Ithaca Energy Inc.: Acquisition of Interests in Three UK Producing Oil Fields

Ithaca Energy Inc.: Acquisition of Interests in Three UK Producing Oil Fields 
Not for Distribution to U.S. Newswire Services or for Dissemination
in the United States 
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
--  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
--  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 
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
Further Information 
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
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
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
 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
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  
Not for Distribution to U.S. Newswire Services or for Dissemination
in the United States 
Forward-looking statements
 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 ( 
This information is provided by RNS
 The company news service from
the London Stock Exchange 
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)207 269 7230 
Shannon Brushe 
+44 (0)203 727 1077 
Cenkos Securities 
Neil McDonald 
+44 (0)131 220 6939 
Beth McKiernan 
+44 (0)131 220 9778 
RBC Capital Markets 
Tim Chapman 
+44 (0)207 653 4641 
Matthew Coakes 
+44 (0)207 653 4871 
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