North Sea independent oil and gas firm Ithaca Energy today announced an 81% drop in its third quarter profits as planned maintenance shutdowns took their toll.
The Aberdeen and Calgary-based company said its profit after tax of $8million, down $35million year-on-year, represented a solid result, given the disruption to production, most notably a six week shutdown of the Cook field.
The oil market is also reeling from spiralling exploration development costs and a tumbling Brent price, which has slipped from its June high of more than $115 a barrel to just below $80, amid fears of an oil surplus.
Ithaca recorded $26million in cash-flow from operations for the third quarter, down $52million on last year’s figures.
Average production in the third quarter was about 11,600 barrels of oil equivalent per day (boepd), despite the shutdowns. The figure includes production from the three assets it bought from Japanese industrial giant Sumitomo Corporation in a £100million deal completed in July.
Ithaca chief financial officer Graham Forbes, said: “Given the impact of planned maintenance shutdowns during the quarter, the underlying third quarter numbers represent a solid contribution to the company’s year to date results.
“In light of the recent fall in oil prices, it is important to note that the company is in a strong financial position, with all debt covenants satisfied and future revenues substantially underpinned by the significant quantity of oil price hedges that have been executed well in excess of
prevailing prices.”
The firm said it has 6,300 barrels of oil per day hedged at an average of $102 a barrel from October 2014 until June 2016.
Ithaca also gave an update on its operations on the Causeway Area fields following an unplanned shut-in. It said the export pump on the host platform has recently been repaired and operations are on-going to optimise production from the fields.
Meanwhile, the workover on the P4 well on the Athena field is nearing completion and de-mobilisation of the rig is expected to get under way soon.
The firm added that operations are progressing on the fifth Stella development well, which is slated for completion early next year. Work on subsea infrastructure installation has been completed for the year, while preparation for finishing the remaining subsea activities in early 2015 is at an advanced stage.
Ithaca expects the Greater Stella area to pump out about 30,000 boepd, with first production anticipated in mid-2015.
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