Ithaca Energy Inc IAE Acquisition of Non-Operated Interests

  Ithaca Energy Inc (IAE) - Acquisition of Non-Operated Interests

RNS Number : 2408O
Ithaca Energy Inc
09 October 2012




                                      

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





                              Ithaca Energy Inc.

                                      

         Acquisition of Non-Operated Interests in Cook and MacCulloch
                        UK North Sea Producing Fields

                                      

                                9 October 2012



Ithaca Energy Inc. announces  that it has entered  into agreements with  Noble 
Energy Capital  Limited (a  subsidiary of  Noble Energy  Inc., NYSE:  NBL)  to 
acquire two wholly owned UK  subsidiary companies that will hold  non-operated 
interests in UK  North Sea producing  fields; a 12.885%  interest in the  Cook 
field and a 14% interest in the MacCulloch field.



Highlights

o The  acquisitions are  forecast to  result in  net incremental  production, 
predominantly oil,  for the  Company  of approximately  1,100 barrels  of  oil 
equivalent per day ("boepd") in 2012.

o The two  fields are anticipated  to increase the  Company's net proven  and 
probable reserves by 3.4 million barrels of oil equivalent ("mmboe"), based on
the effective date of the transactions of 1 January 2012.

o The total consideration is US$38.5 million, implying an acquisition cost of
US$11.3 per barrel of proven and probable reserves.

o The  acquisition  is  in  line  with  the  Company's  strategy  of  further 
diversifying and expanding its producing asset portfolio and accelerating  the 
monetisation of its existing pool of UK tax allowances.



The Cook oil field,  operated by Shell,  lies in Block  21/20a in the  Central 
North Sea. The field has been developed  as a single well subsea tie-back  to 
the Shell operated Anasuria floating production, storage and offloading vessel
("FPSO"), which serves as a host processing facility to several nearby fields,
with oil exported from the  FPSO via shuttle tankers  and gas via pipeline  to 
shore.



The acquisition will result in the Company increasing its existing Cook  field 
interest from  28.46%  to 41.345%,  furthering  its position  as  the  field's 
largest owner.  Based on  the independent  reserves assessment  performed  by 
Sproule International Limited ("Sproule"), effective  as of 31 December  2011, 
remaining net  proved and  probable reserves  associated with  the  additional 
12.885% interest (as of that date) are 2.0 mmboe.



The MacCulloch oil field, currently operated by ConocoPhillips, lies in Blocks
15/24b in the Central North Sea  (transfer of field operatorship to  Endeavour 
Energy  UK  Limited   is  pending   completion  of   a  previously   announced 
transaction). The field is producing from four subsea wells tied back to  the 
North Sea Producer FPSO, with processed oil and gas exported via pipelines  to 
shore. Remaining net proved and probable reserves effective as of 31 December
2011 are estimated by Ithaca to be approximately 1.4 mmboe. An assessment  of 
the field reserves will be performed by Sproule as part of the normal year end
reserves evaluation exercise.



Net production from the two fields is anticipated to average 1,100 boepd  over 
2012, with  the  contribution  from  each field  being  broadly  equal.  This 
estimate takes into account actual field performance, including the impact  of 
planned maintenance shutdowns  on the fields  and the anticipated  operational 
performance of the fields over the remainder of the year (including a  planned 
shutdown of approximately 15 days on the MacCulloch field in the final quarter
of 2012). The  fields are  anticipated to contribute  approximately the  same 
level of net production in 2013.



Completion of the transactions is anticipated in early 2013 and is subject  to 
normal regulatory and joint venture approvals, including reaching agreement in
respect of decommissioning cost security.



The acquisition  will be  funded from  Ithaca's existing  cash resources.  At 
completion  the  consideration  paid  will  be  subject  to  normal   industry 
adjustments to reflect the income and costs incurred since the effective date.
The Company anticipates that the resulting net cash consideration payable  at 
completion will be under US$30 million, based on the 1 January 2012  effective 
date and assuming completion occurs in early 2013. Following completion,  the 
Company's available tax allowances mean that the resulting net cash flow  from 
the assets is forecast to deliver a rapid payback of the total consideration.



Iain McKendrick, Chief Executive Officer, commented:

"This is the  Company's first  acquisition post  the announcement  of the  new 
enlarged debt facility and is in  line with the stated objective of  acquiring 
producing reserves in the UKCS to both diversify the Company's production base
and accelerate the utilisation of existing tax allowances. I am  particularly 
pleased to be  acquiring the  interests in these  fields, where  we see  large 
potential production and reserve upsides. These acquisitions represent highly
accretive and quick pay-back  additions to our  growing production base.  The 
Company  is  cautiously  optimistic  of  being  able  to  add  further   asset 
acquisitions to its portfolio, given  its efforts to continue driving  forward 
the growth of the Company."







Enquiries:

Ithaca Energy:

Iain McKendrick, CEO imckendrick@ithacaenergy.com  +44 
(0) 1224 650 261

Graham Forbes, CFO  gforbes@ithacaenergy.com+44
(0) 1224 652 151



FTI Consulting:

Billy Clegg 
billy.clegg@fticonsulting.com+44 (0) 207 269 7157

Edward  Westropp  edward.westropp@fticonsulting.com  +44 
(0) 207 269 7230

Georgia Mann georgia.mann@fticonsulting.com
+44 (0) 207 269 7212



Cenkos Securities plc:

Jon                                        Fitzpatrick 
jfitzpatrick@cenkos.com+44 (0) 207 397 8900

Ken                     Fleming                      
kfleming@cenkos.com+44 (0) 131 220 6939



RBC Capital Markets:

Tim Chapman tim.chapman@rbccm.com
+44 (0) 207 653 4641

Matthew  Coakes   matthew.coakes@rbccm.com 
+44 (0) 207 653 4871





Notes to oil and gas disclosure:

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.



The report  prepared by  Sproule  International Limited,  effective as  of  31 
December 2011,  was prepared  in  accordance with  the  Canadian Oil  and  Gas 
Evaluation Handbook ("COGEH")  reserves definitions  and evaluation  practices 
and procedures as specified by National Instrument 51-101 ("NI 51-101").  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.  The  NI  51-101 summary  data  is  available  under 
Company's Profile  on  SEDAR at  www.sedar.com.  Estimated reserves  for  the 
MacCulloch oil fieldare based on Ithaca's internal evaluation of the asset.



The term "boe"  may be misleading,  particularly if used  in isolation. A  boe 
conversion of 6 Mcf: 1 bbl is based on an energy equivalency conversion method
primarily applicable  at  the  burner  tip and  does  not  represent  a  value 
equivalency at the wellhead.



About Ithaca Energy:

Ithaca Energy Inc. (TSX:  IAE, LSE AIM: IAE)  and its wholly owned  subsidiary 
Ithaca Energy  (UK) Limited  ("Ithaca" or  "the Company"),is  an oil  and  gas 
operator focused on  production, appraisal and  development activities on  the 
United Kingdom Continental Shelf. The goal of Ithaca, in the near term, is to
maximize production  and  achieve early  production  from the  development  of 
existing  discoveries  on  properties  held   by  Ithaca,  to  originate   and 
participate in exploration  and appraisal  on properties held  by Ithaca  when 
capital permits, and to  consider other opportunities for  growth as they  are 
identified from time to time by Ithaca.



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



Forward-looking statements

Some  of   the   statements   in  this   announcement   are   forward-looking. 
Forward-looking statements include statements regarding the intent, belief and
current expectations of  Ithaca Energy Inc.  or its officers  with respect  to 
various matters.  When used  in this  announcement, 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 the  closing of  the  acquisitions 
referred to herein, including the timing thereof and the anticipated net  cash 
consideration payable  therewith, the  reserves and  production of  the  field 
interests being acquired, the Company's other fields or otherwise are intended
to identify forward-looking statements. Such  statements are not promises  or 
guarantees, and are subject to known  and unknown risks and uncertainties  and 
other factors that  may cause actual  results or events  to differ  materially 
from those  anticipated in  such  forward-looking statements  or  information. 
These  forward-looking  statements  speak  only  as  of  the  date  of   this 
announcement. 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.



                                    -ENDS-

                     This information is provided by RNS
           The company news service from the London Stock Exchange

END


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