Ithaca Energy Says Profits Are Down Nearly 34%

North Sea oil and gas company Ithaca Energy reported a nearly 34% fall in net profit for the first half of the year on Thursday, hurt by lower production, a decline in natural gas prices and impairment charges.

Shares of Ithaca, fell about 2.3% to 128p in morning trade.

Ithaca, which in April agreed to buy nearly all Eni's UK oil and gas producing assets for about 754 million pounds ($986.53 million) in stock, also lowered its full-year production forecast to 76 to 81 thousand barrels of oil equivalent per day (kboepd), from 80 to 87 kboepd expected earlier.

Ithaca on a post-earnings call said that the deal progressing towards completion, is facing some "technical pieces" for closing, but expects it to be completed by early October.

The company expects pro-forma full-year 2024 production to be between 100 and 110 kboepd and a potential $10 billion of total pre-tax cash flow from operation over next five years.

"The results were a miss vs consensus, and the downgrade to guidance is a concern, although the ability to close the deal arguably remains a bigger worry," said Panmure Liberum analyst Ashley Kelty.

Production fell to 53 kboepd in the six-month period ended June 30, from last year's 75.8 kboepd.

The company said its output was hit by operational issues across its non-operated joint ventures and infrastructure as well as planned shutdowns across operated portfolio.

Ithaca said realised gas prices fell to $92 per barrel of oil equivalent (boe) in the first six months of the year after hedging from last year's $125 per boe.

The company, owned by Tel Aviv-listed Delek Group, on Thursday declared a first interim 2024 dividend of $100 million with the aim for special dividends to increase total distribution to up to $500 million per annum.

Ithaca also lowered the capital cost outlook for its Rosebank oil development in the North Sea basin to $170-195 million from a previous forecast of $190-230 million, as it eyes starting oil production there by 2026/27.

Ithaca recorded net income of $105.7 million for the first half, compared with $159.6 million a year earlier. It took decommissioning liability related impairment charges of $19 million in the reported period.

($1 = 0.7643 pounds)

(Reuters - Reporting by Arunima Kumar; Editing by Subhranshu Sahu, Christopher Cushing and David Evans)