New production starts in the North Sea

Announcement from Ithaca Energy follows plan to merge with Israel's Delek Group.
By Daniel J. Graeber Follow @dan_graeber Contact the Author   |   Feb. 17, 2017 at 6:42 AM
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Feb. 17 (UPI) -- North Sea oil and gas company Ithaca Energy announced Friday the successful start of production from the region's Stella field.

"Production has been started from the field and oil export to the adjacent shuttle tanker has commenced," the company said in a statement. "The production ramp-up phase will commence when the on-going commissioning of the gas processing and compression facilities is complete."

First discovered in 1979, Ithaca has led in a string of discoveries in the field in the central British waters of the North Sea. Combined with developments close by, the company said it expected an initial production rate of about 30,000 barrels of oil equivalent.

The announcement comes two weeks after the company's board of directors said they were unanimous in their recommendation of a merger with Delek Group, an Israeli energy company.

Ithaca said it would "crystallize" the value of their holdings, targeting spending for the year at about $70 million.

Delek Group controls just less than 20 percent of Ithaca already and offered $524 million for the remaining stake.

North Sea oil and gas production is pivotal for the regional economy, which this year is expected to rely on imports to satisfy about 44 percent of its oil and gas needs.

Net British oil production is expected to hold steady this year, while gas output continues to show a slow decline in government forecasts.

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