Ithaca Energy Releases Financial Results (UK)

Ithaca Energy Releases Financial Results (UK)

Ithaca Energy Inc. announces its financial results for the twelve months ended December 31, 2012, the Company’s independently evaluated reserves as of the same date and a Q1-2013 production update.

HIGHLIGHTS

Financial

· 2012 cashflow from operations increased 50% to $90.3 million (2011: $60.2 million) – cashflow per share of $0.35 (2011: $0.23).

· 2012 net earnings increased 160% to $93.4 million (2011: $35.9 million) – earnings per share of $0.36 (2011: $0.14).

· 2012 average realised oil price of $112.76/bbl (2011: $111.46/bbl) including a realised hedging gain in the year of $2.61/bbl.

· Cash balance at year end of $31.4 million and $430 million senior borrowing base facility undrawn at the year end – fully funded for execution of the business plan.

· UK tax allowances pool of $416 million at year end.

· Approximately 2 million barrels of 2013-2014 oil production hedged at a weighted average price of ~$109/bbl (approximately 40% puts/ 60% Swaps).

Reserves

· Net proved and probable (“2P”) reserves increased to 51.9 MMboe at 31 December 2012 (2011: 50.3 MMboe), as independently assessed by the Company’s independent reserves auditor, Sproule International Limited (“Sproule”).

· Net 2P reserves post-tax net asset value (“NAV”) increased by ~40% to over $1 billion.

· The Sproule reserves assessment reflects the inclusion of the Cook and MacCulloch field interests being acquired from Noble Energy Inc. (“Noble”) and an upward revision to the Greater Stella Area reserves, partially offset by actual production during 2012 and relinquishment of the Carna discovery. No material revisions to Athena 2P reserves.

Operational & Corporate

· Total average net export production in 2012 increased 34% to approximately 5,862 barrels of oil equivalent per day (“boepd”) (2011: 4,370 boepd), including production from the assets being acquired from Noble (effective January 1, 2012).

· Start-up of the Athena field represents the third major development delivered by the Company. Strong operational performance by the BW Athena floating production, storage and offloading vessel has resulted in a field uptime in excess of 95% since completion of start-up and commissioning operations in June 2012. The field continues to produce “dry” oil at a gross daily rate of 10,000 to 11,000 barrels of oil per day (“bopd”), 2,250 to 2,475 bopd net to Ithaca.

· Field Development Plan (“FDP”) approval was received from the Department of Energy and Climate Change (“DECC”) for the Ithaca operated Stella and Harrier fields in April 2012. A full Greater Stella Area development update is provided in the 2012 Management Discussion & Analysis.

· Agreements were executed in October 2012 to acquire from Noble an additional 12.885% interest in the Cook field (acquisition completed February 2013) and a 14% interest in the MacCulloch field, further broadening the Company’s producing asset portfolio.

· Ithaca was awarded two operated licences by the DECC in the 27th UK Licence Round.

INTENDED VALIANT ACQUISITION

On March 1, 2013, the Company announced the intended acquisition of Valiant Petroleum plc (“Valiant”) for a total enterprise value of approximately $459 million. The Valiant Board is recommending approval of the offer to its shareholders and the transaction is scheduled to close around mid April 2013.

The acquisition is anticipated to be highly accretive, materially increasing the Company’s production, reserves and cashflow from operations, establishing Ithaca as a leading mid-cap North Sea oil and gas operator.

PRODUCTION Q1-2013

The Company estimates net export production to be in excess of 6,500 boepd, 90% oil, in the upper range of that anticipated by the 2013 annual guidance range of 6000 to 6,700 boepd.

Iain McKendrick, Chief Executive Officer, commented:

These strong results together with the announced Valiant acquisition demonstrate the Company’s ability to execute upon its strategy for growing shareholder value though the delivery of development and acquisition led growth.”

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Press Release , March 27 , 2013