Ithaca Energy Inc. (TSX: IAE, LSE AIM: IAE) (“Ithaca” or the “Company”) provides an operations update following the end of the third quarter of the year (“Q3-2016” or the “Quarter”). The Company is scheduled to issue its financial results for the first nine months of the year on 14 November 2016.Highlights
Production & Operations
- 9,550 boepd average production for first nine months of 2016 – ahead of 9,000 boepd guidance
- FPF-1 offshore hook-up and commissioning operations progressing to plan – start-up of the Stella field continues to be anticipated in November 2016
- Significant progress made on installation of the oil export pipeline from the FPF-1 to the Norpipe system
- Continued deleveraging, with net debt at 30 September 2016 reduced to $598 million
The producing asset portfolio has performed well over the first nine months of the year (“YTD-2016”), with production running ahead of guidance. Average production during the Quarter was approximately 9,900 boepd, resulting in YTD-2016 average production of 9,550 boepd.
It is anticipated that full year base production, excluding any contribution from the start-up of the Stella field during 2016, will be modestly ahead of the 9,000 boepd guidance range. During the final quarter of the year, base production volumes will be reduced compared to the previous quarters as a result of the approximately two week planned maintenance shutdown of the Brent Pipeline System that serves the Company’s Northern North Sea fields.Greater Stella Area Development
Good progress has been made on the final stages of the Stella development programme since the FPF-1 floating production facility set sail from Poland in August 2016. The FPF-1 was safely towed to the field, moored on location and the dynamic risers and umbilical connecting the subsea infrastructure to the vessel installed as planned. Technip is in the process of concluding the remaining subsea commissioning works. At the same time the FPF-1 offshore commissioning programme is on-going, with preparation of the topsides processing and utility systems for the introduction of hydrocarbons underway. The scheduled completion of these activities remains in line with previous guidance, with first hydrocarbons from the Stella field anticipated in November 2016.
Significant progress was also made during the Quarter on the work programme associated with making the switch from tanker loading to oil pipeline exports for the Greater Stella Area in 2017. The 44 kilometre spurline from the FPF-1 to the Norpipe system was successfully installed as planned in September 2016. The key outstanding activities that now remain to be completed are the manufacture and installation of pipeline export pumps on the FPF-1 and the final subsea connections that need undertaking immediately prior to the switchover.
During Q3-2016 approximately 9,900 boepd (47% oil) of commodity hedges were realised at an average price of $56/boe. The volume of production hedged in the final quarter of 2016 remains unchanged, at approximately 8,800 boepd (50% oil) at an average price of $59/boe.Operating Expenditure
As previously guided, average unit operating expenditure in 2016 for the existing producing asset base is anticipated to be approximately $25/boe. Following the start-up of production from the Stella field this cost is forecast to reduce to approximately $20/boe, reflecting the lower unit operating costs associated with the field.Net Debt
Net debt at 30 September 2016 reduced to $598 million. The Company has in place total available debt facilities of $730 million, providing in excess of $130 million of funding headroom ahead of planned first hydrocarbons from the Stella field. This funding capacity comprises $300 million unsecured senior notes and $430 million bank debt facilities.Q3-2016 Financial Results Conference Call
The Company is scheduled to release its Q3-2016 financial results on 14 November 2016. A conference call and webcast for investors and analysts will be held on the same day at 12.00 GMT (07.00 EST). Listen to the call live via the Company’s website (www.ithacaenergy.com) or alternatively dial-in on one of the following telephone numbers and request access to the Ithaca Energy conference call: UK +44 (0)203 059 8125; Canada +1 855 287 9927; US +1 855 442 0877.Glossary
boe Barrels of oil equivalent
boepd Barrels of oil equivalent per day
MMbbl Millions of barrels of oil
RBL Reserves Based Lending facility
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