CALGARY, AB--(Marketwired - Apr 24, 2015) - Ithaca Energy Inc. (TSX: IAE) (LSE: IAE)
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Ithaca Energy Inc.
Sale of Norwegian Exploration Business
24 April 2015
Ithaca Energy Inc. (TSX: IAE) (LSE: IAE) ("Ithaca" or the "Company") announces that it has entered into an agreement to sell its wholly owned subsidiary, Ithaca Petroleum Norge AS ("Ithaca Norge"), for an initial consideration of US$60 million. The Company also has the ability to earn additional bonus payments of up to US$30 million dependent on exploration success from the existing licence portfolio.
Pursuant to the agreement, Ithaca Norge will be acquired by MOL Nordsjon B.V., a wholly owned subsidiary of the Hungarian listed company MOL Plc (BUD). The transaction has an effective date of 1 January 2015 and is expected to complete in the third quarter of 2015.
Upon completion, the transaction will conclude Ithaca's successful restructuring and monetisation of the Norwegian operations acquired as part of the acquisition of Valiant Petroleum plc in April 2013.
After repayment of the Company's Norwegian exploration financing facility and forecast working capital adjustments, the sale is anticipated to result in an initial net cash receipt of approximately $30 million, which will be used to offset drawings under the Company's existing bank debt facility. The potential future bonus payments depend on successful discoveries being drilled on Ithaca Norge's existing licence portfolio between 2015 and 2017, with any payments based on a sliding scale depending on discovery size.
The transaction is subject to the approval of the Norwegian Ministry of Petroleum and Energy.
Les Thomas, Chief Executive Officer, commented:
"The team has done an excellent job in restructuring the Norwegian business following its acquisition as part of the Valiant transaction in 2013. The sale provides Ithaca with the right opportunity to now monetise the value of this non-core part of the Company while retaining upside exposure to the anticipated drilling programme over the next two years."
Pareto Securities, the specialist oil and gas investment bank headquartered in Oslo, Norway, acted as Sole Financial Advisor to Ithaca in relation to the transaction.
About Ithaca Energy
Ithaca Energy Inc. (TSX: IAE) (LSE: IAE) is a North Sea oil and gas operator focused on the delivery of lower risk growth through the appraisal and development of UK undeveloped discoveries, the exploitation of its existing UK producing asset portfolio and a Norwegian exploration and appraisal business targeting the generation of discoveries capable of monetisation prior to development. Ithaca's strategy is centred on generating sustainable long term shareholder value by building a highly profitable 25kboe/d North Sea oil and gas company. For further information please consult the Company's website www.ithacaenergy.com.
About Ithaca Norge
Ithaca Norge is a wholly-owned subsidiary of Ithaca Energy Inc. and has a portfolio of 14 licences in the North Sea area of the Norwegian Continental Shelf. In 2014, Ithaca Norge generated an unaudited loss after tax of NOK 143.4 million.
About MOL Group
MOL Group is an integrated, independent, international oil and gas company, headquartered in Budapest, Hungary. It has operations in over 40 countries and employs approximately 29,000 people worldwide. MOL's exploration and production activities are supported by more than 75 years' experience in the upstream business. MOL currently has production operations in 8 countries and exploration assets in 13 countries. The Group operates four refineries and two petrochemicals plants, under integrated supply chain management, in Hungary, Slovakia and Croatia. MOL Group also owns a network of over 1,700 filling stations across 11 countries in Central and South Eastern Europe.
Forward-looking statements
Some of the statements and information in this press release are forward-looking. Forward-looking statements and forward-looking information (collectively, "forward-looking statements") are based on the Company's internal expectations, estimates, projections, assumptions and beliefs as at the date of such statements or information, including, among other things, assumptions with respect to production, drilling, construction times, well completion times, risks associated with operations, future capital expenditures, continued availability of financing for future capital expenditures, future acquisitions and cash flow. The reader is cautioned that assumptions used in the preparation of such information may prove to be incorrect. When used in this press release, the words "anticipate", "continue", "estimate", "expect", "may", "will", "project", "plan", "should", "believe", "could", "target" and similar expressions, and the negatives thereof, whether used in connection with operational activities, drilling plans, production forecasts, potential developments or uncertainties such as the ability to earn additional bonus payments of up to US$30 million dependent on exploration success from the existing Norwegian licence portfolio, are intended to identify forward-looking statements. Such statements are not promises or guarantees, and are subject to known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. The Company believes that the expectations reflected in those forward-looking statements are reasonable but no assurance can be given that these expectations, or the assumptions underlying these expectations, will prove to be correct and such forward-looking statements included in this press release should not be unduly relied upon. These forward-looking statements speak only as of the date of this press release. Ithaca Energy Inc. expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement contained herein to reflect any change in its expectations with regard thereto or any change in events, conditions or circumstances on which any forward-looking statement is based except as required by applicable securities laws.
Additional information on these and other factors that could affect Ithaca's operations and financial results are included in the Company's Management's Discussion and Analysis for the year ended December 31, 2014, and the Company's Annual Information Form for the year ended December 31, 2014 and in reports which are on file with the Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com).
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