Ithaca Energy production falls short after problem summer
ITHACA Energy’s share price fell by almost seven per cent yesterday after a third-quarter trading update revealed that production had failed to meet the predicted level.
The company reported average production of 11,600 barrels of oil equivalent per day (boepd) and said it now anticipated full-year production of 12,500 boepd for 2014, whereas guidance production was 13,500 boepd.
The firm said production was reduced by planned summer maintenance shutdowns, in particlar a six-week one at its Cook field, and had also been impacted by equipment failure in one of its facilities.
Malcolm Graham-Wood, analyst at HydroCarbon Capital, commented: “The market never likes to see production guidance missed.”
However, he added that the company had “had a hard time of late” and said the stock was “worth significantly more than its current market cap of £337m”.
Ithaca stated that it has around 6,400 barrels of oil per day hedged at an average price of $102 a barrel for two years from July 2014. Analysts at Westhouse Securities said this was a positive for the firm “given the pressure on oil prices”.