Ithaca Makes Further North Sea Farm-out Deals

North Sea-focused Ithaca Energy reported Monday that it has made further farm-out deals connected to its UK exploration portfolio. The deals will see it received more than $8 million in cash from the parties involved in the farm-outs.

Ithaca said it had farmed out to Oyster Petroleum a nine-percent working interest in the UK licenses containing the Handcross prospect along with a further five-percent interest to Sussex Energy. Ithaca retains a fully-carried 31-percent working interest as well as operatorship of the P1631 and P1832 licenses. In addition the firm has agreed to transfer its full 33.33-percent non-operated interest in UK license P2018, covering three West of Shetland blocks, for a cash sum.

The firm also farmed out to Euroil Exploration – a subsidiary of Edison – a 10-percent working interest in the UK P1820 license that contains the Isabella prospect.

Ithaca said that the deals mean it has now offset the full $85 million of forecast UK exploration well commitment costs that were transferred to it as part of its acquisition of Valiant Petroleum, which was completed in April.

Ithaca CEO Iain McKendrick commented in a company statement:

"I am delighted that the company has achieved a cash flow-positive position with respect to the Handcross and Isabella exploration wells.  The company has successfully executed upon its key post-acquisition objective of removing its UK exploration cost exposure whilst still retaining potential upside."


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