LONDON (Alliance News) - Ithaca Energy Inc on Monday said it and its partners on the Greater Stella project in the North Sea have entered into an agreement with Petrofac Ltd, the oil services company, for the FPF-1 floating production facility.
The agreement will enhance the incentives for the vessel to be delivered in a timely fashion, Ithaca said, adding it remains on track for sail-away from the Poland shipyard in the first quarter of 2016.
Under the new agreement, all costs for modifying the contract cost cap will continue to be fully paid by Petrofac. Ithaca will pay Petrofac USD13.7 million to cover the final payment of variations on the contract, with this payment to be deferred for three and a half year after the first production from the Greater Stella field.
A further payment of USD34.0 million will be made to Petrofac dependent on the timing of the sail away of the FPF-1. The maximum payment will be made as long as the facility leaves the shipyard in Poland before the end of March 2016, with the incentive-based payment to fall for every day over this deadline.
Ithaca also added commissioning operations have started on the facility and that the sail-away does remain on track, with first production from Stella anticipated in the second quarter of 2016.
Ithaca holds a 54.6% stake in the Greater Stella licence, while Petrofac has a 20% stake. The balance is held by Dyas, a long-established privately-owned North Sea oil and gas producer based in the Netherlands.
"Delivery of first hydrocarbons from the Greater Stella Area is the next key operational priority of the company. This agreement introduces a significant additional incentive for Petrofac to provide timely delivery of the FPF-1, without affecting the liquidity position of the company," said Les Thomas, Ithaca's chief executive.
Shares in Ithaca were down 3.3% to 31.57 pence on Monday.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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Petrofac (PFC)