Investing.com -- Ithaca Energy (LON:ITH) on Wednesday reported a strong first quarter in 2025, driven by high operational efficiency and investment in the UK Continental Shelf, with production averaging 127,400 barrels of oil equivalent per day.
The company emphasized its continued focus on investment in the UKCS, highlighting both organic and inorganic growth opportunities.
Executive chairman Yaniv Friedman noted that Ithaca is "consolidating in our core market," as the company seeks to capitalize on value and accretive opportunities within this region.
CEO Luciano Vasques discussed the company’s operational approach, which prioritizes a "perfect day" model to optimize production efficiency.
This method has contributed to high operational performance, with seven out of ten operated assets delivering a "perfect quarter."
This approach was also a focal point during Ithaca’s investor day earlier in the year, following the release of its fiscal year 2024 results.
On the financial side, CFO Iain Lewis indicated that other UK exploration and production companies are likely to face tax charges due to the extension of the Extended Profit Levy (EPL).
The company’s net debt increased in the first quarter, partly due to an underlift during the period. Ithaca reported liquidity of approximately $1.1 billion, supported by a strong hedge position.
The company’s oil hedges have a weighted average floor above $70 per barrel for both swaps and collars, while its gas hedges are positioned around 90p per therm.
The company’s strong performance is also reflected in its production figures. Ithaca’s first-quarter 2025 production averaged 127,400 barrels of oil equivalent per day, up from 116,000 barrels of oil equivalent per day in the fourth quarter of 2024.
Management attributed this increase to high production efficiency, which exceeds the UKCS average of 75%.
Key contributors to the strong performance include the Captain field (about 21,000 barrels of oil equivalent per day net, with an 85% working interest), as well as the Jocelyn South, Elgin Franklin, and Seagull fields.
Ithaca’s future prospects are dependent on decisions regarding UK oil and gas taxation. Currently, Ithaca is awaiting further clarity on the UK’s fiscal regime and how it will affect projects such as Cambo, where it holds a 100% working interest.
Tax and regulatory discussions remain crucial to the company’s ability to farm out such projects.