SHARES in North Sea-focused Ithaca Energy surged 14% following well results that indicated fields it aims to bring onstream next year may produce at better rates than expected.
The news came in an update on progress at Ithaca's Greater Stella area project, which highlighted potential for firms to develop significant new fields in the mature North Sea.
Ithaca said the first well drilled to develop the Greater Stella fields off eastern Scotland flowed at 10,835 barrels oil equivalent daily. Analysts at Mirabaud Securities called it an impressive rate.
With three more wells to drill, the results raise the possibility the fields may produce at much more than the expected 30,000 boed.
Aberdeen-based Ithaca is on course to complete the project on time and on budget. It is investing $385m (£245m) in Greater Stella, due onstream next summer.
"This is an enormous leap forward in de-risking of the Greater Stella Area development and the creation of a major new production hub in the UK Central North Sea," said chief executive Ian McKendrick.
The results provided a big boost for Ithaca Energy, which has ambitions to become a major player in the North Sea. The company significantly increased its exposure to the area through the £203m acquisition of Valiant Petroleum in March.
Production from the Greater Stella fields could generate lots of cash Ithaca could use to grow its North Sea portfolio.
The Aim-listed company says it aims to realise the value of 30 million barrels reserves thorough its investment.
Analysts at joint house broker RBC Capital Markets said the Greater Stella project is central to the company's outlook.
While Ithaca still has lots of work to complete on the development, the results to date are likely to be welcomed by champions of the UK North Sea.
Ithaca is one of a range of companies that are investing heavily in bringing undeveloped discoveries onstream in UK waters.
Strong increases in oil prices in recent years combined with advances in technology have helped transform the economics of some fields that have lain undeveloped for years.
Ithaca and Holland's Dyas acquired interests in the Stella and Harrier licence through deals with Shell, Esso and Maersk between 2008 and 2009.
Ithaca has noted there are other undeveloped discoveries surrounding the production hub that is being constructed for the Greater Stella fields.
Shares in Ithaca Energy closed up 18.25p at 144.75p.
Ithaca has a 54.66% stake in Greater Stella, Dyas has 25.34% while Petrofac has 20%.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article