Ithaca to pump $360m into North Sea projects after output increases

Oil and gas producer Ithaca 
Energy has unveiled plans to 
invest $360 million (£224.6m) on developing its North Sea assets this year as it reported a 31 per cent jump in quarterly output.

The Aberdeen-based firm, listed in London and Toronto, has a 54.7 per cent working interest in a number of blocks in the Greater Stella area, about 148 miles south-east of Peterhead.

Ithaca, headed by chief executive Iain McKendrick, said its 2013 capital expenditure programme “is focused on execution of the Greater Stella area and is anticipated to total $360m, which will be funded from existing financial resources”. Its partners in the development are Dyas and Petrofac.

The update came as the group said production during the fourth quarter rose to an average of 6,631 barrels a day, up from 5,061 in the third quarter.

Production could be boosted this year following the firm’s acquisition of Noble Energy’s interests in the Cook and MacCulloch fields. The $38.5m deal, announced in October, is due to be completed during the first quarter of this year.

McKendrick said: “The company’s 2013 net average export production is anticipated to be in the range of 6,000 to 6,700 barrels of oil equivalent per day, including approximately 1,000 barrels from the Noble assets.”

Cenkos analyst Ashley Kelty said the production forecast was lower than previous estimates because the MacCulloch field is currently shut because of suspected storm damage, but he remained upbeat about the firm’s prospects given its “significant surplus cashflow”.