North east oil firm Ithaca saw a fourfold boom in spring cashflow after tying up a £203 million buyout of North Sea rival Valiant Petroleum, new figures have revealed.
Ithaca Energy saw after-costs operating income climb to $65m during the second quarter up 300% on the $16.3m posted for the same period this time last year.
The performance helped the group’s first half revenues more than double on last year, and underlined the benefits of April’s acquisition.
It has seen a production boost equivalent to more than 8,000 barrels a day in the 10 weeks since capturing Valiant’s assets. Group-wide revenues climbed to $128.4m in the quarter, as pre-tax profits reached $69.1m.
Equivalent figures for the half-year were $180.5m and $71.4m, well ahead of last year’s $76.3m and $35.5m totals.
But shares dipped closing yesterday down 4.00 at 115.00 as the Toronto-listed firm warned that full-year production would be at the lower end of its 14,000 to 16,000 boepd estimates.
Chief executive Iain McKendrick said he looked forward to future developments at the Greater Stella field during what he hoped would be an “active” second half.
Drilling there began in June, with the first development well progressing “as planned” and subsea infrastructure now being installed.
An additional well has been drilled at the Don Southwest field, with “good progress” being made on a submersible pump expected to significantly boost production on the Causeway field.
Other assets, including the Athena field, are subject to temporary repairs expected to be completed in the second half.
“In the first half of the year we have doubled production and operating cashflow and importantly diversified our producing asset base to 11 fields,” Mr McKendrick said.
“The Greater Stella Area development is moving forward rapidly and with the integration of the Valiant acquisition now completed, including restructuring of the UK exploration portfolio, we look forward to an active second-half of the year.”
Ithaca said all “major integration milestones” for the Valiant buyout had now been achieved.
Works on all future exploration and appraisal wells in the UK had been successfully farmed out, it said, reducing net exploration expenditure by $75m while retaining carrying interests.
The firm, which booked restructuring and acquisition costs totalling some £10.5m in relation to the deal, said the process had been completed more quickly than anticipated, with greater-than-expected exposure to potential future upside retained.
Meanwhile, a newly “re-focused” strategy has been established for Norwegian waters where Ithaca will now target lower-risk developments after recruiting Lars Thorrud from Det Norske Oljeselskap AP.
Drilling operations at the Norvag field in the Barents Sea are being evaluated. Analysts agreed the Great Stellar Area looked set to make a considerable difference to the firm’s fortunes from next year.
But Ithaca also revealed how drawn debt climbed to $346m in the six-month period, up from zero at the end of last year. The firm’s bank facilities total $780m.