Ithaca revenue soars as Stella starts to pay off

Ensco 100 rig
Ensco 100 rig

An Aberdeen based oil firm saw its top line boosted as production from its flagship North Sea field ramped up.

Ithaca Energy’s revenue for the third quarter was $73.6million, up from $44.5million in the same period last year.

Losses before taxes however widened to $17.5million, compared to the loss of $6.7million in the third quarter of 2016.

Profits after tax swung from the red into the black though, with a third quarter earning of $3.7million compared to a loss after tax of $70.6million in the same period last year.

Ithaca, now owned by Israeli firm Delek Group, achieved first oil from the Stella field in the first six months of 2017.

The field is part of the Greater Stella Area (GSA), located about 175miles east of Aberdeen in the central North Sea.

Average production for the year has gradually increased as the Stella ramps up.

Unite operating expenditure has also been shaved down in terms of cost from £23boe to £20boe.

Year to date 2017 production has averaged 12,525 boepd, a 31% increase on the same period in the previous year.

While volumes have been on an increasing trend over the course of the year, average production in the third quarter of the year was moderated by an approximately three week shutdown of the Stella field to enable the final FPF-1 oil export pipeline tie-in works to be completed and the switchover from oil tanker loading to pipeline exports to take place.

Production was also reduced at the end of the quarter as a consequence of planned maintenance shutdowns commencing on the Floating Production, Storage and
Offloading facilities (“FPSOs”) serving the Cook and Pierce fields, both of which were completed in October 2017.

In a trading update, Ithaca said: “Following completion of the maintenance shutdown of the host facility serving the Cook field, it has been identified that certain modifications are required to the control systems on the Cook field to operate the well at unrestricted rates.

“As such, volumes from the field are expected to be moderately constrained for approximately six months while the necessary equipment is procured and installed.

“Taking into account the associated deferral of some Cook production and year to date production from the overall asset portfolio, full year 2017 average production is expected to be in the range of 13,000 to 14,000 boepd.”

Ithaca is the operator of Stella and Harrier with 54.66% working interests.

The company said that negotitations over the BP-operated Vorlich discovery (34% Ithaca working interest) in the Greater Stella Area had now concluded and that the FPF-1 floating production unit had been selected as the development vessel.

It is scheduled for a Field Development Plan to be submitted to the UK Oil and Gas Authority in 2018 for regulatory approval, with
the development scheme involving the drilling of two production wells tied back approximately 9 kilometres to the FPF-1.

In addition to the value associated with the firm’s interest in the Vorlich field, Ithaca will benefit from the income received by the Stella field joint venture (54.66% Ithaca working interest) for the provision of transportation, processing and operating services by the FPF-1.