Ithaca signs deal with Shell

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Ithaca Energy, the Aberdeen-based oil producer that took over Valiant Petroleum last month, has sealed a deal with Shell to reduce the amount it will have to pay to develop the Beverley prospect.

The North Sea driller has “farmed out” half of its 40 per cent stake in the licence that covers the Beverley prospect and the Belinda and Evelyn discoveries.

Ithaca said: “The farm-out is in exchange for a partial carry of Ithaca’s 20 per cent share of the costs of a well on the Beverley prospect, with the license terms requiring the well to be drilled by early 2015.”

Ithaca also revealed that an appraisal well has begun drilling on the Norvarg discovery in the Norwegian sector of the Barents Sea.

The well, operated by Total, will take at least 70 days to drill.

News of the Shell deal and the Total well came as Ithaca posted its first-quarter trading update, which revealed that cashflow from operations increased by more than 20 per cent to $34.8 million (£22.7m).