North Sea oil and gas firm Ithaca Energy raised reserve estimates yesterday as it revealed a jump in profits and said it was still scouting for new assets on the UK continental shelf.
The Canadian-owned company said net proved and probable reserves rose about 10% to 46.1million barrels of oil equivalent during 2010.
Pre-tax profits were up more than 380% on a year earlier, to £23million, as revenue rose 31% to £80.4million – driven mainly by higher oil output.
Oil production climbed 11% to 4,485 barrels per day.
In March, Ithaca chief executive Iain McKendrick announced the company was in talks with several parties about potential acquisitions in the North Sea.
Despite widespread fears the UK Government’s latest tax hit on oil and gas production will drive away investment, Mr McKendrick said it could create opportunities for Ithaca and other firms that either had large allowances or were looking to take advantage of reasonable prices as a result of taxpaying companies wanting out.
Ithaca does not expect to have to pay UK taxes for at least five years due to allowances linked to its investment in the North Sea.
It already plans to spend around £75million this year developing its core Athena and Stella oil fields
Announcing the 2010 results yesterday, Mr McKendrick said last year’s earnings and a £91million fundraising had delivered a strong balance sheet.
Cash holdings of more than £121million and an undrawn debt facility underpinned two development projects, Athena and Stella, and provided a platform from which to continue Ithaca’s “successful acquisition strategy”, Mr McKendrick added.
Ithaca also announced it had agreed to farm out a 31% stake in its central North Sea Hurricane oil field – within the Ithaca-operated Greater Stella development area – to the UK subsidiary of Houston-based Challenger Minerals.
Challenger will pay a share of drilling and exploration costs in exchange for the interest.