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Ithaca unveils encouraging results from North Sea well

NORTH Sea-focused Ithaca Energy has announced encouraging results from a well on the Stella field east of Scotland but revealed the start of production would be delayed by six months.

The oil and gas firm said the results of the second development well on the field increased confidence in the production estimates on which the company based its decision to proceed with the $385 million (£235m) project to bring it onstream.

Chief executive Les Thomas said: "The excellent results of the A2 well represent another important step in de-risking the forecast production from the Stella field and realising the significant shareholder value that lies within the Greater Stella Area."

But Aberdeen-based Ithaca said first production from the Greater Stella hub is now expected to be at the end of 2014 as opposed to the middle of the year.

The timetable has been revised following a change to the programme of work that will be done on the floating production facility that will be used on the field.

Ithaca has decided to install new oil and gas processing plant on the vessel.

The company said: "While this is now scheduled to take longer, the new facilities are designed to ensure that a quality vessel capable of achieving high operational uptime performance is deployed on the hub."

The capital cost of the work has not changed.

The second Stella development well flowed at a maximum 10,442 barrels oil equivalent per day (boepd).

The A1 well completed in September flowed at a maximum 10,835 boepd.

Ithaca said the test results from the first two development wells substantially de-risked the initial annualised production forecast for the GSA hub of approximately 30,000 boepd ( of which Ithaca's share would be 16,000 boepd), announced when the development concept was selected in October 2011.

In November Ithaca said it expected 2013 production to average around 13,000 boepd, including assets acquired in the £203m takeover of Valiant Petroleum in April.

Shares in Ithaca Energy closed down 3.75p, at 155.25p, in London. The company is also listed on the Toronto exchange.

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