Ithaca Energy H1 Pre-tax Income Plunges; Backs Annual Production View

Ithaca Energy Plc (IAE.L), a British oil and gas company, on Wednesday posted a decline in pre-tax earnings and revenue for the first-half of 2023. In addition, the Group has reaffirmed its Annual production guidance.

For the six-month period to June 30, the UK-based company posted a pre-tax income of $248.741 million, compared with $1.741 billion, recorded for the same period of previous year.

Net profit stood at $159.586 million or 15.7 cents per share as against last year’s $1.557 billion or 154.8 cents per share.

Excluding items, income rose to $253.2 million from previous year’s $233.4 million.

The earnings were hurt by a $73.7 million post-tax impairment of the Greater Stella Area due to reduction in planned activity, as a direct result of the energy profits levy and falling gas prices. For the first-half of 2022, the company had obtained a $1.324 billion gain on bargain purchase which arose from the acquisitions of Marubeni UK and Siccar Point Energy.

Profit from operations before tax and net finance costs moved down to $345.262 million from $1.838 billion a year ago. Impairment charge surged to $328.426 million from $7.608 million of 2022.

Adjusted EBITDAX was at $ 979.7 million as against previous year’s $907.4 million.

Revenue was $1.248 billion, down from $1.337 billion of last year. The reduction in revenue was mainly due to changes in overlift and underlift positions relative to the first-half of 2022, lower commodity prices, and higher production.

For the first-half of 2023, the Group’s production stood at 75.8 thousand barrels of oil equivalent per day or kboe/d, compared with last year’s 66.7 kboe/d.

Gilad Myerson, Executive Chairman, said: “…The Energy Profits Levy continues to have a direct impact on investment in the UK North Sea and Ithaca Energy’s own investment programme across its diverse high-quality operated and non-operated asset base. We continue to constructively engage with the UK government to highlight the impact of the current fiscal regime to the industry’s outlook and to the UK government’s stated energy security and Net Zero ambitions.”

For the period to June, the Group incurred Energy Profits Levy charges of $223 million.

As a direct result of the energy profits levy, Ithaca noted that its investment across its portfolio will reduce. This includes the deferral and cancellation of certain 2023 and 2024 projects, impacting medium-term output outlook, with production in 2024 expected to be lower than 2023 levels.

Looking ahead, for full year 2023, the company has reiterated its production guidance of 68-74 kboe/d. Ithaca has reaffirmed its commitment to pay $400 million in total dividend, for 2023.

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