Press Release

Q1-2018 Financial Results

8 May 2018

08 May

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 three months ended 31 March 2018 (“Q1- 2018” or the “Quarter”).

Solid cashflow generation, with improving cash netbacks

  • Average Q1-2018 production of 18,165 barrels of oil equivalent per day (“boepd”) – a 95% increase on Q1-2017 driven by a full quarter’s contribution from the Stella field and consistent performance across the base producing asset portfolio
  • Unit operating expenditure reduced to $18/boe1, a $3/boe or 14% reduction on Q1-2017
  • Cashflow from operations of $47 million1, equating to $29/boe
  • Earnings of $5 million
  • Downside commodity price hedging extended - 4,600 barrels of oil per day ("bopd") for the 24 months to March 2020 at an average floor price of $59/bbl and 2,000 boepd of gas at 46p/therm to June 2019
  • Net debt reduced to $554 million at 31 March 2018

Refinancing of the Company’s debt facilities underway

  • Proactively addressing the existing debt maturity profile, while simplifying the capital structure and significantly enhancing liquidity
  • Reserves Based Lending (“RBL”) facility to be extended and increased to $350 million, enabling retirement of the $140 million Term Loan. The existing $100 million Delek Parent Loans will be replaced with a $100 million Subordinated Shareholder Loan (ranks with equity), resulting in a pro-forma reduction in net debt at end Q1-2018 to $454 million2

Increasing 2018 production and cashflow generation

  • 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
  • 2018 unit operating expenditure forecast to average approximately $19/boe1 – underpinning strong cash netbacks that are sheltered from tax by the Company’s approximately $1.8 billion UK tax allowances pool

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

  • GSA production hub fully operational – strong “FPF-1” uptime performance being achieved
  • Completion of Harrier field development activities progressing ahead of schedule – only tie-in of the Harrier infield pipeline to the existing GSA facilities remaining prior to startup in mid-2018
  • Planning underway for drilling of a potential Stella infill well in 2019 to maximise reserves recovery from the field
  • Vorlich development sanctioned and progressing to plan – field to be tied back to the FPF-1 with work underway to deliver start-up of production in 2020

Strategic focus on growing the business with the support of Delek Group (“Delek”)

  • Ithaca represents a core component of Delek’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:

“We are pleased to announce a strong set of first quarter financial results, driven by solid operating performance across the portfolio. We continue to make good progress in extending the GSA production hub, with the remaining Harrier development activities running ahead of schedule and start-up of the field anticipated mid-2018. Refinancing of our debt facilities is well underway and set to deliver a material reduction in net debt, along with significantly enhanced liquidity and financial flexibility for the future.”


1. Unit costs and cashflows from operations are stated net of Stella related revenues and expenditures from investment in associate.
2. Pro-forma net debt excludes $100 million Subordinated Shareholder Loan, which ranks with equity

The consolidated financial statements of the Company for the three months ended 31 March 2018 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
Les Thomas
+44 (0)1224 650 261

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, anticipated timing for the commencement of production from new fields and wells, 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, financing activities, 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 forwardlooking 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 three months ended 31 March 2018 and in reports which are on file on the Company’s website (

Q1 2018 Financial Results