Ithaca Energy Inc and its wholly owned subsidiary Ithaca Energy (UK) Limited is pleased to announce the acquisition from joint owners Shell U.K. Limited ('Shell') and Esso Exploration and Production UK Limited ('Esso') of a 66.67% working interest in the Stella and Harrier Shallow discoveries which lie in UKCS Block 30/6 Rest of Block (Chalk Layers and Younger) for an initial consideration of US$15 million. A further payment of US$15 million will become payable to Shell and Esso at the time of Field Development Plan approval and proceeds from production will be subject to a 5% over-riding royalty. The acquisition is expected to close before the end of the second quarter 2008 and is subject to the usual government and partner consents.
Stella was discovered in 1979 by the 30/6-2 well and subsequently appraised by well 30/6-3 in 1983. A drill stem test carried out in the 1983 well flowed 2,750 barrels of oil per day ('bopd') of condensate and 23 million cubic feet of gas per day ('MMcfpd') from the Andrew Sandstone. The most recent appraisal well, 30/6-5, drilled by Maersk in 2004 as part of a farm-in from Shell and Esso, confirmed the presence of a gas-condensate in the Tertiary, Andrew Sandstone. A drill stem test was carried out on the 30/6-5 well and flowed 3,200 bopd of condensate and 17 MMcfpd. The 30/6-5 well also found intervals of high hydrocarbon saturation in the porous zones (up to 30% porosity) of the underlying chalk strata. A gas-water contact has not been yet been encountered but Ithaca believes the accumulation to be commercial with established reserves. A further appraisal of the Stella discovery is planned for 2008/9 which will attempt to locate the gas/water contact and confirm the nature of and volume of hydrocarbons in the accumulation.
In addition, the Harrier Shallow accumulation was discovered by well 30/6-4 in 2002 and appraised by 3 sidetracks. The discovery tested condensate and gas in the Upper Cretaceous Ekofisk and Tor formations. Further technical work is required to understand the potential of this discovery.
Lawrie Payne, Chief Executive Officer of Ithaca Energy, said: "This is another significant acquisition for Ithaca Energy that fits with our strategy of pursuing near term developments of undeveloped discoveries and represents our fourth development project. We are committed to an early appraisal of the Stella discovery and, on success, the subsequent fast-track development of this and other discoveries in the area."
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