North Sea energy company Ithaca Energy Inc is set to more than double its production to between 20,000 and 25,000 barrels of oil equivalent per day with the start-up of the Stella field, located in the Central Graben area of the UK continental Shelf.
Stella is on-track for first hydrocarbons in November 2016, according to Ithaca’s results statement for the first half of the year. Average production for the company during 1H 2016 was 9,378 boepd, 93 percent of which was oil.
The additional production contribution resulting from the start-up of Stella during the year will depend on the exact timing of first hydrocarbons from the field. A prompt ramp up of production is anticipated following first hydrocarbons, however, leading to an expected initial annualized production rate of approximately 16,000 boepd net to Ithaca.
Ithaca reported an $82 million cashflow from operations during 1H 2016, driven by reduced operating costs and hedging. The company’s net debt reduced from a peak of over $800 million in the first half of last year to $606 million at June 30, 2016.
“The business has continued to perform well over the first half of the year. Production is running ahead of guidance, operating costs have been further reduced and we have continued deleveraging the business,” said Les Thomas, Ithaca Energy CEO.
“It has been particularly pleasing to announce the recent sail-away of the FPF-1, the quality and completeness of which means we move forward into the operational phase of the Stella development with confidence. We remain focused on getting to first production safely and efficiently, whilst ensuring we secure the long term value of the hub through our on-going investment activities,” he added.
Ithaca’s net cash from operating activities was “well ahead” of FirstEnergy Capital’s expectations and the company’s latest update was viewed as “positive” by the market, according to a brief research note from FirstEnergy Capital that was sent to Rigzone.
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