UK: Ithaca Energy Provides Q4 2012 Production Results & 2013 Outlook

UK Ithaca Energy Athena Development

Ithaca Energy Inc. reports fourth quarter 2012 (“Q4-2012” or the “quarter”) production results and provides guidance on the Company’s planned 2013 production and capital expenditure programme.


o Q4-2012 net average export production, including net production from the Cook and MacCulloch field interests being acquired from Noble Energy Inc. (the “Noble Assets”), was 6,631 barrels of oil equivalent per day (“boepd”), within the Company’s guidance range for the quarter.

o Net average export production for 2013 is forecast to be in the range of 6,000 to 6,700 boepd, including the net contribution anticipated from the Noble Assets.

o The Company’s 2013 capital expenditure programme is focused on execution of the Greater Stella Area (“GSA”) development and is anticipated to total US$360 million, which will be funded from existing financial resources.

Q4-2012 Production

Total net export production in the quarter, including net production from the Noble Assets, was 610,070 barrels of oil equivalent (“boe”), resulting in an average rate of 6,631 boepd, with approximately 90% being oil production. This represents a 31% increase on production in the third quarter of 2012 (Q3-2012: 5,061 boepd) and is within the Q4-2012 guidance range issued by the Company of 6,300 to 6,900 boepd.

Production in the quarter came from the operated Athena, Beatrice, Jacky and Anglia fields, the non-operated Cook, Broom and Topaz fields and the Noble Assets. The effective date of the Noble Assets acquisition is 1 January 2012, with completion anticipated to occur in Q1-2013.

Production in Q4-2012 benefited from strong performance by the Athena field, which continues to produce “dry” oil at a stable gross daily rate of between 10,000 and 11,000 barrels of oil per day (“bopd”), 2,250 to 2,475 bopd net to Ithaca. Forecast production was achieved from the Beatrice, Jacky, Cook, Broom and MacCulloch Fields.

Both the Anglia and Topaz fields were shut-in for a considerable period during the quarter due to issues on the ConocoPhillips operated Lincolnshire Offshore Gas Gathering System (“LOGGS”), the gas export infrastructure that receives and transports gas from these fields to shore. Both fields came back online at the end of December 2012.

2013 Production and Capital Expenditure Programme Guidance

The Company’s 2013 net average export production is anticipated to be in the range of 6,000 to 6,700 boepd, including approximately 1,000 boepd from the Noble Assets; approximately 90% is forecast to be oil production. Approximately 80% of total net production is anticipated to be derived from the Cook, Athena and Beatrice / Jacky fields.

The production guidance range reflects anticipated water breakthrough on the Athena field during 2013 and the impact of planned maintenance shutdowns, most notably including approximately 25 days on the Shell operated Anasuria FPSO, the host facility for the Cook field, and 20 days for the Beatrice Complex. The MacCulloch field is currently shut-in due to suspected damage resulting from the recent period of extreme weather in the North Sea. The field operator, ConocoPhillips, is currently investigating the exact nature of the damage and the schedule associated with reinstating production. The 2013 production guidance range allows for a potential extended shutdown period associated with the resumption of normal operations on the MacCulloch field.

The Company anticipates 2013 net capital expenditure to total approximately US$360 million. This expenditure is almost entirely focused on execution of the GSA development, involving commencement of the development drilling campaign, scheduled for late Q1-2013, performance of the key offshore subsea infrastructure installation works by Technip and the FPF-1 modifications programme by Petrofac at the Remontowa shipyard in Poland.

The Company will fund the 2013 capital expenditure programme from its existing cash balance, anticipated cashflow from its producing asset portfolio and some of its currently undrawn US$430 million debt facility.

Over the course of 2013, the Company intends to issue quarterly operational updates (alongside its usual quarterly production updates) highlighting progress on key GSA development activities. Specific announcements are anticipated to be issued upon the completion of milestones including for example, commencement of the development drilling campaign and completion of each well, execution of the subsea infrastructure installation works and completion of various stages of work on the FPF-1.

Press Release, January 10, 2013

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