Ithaca Energy was back in the black in the first quarter of 2021, as the North Sea oil firm shook off the ill effects last year’s hefty impairments.
The Aberdeen-headquartered company is also pressing ahead with two key projects and has been dishing out contracts, with more to follow.
In addition, Ithaca’s chief financial officer David Crawford said the firm was looking at options for refinancing its reserve-based lending (RBL) facility and was “quite far down the line” on making an acquisition.
Earlier this week, parent company Delek Group, of Israel, said it would make every effort to complete an IPO of Ithaca, potentially in London and Tel Aviv, by September 15 2021.
Ithaca, which bought Chevron’s North Sea business in 2019, has been one of the busier UK exploration and production companies in recent months.
In March, it sanctioned phase two of an enhanced oil recovery (EOR) project at the Captain field, 90 miles north-east of Aberdeen.
The £400 million scheme will involve new wells, pipelines and platform modifications.
Ithaca handed a subsea equipment deal for Captain to TechnipFMC last month, while information on the Oil and Gas Authority’s website indicates Worley was picked for engineering and procurement work.
The operator said it is currently working on the award of additional contracts, including topsides construction and rig hire.
Ithaca has submitted a field development plan to regulators for the Abigail project, with approval expected “in the next quarter”.
It would be developed as a subsea tieback to the FPF-1 platform in the Greater Stella Area.
A subsea construction services deal for Abigail went to TechnipFMC in March and Ithaca expects the rig hire agreement to be confirmed during the current quarter.
In April, Ithaca picked rig contractor Awilco to drill the Fotla exploration well, most likely during the third quarter of this year.
And last month it agreed with Malaysian firm Hibiscus Petroleum to jointly develop the Marigold and Marigold East discoveries.
A healthier looking balance sheet should help Ithaca make progress. It recorded pre-tax profits of £43.5 million in the first quarter, against losses of £820m in the corresponding period last year.
Its Q1 2020 figures were dented by impairments of £834m linked to a slump in oil and gas prices, caused by the pandemic and a fallout between Russia and Saudi Arabia.
The impact of the subsequent recovery in prices has been offset by lower gains from Ithaca’s hedging portfolio, reduced from £57m to £9.4m.
Revenues dipped slightly, to £240m, as production slid 13% year-on-year to 65,000 barrels of oil equivalent per day.
This was due to water-injection constraints on Captain and natural field decline across the portfolio, offset by first oil from the Vorlich field, which came online in November 2020.
Net debt at the end of March was £756m, down from £860m at year-end 2020 following a further repayment of RBL debt of £106m.
Mr Crawford said Ithaca was looking at options for a refinancing later this year so that it could include the “full benefit of Captain EOR 2” in its RBL, which would increase availability by £280m.
He added Ithaca was making progress on a potential acquisition, which could be agreed in the next two months and would not involve “a big cash outflow”.
