Ithaca Energy Inc. has announced that it has entered into an agreement with Sumitomo Corporation to acquire interests in three non-operated UK producing oil fields for a total consideration of US$ 170 million. The acquisition further broadens the Company's producing asset base with high quality, long-life oil assets, delivering a step-up in reserves and accelerating monetisation of existing UK tax allowances.
- Acquisition of interests in three long-life producing oil fields, with clearly defined upside opportunities.
- A further 20% interest in the Cook field in which the Company already has a 41.346% interest, a 7.480% interest in the Pierce field and a 7.430% interest in the Wytch Farm field.
- An increase in net proved and probable (2P) reserves of approximately 12.0 million bbls of oil equivalent, equating to an uplift in total Company 2P reserves of approximately 20%.
- Total acquisition consideration of US$ 170 million, equating to approximately US$14.2 per bbl of oil equivalent ("US$/boe"). Taking into account the value associated with accelerating use of the Company's existing tax allowances pool, the acquisition cost falls to approximately US$ 12/boe.
- Incremental 2014 pro-forma production from the field interests is estimated to be approximately 2500 bbls of oil equivalent per day.
- Integration of the acquired fields into the existing portfolio is forecast to have a positive impact on the average unit operating cost per bbl of the Company.
- The Company's leverage (Net Debt/Adjusted EBITDAX) is anticipated to be broadly unchanged at completion.
Les Thomas, Chief Executive Officer, commented: "I am very pleased to announce the acquisition of these three high quality, long-life assets, which represent an excellent addition to the portfolio. The transaction is directly in line with our strategy to further diversify and expand our producing asset portfolio. Moreover, each of the assets has clearly defined upsides that provide the opportunity to generate significant additional value."
A presentation summarising the acquisition is available on the Company's website at www.ithacaenergy.com.
Adapted from a press release by David Bizley
Read the article online at: https://www.oilfieldtechnology.com/drilling-and-production/23062014/ithaca_energy_inc_acquisition_of_interests_in_three_uk_producing_oilfields/