TIDMITH TIDMTTM
RNS Number : 0896B
Ithaca Energy PLC
31 May 2023
Press release
31 May 2023
ITHACA ENERGY PLC
("Ithaca Energy", the "Company" or the "Group")
First Quarter Results for the Three Months to 31 March 2023
Q1 production ahead of guidance, continued strategic and
operational progress
Ithaca Energy, a leading UK independent exploration and
production company, today announced its unaudited financial results
for the three months ended 31 March 2023.
Financial key performance indicators (KPIs)
Q1 2023 Q1 2022
---------------------------------------------- -------- --------
Group adjusted EBITDAX(1) ($m) 518.1 474.2
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Adjusted net income (1) ($m) 158.4 161.3
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Net cash flow from operating activities ($m) 351.4 283.7
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Available liquidity (1) ($m) 650.4 846.9
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Unit operating expenditure(1) ($/boe) 20.3 18.9
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Net debt (1) ($m) 899.6 703.1
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Net debt/Group adjusted EBITDAX (1) 0.46x 0.55x
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Other KPIs
Total production (boe/d) 75,257 70,527
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Tier 1 process safety events 0 0
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Serious injury and fatality frequency 0 0
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(1) Non-GAAP measure
Q1 2023 Operational highlights
-- Strong safety performance in Q1 2023 with no serious
incidents or Tier 1 or 2 process safety events recorded in the
period
-- Production of 75.3 thousand barrels of oil equivalent per day
("kboe/d"), ahead of guidance of 70-72 kboe/d, following a positive
end to the quarter
- Production early in the quarter was impacted by operational
issues at Captain and FPF-1, with FPF-1 partially offline for 1
month due to a damaged heat exchanger. Operations resumed in March
after a swift resolution, demonstrating Ithaca Energy's deep
operational expertise and production delivery capabilities
- Pierce field restarted operations following a major
redevelopment to enable gas production. Gross peak production is
expected to reach 30 kboe/d (Ithaca Energy working interest 7.48%),
doubling the field's production prior to redevelopment
-- Production split 67% liquids and 33% gas
-- Ongoing offshore construction activities continued at Captain
Enhanced Oil Recovery ("EOR") Phase II with engineering close to
completion. B28 well construction mechanically complete, converting
the well from water to polymer injection
-- Commenced preparation for exploration drilling at K2 (Ithaca
Energy operated, working interest 50%), and appraisal drilling at
Leverett (Ithaca Energy working interest 12%) in June 2023. The
Leverett field is situated in close proximity to Britannia, where
Ithaca Energy holds a 32.38% non-operated working interest
-- Captain Electrification Pre-FEED study completed in the
quarter, confirming viability of the concept
-- Pre-FID work continues across the Group's high-value
greenfield and brownfield development portfolio
Q1 2023 Financial highlights
-- Group adjusted EBITDAX up 9% to $518.1 million (Q1 2022:
$474.2 million), driven by higher production and despite lower
average oil and gas prices
-- Adjusted net income of $158.4 million broadly flat (Q1 2022: $161.3 million)
-- Net cash flow from operating activities up 24% to $351.4 million (Q1 2022: $283.7 million)
-- Realised oil and gas prices of $83/bbl (Q1 2022: $100/bbl)
and 137p/therm before hedging (Q1 2022: 227p/therm)
-- Strong cost control, delivering unit operating costs of $137
million ($20.3/boe (Q1 2022: $18.9/boe)), at the lower end of
guidance range of $130-$150 million for the quarter
-- Producing asset capex of $90 million, at the lower end of
guidance range of $90-$110 million for the quarter
-- Balance sheet remains strong with further deleveraging in the
quarter. Net debt of $899.6 million at 31 March 2023 (31 December
2022: $971.2 million; 31 March 2022: $703.1 million) representing a
Group leverage position of 0.46x net debt to adjusted EBITDAX (31
March 2022: 0.55x) despite material M&A activity over the past
12 months
-- At 31 March 2023, 10.7 million barrels of oil equivalent (68%
oil) hedged from Q2 2023 into 2025 at an average price floor of
$70/bbl for oil and 189p/therm for gas
Q1 2023 Corporate highlights
-- On 4 May 2023, Ithaca Energy signed a marketing agreement
with Shell U.K. Limited, representing a meaningful step towards
securing an aligned joint venture partnership that would enable the
successful future progression of the Cambo project towards FID,
subject to regulatory and licensing approval processes and market
conditions
-- Initial 2023 interim dividend of $133 million paid in March 2023
-- Targeted total dividend of $400 million reaffirmed for
financial year 2023, with two further dividend payments following
the first half of the financial year end and the end of the
financial year
FY 2023 Management Guidance and Outlook for 2023
-- Management reaffirms the previously provided guidance ranges
for currently producing assets for full year 2023, and provides the
following activity updates:
Production guidance:
-- Guidance reaffirmed for the year ended 31 December 2023 of 68-74 kboe/d
Operating cost guidance:
-- Guidance reaffirmed for the year ended 31 December 2023: $560-$630 million
Producing asset capital cost guidance:
-- Guidance reaffirmed for the year ended 31 December 2023: $400-$460 million
-- Material ongoing activity at the Captain EOR Phase II project
that will support near-term production growth and increased reserve
recovery, with first Phase II polymer production expected in 2024
and peak production in 2025, following the success of EOR Phase
I
-- FEED activity commenced in April 2023 to explore the
potential for electrification of the Captain field, following
pre-FEED studies in Q1 2023, demonstrating our continued focus on
decarbonisation initiatives across our portfolio
-- Exploration and appraisal activity at K2 and Leverett in
Q2/Q3 provides near-term upside potential
-- Continued deleveraging of the Balance Sheet, in line with the
Group's capital allocation policy
-- Near-term focus on maturing high value development projects
in our portfolio towards FID while prioritising capital allocation
to maximise sustainable shareholder returns
Chief Executive Officer, Alan Bruce , commented "I am pleased to
report a strong Q1 2023 performance with adjusted EBITDAX of $518.1
million. We remain focused on delivering safe and environmentally
responsible operations as we execute our value-adding near-term
developments such as Captain EORII, K2 and infill drilling at
Alba"
Executive Chairman, Gilad Myerson , commented "We delivered
another strong quarter and met our commitments to deliver high
operational performance in a responsible manner, deleverage our
balance sheet, and distribute dividends to our shareholders. We are
working constructively with the UK government to further develop
our key development projects and continue to keep a watchful eye on
consolidation opportunities with a focus on maximising shareholder
returns."
Webcast and Conference call
Ithaca Energy will host a virtual presentation and Q&A
session for investors and analysts at 09:00 (BST) today, 31 May
2023, and a further presentation and Q&A session for Bond
Holders only, which will be held at 13:00 (BST) today, 31 May 2023.
Details of both sessions are accessible via our website.
Investors and Analysts - Webcast link
https://www.investis-live.com/ithaca-energy/646654b5900ed61400612ad5/meht
Investors and Analysts - Conference call
Operator Assisted Dial-In: United Kingdom (Local): +44 20 3936
2999 United Kingdom (Toll-Free): +44 800 358 1035 Global Dial-In
Numbers Access Code: 921827
Bond Holders - Webcast link
https://www.investis-live.com/ithaca-energy/646656096ea6bc0e00602d06/bgfd
Bond Holders - Conference call
Operator Assisted Dial-In: United Kingdom (Local): +44 20 3936
2999 United Kingdom (Toll-Free): +44 800 358 1035 Global Dial-In
Numbers Access Code: 707922
Enquiries
Ithaca Energy
Kathryn Reid - Head of Investor Relations, kathryn.reid@ithacaenergy.com
Corporate Affairs & Communications
FTI Consulting (PR Advisers to Ithaca
Energy) +44 (0)203 727 1000
Ben Brewerton / Nick Hennis ithaca@fticonsulting.com
About Ithaca Energy plc
Ithaca Energy is a leading UK independent exploration and
production company focused on the UK North Sea with a strong track
record of material value creation. In recent years, the Company has
been focused on growing its portfolio of assets through both
organic investment programmes and acquisitions and has seen a
period of significant M&A driven growth centred upon two
transformational acquisitions in recent years. Today, Ithaca Energy
is one of the largest independent oil and gas companies in the
United Kingdom Continental Shelf (the "UKCS"), ranking second by
resources.
With stakes in six of the ten largest fields in the UKCS and two
of UKCS's largest pre-development fields, and with energy security
currently being a key focus of the UK Government, the Group
believes it can utilise its significant reserves and operational
capabilities to play a key role in delivering security of domestic
energy supply from the UKCS.
Ithaca Energy serves today's needs for domestic energy through
operating sustainably. The Group achieves this by harnessing Ithaca
Energy's deep operational expertise and innovative minds to
collectively challenge the norm, continually seeking better ways to
meet evolving demands.
Ithaca Energy's commitment to delivering attractive and
sustainable returns is supported by a well-defined
emissions-reduction strategy with a target of achieving net zero by
2040.
Ithaca Energy plc was admitted to trading on the London Stock
Exchange (LON: ITH) on 14 November 2022.
-ENDS-
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