Bloomberg News

Ithaca Boosts Stakes in North Sea Fields to Double Output

October 20, 2011

(Updates with comment from CEO in third paragraph.)

Oct. 20 (Bloomberg) -- Ithaca Energy Inc., a North Sea oil explorer and producer, acquired Transocean Ltd.’s U.K. unit in a move that will more than double its output.

Ithaca bought Challenger Minerals (North Sea) Ltd. for $35 million in cash, increasing Ithaca’s stakes in the Stella and Harrier fields and gives it a non-operated interest in the producing Broom field, the Calgary-based company said today in a statement. It also entered a strategic partnership with Petrofac Ltd., a FTSE 100-listed oilfield services provider, to create a production hub for the greater Stella area fields.

“This will take us well above 20,000 barrels of production,” Ithaca Chief Executive Officer Iain McKendrick said in an interview. “Hunting with a company with the amount of resources Petrofac has is something we look forward to.”

Petrofac and Ithaca will build a floating production unit for the Stella, Harrier, Hurricane and Helios fields, with the first production forecast in the second half of 2013. Petrofac is taking a 20 percent interest in Hurricane and Helios in exchange for transferring ownership of the floating unit to Ithaca and Dyas U.K. Ltd.

Ithaca also agreed to divest a stake in the Hurricane field to Dyas. It has signed a contract letter of intent to secure a rig to drill an appraisal well at Hurricane in early 2012, the company said in a separate statement.

--Editors: Stephen Cunningham, Alex Devine.

To contact the reporter on this story: Brian Swint in London at bswint@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net


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