Aberdeen-based Ithaca Energy turned round its fortunes in no uncertain fashion last year, despite a big fall in production.
The second-largest UK North Sea independent operator has, like many of its peers, benefited from the big increase in oil and gas prices.
It was revealed yesterday that Ithaca made net profits of £304.85million in 2021 compared to losses of £217.97million the year before.
Revenues last year were £1.12billion as against £900million in 2020.
The firm is a subsidiary of Israeli integrated energy company Delek, which has just released the group’s results for 2021.
Ithaca's daily output last year was around 56,000 barrels of oil equivalent (boe) - a drop of 10,000 barrels per day on 2020.
The cost of production in 2021 was about $18 per barrel, compared with $16 per barrel the year before.
Delek explained that the reasons for the fall in output last year included large-scale maintenance work in the summer in the transmission system, as well as maintenance work postponed from 2020 due to the Covid pandemic.
But production has bounced back in 2022 and is now around 70,000 boe per day.
Delek also said that Ithaca had started the second stage of development of the Captain reservoir.
It went on: "The multi-year project is intended to enable significant increase of the production from the reservoir from 2024, for several years.
"In addition, the production of the Abigail reservoir is expected to commence in 2022."
Last November, Ithaca signed an agreement for the acquisition of Marubeni Oil and Gas.
Japanese trading house Marubeni was the seller and the transaction was closed last month.
Delek said the non-contingent consideration in the deal for the Marubeni assets was £106.7million - of which £53.35million was paid on the transaction closing date, offset against the cash accrued in the company. Another $53.35million will be paid as deferred consideration in July 2025.
In addition, the agreement provides for further consideration of up to £171.48million, dependent on future activity in the assets of the acquired company.
The annual statements from Delek were accompanied by a “fair-value” assessment for Ithaca carried out by an independent appraiser, whereby Ithaca's value (net of debt) at the end of last year had increased to around £2.36billion, compared with a value of £1.43billion at the end of 2020. Delek said the increase reflected a 72% rise in Ithaca's value based on the energy prices in the markets as of the end of 2021, and it excluded the additional value of the Marubeni transaction.
There have been reports that Delek could float Ithaca on the London and Tel Aviv stock exchanges in the future to realise some of the large increase in the value of its North Sea investments,
Brent crude futures were down by 4.54% at $108.30 a barrel earlier today.
Companies reporting today:
Finals: BBGI Global Infrastructure
Trading statement: 3i Infrastructure