Shell deal for oil driller Ithaca Energy

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

Ithaca Energy sealed a deal with Shell to reduce the amount it will have to pay to develop the Beverley prospect. Picture: Getty

The 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 also said 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).

Ashley Kelty, an analyst at house broker Cenkos, said: “The current price does not fairly reflect the value in the company’s enlarged portfolio post the Valiant acquisition and [I] believe the company remains undervalued relative to peers.”

• Wood Group, the Aberdeen-based energy services firm, yesterday announced that it has won a “multi-million dollar” engineering contract to work on GDF Suez’s first liquefied natural gas (LNG) plant in Australia.