Ithaca Energy Inc.
TSX VENTURE : IAE
AIM : IAE

Ithaca Energy Inc.

November 15, 2010 02:00 ET

Ithaca Energy Inc.: Third Quarter 2010 Financial Results

Adjusted net profit $13.5 million and Record Cash flow from Operations of $26.4 million

LONDON, UNITED KINGDOM and CALGARY, ALBERTA--(Marketwire - Nov. 15, 2010) - Ithaca Energy Inc (TSX VENTURE:IAE)(AIM:IAE)

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

SUMMARY OF KEY RESULTS

For the third quarter ended September 30, 2010

Financial

  • Record Cashflow from Operations $26.4 million ($23.9 million inflow in quarter ended September, 2009)
  • Adjusted net profit of $13.5 million (loss of $1.1 million for quarter ended September 30, 2009). Reported Net Profit of $10.4 Million after adjusting for non-cash foreign exchange entry associated with equity raise
  • $150 million cash raised through the issue of 92.7 million common shares
  • Signed and completed $140 million senior debt facility with Bank of Scotland plc – no debt drawn at September 30, 2010
  • Cash balance as at September 30, 2010 of $193.3 million ($29.9 million as at 31 December 2009)
  • Netback $56.21 / barrel ($53.73 / barrel in quarter ended September, 2009)

Operational

  • Combined production during the third quarter averaged 10,125 barrels of oil per day ("bopd") gross (4,862 bopd net to Ithaca). The first of a five well workover programme on Beatrice was completed boosting production in the well 100% to 680 bopd gross (340 bopd net to Ithaca), in line with expectation.

  • On September 9, 2010, the contract for provision of a floating production facility and the letter of award for provision of a semi-submersible drilling rig were awarded for the Athena development.

  • On September 21, 2010, Field Development Plan approval was received from the UK Department for Energy and Climate Change for the Athena oil field.

Corporate

  • On July 28, 2010, the Company completed a "bought deal" equity issue of 47.6 million Common Shares in Ithaca at a price of C$1.70 per Common Share for aggregate gross proceeds of C$81 million and a "private placement" of 45.1 million Common Shares at a price of £1.07 per Common Share (approximately equivalent to C$1.70 per common share) for aggregate proceeds of approximately C$77 million. Together, the equity issues generated gross proceeds of C$158 million.

  • On August 4, 2010, an agreement was entered into to acquire certain UK North Sea gas interests from GDF SUEZ E&P UK Ltd for a cash consideration of £11.25 million (approximately $16.9 million) (the "Acquisition"). The Acquisition includes operated interests in the producing Anglia Field, the Garnet and Opal discoveries, and a non operated interest in the producing Topaz Field. The effective date of the Acquisition is January 1, 2010 with an expected closing date in Q4 2010.

  • On November 1, the company announced that it had been offered one new licence, namely Block 29/10d, in the 26th United Kingdom Offshore Licensing Round. The block lies in the Greater Stella Area and neighbours Block 29/10b (Hurricane discovery) and Block 30/6a (Stella and Harrier discoveries). The block contains the Helios discovery which was drilled in the late 1960s by a well which encountered gas and condensate. This is consistent with the Company's strategy of selective licensing applications for blocks with early exploitation and commercialisation opportunity.

Iain McKendrick, CEO, commented,

"Our operations are now generating record cash levels, which is partly due to the sustained performance levels of our producing assets. FDP approval for the Athena project is another milestone for the Company and now most of the major development contracts have been placed. We anticipate completing the GDF SUEZ transaction before year end to integrate the operatorship of the producing Anglia field and currently undeveloped discoveries, Garnet and Opal. The continued strong financial performance has placed the Company in a secure position to execute its investment plans in the coming months and delay the requirement to access a Senior Debt facility (HBOS) secured earlier in the year."

Full details on the above are provided in the Consolidated Financial Statements and Management's Discussion and Analysis for the third quarter ended September 30, 2010, which will be filed with the securities regulatory authorities in Canada. These documents will be available on the System for Electronic Document Analysis and Retrieval at www.sedar.com (together with a copy of this announcement) and on the Company's website:

http://www.ithacaenergy.com/uploads/IthacaPressReleaseFull101115.pdf

The calculation of barrels of oil equivalent ("boe") is based on a conversion rate of six thousand cubic feet of natural gas ("mcf") to one barrel of crude oil ("bbl"). Boes may be misleading, particularly if used in isolation. A boe conversion ratio 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. 

In accordance with AIM Guidelines, Lawrie Payne, MA Marine Geology (Alberta & Columbia) and Chairman of Ithaca Energy is the qualified person that has reviewed the technical information contained in this press release.

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 "expects," "believes," "anticipate," "plans," "may," "will," "should", "scheduled", "targeted", "estimated" and similar expressions, and the negatives thereof, whether used in connection with the anticipated closing date of the Acquisition, estimated production levels, anticipated time of first oil, oil in place, hydrocarbon composition or otherwise, are intended to identify forward-looking statements. Such statements are not promises or guarantees, and are subject to risks and uncertainties that could cause actual outcome to differ materially from those suggested by any such statements. 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.

Neither TSX Venture nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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