Ithaca Energy expands footprint in the Greater Stella Area

Ithaca Energy took another step in its 'hub and spoke' strategy in the Greater Stella Area of the North Sea after signing four agreements to acquire further interests in the Vorlich and Austen discoveries.

In parallel, the company had completed the majority of the deep water marine marine system trials for its FPF-1 floating production facility.

The transactions announced on Tuesday held the potential to help extend the life of the company´s facilities.

"We are very pleased to announce this group of low cost acquisitions that further expand our core Greater Stella Area portfolio. This is in line with our "hub and spoke" strategy for maximising the value of the central infrastructure that has been put in place for the start-up of production from the Stella field," said Les Thomas, the company´s chief executive officer.

The oil and gas explorer announced the purchase of an increased stake in Vorlich - taking its overall interest from 17% to 33% - via agreements inked with ENGIE E&P, INEOS and Maersk to acquire block P1588.

BP held an 80% operator interest in another licence, P363, which contained the bulk of the Vorlich discovery and Ithaca the remaining 20%.

That transaction would add another approximately 4m barrels of oil equivalent in net proven and probable reserves to its portfolio and leave Ithaca as the sole operator, Ithaca said in a statement.

The Greater Stella Area was located in the heart of the Central Graben region of the Central North Sea, on the UK continental shelf.

AIM-listed Ithaca also bought a 75% interest and operatorship in the Austen discovery, an oil and gas condensate field which lay 30 kilometres from the GSA production hub. Premier Oil held the remaining 25% stake.

FPF-1 was to be deployed to the Stella field once its trials were completed.

"Extending the life of the facilities through acquisition of additional volumes is important to maximise the value of what is now the company’s core area. We will incorporate the impact of these acquisitions into our valuation shortly, but in the meantime maintain our 64p target price and Hold recommendation," Peel Hunt analyst James Carmichael said in a research note sent to clients.

Shares in Ithaca Energy finished the session 1.77% lower at 55.50p.