TIDMIAE
RNS Number : 9104F
Ithaca Energy Inc
02 August 2016
Not for Distribution to U.S. Newswire Services or for
Dissemination in the United States
Ithaca Energy Inc.
GSA Satellites Acquisitions
2 August 2016
Ithaca Energy Inc. (TSX: IAE, LSE AIM: IAE) ("Ithaca" or the
"Company") announces that it has expanded its core position in the
Greater Stella Area ("GSA"), with four agreements entered into for
the acquisition of additional interests in the "Vorlich" discovery
and an operated interest in the "Austen" discovery.
Highlights
-- Interest in the Vorlich discovery increased from
approximately 17% to 33% - additional licence interests acquired
from ENGIE E&P, INEOS and Maersk
-- Approximately 4 MMboe(1) of net proven and probable reserves
added to the portfolio from the additional Vorlich licence
interests
-- Acquisition from ENGIE E&P of a 75% interest and
operatorship of the Austen discovery, which lies approximately 30
kilometres from the GSA production hub
-- Total acquisition costs including potential future contingent payments of under $6 million
Les Thomas, Chief Executive Officer, commented:
"We are very pleased to announce this group of low cost
acquisitions that further expand our core Greater Stella Area
portfolio. This is in line with our "hub and spoke" strategy for
maximising the value of the central infrastructure that has been
put in place for the start-up of production from the Stella
field."
Further Information
Vorlich
Sale and purchase agreements ("SPAs") have been executed with
ENGIE E&P, INEOS and Maersk to acquire a 100% interest and
operatorship of Licence P1588 (Block 30/1f), effective 1 January
2016.
Licence P1588 contains approximately 10-20% of the Vorlich
discovery, with the balance of the discovery being located in
licence P363 (Block 30/1c). When taking into account the P363
licence interest acquired from TOTAL in January 2016, execution of
the SPAs increases Ithaca's overall interest in the Vorlich
discovery to approximately 33%.
Vorlich was discovered and appraised in 2014 with exploration
well 30/1f-13A,Z and 13Z. The well encountered hydrocarbons in a
Palaeocene sandstone reservoir in Block 30/1c and a subsequent
side-track into Block 30/1f confirmed the westerly extension of the
discovery. The well was flow tested at a maximum rate of 5,350
boepd (approximately 80% oil).
Vorlich is located approximately 10 kilometres north of the
Company's GSA production hub and is estimated to contain gross
proven and probable undeveloped reserves of approximately 24
MMboe(1) . Following completion of the Vorlich appraisal programme
in 2014, current activities are focused on planning and preparation
of an FDP.
Upon completion of the acquisitions, the overall Vorlich licence
interests will be as follows:
-- Licence P363: BP (Operator), 80%; Ithaca, 20%
-- Licence P1588: Ithaca (Operator), 100%
Austen
An SPA has been executed with ENGIE E&P to acquire a 75%
interest and operatorship of Licence P1823 (Block 30/13b),
effective 1 May 2016. The licence contains the Austen discovery,
which is located approximately 30 kilometres south-east of the GSA
hub.
Austen is an Upper Jurassic oil / gas-condensate accumulation on
which a number of wells have been drilled, the most recent being
appraisal well 30/1b-10,10Z drilled by ENGIE E&P in 2012 that
was flow tested at a maximum rate of 7,820 boepd (approximately 50%
oil).
The gross contingent resources ("1C" to "3C") associated with
Austen are estimated by Ithaca to be in the range of 4-28 MMboe(2)
. An independent assessment will be completed at the end of the
year as part of the usual annual reserves evaluation exercise.
Upon completion of the acquisition, the Austen licence interests
will be as follows:
-- Ithaca (Operator), 75%; Premier Oil, 25%.
It is planned for further subsurface and development engineering
studies to be completed in order to advance preparation of an FDP
for approval prior to January 2019.
Acquisition Completion
Initial considerations are payable at completion of the
acquisitions, with additional contingent payments at FDP approval
and upon reaching reserves recovery thresholds.
The licence acquisitions are expected to complete in the second
half of 2016 and are subject to normal regulatory and partner
approvals, including approval for the transfer of operatorship. At
completion the considerations paid will be subject to normal
industry adjustments to reflect costs incurred since the effective
dates of the transactions.
The Company notes that the previously announced acquisition of
the Vorlich working interest from TOTAL was completed in July
2016.
FPF-1 Update
Since the recent departure of the "FPF-1" floating production
facility from the Remontowa shipyard in Poland, the majority of the
required deep water marine system trials have been successfully
completed. The final remaining trials are expected to be completed
in the coming days. An update will be provided once the FPF-1
commences sail-away to the Stella field.
Glossary
boe Barrel of oil equivalent
boepd Barrels of oil equivalent per day
ENGIE E&P ENGIE E&P UK Limited (formerly GDF Suez)
FDP Field Development Plan
INEOS INEOS UK SNS Limited
Maersk Maersk Oil North Sea Limited
MMboe Million barrels of oil equivalent
Premier Oil Premier Oil E&P UK Limited
TOTAL TOTAL E&P UK Limited
-S -
Enquiries:
Ithaca Energy
Les Thomas lthomas@ithacaenergy.com +44 (0)1224 650 261
Graham Forbes gforbes@ithacaenergy.com +44 (0)1224 652 151
Richard Smith rsmith@ithacaenergy.com +44 (0)1224 652 172
FTI Consulting
Edward Westropp edward.westropp@fticonsulting.com +44 (0)203 727 1521
Tom Hufton tom.hufton@fticonsulting.com +44 (0)203 727 1625
Cenkos Securities
Neil McDonald nmcdonald@cenkos.com +44 (0)207 397 1953
Nick Tulloch ntulloch@cenkos.com +44 (0)131 220 9772
Beth McKiernan bmckiernan@cenkos.com +44 (0)131 220 9778
RBC Capital Markets
Daniel Conti daniel.conti@rbccm.com +44 (0)207 653 4000
Matthew Coakes matthew.coakes@rbccm.com +44 (0)207 653 4000
Notes
In accordance with AIM Guidelines, John Horsburgh, BSc (Hons)
Geophysics (Edinburgh), MSc Petroleum Geology (Aberdeen) and
Subsurface Manager at Ithaca is the qualified person that has
reviewed the technical information contained in this press release.
Mr Horsburgh has over 15 years operating experience in the upstream
oil and gas industry.
1. Based on the independent reserves assessment performed by
Sproule International Limited ("Sproule"), effective as of 31
December 2015, and prepared in accordance with the Canadian Oil and
Gas Evaluation Handbook maintained by the Society of Petroleum
Engineers (Calgary Chapter), as amended from time to time.
2. Estimates of the gross 1C to 3C contingent resource
(Development Pending) range associated with the Austen discovery
have been prepared by Ithaca, effective as of 1 July 2016, and not
by an independent qualified reserves evaluator or assessor. These
figures are estimates only and the actual results may be greater
than or less than the estimates provided herein, with the resource
range reflecting uncertainties and risks associated with
compartmentalisation of the reservoir. There is no certainty that
it will be commercially viable to produce any portion of these
resources.
The estimates of reserves and resources stated herein for
individual properties may not reflect the same confidence level as
estimates of reserves and resources for all properties, due to the
effects of aggregation. The well test results disclosed in this
press release represent short-term results, which may not
necessarily be indicative of long-term well performance or ultimate
hydrocarbon recovery therefrom.
The Company's total proved and probable reserves at 31 December
2015 plus the estimated reserves associated with the Vorlich
licence acquisition from TOTAL, which completed in July 2016, were
57 MMboe. These reserves were independently assessed by Sproule, a
qualified reserves evaluator.
References herein to barrels of oil equivalent ("boe") are
derived by converting gas to oil in the ratio of six thousand cubic
feet ("Mcf") of gas to one barrel ("bbl") of oil. Boe may be
misleading, particularly if used in isolation. A boe conversion
ratio of 6 Mcf: 1 bbl is based on an energy conversion method
primarily applicable at the burner tip and does not represent a
value equivalency at the wellhead. Given the value ratio based on
the current price of crude oil as compared to natural gas is
significantly different from the energy equivalency of 6 Mcf: 1
bbl, utilising a conversion ratio at 6 Mcf: 1 bbl may be misleading
as an indication of value.
About Ithaca Energy
Ithaca Energy Inc. (TSX: IAE, LSE AIM: IAE) is a North Sea oil
and gas operator focused on the delivery of lower risk growth
through the appraisal and development of UK undeveloped discoveries
and the exploitation of its existing UK producing asset portfolio.
Ithaca's strategy is centred on generating sustainable long term
shareholder value by building a highly profitable 25kboe/d North
Sea oil and gas company. For further information please consult the
Company's website www.ithacaenergy.com.
Forward-looking Statements
Some of the statements and information in this press release are
forward-looking. Forward-looking statements and forward-looking
information (collectively, "forward-looking statements") are based
on the Company's internal expectations, estimates, projections,
assumptions and beliefs as at the date of such statements or
information, including, among other things, assumptions with
respect to production, drilling, construction and maintenance
times, well completion times, risks associated with operations,
required regulatory, partner and other third party approvals,
commodity prices, future capital expenditures, continued
availability of financing for future capital expenditures, future
acquisitions and dispositions and cash flow. The reader is
cautioned that assumptions used in the preparation of such
information may prove to be incorrect. When used in this press
release, the words and phrases like "anticipate", "continue",
"estimate", "expect", "may", "will", "project", "plan", "should",
"believe", "could", "target", "in the process of", "on track" ,"set
to" and similar expressions, and the negatives thereof, whether
used in connection with operational activities, remaining work
activities prior to the FPF-1 being towed to the Stella field and
the timing thereof, timing of commencement of towing the FPF-1 to
the Stella field, timing of future FPF-1 updates regarding the
status of the FPF-1 operational programme, the anticipated timing
for completion of the Vorlich and Austen acquisitions and the
effects thereof, expected future payments in connection with such
acquisitions, statements relating to reserves, planned future
activities in connection with the Vorlich and Austen interests, the
timing of completion of the independent assessment of the Austen
interests, or otherwise, are intended to identify forward-looking
statements. Such statements are not promises or guarantees, and are
subject to known and unknown risks, uncertainties and other factors
that may cause actual results or events to differ materially from
those anticipated in such forward-looking statements. The Company
believes that the expectations reflected in those forward-looking
statements are reasonable but no assurance can be given that these
expectations, or the assumptions underlying these expectations,
will prove to be correct and such forward-looking statements
included in this press release should not be unduly relied upon.
These forward-looking statements speak only as of the date of this
press release. Ithaca Energy Inc. expressly disclaims any
obligation or undertaking to release publicly any updates or
revisions to any forward-looking statement contained herein to
reflect any change in its expectations with regard thereto or any
change in events, conditions or circumstances on which any
forward-looking statement is based except as required by applicable
securities laws.
Additional information on these and other factors that could
affect Ithaca's operations and financial results are included in
the Company's Management Discussion and Analysis for the quarter
ended 31 March 2016 and the Company's Annual Information Form for
the year ended 31 December 2015 and in reports which are on file
with the Canadian securities regulatory authorities and may be
accessed through the SEDAR website (www.sedar.com).
Not for Distribution to U.S. Newswire Services or for
Dissemination in the United States
This information is provided by RNS
The company news service from the London Stock Exchange
END
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