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Key field delay hits Ithaca's shares

SHARES in North Sea-focused Ithaca plunged 11 per cent in London yesterday when the oil and gas firm announced it faced a costly delay to the start of production from a key field.

The Aberdeen-based firm now expects to produce first oil from the Greater Stella Area in mid-2015 rather than at the end of this year.

The Aim-listed company said the delay is expected to cost $5 million (£3m) to $10m, relating primarily to project management costs.

It said the delay was due to the fact that work on the floating production facility that will be used on the field is going more slowly than planned.

It expects the vessel will be ready for sail-away from the Remontowa yard in Poland in spring 2015.

Chief executive Les Thomas said: "While good progress has been made with drilling of the third Stella development well and the subsea infrastructure installation works, the delay in the FPF-1 sail-away schedule and consequently the impact on the timing of Stella first oil is clearly disappointing."

However, Ithaca said the funding position of the company is not materially impacted by the delay, which highlights the challenges firms can face developing new fields.

In its annual results announcement in March, Ithaca said the first two development wells on the $385m Greater Stella scheme had substantially derisked forecasts that its share of the output would be 16,000 barrels oil equivalent daily.

The company produced an average 10,392 BOE/D in 2013. It increased profits by 38per cent annually in the year, to $40.2m.

Shares in Ithaca closed down 16.75p at 135p.

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