|By Marketwired .||
|June 23, 2014 02:00 AM EDT||
CALGARY, AB -- (Marketwired) -- 06/23/14 -- Ithaca Energy Inc. (TSX: IAE) (LSE: IAE) ("Ithaca" or the "Company") announces it has entered into an agreement with Sumitomo Corporation to acquire interests in three non-operated UK producing oil fields for a total consideration of $170 million. The acquisition further broadens the Company's producing asset base with high quality, long-life oil assets, delivering a step-up in reserves and accelerating monetisation of existing UK tax allowances.
- Acquisition of interests in three long-life producing oil fields, with clearly defined upside opportunities
- A further 20.000% interest in the Cook field in which the Company already has a 41.346% interest, a 7.480% interest in the Pierce field and a 7.430% interest in the Wytch Farm field
- An increase in net proved and probable ("2P") reserves of approximately 12.0 million barrels of oil equivalent ("MMboe")(1), equating to an uplift in total Company 2P reserves of approximately 20%
- Total acquisition consideration of $170 million, equating to approximately $14.2 per barrel of oil equivalent ("$/boe"). Taking into account the value associated with accelerating use of the Company's existing tax allowances pool, the acquisition cost falls to approximately $12/boe
- Incremental 2014 pro-forma production from the field interests is estimated to be approximately 2,500 barrels of oil equivalent per day ("boepd")
- Integration of the acquired fields into the existing portfolio is forecast to have a positive impact on the average unit operating cost per barrel of the Company
- The Company's leverage (Net Debt / Adjusted EBITDAX) is anticipated to be broadly unchanged at completion
Les Thomas, Chief Executive Officer, commented:
"I am very pleased to announce the acquisition of these three high quality, long-life assets, which represent an excellent addition to the portfolio. The transaction is directly in line with our strategy to further diversify and expand our producing asset portfolio. Moreover, each of the assets has clearly defined upsides that provide the opportunity to generate significant additional value."
A presentation summarising the acquisition is available on the Company's website at www.ithacaenergy.com.
A short conference call for European research analysts will take place at 08.30 UK time on 23 June 2014 and again at 13.30 UK time for North American analysts. For further information contact FTI Consulting.
The transaction involves the acquisition of interests in three producing UK oil fields, through the purchase of Summit Petroleum Limited, a subsidiary company of Sumitomo Corporation. Specifically:
- A further 20.000% interest in the Shell-operated Cook field in which the Company already has a 41.346% interest;
- A 7.480% interest in the Shell-operated Pierce oil field; and,
- A 7.430% interest in the Perenco-operated Wytch Farm oil field.
The effective date of the acquisition is 1 January 2014 (the "Effective Date"). The transaction is expected to complete in the third quarter of 2014 and is subject to normal regulatory approvals. At completion the consideration paid will be subject to normal industry adjustments to reflect the income and costs incurred since the Effective Date.
Reserve, Production & Cashflow
The reserves associated with the acquired field interests of approximately 12.0MMboe, over 90% oil, have been estimated by Ithaca(1). The reserves will be independently assessed by Sproule International Limited as part of the normal year end reserves evaluation exercise.
In total the acquired assets produced approximately 2,500 boepd in 2013, approximately 92% oil. This includes the impact of a planned shut-in of the Pierce field for approximately seven months of 2013 in order for the "Haewene Brim" floating production, storage and offloading vessel ("FPSO") that is used on the field to be transferred to dry dock for modification and refurbishment works to enable the tie-in of a third party field to the FPSO in 2014. The vessel returned to the field in late 2013 and production is forecast to resume from the Pierce field in the third quarter of 2014.
On a pro-forma basis, taking into account production from each of the acquired field interests from the transaction Effective Date, the acquisition is forecast to increase the Company's 2014 production guidance by approximately 2,500 boepd. The production guidance for the Company's existing assets remains unchanged, implying increased forecast pro-forma 2014 production guidance of 13,500 to 15,500 boepd.
The aggregate 2013 unit operating costs for the acquired fields was approximately $31/boe, which reflects the impact of the extended shut-in of production on the Pierce field during the year, as described above. Unit operating costs for the acquired fields are anticipated to remain broadly unchanged in 2014, reducing thereafter with the benefit of normal annual production operations at the Pierce field. Given this, the integration of the fields into the Company's existing producing asset portfolio is expected to result in a reduction in the Company's overall unit operating costs.
Oil sales from each of the fields' trades at or around the Brent benchmark price, implying an aggregate cash netback associated with the fields being acquired in 2013 of approximately $72/boe based on an average Brent price for the year of $109/bbl and taking into account gas export sales from the Cook field. Adjusting for the payment of Petroleum Revenue Tax applicable on production from the Wytch Farm field, the aggregate unit cashflow from the fields in 2013 is estimated to have been approximately $52/boe.
Cook Field Summary
The Cook oil field, operated by Shell, lies in Block 21/20a (N) in the Central North Sea area of the UK Continental Shelf ("UKCS"), approximately 175 kilometres east of Aberdeen. The field has been developed as a single well subsea tie-back to the Shell-operated Anasuria FPSO, which serves as a host processing facility to two other nearby fields, with oil exported from the FPSO via shuttle tankers and gas via pipeline to shore.
A "4D" seismic survey was acquired over the field in 2013 in order to obtain additional data to further enhance the co-venturers understanding of the reservoir geology and hydrocarbon sweep to date. Evaluation of the data is currently on-going to assess the potential for drilling of a further well on the field and the associated optimal well location.
The acquisition will result in the Company increasing its existing Cook field interest from 41.345% to 61.346%, furthering its position as the field's largest owner.
Pierce Field Summary
The Pierce field, operated by Shell, is located in blocks 23/22a (ALL) in the Central North Sea area of the UKCS, approximately 280 kilometres east of Aberdeen. The field was discovered in 1975, with first oil achieved in February 1999. The field is developed by subsea wells tied into the Haewene Brim FPSO, with oil export directly to market via shuttle tankers. All Pierce produced gas, other than that consumed for fuel and flare on the FPSO, is currently re-injected into the reservoir. Blowdown of the gas cap is expected later in field life. An infill well / workover programme is scheduled to commence in late 2014 with the objective of boosting near term production levels and maximising reserves recovery.
Wytch Farm Field Summary
The Wytch Farm field, operated by Perenco UK Limited, is located in offshore blocks 98/6a (ALL) and 98/7a (ALL) and onshore blocks SY/88b (ALL), SY/98a (ALL) and SZ/8a (ALL) in Dorset, England. The field was discovered in 1973 by British Gas Corporation, with first oil achieved in 1979. Both the onshore and offshore wells on the field have been drilled from twelve onshore pads (drill centres) located alongside the on-site oil processing facilities; with sixty-four production wells and 31 water injection wells currently in operation. Oil is exported from the field via pipeline directly to the BP-operated Hamble terminal. An infill drilling / well workover programme, including the targeting of undeveloped satellite accumulations, is on-going on the field in order to maintain and grow production levels and maximise reserves recovery.
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) Estimates of the proved plus probable reserves associated with the acquisition as disclosed in this press release have been prepared by Ithaca's non-independent qualified reserves evaluator as of June 2014. The reserves estimates contained in this press release are estimates only and the actual results may be greater than or less than the estimates provided herein. The estimates of reserves for individual properties may not reflect the same confidence level as estimates of reserves for all properties, due to the effects of aggregation.
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.
Net Debt is calculated as the total debt of the Company excluding the Norwegian tax rebate facility, less unrestricted cash and cash equivalents. EBITDAX is calculated as earnings before interest, tax, depreciation, amortisation and exploration expenditure. Adjusted EBITDAX is calculated as EBITDAX adjusted for costs that are considered by management to be not reflective of our core operations.
About Ithaca Energy
Ithaca Energy Inc. (TSX: IAE) (LSE: 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, the exploitation of its existing UK producing asset portfolio and a Norwegian exploration and appraisal business targeting the generation of discoveries capable of monetisation prior to development. 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.
Not for Distribution to U.S. Newswire Services or for Dissemination in the United States
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 times, well completion times, risks associated with operations, future capital expenditures, continued availability of financing for future capital expenditures, future acquisitions 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 "anticipate", "continue", "estimate", "expect", "may", "will", "project", "plan", "should", "believe", "could", "target" and similar expressions, and the negatives thereof, whether used in connection with operational activities, the acquisition of assets from Sumitomo Corporation and the current and forecast production from those assets, budgetary figures, potential developments 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 and 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 and 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's Discussion and Analysis for the year ended December 31, 2013, and the Company's Annual Information Form for the year ended December 31, 2013 and in reports which are on file with the Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com).
This information is provided by RNS
The company news service from the London Stock Exchange
+44 (0)1224 650 261
+44 (0)1224 652 151
+44 (0)1224 652 172
+44 (0)207 269 7230
+44 (0)203 727 1077
+44 (0)131 220 6939
+44 (0)131 220 9778
RBC Capital Markets
+44 (0)207 653 4641
+44 (0)207 653 4871
SYS-CON Events announced today that Juniper Networks (NYSE: JNPR), an industry leader in automated, scalable and secure networks, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Juniper Networks challenges the status quo with products, solutions and services that transform the economics of networking. The company co-innovates with customers and partners to deliver automated, scalable and secure network...
Apr. 29, 2017 08:45 AM EDT Reads: 1,748
Five years ago development was seen as a dead-end career, now it’s anything but – with an explosion in mobile and IoT initiatives increasing the demand for skilled engineers. But apart from having a ready supply of great coders, what constitutes true ‘DevOps Royalty’? It’ll be the ability to craft resilient architectures, supportability, security everywhere across the software lifecycle. In his keynote at @DevOpsSummit at 20th Cloud Expo, Jeffrey Scheaffer, GM and SVP, Continuous Delivery Busine...
Apr. 29, 2017 08:45 AM EDT Reads: 1,261
While some vendors scramble to create and sell you a fancy solution for monitoring your spanking new Amazon Lambdas, hear how you can do it on the cheap using just built-in Java APIs yourself. By exploiting a little-known fact that Lambdas aren’t exactly single threaded, you can effectively identify hot spots in your serverless code. In his session at 20th Cloud Expo, David Martin, Principal Product Owner at CA Technologies, will give a live demonstration and code walkthrough, showing how to o...
Apr. 29, 2017 08:45 AM EDT Reads: 758
SYS-CON Events announced today that T-Mobile will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. As America's Un-carrier, T-Mobile US, Inc., is redefining the way consumers and businesses buy wireless services through leading product and service innovation. The Company's advanced nationwide 4G LTE network delivers outstanding wireless experiences to 67.4 million customers who are unwilling to compromise on ...
Apr. 29, 2017 07:15 AM EDT Reads: 1,496
Bert Loomis was a visionary. This general session will highlight how Bert Loomis and people like him inspire us to build great things with small inventions. In their general session at 19th Cloud Expo, Harold Hannon, Architect at IBM Bluemix, and Michael O'Neill, Strategic Business Development at Nvidia, discussed the accelerating pace of AI development and how IBM Cloud and NVIDIA are partnering to bring AI capabilities to "every day," on-demand. They also reviewed two "free infrastructure" pr...
Apr. 29, 2017 07:15 AM EDT Reads: 1,730
Everyone wants to use containers, but monitoring containers is hard. New ephemeral architecture introduces new challenges in how monitoring tools need to monitor and visualize containers, so your team can make sense of everything. In his session at @DevOpsSummit, David Gildeh, co-founder and CEO of Outlyer, will go through the challenges and show there is light at the end of the tunnel if you use the right tools and understand what you need to be monitoring to successfully use containers in your...
Apr. 29, 2017 05:45 AM EDT Reads: 2,297
SYS-CON Events announced today that Super Micro Computer, Inc., a global leader in compute, storage and networking technologies, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Supermicro (NASDAQ: SMCI), the leading innovator in high-performance, high-efficiency server technology, is a premier provider of advanced server Building Block Solutions® for Data Center, Cloud Computing, Enterprise IT, Hadoop/...
Apr. 29, 2017 05:30 AM EDT Reads: 2,563
With major technology companies and startups seriously embracing IoT strategies, now is the perfect time to attend @ThingsExpo 2016 in New York. Learn what is going on, contribute to the discussions, and ensure that your enterprise is as "IoT-Ready" as it can be! Internet of @ThingsExpo, taking place June 6-8, 2017, at the Javits Center in New York City, New York, is co-located with 20th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry p...
Apr. 29, 2017 05:00 AM EDT Reads: 1,551
All organizations that did not originate this moment have a pre-existing culture as well as legacy technology and processes that can be more or less amenable to DevOps implementation. That organizational culture is influenced by the personalities and management styles of Executive Management, the wider culture in which the organization is situated, and the personalities of key team members at all levels of the organization. This culture and entrenched interests usually throw a wrench in the work...
Apr. 29, 2017 04:15 AM EDT Reads: 919
Judith Hurwitz is president and CEO of Hurwitz & Associates, a Needham, Mass., research and consulting firm focused on emerging technology, including big data, cognitive computing and governance. She is co-author of the book Cognitive Computing and Big Data Analytics, published in 2015. Her Cloud Expo session, "What Is the Business Imperative for Cognitive Computing?" is scheduled for Wednesday, June 8, at 8:40 a.m. In it, she puts cognitive computing into perspective with its value to the busin...
Apr. 29, 2017 04:00 AM EDT Reads: 3,840
NHK, Japan Broadcasting, will feature the upcoming @ThingsExpo Silicon Valley in a special 'Internet of Things' and smart technology documentary that will be filmed on the expo floor between November 3 to 5, 2015, in Santa Clara. NHK is the sole public TV network in Japan equivalent to the BBC in the UK and the largest in Asia with many award-winning science and technology programs. Japanese TV is producing a documentary about IoT and Smart technology and will be covering @ThingsExpo Silicon Val...
Apr. 29, 2017 02:30 AM EDT Reads: 9,376
SYS-CON Events announced today that CollabNet, a global leader in enterprise software development, release automation and DevOps solutions, will be a Bronze Sponsor of SYS-CON's 20th International Cloud Expo®, taking place from June 6-8, 2017, at the Javits Center in New York City, NY. CollabNet offers a broad range of solutions with the mission of helping modern organizations deliver quality software at speed. The company’s latest innovation, the DevOps Lifecycle Manager (DLM), supports Value S...
Apr. 29, 2017 01:45 AM EDT Reads: 1,331
The 20th International Cloud Expo has announced that its Call for Papers is open. Cloud Expo, to be held June 6-8, 2017, at the Javits Center in New York City, brings together Cloud Computing, Big Data, Internet of Things, DevOps, Containers, Microservices and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding business opportunity. Submit your speaking proposal ...
Apr. 29, 2017 01:45 AM EDT Reads: 1,632
Building a cross-cloud operational model can be a daunting task. Per-cloud silos are not the answer, but neither is a fully generic abstraction plane that strips out capabilities unique to a particular provider. In his session at 20th Cloud Expo, Chris Wolf, VP & Chief Technology Officer, Global Field & Industry at VMware, will discuss how successful organizations approach cloud operations and management, with insights into where operations should be centralized and when it’s best to decentraliz...
Apr. 29, 2017 01:15 AM EDT Reads: 984
The age of Digital Disruption is evolving into the next era – Digital Cohesion, an age in which applications securely self-assemble and deliver predictive services that continuously adapt to user behavior. Information from devices, sensors and applications around us will drive services seamlessly across mobile and fixed devices/infrastructure. This evolution is happening now in software defined services and secure networking. Four key drivers – Performance, Economics, Interoperability and Trust ...
Apr. 29, 2017 12:30 AM EDT Reads: 988