Aberdeen-based Ithaca Energy has announced production has started on its Harrier oil and gas field in the North Sea.
Harrier is a satellite field in the Greater Stella Area development, which could produce more than 30million barrels of oil.
The firm today said Harrier production started in June, but has not given specific information on its output.
Ithaca set about the process of installing a 7.5mile pipeline to tie-back the field to the GSA production hub earlier this year.
The firm, owned by Israel’s Delek Group, said the total cost of the Harrier development was £50.4m.
Ithaca made the announcement in its half-year results, reporting a large increase in revenues thanks to production from its Stella field, but its pre-tax losses widened.
Revenues were up 68% to £124.5million, but pre-tax losses widened to £37.8m amid higher operating costs and measures it has taken to mitigate negative effects of the oil price, from just £2.5m in the same period last year.
The Stella field started production last year and has led to a 33% increase in Ithaca’s daily production to 15,500 barrels of oil equivalent per day.
Ithaca attributed Stella to its 68% increase in revenues, however it also resulted in an increase to operating expenditure.
Last week Ithaca announced a deal to buyout its partners in the Greater Stella Area in the North Sea, Petrofac and Dyas.
The deal with Petrofac is for up to £228m.
Upon completion, it will make Ithaca the 100% owner of GSA and the FPF-1 floating production hub.
Production from Harrier, and the Stella field which started-up last year, are filling the gas processing facilities at FPF-1.
Higher production volumes were a driver for Ithaca’s development expenses surging to £57.4m, a 74% increase on the same period last year.
A stronger oil price also led to the firm losing money through hedging – a measure to mitigate its effects on the company’s North Sea assets when it is low.
However, the price was higher than estimared by Ithaca, resulting in a loss of “$8.7 per barrel of oil equivalent sold”.
The hedging measure had worked in Ithaca’s favour last year, when the average price was lower, resulting in a profit of £12.2million.
It also comes as the firm is undergoing a restructuring programme for its net debt of £412.9m.
Aside from its GSA deal, Ithaca said it is “actively engaged” in identifying high quality North Sea acquisitions that can enhance the business.
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