LONDON (Alliance News) - Ithaca Energy Inc Thursday said it is well set up to manage the prevailing uncertainty over oil prices, as it posted a rise in pretax profit for the first quarter despite the drop in the Brent oil price.
The company is an oil and gas operator focused on opportunities in the UK North Sea.
Ithaca posted a pretax profit of USD8.4 million for the quarter to end-March, up from USD4.6 million a year before, as a USD59.7 million one-off gain from the acceleration of oil price hedges and lower operating expenses helped offset the drop in the oil price.
Ithaca produced 12,489 barrels of oil equivalent per day, compared to 9,200 in the previous year, but the average realised oil price fell to USD58 per barrel of oil, down from USD108 per barrel of oil leading its overall revenue to fall to USD54.2 million from USD87.4 million
The company said it had made good operational progress in the quarter, having completed a number of its key activities. After the end of the quarter it entered a deal to sell its Norwegian subsidiary Ithaca Petroleum Norge AS to a subsidiary of MOL PLC for up to USD60 million.
The deal is expected to be completed in the third quarter, and after the repayment of its Norwegian exploration financing facility and forecast working capital adjustments, it expects to receive USD30 million from the sale.
"Given an average Brent price of under USD55 a barrel in the first quarter of the year, the company has generated strong cashflow that reflects the benefit of our oil hedging position and a significant lowering of unit operating costs. The company is well set up to manage the prevailing oil price uncertainties, continues to maintain a strong balance sheet and will shortly start deleveraging, well ahead of start-up of production from the Stella field in the second quarter of 2016," said Chief Executive Officer Les Thomas in a statement.
Ithaca Energy shares were up 1.0% at 58.08 pence Thursday.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews
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