CALGARY, AB--(Marketwired - Jan 12, 2015) - Ithaca Energy Inc. (TSX: IAE) (LSE: IAE)


Not for Distribution to U.S. Newswire Services or for Dissemination in the United States

Ithaca Energy Inc.

Operations Update & 2015 Outlook

12 January 2015

Ithaca Energy Inc. (TSX: IAE; LSE: IAE) ("Ithaca" or the "Company") provides an operational update and guidance on the outlook for the year ahead.

  • Average pro-forma production in 2014 was approximately 12,300 barrels of oil equivalent per day ("boepd"), 95% oil 
  • Base production in 2015, excluding any contribution associated with start-up of the Stella field during the year, is anticipated to be approximately 12,000 boepd, approximately 95% oil
  • First hydrocarbons anticipated from the Greater Stella Area ("GSA") in the third quarter of 2015, delivering an approximately 16,000 boepd step change in production for the Company
  • 2015 capital expenditure is anticipated to total approximately $150 million, reflecting the advanced status of the GSA investment programme and reduced production enhancement expenditure
  • 6,300 barrels of oil per day ("bopd") hedged at an average of $102/bbl from 1 January 2015 to 30 June 2016
  • The executed hedges through to mid-2016 result in the Company having a Brent breakeven price from the existing producing asset base of under $20/bbl

2014 Production
Average pro-forma production in 2014 was approximately 12,300 boepd; this reflects inclusion of full year production from the assets acquired from Sumitomo Corporation (the "Summit Assets") in July 2014.

During the fourth quarter production was re-started from the Causeway Area fields following the previously announced unplanned shutdown and the Athena well workover was completed. In addition, production was re-started at the end of the year from the Pierce field following completion of the extended shut-in of the "Haewene Brim" floating production, storage and offloading facility.

Greater Stella Area
Significant progress was made in 2014 on the development of the GSA production hub, with the clean-up flow test results from the first four Stella development wells de-risking forecast initial production from the hub.

The critical path item for delivering first hydrocarbons from the Stella field is completion of the "FPF-1" floating production facility modifications being undertaken by Petrofac. As reported by Petrofac at the end of November 2014, it continues to advance the modification works and anticipates the vessel being finished in time to enable first production from the Stella field in the third quarter of 2015. Further details will be provided during the year on the anticipated start-up schedule for the field as additional information becomes available from Petrofac on the timing for sail-away of the FPF-1 from the modifications yard in Gdansk, Poland.

Drilling operations on the Stella Ekofisk development well are progressing and completion of the clean-up flow test period is anticipated in February 2015. Following completion of the well the ENSCO 100 rig will be demobilised, marking the end of the Stella development drilling campaign. It is planned for the remaining subsea infrastructure installation activities required prior to the arrival of the FPF-1 on location to be undertaken in Spring 2015, leaving the final vessel hook-up element of the programme to be completed once the vessel is on location.

2015 Production Guidance
Base production in 2015, excluding any contribution associated with start-up of the Stella field during the year, is anticipated to be approximately 12,000 boepd, approximately 95% oil. The additional contribution resulting from the start-up of Stella will depend on the exact timing of first hydrocarbons from the field, with the quantum reflecting the relevant pro-rata share of the initial annualised production forecast for the field of 16,000 boepd net to Ithaca.

As previously noted, cessation of production from the Beatrice area will occur in January 2015, with the Beatrice facilities subsequently being re-transferred to Talisman for decommissioning.

2015 Capital Expenditure
The Company anticipates net 2015 capital expenditure to total approximately $150 million, a near 60% reduction compared to the previous year. Approximately two-thirds of the expenditure relates to the GSA, with the balance associated with completion and tie-in of the on-going Ythan development well, continuation of the Wytch Farm well workover programme, asset maintenance activities and two Norwegian wells (net of the 78% Norwegian tax refund).

Given the schedule of activities for 2015, capital expenditure is expected to be weighted towards the first half of the year. The programme is forecast to be fully funded on an annual basis by operating cashflows generated from the Company's currently producing asset portfolio, based on current Brent oil prices and reflecting the benefit of the oil price hedges that have been executed and anticipated operating costs for the year.

Commodity Hedging
For the eighteen month period from 1 January 2015 the Company has approximately 6,300 bopd hedged at an average price of $102/bbl (70% swaps / 30% puts). Additionally the Company has in place a gas price floor of £0.58/therm (~$10/MMbtu) for 190 million therms (~20 billion cubic feet) of production from the Stella field via put options.

Consolidated 2014 Production
The acquisition of the Summit Assets was completed on 31 July 2014, with production from those assets being included in the Company's reported earnings from that date. Average consolidated production for 2014 was approximately 10,900 boepd.

Net Debt
Net drawn debt at 31 December 2014 was $763 million (excluding the Norwegian tax rebate facility) out of total debt facilities of $1,010 million.

2014 Financial Results
The Company is scheduled to publish its full year 2014 financial results on 31 March 2015 along with the results of its year-end independent reserves evaluation, which is being performed by Sproule International Limited ("Sproule") and will reflect Sproule's future oil and gas price assumptions as of 31 December 2014. A conference call for investors and analysts will be held on that day. Access details for the call will be made available on the Company's website ahead of the event.

- ENDS -


Ithaca Energy
Les Thomas +44 (0)1224 650 261
Graham Forbes +44 (0)1224 652 151
Richard Smith +44 (0)1224 652 172

FTI Consulting
Edward Westropp +44 (0)203 727 1521
Shannon Brushe +44 (0)203 727 1077

Cenkos Securities
Neil McDonald +44 (0)207 397 8900
Nick Tulloch +44 (0)131 220 6939

RBC Capital Markets
Jeremy Low +44 (0)207 653 4000
Matthew Coakes +44 (0)207 653 4000

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.

About Ithaca Energy
Ithaca Energy Inc. (TSX: IAE; LSE: 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

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, continued availability of financing for 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, the current and forecast production from the Company's assets, 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, 2013, and the Company's Annual Information Form for the year ended December 31, 2013 and in reports which are on file with the Canadian securities regulatory authorities and may be accessed through the SEDAR website (

This information is provided by RNS
The company news service from the London Stock Exchange

Contact Information:


Ithaca Energy
Les Thomas
+44 (0)1224 650 261

Graham Forbes
+44 (0)1224 652 151

Richard Smith
+44 (0)1224 652 172

FTI Consulting
Edward Westropp
+44 (0)203 727 1521

Shannon Brushe
+44 (0)203 727 1077

Cenkos Securities
Neil McDonald
+44 (0)207 397 8900

Nick Tulloch
+44 (0)131 220 6939

RBC Capital Markets
Jeremy Low
+44 (0)207 653 4000

Matthew Coakes
+44 (0)207 653 4000