Ithaca Energy Inc. (TSX: IAE, LSE AIM: IAE) announces its quarterly financial results for the three months ended 30 September 2015 and for the nine months ended 30 September 2015.

Financial Highlights

Solid cashflow generation in the first nine months of the year

  • Average production of 12,355 barrels of oil equivalent per day, in line with guidance (YTD-2014: 10,640 boepd)
  • $217 million cashflow from on-going operations ($57 million in Q3-2015), including oil price hedging gains (YTD-2014: $128 million)
  • Adjusted earnings of $98 million, excluding a non-cash accounting tax charge of $41 million resulting from a reduction in UK tax rates (YTD-2014: $25 million)
  • Cashflow per share $0.66 (YTD-2014: $0.39) and adjusted earnings per share $0.30 (YTD-2014: $0.08)

Business resilient to lower oil price environment

  • Full year 2015 production guidance remains unchanged at 12,000 boepd (95% oil)
  • Significant commodity price hedging in place – average of 5,900 barrels of oil per day at $64/bbl until June 2017 and approximately 5,000 boepd of gas at 63 pence per therm (~$9.70/MMbtu) until June 2017
  • YTD-2015 unit operating expenditure of approximately $33/boe, a reduction of over 40% compared to 2014, and forecast to fall further to around $25/boe following Stella start-up Forecast 2015 capital expenditure reduced to $120 million – reflecting $30 million of savings associated with lower Greater Stella Area subsea infrastructure installation costs and removal of Norwegian expenditure
  • Solid cash netbacks – underpinned by tax allowances pool of over $1.5 billion at 30 September 2015

Deleveraging process commenced

  • Net debt reduced from peak of over $800 million in the first half of 2015 to under $690 million at 31 October 2015 – position expected to be broadly unchanged at year-end 2015
  • Deleveraging reflects the benefit of strong operating cashflow generation, lower capital expenditures, the cash received from the sale of the non-core Norwegian business and the recent $66 million premium equity placing
  • Semi-annual redetermination of reserves based lending facilities successfully completed – maintaining over $125 million of funding headroom ahead of Stella start-up

Les Thomas, Chief Executive Officer, commented:

‘We are very pleased to report a strong set of results thanks to consistent production levels, strong hedging gains and rigorous cost control, all of which has contributed to commencing deleveraging of the business ahead of the step-change that comes with Stella start-up. In parallel, solid progress continues to be made on the Stella development, with commissioning operations advancing on the critical path FPF-1 modifications programme.’



Article Tags

Ithaca Energy
United Kingdom
West Europe

Finance
Subsea


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