In This Article:
Release Date: May 21, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Ithaca Energy PLC (STU:XE3) reported a record quarterly production of 127,400 barrels per day, demonstrating enhanced operating capacity.
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The company achieved a record quarterly adjusted EBITAX of $653.2 million, supported by a reduction in OpEx per barrel.
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Ithaca Energy PLC (STU:XE3) has successfully executed strategic acquisitions, including increasing its stake in the Cygnus Bravo project to 85%, which is expected to add significant production capacity.
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The company maintained a strong safety record with zero incidents reported, emphasizing its focus on safety and environmental performance.
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Ithaca Energy PLC (STU:XE3) reaffirmed its commitment to shareholder returns, with a third interim dividend paid in April and a target dividend of $500 million for 2025.
Negative Points
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The company reported a loss for the period due to a one-off non-cash deferred tax charge of $327 million related to the extension of the EPL.
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There is an increase in the net OpEx range by $10 million and net producing asset CapEx by $20 million, which could impact future profitability.
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The strengthening of the pound against the dollar has put upward pressure on costs, despite hedging efforts.
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Ithaca Energy PLC (STU:XE3) faces challenges in the M&A market, with limited opportunities for accretive acquisitions as the company continues to high-grade its portfolio.
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The company is awaiting clarity on the environmental and tax situation in the North Sea, which could impact future projects like the Cambo development.
Q & A Highlights
Q: Can you discuss the current M&A market in the UK, particularly in terms of the quality and quantity of assets available? Would you classify it as a buyer's or seller's market? A: We have seen increased interest in the UKCS since the autumn budget, with several deals and discussions taking place. It's difficult to categorize the market as strictly a buyer's or seller's market. We focus on value and meeting our investment metrics, aiming to add high-quality, accretive assets to our portfolio. We continue to see value in the UKCS and are methodical in our approach to M&A.
Q: What are your current production levels for the Captain project, and what are your expectations for year-end and peak production rates? A: In Q1, Captain's production was around 21,000 barrels of oil equivalent per day, which was 15% higher than planned. This was due to the enhanced oil recovery response and production efficiency being 2% ahead of our plan. We are pleased with the performance and expect continued strong results.