Ithaca Energy has reported a loss after tax of $121 million as result of a $203 million post-tax impairment charge arising from lower forecast future oil and gas prices.
The Aberdeen-headquartered company has announced its financial results for the 12 months ended 31 December 2015, together with the results of its independent year-end reserves assessment and an operations update.
The North Sea focused producer reported solid cashflow generation despite the material decline in Brent prices over the period.
Its average production of 12,066 barrels of oil equivalent per day was above full year guidance and an increase on 2014’s 10,947 boepd.
Ithaca said the completion of the FPF-1 platfrom modifications programme remains on track for sail-away of the vessel in May/June 2016 period, leading to anticipated first hydrocarbons from the Stella field in the third quarter of the year.
The five well Stella development drilling programme was successfully completed during 2015, along with the subsea infrastructure installation activities required prior to arrival of the FPF-1 on location.
The company said it had taken “decisive actions” in 2015 to ensure the business is resilient to the lower oil price environment including a major re-set of operating expenditure resulting in unit operating cost of $31/boe in 2015, a 44% reduction on the previous year’s $55/boe and 22% ahead of targeted savings
Chief executive Les Thomas, said: “We are pleased to have delivered such a strong cashflow performance in 2015, driven by consistent production levels and rigorous cost control, all underpinned by a substantial hedging position.
“Further decisive actions, including sale of the Norwegian business and a premium equity placement, have reduced net debt and strengthened the balance sheet, providing increased flexibility to cope with current commodity price volatility and development of the Greater Stella Area.
“Good progress on the FPF-1 modifications means we remain on track for first production from Stella during the third quarter of 2016.”
The Company’s commodity hedging position remains unchanged. In 2016 a volume of 11,500 boepd (52% oil) is hedged at an average price of $60/boe, with those volumes weighted toward the first half of the year.
In the first half of 2017 approximately 7,000 boepd (50% oil) is hedged at an average price of $62/boe. As of 1 January 2016 the Company’s commodity hedges were valued at $127 million based on the prevailing oil and gas forward curves at that time.