Ithaca Energy increased output by 34% during 2012, the North Sea-focused oil and gas company said yesterday.
The Calgary-based firm expects last year’s daily average of 5,862 barrels of oil equivalent (boe) to rocket to up to 16,000 after its Aberdeen-based subsidiary, Ithaca Energy UK, takes over smaller rival Valiant Petroleum.
Ithaca announced earlier this month that it had agreed to acquire Valiant for £203million.
Valiant’s board has urged investors to approve the offer, equal to £4.75 per Valiant share, in a vote next Tuesday and the deal is expected to complete around the middle of next month.
Announcing annual results yesterday, Ithaca said it expected the acquisition to materially increase its production, reserves and cash flow from operations – establishing the company as a leading mid-cap North Sea oil and gas operator.
Ithaca said net (after-tax) earnings increased by 160% last year to £61.6million, although pre-tax profits were down by 21% at £19.3million.
Revenue rose to £112.5million in the latest period, from £85.2million previously.
Ithaca said its net proved and probable reserves had increased to 51.9million barrels of oil equivalent by the end of last year.
The company expects this to increase to 70million after the Valiant acquisition, with about half of the bigger figure related to producing assets.
Chief executive Iain McKendrick said: “These strong results together with the announced Valiant acquisition demonstrate the company’s ability to execute upon its strategy for growing shareholder value through the delivery of development and acquisition-led growth.”
Ithaca’s 2012 production figures included first output from the Athena field in the outer Moray Firth. Athena – operated by Ithaca and co-owned by Dyas UK, EWE Energie, Trap Oil and Zeus Petroleum – is now producing up to 11,000boe per day, including up to 2,475 net to Ithaca. Oil produced from the field is transported from the BW Athena floating, production, storage, and offloading vessel by shuttle tankers to the onshore Nigg storage facility, also operated by Ithaca.