Not good news but thankfully IAE only had a 10% interest in Lupus so not too big a setback.
LUPUS is dry
7 Jul '14
RBC on prospects for IAE
RBC have this to say in their new round-up of news for July: Https://rbcnew.bluematrix.com/docs/pdf/7fb7e3b9-ec96-431d-b17a-e7c84f37839c.pdf "Ithaca Energy (TSX: IAE; AIM: IAE; Outperform, C$3.30 Price Target) We have updated our models for Ithaca’s acquisition of three non-operated fields in a $170m deal with Sumitomo Corporation. Ithaca estimates the Cook, Pierce and Wytch Farm fields hold 2P reserves of 12MMboe, implying a 2P valuation metric of ~$14/boe, which falls to ~$12/boe taking into consideration the tax losses. The integration of these assets has increased our risked NAV to C$3.64/share (216p/share) from C$3.50/share (208p/share). The fields should add production of ~2,500boe/d net to Ithaca in 2014, management has increased its FY14 production guidance range to 13,500-15,500boe/d. In turn, we forecast 2015 production of ~19,000boe/d and free cashflow rising to ~$180m. We have also included Ithaca’s newly issued 8.125% $300m Senior Notes in our NAV, which were issued to repay a portion of the Reserve Based Lending facility ahead of the Sumitomo deal completing. In early July we expect Ithaca to spud the fourth development well on the Stella field. This should be completed as a gas production well, with drilling expected to continue until the end of Q3/14. The first three wells exceeded the pre-drill estimates and should be able to fulfil the 30,000boe/d capacity."
4 Jul '14
RE: Lupus about to start drilling
Lupus has a 39 day drill booked so should be about mid August for completion if all goes well. Success is being valued at upside of 52p per share to NAV for Tullow with @ 900m shares equates to up to £470 m to NAV (on a 60% share). On a back of the envelope for IAE's their 10% share is worth up to £78m to NAV on a similar share the downside for IAE is £ 20m. Downside costs come from the risk the well will be a dud/non commercial and the monies wasted on pre drill exploration / licence /drill etc.. Another point of interest for those who hold IAE.
4 Jul '14
Lupus about to start drilling
From RBC yesterday re Lupus (IAE 10%): Https://rbcnew.bluematrix.com/docs/pdf/e1be69d2-ee7d-47b9-8b38-2e39bbecf07b.pdf "Tullow Oil (TLW.L): Tullow (60%) is drilling a well on the ~240mmboe Lupus oil prospect on PL507, in the North Sea offshore Norway. We expect the well to conclude in August and include upside/risk of +52p/-13p per share for the prospect in our Tullow NAV." Incidentally, the loan note rate is actually pretty good relative to other examples: Enquest 7% Ithaca 8.125% Iona 9.5% Xcite 12.5%
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