Ithaca Energy doubles North Sea production as Athena field fires up

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North Sea oil producer, Ithaca Energy, saw its shares hit £1.10 yesterday. The shares have fallen from over £1.75 in the last week or so on news that it had ended takeover talks with several interested parties due to the offers being insufficiently high!
This morning the company has today announced that the North Sea Athena field in which it has a 22.5% stake and operatorship is producing 22,000 barrels a day, 4950 net to Ithaca. This means that Ithaca’s production has doubled from 5000 barrels a day to 9950. At $70 a barrel after costs, that equates to $700,000 a day, $234 million a year (£146 million). The company has no debt and a new $400 million debt facility. The current market cap is only £283 million!
Am I the only one who thinks this looks really, really cheap?

FOR: ITHACA ENERGY INC.
TSX, AIM SYMBOL: IAE
June 7, 2012
Ithaca Energy Inc.: Athena Production Rates
LONDON, UNITED KINGDOM and CALGARY, ALBERTA—(Marketwire – June 7, 2012) –
NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

Ithaca Energy Inc. (TSX:IAE)(AIM:IAE) announces initial peak gross oil production rates from the Athena field of 22,000barrels of oil per day (“bopd”) (4,950 bopd net to Ithaca) as metered into the BW Athena’s storage tanks. Oil exportoperations have commenced.
The flow from each of the four oil production wells is being supported by electrical submersible pumps, the operatingparameters for which are being monitored to stabilise long term production rates. Water injection will be used tosupport the reservoir pressure of the field and thereby maintain and sustain production rates.
An initial cargo has already been offloaded from the BW Athena to the shuttle tanker “Betty Knutsen”. This and futurecargoes will be transferred to Ithaca’s Nigg oil terminal from where Athena crude will be sold to the market under theCompany’s marketing contract with BP.
At current oil prices, the project is anticipated to achieve payback within twelve months.
John Woods, Chief Developments Officer, commented:
“The successful start-up of all the Athena wells and completion of commissioning activities on the FPSO mark majormilestones for both the Athena development and the continued growth of the Company. These achievements are testament to the expertise of our project team and contractors who have created an efficient and highly valuable development solutionfor the field. Completion of the Athena project again demonstrates the Company’s ability to deliver major North Seaprojects and we look forward to continuing to grow the Company with the ongoing Greater Stella Area development.”
Joint Venture partners in the Athena field are: Ithaca, operator (22.5%), Dyas UK Limited (47.5%), EWE Energie AG (20%)and Zeus Petroleum Limited (10%).

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