Press Release

2017 Financial Results

28 March 2018

28 Mar

Not for Distribution to U.S. Newswire Services or for Dissemination in the United States

Ithaca Energy Inc. (IAECN: ISINs US465676AA22 / USC48677AA34) (“Ithaca” or the “Company”) announces its financial results for the twelve months ended 31 December 2017, together with the results of its independent year-end reserves assessment.

Solid cashflow generation, with improving cash netbacks driven by lower unit operating expenditures

  • Average production of 13,909 barrels of oil equivalent per day (“boepd”) – a 49% increase on the prior year as a result of the start-up of production from the Stella field
  • Unit operating expenditure reduced to $19/boe1, a $4/boe or 17% reduction on 2016
  • 2017 cashflow from operations of $146 million1, equating to $29/boe
  • Underlying earnings of $17 million after adjusting for one-off impairments ($24 million post-tax) and non-cash mark-to-market revaluation of hedges ($19.3 million post tax)

Increasing production and cashflow generation forecast to deliver accelerated deleveraging in 2018

  • Average 2018 production forecast to be approximately 15,000 boepd, reflecting the divestment of the Wytch Farm field, the anticipated start-up of the Harrier field in mid-2018 and planned maintenance shutdowns being undertaken during the year
  • Production in the first quarter of 2018 is forecast to be approximately 18,000 boepd2, reflecting strong operational uptime performance across the portfolio
  • Proved and probable reserves as of 31 December 2017 of 72 million barrels of oil equivalent, as independently evaluated by Sproule International Limited (“Sproule”)3
  • Net debt of $605 million at 31 December 2017 – forecast to reduce to approximately $560 million at 31 March 2018 including the anticipated proceeds of the Wytch Farm divestment
  • Refinancing of the Company’s debt facilities anticipated during 2018

Greater Stella Area (“GSA”) “hub and spoke” strategy progressing to plan

  • GSA production hub fully operational – switch from tanker loading to oil pipeline export completed and strong “FPF-1” operational uptime performance being achieved
  • Maximising value of GSA infrastructure through execution of satellite field development strategy – Harrier start-up anticipated mid-2018 and Vorlich development sanctioned for start-up in 2020

Strong outlook – platform for continued North Sea growth established

  • Ithaca represents a core component of Delek Group’s strategy to grow its international E&P business - strong shareholder with ambition to expand its North Sea business using the established platform and expertise of Ithaca
  • Corporate strategy remains unchanged following the takeover - focus on the delivery of lower risk production and development-led growth and further expansion of the asset portfolio while maintaining a robust low-cost capital structure

Les Thomas, Chief Executive Officer, commented:
“2017 has been a significant year for Ithaca. With the Company now fully established within the Delek Group, we have an enhanced platform from which to deliver upon our objectives for growing the business in the North Sea. Additionally, start-up of the Greater Stella Area production hub during the year enables us to continue progressing our “hub and spoke” strategy for the area, with the Harrier field scheduled to start-up in the coming months and the Vorlich development programme now underway.”

Year-End Reserves

Total proved and probable (“2P”) reserves as at 31 December 2017 have been independently estimated by Sproule1, a qualified reserves evaluator, as 72 million barrels of oil equivalent (“MMboe”) with an associated post-tax net present value discounted at 10% of $1,370 million.

It is noted that the 2P reserves include approximately 4.2 MMboe associated with the Wytch Farm field and associated licences as the divestment had not completed as of the effective date of the reserves evaluation (the transaction is anticipated to complete by the end of March 2018).

The report summarising the Sproule reserves evaluation is available on the Company’s website (

2017 Financial Results Conference Call

A conference call and webcast will be held today at 12.00 BST (07.00 EDT), with a playback facility being made available on the Company’s website later that day. Listen to the call live via the Company’s website ( or alternatively dial-in on one of the following telephone numbers: UK +44 (0)203 936 2999; US +1 855 979 6654 using the participant code 83 20 90 to access the conference call. A short presentation to accompany the results will be available on the Company’s website prior to the call.


  1. Unit costs and cashflows from operations are stated net of Stella related revenues and expenditures from investment in associate.
  2. First quarter 2018 forecast production includes approximately 1,000 boepd from Wytch Farm, the divestment of which is expected to complete by the end of March 2018.
  3. The Company’s reserves as of 31 December 2017 have been independently evaluated by Sproule, a qualified reserves evaluator, in accordance with the Canadian Oil and Gas Evaluation Handbook pursuant to NI 51-101 – Standards of Reserves Disclosures for Oil and Gas Activities, which comply in all material respects with the definitions and guidelines set forth in the 2007 Petroleum Resources Management System approved by the Society of Petroleum Engineers. The report summarising the Sproule reserves evaluation is available on the Company’s website (

The audited consolidated financial statements of the Company for the year ended 31 December 2017 and the related Management Discussion and Analysis are available on the Company’s website (

All values in this release and the Company's financial disclosures are in US dollars, unless otherwise stated.

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.

- ENDS -


Ithaca Energy
Graham Forbes
+44 (0)1224 652 151

Richard Smith
+44 (0)1224 652 172

FTI Consulting
Edward Westropp
+44 (0)203 727 1521

Emerson Clarke
+44 (0)203 727 1564

About Ithaca Energy

Ithaca Energy Inc. 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. The Company is a wholly owned subsidiary of the Tel Aviv stock exchange listed Delek Group Limited (TASE: DLEKG, US ADR: DGRLY), Israel’s leading integrated energy company. For further information please consult the Company’s website

Forward-looking Statements

This press release contains projections, information and other forward-looking statements (collectively “forward looking statements”) regarding future events and the Company’s future performance. All statements and information other than present and historical facts contained in this release are forward looking. When used in this press release, the words and phrases like “forecast”, "anticipate", "continue", "estimate", "expect", "may", "will", "project", "plan", "should", "believe", "could", “target”, “in the process of”, “on track” and similar expressions, and the negatives thereof, whether used in connection with production forecasts, operational activities, drilling plans, budgetary figures, future operating costs, financing activities, anticipated net debt, anticipated funding requirements and uses of available credit under the Company’s debt facilities, potential developments including the timing and anticipated benefits of acquisitions and dispositions or otherwise, expected future payments in connection with such acquisitions and dispositions, statements relating to reserves, or otherwise, are intended to identify forward-looking statements. Forward-looking statements are based on the Company's current internal expectations, estimates, projections, assumptions and beliefs, including, among other things, assumptions with respect to production, drilling, construction and maintenance times, well completion times, risks associated with operations, future capital and operating expenditures, continued availability of financing for future capital expenditures, future acquisitions and dispositions and cash flow, required regulatory, partner and other third party approvals. The reader is cautioned that assumptions used in the preparation of such information may prove to be incorrect. 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 at the date of this press release 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. Ithaca 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 twelve months ended 31 December 2017 and in reports which are on file on the Company’s website (

2017 Financial Results