ABERDEEN, SCOTLAND--(Marketwired - Sep 23, 2013) - Ithaca Energy Inc . (
TSX VENTURE: IAE
Not for Distribution to U.S. Newswire Services or for Dissemination in
the United States
Ithaca Energy Inc.
Further UK Exploration Portfolio Farm-Outs
23 September 2013
Ithaca Energy Inc. (TSX: IAE, LSE AIM: IAE) ("Ithaca" or the "Company")
announces further UK exploration portfolio farm-out transactions.When
combined with the previously announced UK farm-outs the Company is now
fully carried for the forecast cost of drilling the UK exploration well
commitments transferred as part of the Valiant Petroleum plc
("Valiant") acquisition and in addition will receive over $8 million in
cash from the farm-out parties.
Highlights
*Farm-out to Oyster Petroleum Limited ("Oyster Petroleum") of a
9% working interest in the UK licences containing the Handcross
prospect and a further 5% working interest to Sussex Energy Limited
("Sussex Energy").Ithaca has a fully carried 31% working interest,
will receive a cash payment and has retained operatorship of the
licence.
*Farm-out to Euroil Exploration Limited, a subsidiary of Edison
SpA ("Edison"), of a 10% working interest in the UK licence
containing the Isabella prospect for cash.Ithaca has a fully carried
10% non-operated working interest and will receive a cash payment.
*The farm-out agreements collectively provide for the parties to
pay their working interest share of future licence costs, the
reimbursement of past licence costs and the payment of certain cash
considerations.
*Ithaca has now offset the full $85 million of forecast UK
exploration well commitment costs transferred as part of the Valiant
acquisition and generated over $8 million in cash payments.
Iain McKendrick, Chief Executive Officer, commented:"I am delighted that
the Company has achieved a cashflow positive
position with respect to the Handcross and Isabella exploration
wells.The Company has successfully executed upon its key
post-acquisition objective of removing its UK exploration cost exposure
whilst still retaining potential upside."
Handcross Exploration Well Farm-Out
Ithaca has entered into a farm-out agreement with Oyster Petroleum
concerning UK licences P1631 and P1832 (blocks 204/14c, 204/18b and 204
/19c), which contain the Handcross prospect.In addition Sussex
Energy, an existing Handcross co-venturer, has exercised an option
under the terms of its original farm-out agreement to take a further 5%
working interest in the licences.
The agreements will result in the transfer of a 9% working interest in
the licences to Oyster Petroleum and a 5% working interest to Sussex
Energy in exchange for the companies paying their working interest
shares of past and future licence costs in addition to providing Ithaca
with a cash payment.These transactions reduce Ithaca's working
interest in the licences from 45% to 31%.Ithaca retains operatorship
of the licences.
When combined with earlier farm-out transactions to RWE Dea UK SNS
Limited and Edison, Ithaca is now carried for its forecast share of the
planned Handcross exploration well cost and will also receive
additional cash beyond the carry.
Handcross is a Palaeocene prospect located in the Judd Basin in the
West of Shetland sector of the UK Continental Shelf ("UKCS").An
exploration well is to be drilled on the prospect using the Stena
Carron drillship, with operations anticipated to commence in late 2013.
Completion of the transactions is subject to normal regulatory and
third party consents.Following completion, the Handcross partners
will be Ithaca (31%, Operator), Edison (25%), RWE Dea (20%), Sussex
Energy (15%) and Oyster Petroleum (9%).
In addition, Ithaca has entered into a further agreement with Oyster
Petroleum to transfer its full 33.33% non-operated interest in UK
licence P2018 for a cash sum.The licence, covering West of Shetland
blocks 214/24b, 214/29a and 214/30c, was awarded in the UK 27th
Offshore Licensing Round.Completion of the licence transfer is
subject to normal third party and regulatory consents.
Oyster Petroleum isa new UK West of Shetland focused exploration
company backed by the Norwegian international oil and gas investor
HitecVision.Sussex Energy is a subsidiary of Azimuth Limited, a
privately owned company with assets in the UKCS, Norway, Eire and
Namibia.
Isabella Exploration Well Farm-Out
Ithaca has entered into an agreement with Euroil Exploration Limited, a
wholly owned subsidiary of Edison, to farm-out a 10% interest in UK
licence P1820 which contains the Isabella gas condensate
prospect.This transaction reduces Ithaca's non-operated working
interest in the licence from 20% to 10%.
The farm-out agreement provides for Edison to pay its 10% working
interest share of future licence costs in addition to a cash payment to
Ithaca.When combined with the earlier Isabella farm-out transaction
executed with Maersk Oil North Sea UK Limited, Ithaca is now carried
for its forecast share of the Isabella exploration commitment well cost
and will also receive additional cash beyond the carry.
The P1820 licence was awarded in the UK 26th Offshore Licensing Round
and covers blocks 30/6b, 30/11a and 30/12d in the UK Central North
Sea.The licence work programme requires an exploration well to be
drilled on the Isabella prospect by early 2015.
Completion of the transaction is subject to normal third party and
regulatory consents.Following completion, the Isabella partners will
be Apache North Sea Limited (50%, Operator), Maersk Oil North Sea UK
Limited (30%), Ithaca (10%) and Edison (10%).
Edison is a major European energy company, with operations spanning the
full energy supply chain, including oil and gas activities in Europe
and Africa.
- ENDS -
Enquiries:
Ithaca Energy
Iain McKendrick imckendrick@ithacaenergy.com +44 (0)1224 650 261
Graham Forbes 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
Jon Fitzpatrick jfitzpatrick@cenkos.com +44 (0)207 397 8900
Neil McDonald nmcdonald@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
About Ithaca Energy
Ithaca Energy Inc. (TSX: IAE, LSE AIM: 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 centred on 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
www.ithacaenergy.com .
About Edison:
Edison, the oldest energy company in Europe and now part of the EDF
Group (Electricite de France), has about 3,200 employees in more than
10 countries across Europe, Africa and the Middle East, with activities
ranging from exploration and production of crude oil and natural gas to
the production and sales of electric power and the marketing of natural
gas. Edison's Exploration & Production activities cover approximately
100 permits and concessions in Italy and abroad (Egypt, Norway,
Falkland Islands, Algeria, Croatia, Israel, UK).
About Oyster Petroleum:
Formed in summer 2013, Oyster Petroleum is a new exploration and
production company focused on the UKCS. The company is financially
backed and fully funded by HitecVision, a leading international oil and
gas investor. HitecVision has committed funds of USD150 million to
Oyster Petroleum from its HitecVision VI L.P. fund. Since 2003,
HitecVision has invested in a number of highly successful start-ups in
the North Sea, including Revus Energy, Noreco, Spring Energy, Core
Energy and Spike Exploration.
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, well completion times, 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, production forecasts, 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.
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