ABERDEEN, SCOTLAND--(Marketwired - Jun 17, 2013) - Ithaca Energy (
Not for Distribution to U.S. Newswire Services or for Dissemination in
the United States
Ithaca Energy Inc.
Further UK Exploration Portfolio Farm-Outs to Edison International and
Shell
17 June 2013
Ithaca Energy Inc. (TSX: IAE, LSE AIM: IAE) ("Ithaca" or the "Company")
announces the execution of further UK exploration farm-out
transactions. The Company has executed a farm-out agreement with a
subsidiary of Edison International SpA ("Edison") for a 25% interest in
the licences containing the Handcross prospect and an agreement with
Shell UK Limited ("Shell") concerning a licence awarded in the 27th UK
Offshore Licensing Round.
Highlights
* As a result of the two farm-outs on the Handcross prospect, to
Edison and RWE Dea, Ithaca has now reduced its share of the forecast
cost of the Handcross exploration well to 6%, while retaining a 45%
working interest.
* In line with its stated strategy, the Edison farm-out means that
Ithaca has now substantially mitigated all committed UK exploration
expenditure.
Iain McKendrick, Chief Executive Officer, commented:"I am delighted that,
not only have the farm-out team delivered very
prompt and tangible results from the exploration farm-out effort, but
also that we have been joined by such high quality industry partners
across our UK exploration assets. The monetisation of the UK
exploration portfolio has far exceeded our expectations in terms of
levels of expenditure carry. Ithaca shareholders are now exposed to
some potentially high impact exploration at negligible cost".
Handcross Exploration Well Farm-Out
Ithaca has entered into an agreement with Euroil Exploration Limited, a
wholly owned subsidiary of Edison, to farm-out a 25% interest in UK
licences P1631 and P1832 (blocks 204/14c, 204/18b and 204/19c), which
contain the Handcross prospect. This agreement reduces Ithaca's
working interest in the licences from 70% to 45%. Ithaca retains
operatorship of the licences.
The Edison farm-out is in exchange for a partial carry of Ithaca's
share of the costs of an exploration well on the Handcross
prospect. Edison is a major European energy company, with operations
spanning the full energy supply chain, including oil and gas activities
in Europe and Africa.
Handcross is a Palaeocene prospect located in the Judd Basin in the
West of Shetland sector of the UK Continental Shelf. A well is to be
drilled on the prospect using the Stena Carron drillship, with
operations anticipated to commence in late 2013.
The Edison agreement, in combination with the previously announced
farm-out agreement entered into with RWE Dea in April 2013, reduces
Ithaca's paying interest in the Handcross well to 6%. This implies a
forecast net well cost to the Company of $2.5 million, compared to the
net cost prior to the farm-outs of approximately $40 million.
Completion of the transaction with Edison is subject to normal
regulatory and third party consents. Following completion, the
Handcross partners will be Ithaca (45%, operator), Edison (25%), RWE
Dea (20%) and Sussex Energy Limited (10%).
UK 27th Round Licence Farm-Out
Ithaca has also entered into an agreement with Shell to farm-out 50% of
the Company's 100% interest in UK licence P2048, covering blocks 29/24,
29/25, 29/29 and 29/30, which was awarded in the UK 27th Offshore
Licensing Round. The firm licence work programme commitment is to
obtain 500km2 of 3D seismic data.
The agreement provides for Shell to pay the full cost of obtaining the
seismic data. Ithaca has the option to retain its 50% interest in the
licence, subject to paying its corresponding share of the work
programme costs on a future date. Should this option not be exercised,
the Company's 50% interest in the licence will transfer to Shell, with
Ithaca having incurred no costs associated with execution of the
committed work programme.
Completion of the transaction with Shell is subject to normal
regulatory consents.
Enquiries:
Ithaca Energy:
Iain McKendrick, imckendrick@ithacaenergy.com +44(0) 1224 650 261
CEO
Nick Muir, nmuir@ithacaenergy.com +44(0) 1224 650 267
CTO
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
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 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 Ithaca Energy:
Ithaca Energy Inc. (TSX: IAE, LSE AIM: IAE) is an oil and gas operator
focused on North Sea production, appraisal and development activities.
The Company's strategy is centred on building a highly profitable
North Sea oil and gas company by maximising production and cashflow
from its existing assets, the appraisal and development of existing
discoveries on properties held by the Company and the delivery of
additional growth via acquisitions and licence round participation.
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, 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
pressrelease, 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 contained in the corporate presentation, 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 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.
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