Ithaca Energy today announced its financial results for the six months ended 30 June 2022.

Highlights

• During Q2, Ithaca Energy completed the acquisitions of Summit Exploration and Production and Siccar Point Energy.
• The acquisition of Summit E&P increased the Group’s interest in Elgin Franklin from 3.9% to 6.1%, and the acquisition of Siccar Point Energy provides interests in four of the UK’s largest oil and gas fields – Schiehallion (11.8%), Mariner (8.9%), Rosebank (20%) and Cambo (70%).
• $750 million was drawn from the Reserves Based Lending Facility to finance the acquisitions of both Summit E&P and Siccar Point Energy which completed on 30 June.
• The acquisition accounting for Siccar Point Energy Group Limited resulted in the recognition of negative goodwill of $666 million which is non-taxable, due to Ithaca Energy recognising tax assets that were not available to the Siccar Point Energy.
• As at 30 June 2022, net debt was $1.4 billion, maintaining a Leverage Ratio of 0.9x.
• Significant cash generation post quarter end has seen Net Debt further decline.
• Production highlights include 67 thousand barrels of oil equivalent per day (“kboe/d”), 65% liquids for the year.
• Unit operating costs of $19/boe.
• EBITDAX of $905 million.
• 17 million boe (71% oil) hedged from Q3 2022 into 2024 at an average price floor of $63/bbl oil and 125p/therm gas. A number of these hedges are zero cost collars, giving an upside in addition to the floor price.
• Significant activity continues on the Abigail development, a subsea tie back to the FPF1 floating production facility. During the quarter, the subsea construction campaign completed phase one which involved installation of a subsea manifold and subsea isolation riser base structure along with phase two which was the installation of the production and gas lift pipelines. Since the start of the campaign in April 2022, work has progressed safely and according to plan. First oil is planned for October 2022.

Operational highlights

Significant activity continues on the Abigail development which is a subsea tie back to the FPF1 floating production facility. During the quarter the subsea construction campaign completed phase one which involved installation of a subsea manifold and subsea isolation riser base structure along with phase two which was the installation of the production and gas lift pipelines. Since the start of the campaign in April, work has progressed safely and according to plan and first oil is still planned for October 2022.

Captain Enhanced Oil Recovery (“EOR”) Programme
Stage II of the Captain EOR programme involves the drilling of up to ten additional wells (four producers and six injectors) to optimise oil recovery from the area of the Upper Captain Sands reservoir that is produced using subsea wells. The overall work programme involves the installation of approximately six kilometre subsea pipelines and umbilicals to the two subsea areas of the field in order to provide polymer injection capability in addition to the installation of additional polymer storage tanks and pumps on the Captain platform and floating production, storage and offloading (“FPSO”) vessel.

Following attainment of North Sea Transition Authority(“NSTA”) FDP approval and full sanction in Q1 2021, the project continues to focus on finalising topside engineering and procurement. Topside construction is progressing to plan with preassembled units successfully installed during Q2 2022. Topsides preparations continue for caisson installation, which is scheduled for Q3 2022. Subsea infrastructure design and manufacture remains on track for phased installation and tie-in between 2022 and 2024, with B28 flexible flowline successfully installed during the quarter. Emphasis on preparations for the Pioneer drilling rig arrival concluded with mobilisation in June. Significant milestones have been achieved despite the challenges facing the industry because of Covid-19 and Brexit. The development involves a multi-year programme of drilling activities aimed at maximising oil recovery from the field into the 2030s.

Greater Stella Area (“GSA”) Satellite Field Developments
Engineering, procurement and construction activities are progressing for the Abigail field. Key long lead items (christmas tree, flowbase, wellhead etc) were delivered in advance of rig arrival and commencement of drilling operations during March 2022. 

Non operated assets

Pierce
The Operator, Shell Oil UK, completed the onshore scope of the life extension project on the Haewene Brim to allow for reservoir depressurisation on the asset. The vessel was towed from Haugesund, Norway during Q2 2022 to be reconnected to subsea infrastructure and commissioned for production. Production is anticipated to recommence in Q4 2022.

Jade
During Q2 2022, the Operator (Harbour) continued drilling activity on well 30/2c-J14 which has progressed ahead of schedule. The well is estimated to be completed in Q3 2022 with first production in the same quarter.

KeyFacts Energy: Ithaca Energy UK country profile