information (collectively, "forward-looking statements") are based on
the Company's internal expectations, estimates, projections,
assumptions and beliefs as at the date of such statements or
information, including, among other things, assumptions with respect to
production, drilling, construction times, well completion times, risks
associated with operations, future capital expenditures, future
acquisitions and cash flow. The reader is cautioned that assumptions
used in the preparation of such information may prove to be incorrect.
When used in this press release, the words "anticipate",
"continue","estimate", "expect", "may", "will", "project", "plan",
"should","believe", "could", "target" and similar expressions, and the
negatives
thereof, whether used in connection with operational activities,
drilling plans, production forecasts, budgetary figures, potential
developments or otherwise, are intended to identify forward-looking
statements. Such statements are not promises or guarantees, and are
subject to known and unknown risks, uncertainties and other factors
that may cause actual results or events to differ materially from those
anticipated in such forward-looking statements. The Company believes
that the expectations reflected in those forward-looking statements and
are reasonable but no assurance can be given that these expectations,
or the assumptions underlying these expectations, will prove to be
correct and such forward-looking statements and included in this press
release should not be unduly relied upon. These forward-looking
statements speak only as of the date of this press release. Ithaca
Energy Inc. expressly disclaims any obligation or undertaking to
release publicly any updates or revisions to any forward-looking
statement contained herein to reflect any change in its expectations
with regard thereto or any change in events, conditions or
circumstances on which any forward-looking statement is based except as
required by applicable securities laws.
Additional information on these and other factors that could affect
Ithaca's operations and financial results are included in the Company's
Management's Discussion and Analysis for the year ended December 31,
2012, and the Company's Annual Information Form for the year ended
December 31, 2012 and in reports which are on file with the Canadian
securities regulatory authorities and may be accessed through the
Company's profile on the SEDAR website ( www.sedar.com ).
This information is provided by RNS
The company news service from the London Stock Exchange
END