Ithaca Energy, a leading UK independent exploration and production company, has reported a slump in first-quarter earnings thanks to lower production.
The group, which recently announced that it would combine with substantially all of Eni S.p.A’s (Eni) UK upstream oil and gas assets to create a “UK powerhouse”, said statutory net income for the three months ended 31 March 2024 had slumped to $42.7m (£33.4m) down from $158.4m (£124.1m) in the same period last year.
Net cash flow from operating activities fell to $313.8m (£245.6m), down from $351.4m (£275m) in the first quarter of 2023.
The company’s net debt fell from $899.6m (£704.1m) to $461.1m (£360.9m).
A decline in output caused Ithaca’s earnings to fall. The company reported total production of 58,699 barrels of oil equivalent (boe/d) per day during the period, down from 75,257 boe/d in the first three months of 2023.
However, Ithaca said that its combination with the Eni assets would transform its potential in the years ahead. When completed, the enlarged group would have a production capacity of 150,000 boe/d by early 2030s, the company said today, with initial production estimated at between 100,000 boe/d and 110,000 boe/d.
Further, the combination would provide “material dividend capacity with ambition for up to $500m (£391.4m) total dividends each year in 2024 and 20254.”
Interim chief executive officer Iain Lewis, commented: “Ithaca Energy continues to deliver against its BUY, BUILD and BOOST strategy, announcing the transformational business combination with Eni UK in April that positions the company as the largest resource holder in the UK Continental Shelf with the potential for further material organic and inorganic growth.
“The Company’s first quarter performance was in line with our expectations and factored into our full year guidance set towards the end of March, following a number of operational issues across our non-operated joint venture portfolio that have now been resolved,” Lewis added.