NORTH SEA focused Ithaca Energy has sold stakes in two prospects in UK waters in farm-out deals that reflect international investors' belief in the potential for making finds in UK waters.
The stake sales will allow Aberdeen-based Ithaca to cut the costs of its exploration activity while maintaining an interest in the prospects concerned.
Aim-listed Ithaca has agreed to farm out a 9% working interest in the UK licences containing the Handcross prospect west of Shetland to Oyster Petroleum in exchange for the Norwegian company paying an undisclosed share of past and future licence costs. Oyster will also make an unspecified cash payment to Ithaca.
Bermuda-based Azimuth has acquired an additional 5% interest on similar terms.
Ithaca said when combined with earlier farm-outs involving European energy firms, the company will have its forecast share of the Handcross exploration well planned for the fourth quarter covered and will receive some cash.
Ithaca has agreed to farm-out a 10% interest in the licence that contains the Isabella gas condensate prospect off eastern Scotland to a subsidiary of EDF.
The French energy firm will cover a 10% working interest share of future licence costs and pay an unspecified amount to Ithaca.
Combined with an earlier farm-out with a Danish firm, Ithaca is carried for its forecast share of the Isabella exploration commitment well cost and will receive additional cash beyond the carry.
The deals continue the process of rationalising the portfolio of North Sea interests Ithaca acquired through the £203m takeover of Valiant Petroleum in March.
Ithaca's chief executive, Iain McKendrick, said: "The Company has successfully executed upon its key post-acquisition objective of removing its UK exploration cost exposure whilst still retaining potential upside."
Ithaca will retain a 31% interest in Handcross and a 10% stake in Isabella.
Azmiuth will increase its holding in Isabella to 15%.
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