Ithaca Energy – the Aberdeen-based oil exploration ‘minnow’ which is being taken over by the Israeli-based Delek Group – made a loss of $54 million after tax, compared to a loss the preceding year of $121 million.
Average production in the year ending 23 March 2016 of 9,310 barrels of oil equivalent per day (boepd) dropped by more than 25% compared to 12,066 boepd in 2015.
On the upside, however, Ithaca’s operating expenditure was reduced to $23-barrrel in 2016 compared to $31-barrel the previous year.
Actual production was lower than forecast because the much-awaited Stella field only started up in February 2017 – six months behind schedule,
Technical problems have man that Stella has only managed to produce 1,700 barrels a day net to Ithaca, with its FPF-1 dynamic commissioning programme on-going. Stella producing at reduced rates to minimise flaring until the gas processing systems are fully commissioned.
Les Thomas, Chief Executive, commented: “Our 2016 financial results reflect a year of good progress, culminating in first oil from the Stella field in February 2017.
“This progress has been reflected in the near fourfold increase in our share price since the start of last year. Stella first oil was an important milestone for Ithaca and production is forecast to ramp-up upon completion of ongoing dynamic commissioning of the gas processing facilities.
“Meanwhile, having reached this important milestone and after weighing up the potential risks and opportunities that lie ahead, the Board considers the takeover offer tabled by Delek provides full value to shareholders and we wholeheartedly recommends its acceptance.”
Delek’s cash offer of £1.19 to Ithaca shareholders in a $1.2bn deal expires on 20 April 2017.
Meanwhile, Ithaca’s Harrier field development programme is underway: development drilling is due to be completed by the end of 2017, with start-up of production expected in Summer 2018.
See also: 7 Feb 2017
Israeli energy giant launches $1.2bn take-over for Aberdeen oil company