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Ithaca provides operational updates on pipelines and fields

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World Pipelines,

Ithaca Energy Inc. provides an operations update following the end of the third quarter of the year. The company is scheduled to issue its financial results for the first nine months of the year on 14 November 2016.

Production and operations

The producing asset portfolio has performed well over the first nine months of the year, with production running ahead of guidance. Average production during the quarter was approximately 9900 boed, resulting in an average production of 9550 boed over the first nine months of 2016.

It is anticipated that full year base production, excluding any contribution from the start-up of the Stella field during 2016, will be modestly ahead of the 9000 boed guidance range. During the final quarter of the year, base production volumes will be reduced compared to the previous quarters as a result of the approximately two week planned maintenance shutdown of the Brent pipeline system that serves the company’s northern North Sea fields.

Greater Stella area development

Good progress has been made on the final stages of the Stella development programme since the FPF-1 floating production facility set sail from Poland in August 2016. The FPF-1 was safely towed to the field, moored on location and the dynamic risers and umbilical connecting the subsea infrastructure to the vessel installed as planned. Technip is in the process of concluding the remaining subsea commissioning works. At the same time the FPF-1 offshore commissioning programme is ongoing, with preparation of the topsides processing and utility systems for the introduction of hydrocarbons underway. The scheduled completion of these activities remains in line with previous guidance, with first hydrocarbons from the Stella field anticipated in November 2016.

Significant progress was also made during the quarter on the work programme associated with making the switch from tanker loading to oil pipeline exports for the Greater Stella Area in 2017. The 44 km spurline from the FPF-1 to the Norpipe system was successfully installed as planned in September 2016.

The key outstanding activities that now remain to be completed are the manufacture and installation of pipeline export pumps on the FPF-1 and the final subsea connections that need undertaking immediately prior to the switchover.

Financials – hedging

During 3Q16, approximately 9900 boed (47% oil) of commodity hedges were realised at an average price of US$56/boe. The volume of production hedged in the final quarter of 2016 remains unchanged, at approximately 8800 boed (50% oil) at an average price of US$59/boe.

Financials - operating expenditure

As previously guided, average unit operating expenditure in 2016 for the existing producing asset base is anticipated to be approximately US$25/boe. Following the start-up of production from the Stella field this cost is forecast to reduce to approximately US$20/boe, reflecting the lower unit operating costs associated with the field.

Financials - net debt

Net debt at 30 September 2016 reduced to US$598 million. The company has in place total available debt facilities of US$730 million, providing in excess of US$130 million of funding headroom ahead of planned first hydrocarbons from the Stella field. This funding capacity comprises US$300 million unsecured senior notes and US$430 million bank debt facilities.

3Q16 financial results conference call

The company is scheduled to release its 3Q16 financial results on 14 November 2016. A conference call and webcast for investors and analysts will be held on the same day at 12.00 GMT (07.00 EST). More information can be found on the company’s website.

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