Ithaca Energy set to drill Stella well in December after closing transactions
30 November 2009
Oil and gas group Ithaca Energy is planning to drill an appraisal well on its Stella discovery in the North Sea before the end of December after completing a deal that gives it operatorship of the project.
In a move that was first announced in October, the Canadian exploration and production group has paid Maersk Oil US$10 million for an extra 33.33% working interest in Stella and the undeveloped satellite discovery Harrier and 50% working interest in Hurricane.
In a connected agreement that was arranged with Dutch group Dyas in October 2008, Ithaca has now sold on a 31.67% interest in Stella in return for US$8.7 million.
The deal with Dyas was part of a portfolio-wide arrangement struck during difficult market conditions and at a time when Ithaca was keen to raise cash to fund its development work on the Beatrice and Jacky oilfields. It involved selling a 25.25% stake in its assets for £40 million (US$65.6 million). Today’s agreement completes that transaction.
As a result, Ithaca is now operator of all assets involved in the Maersk Oil transaction and holds a 50.33% stake in Stella and Harrier and a 100% stake in Hurricane. As part of the agreement, it will pay Maersk Oil a further US$3 million at Field Development approval and US$5 million at first oil.
In order to reduce its exposure to the costs of drilling the appraisal well on Stella, Ithaca has agreed an earn-in with Challenger Minerals (North Sea), which will pay 27% of the gross costs in exchange for an 18% equity interest in the Stella and Harrier discoveries.
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