CALGARY, AB--(Marketwired - May 14, 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.

First Quarter 2015 Financial Results

14 May 2015

Ithaca Energy Inc. (TSX: IAE; LSE: IAE) ("Ithaca" or the "Company") announces its quarterly financial results for the three months ended 31 March 2015 ("Q1-2015" or the "Quarter").

Financial Highlights

Solid cashflow generation

- Q1-2015 production 12,489 barrels of oil equivalent per day, in line with guidance

- $99.9 million cashflow from ongoing operations1, including $59.7 million from the previously announced acceleration of oil price hedging gains

- Adjusted earnings of $15.4 million, excluding a non-cash accounting tax charge of $41.5 million resulting from a reduction in UK tax rates

- Quarterly cashflow per share $0.27 (Q1-2014: $0.13) and adjusted earnings per share $0.05 (Q1-2014: $0.05)

Strong business fundamentals, well positioned for low Brent price environment

- Over two years of oil hedging in place - average of 6,800 barrels of oil per day ("bopd") at $74/bbl until June 2017

- Operating costs under $35/boe in Q1-2015, approximately 30% lower than 2014

- Brent breakeven price of under $10/bbl through to Stella start-up with benefit of hedges

Fully funded and moving into deleveraging phase in the second half of 2015

- Semi-annual borrowing base review completed, with total bank debt facilities sized at $650 million - $575 million senior Reserve Based Lending ("RBL") facility and $75 million junior RBL facility

- Replacement of the former corporate facility with a junior RBL removes use of any historic financial covenant tests from the Company's debt facilities

- Total debt funding capacity of $950 million in place, with a fully drawn weighted average cost of debt of under 5%

- Forecast peak debt requirement prior to Stella start-up of $825-850 million in the second quarter of 2015, resulting in headroom of over $100 million

- Net drawn debt of $780.6 million at end Q1-2015 (excluding Norwegian tax rebate facility)

Non-core Norwegian exploration business successfully sold
- Accelerated monetisation of non-core operations - $60 million initial consideration with additional $30 million upside exposure to future wells

Les Thomas, Chief Executive Officer, commented:
"Given an average Brent price of under $55/bbl in the first quarter of the year, the Company has generated strong cashflow that reflects the benefit of our oil hedging position and a significant lowering of unit operating costs. The Company is well set up to manage the prevailing oil price uncertainties, continues to maintain a strong balance sheet and will shortly start deleveraging, well ahead of start-up of production from the Stella field in Q2-2016."

Production & Operations
Average production in Q1-2015 was 12,489 barrels of oil equivalent per day("boepd"), in line with 2015 production guidance of 12,000 boepd (95% oil).

The Company made good operational progress in Q1-2015, having completed a number of this year's key activities. Water injection on the Causeway field has commenced following completion of the work required on the Taqa-operated North Cormorant platform facilities. The electrical submersible pump on the Fionn field was brought into service and production from the Pierce field commenced following completion of the floating production, storage and offloading ("FPSO") vessel modification works required for tie-in of the third party Brynhild field.

Drilling operations on the Ythan development well were completed in April 2015 and the rig demobilised from the field. The final remaining activity to be completed prior to the start-up of production from the field is installation of a subsea flowline between the wellhead and the production manifold. A diving support vessel has been contracted and this work is expected to be completed in the coming weeks.

Good progress continues to be made on the Wytch Farm well workover campaign, which is scheduled to continue over the course of the year.

Greater Stella Area Development Update
Continued progress has been made on execution of the main GSA development work programmes since the start of 2015.

The planned five well Stella development drilling programme was completed in April 2015 when the ENSCO 100 rig was demobilised from the field following drilling and testing of the Stella Ekofisk well. In total the wells have achieved a combined maximum flow test rate during clean-up operations of over 53,000 boepd (100%). This well capacity significantly de-risks the initial annualised production forecast for the Greater Stella Area hub of approximately 30,000 boepd (100%), 16,000 boepd net to Ithaca.

As previously announced, sail-away of the FPF-1 floating production facility from the Remontowa yard in Poland to the field is anticipated late in the first quarter of 2016, resulting in first hydrocarbons in the second quarter of that year. Manning levels on the vessel have been at historic highs over recent weeks, with good progress being made towards achieving mechanical completion as planned in Q3-2015.

The 2015 subsea infrastructure installation campaign is advancing well. Since the start of April the mid-water arch and Single Anchor Loading ("SAL") oil export structures have both been installed and the northern drill centre well tie-ins have also been completed. The remaining installation works are scheduled to be concluded by the third quarter of 2015.

Norway Sale
As previously announced, following the end of Quarter the Company entered into an agreement with a subsidiary of the Hungarian listed company MOL plc to sell its wholly owned subsidiary, Ithaca Petroleum Norge AS ("Ithaca Norge"), for an initial consideration of US$60 million. The Company also has the ability to earn additional bonus payments of up to US$30 million dependent on exploration success from the existing licence portfolio.

The transaction has an effective date of 1 January 2015 and is expected to complete in the third quarter of 2015.After repayment of the Company's Norwegian exploration financing facility and forecast working capital adjustments, the sale is anticipated to result in an initial net cash receipt of approximately $30 million, which will be used to offset drawings under the Company's RBL facility.

This transaction marks completion of the highly successful monetisation of the non-core exploration related elements of the licence interests transferred to Ithaca as part of the Valiant Petroleum plc ("Valiant") acquisition in April 2013.While these aspects of the Valiant portfolio were treated as liabilities in the acquisition, substantial value has been generated through the Norwegian sale and the various UK farm-outs that were completed in 2013.

During the Quarter the UK government enacted a reduction in the North Sea Supplementary Charge ("SCT"), resulting in the combined SCT and Corporation Tax ("CT") rate falling from 62% to 50%.

While this is a positive fiscal change, the Company's existing UK tax allowances pool of over $1,500 million is forecast to shelter the business from the payment of SCT and CT prior to 2020 at current commodity prices. More immediately the Company will benefit from the simultaneously announced reduction in the Petroleum Revenue Tax rate from 50% to 35%, applicable from the start of 2016, on its interest in the Wytch Farm field.

Under accounting rules, these positive tax rate improvements result in a one-off non-cash accounting charge of $41.5 million through the Income Statement, as the net deferred tax asset, mainly arising from the UK tax allowances pool, is revalued down to reflect the lower tax rates.

Q1-2015 Financial Results Conference Call
A conference call and webcast for investors and analysts will be held today at 12.00 BST (07.00 EST). Listen to the call live via the Company's website ( or alternatively dial-in on one of the following telephone numbers and request access to the Ithaca Energy conference call: UK +44 203 059 8125; Canada +1 855 287 9927; US +1 866 796 1569. A short presentation to accompany the results will be available on the Company's website prior to the call.

The unaudited consolidated financial statements of the Company for the three month period ended 31 March 2015 and the related Management's Discussion and Analysis are available on the Company's website ( and on SEDAR ( All values in this release and the Company's financial disclosures are in US dollars, unless otherwise stated.

1. Cashflow from on-going operations of $99.9 million less $11.4 million of net outflows from discontinuing fields (Beatrice, Athena & Anglia) provided for as onerous contracts in 2014 equates to overall cashflow from operations of $88.5 million.

- 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)207 269 7230

Tom Hufton
+44 (0)203 727 1625

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

Nick Tulloch  
+44 (0)131 220 6939

RBC Capital Markets
Daniel Conti
+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

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 dispositions 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 and phrases like "anticipate", "continue", "estimate", "expect", "may", "will", "project", "plan", "should", "believe", "could", "target", "in the process of" and similar expressions, and the negatives thereof, whether used in connection with operational activities, Stella first hydrocarbons, drilling plans, production forecasts, budgetary figures, anticipated net drawn debt, potential developments including the timing and anticipated benefits of acquisitions and dispositions 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 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 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.

This press release contains non-International Financial Reporting Standards ("IFRS") industry benchmarks and terms, such as "cashflow from operations", "cashflow per share" and "net drawn debt". These terms do not have any standardised meanings within IFRS and therefore are unlikely to be comparable to similar measures presented by other companies. The Company uses cashflow from operations to help evaluate its performance. As an indicator of the Company's performance, cashflow from operations should not be considered as an alternative to, or more meaningful than, net cash from operating activities as determined in accordance with IFRS. The Company considers cashflow from operations to be a key measure as it demonstrates the Company's underlying ability to generate the cash necessary to fund operations and support activities related to its major assets. Cashflow from operations is determined by adding back changes in non-cash operating working capital to cash from operating activities. The Company uses net drawn debt as a measure to assess its financial position. Net drawn debt includes amounts outstanding under the Company's debt facilities and senior notes, less cash and cash equivalents. Net drawn debt noted above excludes any amounts outstanding under the Norwegian tax rebate facility.

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 quarter ended March 31, 2015, and the Company's Annual Information Form for the year ended December 31, 2014 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: