Ithaca Energy Inc. (IAECN: ISINs US465676AA22 / USC48677AA34) (“Ithaca” or the “Company”) announces that it has entered into an agreement for the sale of its entire interest in Licences PL089, P534 and PEDL 328, which contain the onshore Wytch Farm field, to Verus Petroleum SNS Limited (“Verus”) for a cash consideration of $53 million.
The transaction realises an attractive value for the field and also releases the Company from a $16 million letter of credit posting in relation to future Wytch Farm decommissioning liabilities. The proceeds of the transaction will be used to partly repay Ithaca’s existing bank debt facilities.
The effective date of the transaction is 1 July 2017, with the final consideration paid being subject to customary financial adjustments to reflect income and costs incurred since that date. Completion of the transaction, which is anticipated around mid-2018, is subject to conventional partner and regulatory approvals.
Average Wytch Farm production in 2017 was approximately 1,000 barrels of oil per day net to Ithaca. As of 31 December 2016, the Company’s proven and probable reserves associated with the licences was 4.8 million barrels of oil equivalent, including reserves attributable to the Wareham Field and Beacon discovery, as independently estimated by Sproule International Limited, a qualified reserves evaluator.
2017 Financial Results
The Company is scheduled to release its full year 2017 financial results on 15 March 2018. A conference call and webcast for bond investors will be held on the same day at 12.00 GMT (07.00 EST), with a playback facility being made available on the Company’s website later in the day. Dial-in details for the call will be included in the press release that accompanies the financial results documentation.
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Mr John Horsburgh, BSc (Hons) Geophysics (Edinburgh), MSc Petroleum Geology (Aberdeen) and Subsurface Manager at Ithaca 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.
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.
All references to dollars ($) in this press release refer to the United States dollar (USD), unless otherwise stated.
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 www.ithacaenergy.com.
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, 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. 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” 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. 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 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 and nine months ended 30 September 2017 and the Company’s Annual Information Form for the year ended 31 December 2016 and in reports which are on file with the Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com).
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