q1 2017 consolidated financial statements · 2017-05-15 · consolidated statement of changes in...
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Q1 2017CONSOLIDATED FINANCIAL STATEMENTS
Ithaca Energy Inc. Q1 2017 Financial Statements 1
Consolidated Statement of IncomeFor the three months ended 31 March 2017 and 2016
(unaudited)
Note
Revenue 5
- Operating costs
- Other
- Movement in oil and gas inventory
- Depletion, depreciation and amortisation
Cost of sales
Gross Profit/(Loss)
Exploration and evaluation expenses 10 EXP12
Gain on financial instruments 25
Administrative expenses 6
Foreign exchange
Finance costs 7 EXP11
Interest income EXP13
Share of profit in associate EXP22
Profit/(Loss) Before Tax
Taxation 23
Profit After Tax
Earnings per share (US$ per share)
Basic 22
Diluted 22
The accompanying notes on pages 6 to 22 are an integral part of the financial statements.
(421)
-
0.04 0.03
2016
US$'000
33,250
(44,118)
(10,868)
(8,624)
(18,118)
(1,645)
2017
10,691
0.02
(20,185)
(17,608)
502
(6,325)
1,708
5,706 5,179
(9,173)
(745)
(1,769)
29
34,233
(16,521)
17,712
38 -
409
4,175
37,239
US$'000
(29,910)
7,329
2,795
(14,472)
(115)
0.04
6,516
Ithaca Energy Inc. Q1 2017 Financial Statements 2
(unaudited)
Note
Current assets
Cash and cash equivalents CAS01
Accounts receivable 8 CAS02
Deposits, prepaid expenses and other CAS04
Inventory 9 CAS06
Derivative financial instruments 26 CAS10
Non-current assets
Long-term receivable 28
Long-term inventory 9
Investment in associate 13 CAS07
Exploration and evaluation assets 10
Property, plant & equipment 11 CAS08
Deferred tax assets
Goodwill 12 CAS11
Total assets
LIABILITIES AND EQUITY
Current liabilities
Trade and other payables 15 CLB01
Contingent consideration 19 CLB06
Derivative financial instruments 26 CLB07
Non - current liabilities
Borrowings 14 CLB02
Decommissioning liabilities 16 CLB04
Other long term liabilities 17 CLB03
Contingent consideration 19 CLB06
Net assets
Shareholders' equity
Share capital 20 SEQ01
Share based payment reserve 21 SEQ02
Retained earnings
Total equity
The financial statements were approved by the Board of Directors on 12 May 2017 and signed on its behalf by:
The accompanying notes on pages 6 to 22 are an integral part of the financial statements.
7,812
1,142
5,870
135,105
25,827
175,756
2016
(8,650)
US$'000
(190,580)
1,081,769
743,729
(206,933)
(941,577)
667
27,199
157,912
(4,000)
US$'000
31 December
(236,928)
Director
24,859
1,886,334
(2,812)
31 March
2017
8,438
60,157
18,375
(208,434)
(939,522)
(245,257)
ASSETS
"Alec Carstairs"
110,028
(187,768)
28,150
Director
"Les Thomas"
390,179
123,510
1,710,578
-
621,345
Consolidated Statement of Financial Position
743,729
11,512
27,729
225,019
27,075
123,510
1,705,544
1,084,599
383,663
59,922
8,438
18,337
1,930,563
(4,329)
(614,585)
(107,853)
(618,566)
756,232
756,232
(8,650)
(107,428)
25,185
619,207
99,337
Ithaca Energy Inc. Q1 2017 Financial Statements 3
Consolidated Statement of Changes in Equity(unaudited)
Balance, 1 Jan 2016
Share based payment
Profit for the period
Balance, 31 March 2016
Balance, 1 Jan 2017
Share based payment
Shares issued
Profit for the period
Balance, 31 March 2017
The accompanying notes on pages 6 to 22 are an integral part of the financial statements.
-
Total
768
-
811,669
756,232
-
617,375
US$'000 US$'000
793,189
Retained
earnings
17,712
153,136
110,028
170,848
-
-
283
10,691
22,678
Share based
payment reserve
US$'000
768 -
24,859 621,345
-
25,185
10,691
617,375
619,207
-
-
2,138
283
99,337 743,729
(609) - 1,529
17,712
Share capital
US$'000
Ithaca Energy Inc. Q1 2017 Financial Statements 4
Consolidated Statement of Cash FlowFor the three months ended 31 March 2017 and 2016
(unaudited)
Note
Operating activities
Profit/(Loss) Before Tax
Adjustments for:
Depletion, depreciation and amortisation 11
Exploration and evaluation write off 10
Share based payment 6
Loan fee amortisation 7
Revaluation of financial instruments 25
Accretion on decommissioning provisions 16
Bank interest & charges
Cashflow generated from operations
Changes in inventory, debtors and creditors relating to operating activities
Petroleum Revenue Tax paid
Corporation Tax refunded
Investing activities
Capital expenditure
Contingent consideration 19
Investment in associate
Loan to associate
Decommissioning
Financing activities
Proceeds from issuance of shares
Loan (repayment)
Bank interest and charges
The accompanying notes on pages 6 to 22 are an integral part of the financial statements.
122 158
(8,805)
(2,037)
5,514
(33,226) (15,966)
(5,796)
44,358
(8,818)
2,192
(235)
(569)
-
(38) -
- 2,138
(4,917)
(11,584)
421
(25,000)
21,859
14,472
745
(21,332)
27,199 11,543
10,316
Currency translation differences relating to cash and cash equivalents
US$'000US$'000
111
Net cash generated from operating activities
1,040
17,608
4,175 (16,521)
2,273
51,124
2016
Changes in debtors and creditors relating to investing activities
1,040
65
30,272
(6,916) 1,997
2017
33,565
Cash and cash equivalents, end of period
Net cash used in financing activities
(13,462)
Cash and cash equivalents, beginning of period
5,870
(Decrease)/Increase in cash and cash equivalents
(14,922)
Net cash (used in) investing activities
5,861
2,069
23,356
(1,240)
6,009
-
-
685
(25,000)
-
(4,000)
Ithaca Energy Inc. Q1 2017 Financial Statements 5
1. NATURE OF OPERATIONS
2. BASIS OF PREPARATION
3. SIGNIFICANT ACCOUNTING POLICIES, JUDGEMENTS AND ESTIMATION UNCERTAINTY
Basis of measurement
Basis of consolidation
Goodwill
Capitalisation
The policies applied in these condensed interim consolidated financial statements are based on IFRS issued and outstanding as of
12 May 2017, the date the Board of Directors approved the statements. Any subsequent changes to IFRS that are given effect in
the Corporation’s annual consolidated financial statements for the year ending 31 December 2017 could result in restatement of
these interim consolidated financial statements.
These interim consolidated financial statements have been prepared in accordance with International Financial Reporting Standards
(IFRS) applicable to the preparation of interim financial statements, including IAS 34 Interim Financial Reporting. These interim
consolidated financial statements do not include all the necessary annual disclosures in accordance with IFRS.
Business Combinations
Subsidiaries are all entities, including structured entities, over which the group has control. The group controls an entity when the
group is exposed to or has rights to variable returns from its investments with the entity and has the ability to affect those returns
through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the group.
They are deconsolidated on the date that control ceases.
Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the fair value of
the assets acquired, equity instruments issued and liabilities incurred or assumed at the date of completion of the acquisition.
Acquisition costs incurred are expensed and included in administrative expenses. Identifiable assets acquired and liabilities and
contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. The excess
of the cost of acquisition over the fair value of the Corporation's share of the identifiable net assets acquired is recorded as goodwill.
If the cost of the acquisition is less than the Corporation's share of the net assets acquired, the difference is recognised directly in
the statement of income as negative goodwill.
The interim consolidated financial statements are presented in US dollars and all values are rounded to the nearest thousand
(US$'000), except when otherwise indicated.
The interim consolidated financial statements have been prepared under the historical cost convention, except for the revaluation of
certain financial assets and financial liabilities (under IFRS) to fair value, including derivative instruments.
The interim consolidated financial statements have been prepared on a going concern basis using the historical cost convention,
except for financial instruments which are measured at fair value.
Ithaca Energy Inc. (the “Corporation” or “Ithaca”), incorporated and domiciled in Alberta, Canada on 27 April 2004, is a publicly
traded company involved in the development and production of oil and gas in the North Sea. The Corporation's registered office is
1600, 333 - 7th Avenue S.W., Calgary, Alberta, Canada, T2P 2Z1. The Corporation's shares trade on the Toronto Stock Exchange
in Canada and the London Stock Exchange’s Alternative Investment Market in the United Kingdom under the symbol “IAE”.
Goodwill acquired through business combinations is initially measured at cost, being the excess of the aggregate of the
consideration transferred and the amount recognised as the fair value of the Corporation's share of the identifiable net assets
acquired and liabilities assumed. If this consideration is lower than the fair value of the identifiable assets acquired, the difference is
recognised in the statement of income.
The interim consolidated financial statements of the Corporation include the financial statements of Ithaca Energy Inc. and all wholly-
owned subsidiaries as listed per note 28. Ithaca has twenty wholly-owned subsidiaries. All inter-company transactions and balances
have been eliminated on consolidation.
The condensed interim consolidated financial statements should be read in conjunction with the Corporation’s annual financial
statements for the year ended 31 December 2016.
Ithaca Energy Inc. Q1 2017 Financial Statements 6
Impairment
Interest in joint operations
Revenue
Foreign currency translation
Share based payments
Cash and cash equivalents
Oil, gas and condensate revenues associated with the sale of the Corporation’s crude oil and natural gas are recognised when title
passes to the customer. This generally occurs when the product is physically transferred into a vessel, pipe or other delivery
mechanism. Revenues from the production of oil and natural gas properties in which the Corporation has an interest with joint
venture partners are recognised on the basis of the Corporation’s working interest in those properties (the entitlement method).
Differences between the production sold and the Corporation’s share of production are recognised within cost of sales at market
value.
Items included in the financial statements are measured using the currency of the primary economic environment in which the
Corporation and its subsidiaries operate (the ‘functional currency’). The consolidated financial statements are presented in United
States Dollars, which is the Corporation’s functional and presentation currency.
Under IFRS 11, joint arrangements are those that convey joint control which exists only when decisions about the relevant activities
require the unanimous consent of the parties sharing control. Investments in joint arrangements are classified as either joint
operations or joint ventures depending on the contractual rights and obligations of each investor. Associates are investments over
which the Corporation has significant influence but not control or joint control, and generally holds between 20% and 50% of the
voting rights.
The Corporation's interest in joint operations (eg exploration and production arrangements) are accounted for by recognising its
assets (including its share of assets held jointly), its liabilities (including its share of liabilities incurred jointly), its revenue from the
sale of its share of the output arising from the joint operation, its share of revenue from the sale of output by the joint operation and
its expenses (including its share of any expenses incurred jointly).
Interest income is recognised on an accruals basis and is separately recorded on the face of the statement of income.
The Corporation has a share based payment plan as described in note 20 (c). The expense is recorded in the consolidated
statement of income or capitalised for all options granted in the year, with the gross increase recorded in the share based payment
reserve. Compensation costs are based on the estimated fair values at the time of the grant and the expense or capitalised amount
is recognised over the vesting period of the options. Upon the exercise of the stock options, consideration paid together with the
amount previously recognised in share based compensation reserve is recorded as an increase in share capital. In the event that
vested options expire unexercised, previously recognised compensation expense associated with such stock options is not
reversed. In the event that unvested options are forfeited or expired, previously recognised compensation expense associated with
the unvested portion of such stock options is reversed.
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year
end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the statement of income.
For the purpose of the statement of cash flow, cash and cash equivalents include investments with an original maturity of three
months or less.
Goodwill is tested annually for impairment and also when circumstances indicate that the carrying value may be at risk of being
impaired. Impairment is determined for goodwill by assessing the recoverable amount of each cash generating unit ("CGU") to
which the goodwill relates. Where the recoverable amount of the CGU is less than its carrying amount, an impairment loss is
recognised in the statement of income. Impairment losses relating to goodwill cannot be reversed in future periods.
Under the equity method, investments are carried at cost plus post-acquisition changes in the Corporation's share of net assets,
less any impairment in value in individual investments. The consolidated income statement reflects the Corporation's share of the
results and operations after tax and interest.
Ithaca Energy Inc. Q1 2017 Financial Statements 7
Financial instruments
Inventory
Trade receivables
Trade payables
Property, plant and equipment
Oil and gas expenditure – exploration and evaluation assets
Capitalisation
Analyses of the fair values of financial instruments and further details as to how they are measured are provided in notes 25 to 27.
Pre-acquisition costs on oil and gas assets are recognised in the consolidated statement of income when incurred. Costs incurred
after rights to explore have been obtained, such as geological and geophysical surveys, drilling and commercial appraisal costs and
other directly attributable costs of exploration and evaluation including technical, administrative and share based payment expenses
are capitalised as intangible exploration and evaluation (“E&E”) assets.
Held-for-trading financial instruments are subsequently measured at fair value with changes in fair value recognised in net earnings.
All other categories of financial instruments are measured at amortised cost using the effective interest method. Cash and cash
equivalents are classified as held-for-trading and are measured at fair value. Accounts receivable are classified as loans and
receivables. Accounts payable, accrued liabilities, certain other long-term liabilities, and long-term debt are classified as other
financial liabilities. Although the Corporation does not intend to trade its derivative financial instruments, they are classified as held-
for-trading for accounting purposes.
Trade receivables are recognised and carried at the original invoiced amount, less any provision for estimated irrecoverable
amounts.
Trade payables are measured at cost.
Inventories of materials and product inventory supplies are stated at the lower of cost and net realisable value. Cost is determined
on the first-in, first-out method. Current oil and gas inventories are stated at fair value less cost to sell. Non-current oil and gas
inventories are stated at historic cost.
All financial instruments are initially recognised at fair value on the statement of financial position. The Corporation’s financial
instruments consist of cash, restricted cash, accounts receivable, deposits, derivatives, accounts payable, accrued liabilities,
contingent consideration and the liability acquired as part of the Beatrice field acquisition. The Corporation classifies its financial
instruments into one of the following categories: held-for-trading financial assets and financial liabilities; held-to-maturity
investments; loans and receivables; and other financial liabilities. All financial instruments are required to be measured at fair value
on initial recognition. Measurement in subsequent periods is dependent on the classification of the respective financial instrument.
Transaction costs that are directly attributable to the acquisition or issue of a financial asset or liability and original issue discounts
on long-term debt have been included in the carrying value of the related financial asset or liability and are amortised to
consolidated net earnings over the life of the financial instrument using the effective interest method.
E&E costs are not amortised prior to the conclusion of evaluation activities. At completion of evaluation activities, if technical
feasibility is demonstrated and commercial reserves are discovered then, following development sanction, the carrying value of the
E&E asset is reclassified as a development and production (“D&P”) asset, but only after the carrying value is assessed for
impairment and where appropriate its carrying value adjusted. If after completion of evaluation activities in an area, it is not possible
to determine technical feasibility and commercial viability or if the legal right to explore expires or if the Corporation decides not to
continue exploration and evaluation activity, then the costs of such unsuccessful exploration and evaluation are written off to the
statement of income in the period the relevant events occur.
Ithaca Energy Inc. Q1 2017 Financial Statements 8
Oil and gas expenditure – development and production assets
Capitalisation
Depreciation
Impairment
Non oil and natural gas operations
Borrowings
Decommissioning liabilities
Loan origination fees are capitalised and amortised over the term of the loan. Borrowing costs directly attributable to the acquisition,
construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for
their intended use or sale, are added to the cost of those assets until such time as the assets are substantially ready for their
intended use of sale. All other borrowing costs are expensed as incurred.
All interest-bearing loans and other borrowings with banks are initially recognised at fair value net of directly attributable transaction
costs. After initial recognition, interest-bearing loans and other borrowings are subsequently measured at amortised cost using the
effective interest method. Amortised cost is calculated by taking into account any issue costs, discount or premium.
The Corporation records the present value of legal obligations associated with the retirement of long-term tangible assets, such as
producing well sites and processing plants, in the period in which they are incurred with a corresponding increase in the carrying
amount of the related long-term asset. The obligation generally arises when the asset is installed or the ground/environment is
disturbed at the field location. In subsequent periods, the asset is adjusted for any changes in the estimated amount or timing of the
settlement of the obligations. The carrying amounts of the associated assets are depleted using the unit of production method, in
accordance with the depreciation policy for development and production assets. Actual costs to retire tangible assets are deducted
from the liability as incurred.
Costs of bringing a field into production, including the cost of facilities, wells and subsea equipment, direct costs including staff costs
and share based payment expense together with E&E assets reclassified in accordance with the above policy, are capitalised as a
D&P asset. Normally each individual field development will form an individual D&P asset but there may be cases, such as phased
developments, or multiple fields around a single production facility when fields are grouped together to form a single D&P asset.
For impairment review purposes the Corporation’s oil and gas assets are analysed into cash-generating units ("CGUs") as identified
in accordance with IAS 36. A review is carried out each reporting date for any indicators that the carrying value of the Corporation’s
assets may be impaired. For assets where there are such indicators, an impairment test is carried out on the CGU. The impairment
test involves comparing the carrying value with the recoverable value of an asset. The recoverable amount of an asset is
determined as the higher of its fair value less costs to sell and value in use, where the value in use is determined from estimated
future net cash flows. If the recoverable amount of an asset is estimated to be less that its carrying amount, the carrying amount of
the asset is reduced to the recoverable amount. The resulting impairment losses are written off to the statement of income.
Senior notes are measured at amortised cost.
Computer and office equipment is recorded at cost and depreciated over its estimated useful life on a straight-line basis over three
years. Furniture and fixtures are recorded at cost and depreciated over their estimated useful lives on a straight-line basis over five
years.
All costs relating to a development are accumulated and not depreciated until the commencement of production. Depreciation is
calculated on a unit of production basis based on the proved and probable reserves of the asset. Any re-assessment of reserves
affects the depreciation rate prospectively. Significant items of plant and equipment will normally be fully depreciated over the life of
the field. However, these items are assessed to consider if their useful lives differ from the expected life of the D&P asset and
should this occur a different depreciation rate would be charged.
Ithaca Energy Inc. Q1 2017 Financial Statements 9
Contingent consideration
Taxation
Operating leases
Finance leases
Maintenance expenditure
Recent accounting pronouncements
- IFRS 15 'Revenue from contracts with customers' is effective for accounting periods beginning on or after 1 January 2018.
- IFRS 9 'Financial instruments' is effective for accounting periods on or after 1 January 2018.
- IFRS 16 'Leases' is effective for accounting periods beginning on or after 1 January 2019.
Current income tax
Finance leases that transfer substantially all the risks and benefits incidental to ownership of the leased item to the Corporation, are
capitalised at the commencement of the lease at the fair value of the leased property or, if lower, at the present value of the
minimum lease payments. Lease payments are apportioned between finance charges and reduction of the lease liability so as to
achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognised in finance costs in the
income statement. A leased asset is depreciated over the useful life of the asset. However, if there is no reasonable certainty that
the Corporation will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful
life of the asset and the lease term.
Expenditure on major maintenance refits or repairs is capitalised where it enhances the life or performance of an asset above its
originally assessed standard of performance; replaces an asset or part of an asset which was separately depreciated and which is
then written off, or restores the economic benefits of an asset which has been fully depreciated. All other maintenance expenditure
is charged to the statement of income as incurred.
PRT is accounted for under IAS 12 since it has the characteristics of an income tax as it is imposed under Government authority
and the amount payable is based on taxable profits of the relevant field. Deferred PRT is accounted for on a temporary difference
basis.
Contingent consideration is accounted for as a financial liability and measured at fair value at the date of acquisition with any
subsequent remeasurements recognised either in profit or loss or in other comprehensive income in accordance with IAS 39.
Rentals under operating leases are charged to the statement of income on a straight line basis over the period of the lease.
Deferred income tax
Deferred tax assets and liabilities are offset only when a legally enforceable right of offset exists and the deferred tax assets and
liabilities arose in the same tax jurisdiction.
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation
authorities. The tax rates and tax laws used to compute the amounts are those that are enacted or substantively enacted by the
reporting date.
Petroleum Revenue Tax
Deferred tax is recognised for all deductible temporary differences and the carry-forward of unused tax losses. Deferred tax assets
and liabilities are measured using enacted or substantively enacted income tax rates expected to apply to taxable income in the
years in which temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a
The following standards have been published and are mandatory for the Group's accounting periods beginning on or after 1 January
2018, but the Group has not early adopted them:
In addition to corporate income taxes, the Group's financial statements also include and disclose Petroleum Revenue Tax (PRT) on
net income determined from oil and gas production.
Ithaca Energy Inc. Q1 2017 Financial Statements 10
Significant accounting judgements and estimation uncertainties
4. SEGMENTAL REPORTING
5. REVENUE
Three months ended 31 March
Oil sales REV01
Gas sales REV02
Condensate sales REV03
Other income REV04
6. ADMINISTRATIVE EXPENSES Three months ended 31 March
General & administrative EXP01
Share based payments EXP16
7. FINANCE COSTS Three months ended 31 March
US$'000 US$'000
Bank charges and interest
Senior notes interest
Finance lease interest
Non-operated asset finance fees
Prepayment interest
Loan fee amortisation
Accretion
8. ACCOUNTS RECEIVABLE
Trade debtors
Accrued income
(254)
1,071
35,941
124,857
US$'000
20
135,105
10,247
(240)
(1,658)
US$'000
2017 2016
(1,645)
31 Dec31 March
(1,040)
(8,624)
(622)
(9,173)
(4)
1,130
2017
(1,152)
(2,273)
2016
US$'000 US$'000
(3,830)
33,250
2017
(1,580)
The amounts recorded for depletion, depreciation of property and equipment, long-term liability, share based payment, contingent
consideration, onerous contract provisions, decommissioning liabilities, derivatives, and deferred taxes are based on estimates. The
depreciation charge, any impairment tests and fair value estimates for the purpose of purchase price allocation (business
combinations) are based on estimates of proved and probable reserves, production rates, prices, future costs and other relevant
assumptions. By their nature, these estimates are subject to measurement uncertainty and the effect on the financial statements of
changes in such estimates in future periods could be material. Further information on each of these estimates is included within the
notes to the financial statements.
US$'000
The Company operates a single class of business being oil and gas exploration, development and production and related activities
in a single geographical area presently being the North Sea.
US$'000
(111)
128
The preparation of financial statements in conformity with IFRS requires management to make estimates and assumptions
regarding certain assets, liabilities, revenues and expenses. Such estimates must often be made based on unsettled transactions
and other events and a precise determination of many assets and liabilities is dependent upon future events. Actual results may
differ from estimated amounts.
32,031
116
(65)
37,239
(1,769)
52
2016
(12)
(678)
(1,040)
(2,069)
(755)
157,912
11,722
146,190
20162017
(3,830)
Ithaca Energy Inc. Q1 2017 Financial Statements 11
9. INVENTORY
Current
Crude oil inventory
Materials inventory
Non-current
Crude oil inventory
The non-current portion of inventory relates to long term stocks at the Sullom Voe Terminal.
10. EXPLORATION AND EVALUATION ASSETS
At 1 January 2016
Additions
Write offs/relinquishments
Impairment
At 31 December 2016 and 1 January 2017
Additions
Write offs/relinquishments
At 31 March 2017
11. PROPERTY, PLANT AND EQUIPMENT
Development & Production Other fixed
Cost
At 1 January 2016
Additions
At 31 December 2016 and 1 January 2017
Additions
At 31 March 2017
DD&A and Impairment
At 1 January 2016
DD&A charge for the period
Impairment charge for the year
At 31 December 2016 and 1 January 2017
DD&A charge for the period
At 31 March 2017
NBV at 1 January 2016
NBV at 1 January 2017
NBV at 31 March 2017
11,624
31 March
2016
(770)
US$'000
11,223
US$'000
2017
(14,472)
554
(14,413)
11,642
3,411 2,545,292
Total
18
(60)
(1,472,291)
The net book amount of property, plant and equipment includes $28.1 million (31 December 2016: $28.5 million) in respect of the
Pierce FPSO lease held under finance lease.
1,081,214
Following completion of geotechnical evaluation activity, certain North Sea licences were declared unsuccessful and certain
prospects were declared non-commercial. This resulted in the carrying value of these licences being fully written off to nil with $0.8
million being expensed in the period to 31 March 2017.
2,556,934
(1,457,878)
1,102,046
(1,475,165)(2,875)
1,101,184
596
862
3,429
(745)
US$'000
1,862
US$'000
31 Dec
1,084,599
(2,815) (1,460,693)
1,084,003
1,081,769
2,482,010
28,150
1,820
Oil and Gas Assets
US$'000US$'000
2,541,881
2,553,505
5 59,876 59,871
(70,250)
(2,544) (1,383,370)
(70,521)(271)
(6,802)(6,802) -
assets
2,485,416 3,406
(1,380,826)
27,075
US$'000 US$'000
23,965
1,259
27,729
25,868
31 March 31 Dec
2017 2016
8,438 8,438
15,363
25,827
1,861
Ithaca Energy Inc. Q1 2017 Financial Statements 12
12. GOODWILL 31 March 31 Dec
Closing balance
13. INVESTMENT IN ASSOCIATES 31 March 31 Dec
Investment in FPF-1 and FPU Services
14. BORROWINGS
31 March
RBL facility 38004
Senior notes 38002
Long term bank fees
Long term senior notes fees
Bank debt facilities
Senior Reserves Based Lending Facility
Junior Reserves Based Lending Facility
Senior Notes
Covenants
The key covenants in both the Senior and Junior RBLs are:
US$'000
Investment in associates comprises shares, acquired by Ithaca Energy (Holdings) Limited, in FPF-1 Limited and FPU Services
Limited as part of the completion of the Greater Stella Area transactions in 2012.
2017
123,510
US$'000
As at 31 March 2017, the Corporation has a Senior Reserved Based Lending ("Senior RBL") Facility of $475 million. As at 31
March 2017, $320 million (31 December 2016: $325 million) was drawn down under the Senior RBL. $3.0 million (31 December
2016: $3.7 million) of loan fees relating to the RBL have been capitalised and remain to be amortised.
2017
(300,000)
(320,000)
123,510
US$'000
As at 31 March 2017, the Corporation had a Junior Reserved Based Lending ("Junior RBL") Facility of $60 million. The facility
remains undrawn at the period end.
31 Dec
3,010
2016
18,337
2017
2,405
(614,585)
The Corporation is subject to financial and operating covenants related to the facilities. Failure to meet the terms of one or more of
these covenants may constitute an event of default as defined in the facility agreements, potentially resulting in accelerated
repayment of the debt obligations.
(618,566)
2016
$123.5 million goodwill represents $136.1 million recognised on the acquisition of Summit Petroleum Limited ("Summit") in July
2014 as a result of recognising a $136.9 million deferred tax liability as required under IFRS 3 fair value accounting for business
combinations. Absent the deferred tax liability the price paid for the Summit assets equated to the fair value of the assets. $1.0
million represented goodwill recognised on the acquisition of gas assets from GDF in December 2010. As at 31 December 2015 a
non-taxable impairment of $13.6 million was recorded relating to goodwill.
US$'000
2016
The Company's bank debt facilities are sized at $535 million: a $475 million senior RBL and a $60 million junior RBL. Both RBL
facilities are based on conventional oil and gas industry borrowing base financing terms, with loan maturities in September 2018,
and are available to fund on-going development activities and general corporate purposes. The combined interest rate of the two
bank debt facilities, fully drawn, is LIBOR plus 3.4% prior to Stella coming on-stream, stepping down to LIBOR plus 2.9% after Stella
production has been established.
US$'000
As at 31 March 2017, the Corporation had $300 million 8.125% senior unsecured notes due July 2019, with interest payable semi-
annually. $2.4 million of loan fees (31 December 2016: $2.7 million) have been capitalised and remain to be amortised.
The Corporation was in compliance with all its relevant financial and operating covenants during the period.
There has been an increase of $0.04m in value during the period with the above investment reflecting the Company's share of the
associates' results.
2,686
3,666
(324,918)
(300,000)
US$'000
18,375
Ithaca Energy Inc. Q1 2017 Financial Statements 13
15. TRADE AND OTHER PAYABLES 31 March 31 Dec
Trade payables
Accruals and deferred income
16. DECOMMISSIONING LIABILITIES 31 March 31 Dec
US$'000 US$'000
Balance, beginning of period
Additions
Accretion
Revision to estimates
Decommissioning provision utilised
Balance, end of period
17. OTHER LONG-TERM LIABILITIES 31 March 31 Dec
US$'000 US$'000
Shell oil prepayment
BP gas prepayment
Finance lease
Balance, end of period
(64,468)
2017
- A corporate cashflow projection showing total sources of funds must exceed total forecast uses of funds for the later of the
following 12 months or until forecast first oil from the Stella field.
- The ratio of the net present value of cashflows secured under the RBL for the economic life of the fields to the amount drawn
under the facility must not fall below 1.15:1
- The ratio of the net present value of cashflows secured under the RBL for the life of the debt facility to the amount drawn under
the facility must not fall below 1.05:1.
(107,853)
(29,830)
Security provided against the facilities
The RBL facilities are secured by the assets of the guarantor members of the Ithaca Group, such security including share pledges,
floating charges and/or debentures.
The Senior notes are unsecured senior debt of Ithaca Energy Inc., guaranteed by certain members of the Ithaca Group and
subordinated to existing and future secured obligations.
(13,553)
There are no financial maintenance covenants tests under the senior notes.
2017 2016
2017 2016
(64,017)
The prepayment balances relate balance relates to cash advances under the Shell oil sales agreement and BP gas sales
agreement which have been classified as long-term liabilities as short-term repayment is not due in the current oil price
environment. The finance lease related to the Pierce FPSO acquired as part of the Summit acquisition.
(71,156)
(116,612)
2016
(206,933)
568
(206,933)
4,228
(187,768)
US$'000
(208,434)
US$'000
The total future decommissioning liability was calculated by management based on its net ownership interest in all wells and
facilities, estimated costs to reclaim and abandon wells and facilities and the estimated timing of the costs to be incurred in future
periods. The Corporation uses a risk free rate of 4.0 percent (31 December 2016: 4.0 percent) and an inflation rate of 2.0 percent
(31 December 2016: 2.0 percent) over the varying lives of the assets to calculate the present value of the decommissioning
liabilities. These costs are expected to be incurred at various intervals over the next 24 years.
The economic life and the timing of the obligations are dependent on Government legislation, commodity price and the future
production profiles of the respective production and development facilities.
(107,428)
(140,166)
(96,762)
(236,928)
(2,279)
27,248
(226,915)
(9,215)
-
(2,069)
-
(30,199)
(13,212)
Ithaca Energy Inc. Q1 2017 Financial Statements 14
18. FINANCE LEASE LIABILITIES
31 March 31 Dec
US$'000 US$'000
Total minimum lease payments
Less than 1 year
Between 1 and 5 years
5 years and later
Interest
Less than 1 year
Between 1 and 5 years
5 years and later
Present value of minimum lease payments
Less than 1 year
Between 1 and 5 years
5 years and later
19. CONTINGENT CONSIDERATION
31 March 31 Dec
Current US$'000 US$'000
Balance outstanding
Non-current
Balance outstanding
20. SHARE CAPITAL
Number of Amount Authorised share capital ordinary shares US$'000
At 31 March 2017 and 31 December 2016 Unlimited -
(a) Issued
The issued share capital is as follows:
Issued Number of Amount common shares US$'000
Balance 1 January 2017
Issued for cash - options exercised
Balance 31 March 2017
(b) Stock options
2016
The contingent consideration related to the acquisition of the Stella field and was paid after first oil.
(8,639)
(3,761)
(925)
(2,767)
2017
(1,670)
2016
2017
(17,670)
621,345
(2,595)
2,138 2,786,658
The finance lease relates to the Pierce FPSO acquired as part of the Summit acquisition.
US$'000 US$'000
413,099,042 619,207
(18,124)
(2,595)
(12,434)
(21,043)
(1,656)
(2,919)
(939)
(3,834)
(8,600)
2017 2016
- (4,000)
The non-current contingent consideration balance at the end of the year relates to the acquisition of the Vorlich and Austen fields,
with an amount payable upon FDP submission of $5.9 million and subsequent payment of $2.75 million payable due upon defined
production criteria being met.
(8,650) -
415,885,700
The Corporation’s stock options and exercise prices are denominated in Canadian Dollars when granted. As at 31 March 2017,
21,536,481 stock options to purchase common shares were outstanding, having an exercise price range of $0.40 to $2.51 (C$0.55
to C$2.71) per share and a vesting period of up to 3 years in the future.
(20,437)
(12,400)
Subsequent to the quarter end conditions of a cash takeover offer for all the common shares of the Company not owned by Delek
Group Ltd. (“Delek”) or any of its affiliates for C$1.95 per share (the “Offer”) have been satisfied and the Offer has been accepted by
holders of approximately 70.3% of the issued and outstanding common shares, not including the common shares already owned by
Delek prior to the announcement of the Offer. As a result of this transactions all stock option have immediately vested.
No new stock options have been granted in the quarter ended 31 March 2017.
31 Dec31 March
Ithaca Energy Inc. Q1 2017 Financial Statements 15
31 March 2017 31 December 2016
Balance, beginning of period
Granted
Forfeited / expired
Exercised
The following is a summary of stock options as at 31 March 2017
Wt. Avg. Wt. Avg. Wt. Avg. Wt. Avg.
Life Exercise Life Exercise
(Years) Price * (Years) Price *
1.2 $2.47 0.7 $2.47
1.7 $0.93 1.7 $0.92
$0.40 (C$0.55) 2.8 $0.40 $0.40 (C$0.55) 2.8 $0.40
2.2 $1.16 1.1 $1.69
The following is a summary of stock options as at 31 December 2016:
Wt. Avg. Wt. Avg. Wt. Avg. Wt. Avg.
Life Exercise Life Exercise
(Years) Price * (Years) Price *
1.0 $2.47 0.9 $2.47
1.9 $0.93 1.9 $0.94
$0.40 (C$0.55) 3.0 $0.40 $0.40 (C$0.55) 0.5 $0.40
2.2 $1.10 1.1 $1.72
(c) Share based payments
Risk free interest rate
Expected stock volatility
Expected life of options
Weighted Average Fair Value
-
(1,714,997)
12,000,000
19,216,206
24,413,139
(5,088,070)
$1.10
$2.46-$2.51
(C$2.53-C$2.71)
24,413,139 8,358,336
$2.46-$2.51
(C$2.53-C$2.71)
6,590,003 3,835,003
11,450,000
6,373,136
(90,000)
Options Outstanding
$1.70
$1.81$2.00
Options Exercisable
$0.85
Wt. Avg Exercise
Price *
Wt. Avg Exercise
Price *
Changes to the Corporation’s stock options are summarised as follows:
Options granted are accounted for using the fair value method. The cost during the three months ended 31 March 2017 for total
stock options granted was $0.3 million (Q1 2016: $0.8million). $0.1 million was charged through the statement of income for stock
based compensation for the three months ended 31 March 2017 (Q1 2016: $0.1 million), being the Corporation’s share of stock
based compensation chargeable through the statement of income. The remainder of the Corporation’s share of stock based
compensation has been capitalised. The fair value of each stock option granted in the period was estimated at the date of grant,
using the Black-Scholes option pricing model with the following assumptions:
$0.84-$1.01
(C$1.04-C$1.97)
For the year ended
31 December 2016
N/A
$0.22
4,323,333
Options Outstanding
No. of Options
200,000
60%
$0.58
Options
Range of
Exercise Price No. of Options
Options Exercisable
$1.10
No. of Options
Range of
Exercise Price
2,750,005
6,341,469
For the three months ended
31 March 2017
N/A
N/A
No. of Options
21,536,481
$0.84-$1.01
(C$1.04-C$1.97)
$2.45-$2.51
(C$2.53-C$2.71)
-
0.53%
* The weighted average exercise price has been converted into U.S. dollars based on the foreign exchange rate in effect at the date
of issuance.
Range of
Exercise Price
3 years
No. of OptionsNo. of Options
Range of
Exercise Price
(2,786,658)
5,505,005
6,373,136
$2.45-$2.51
(C$2.53-C$2.71)
$0.84-$0.93
(C$1.04-C$1.06)
9,658,340 2,158,338
21,536,481
$0.84-$0.93
(C$1.04-C$1.06)
$1.16
24,413,139
$0.40
11,249,812
N/A
Ithaca Energy Inc. Q1 2017 Financial Statements 16
21. SHARE BASED PAYMENT RESERVE
31 March 31 Dec
Balance, beginning of period
Share based payment cost
Transfer to share capital on exercise of options
Balance, end of period
22. EARNINGS PER SHARE
Three months ended 31 March
Weighted average number of common shares (basic)
Weighted average number of common shares (diluted)
23. TAXATION
Three months ended 31 March
Taxation
24. COMMITMENTS
31 March 31 Dec
Operating lease commitments
Within one year
Two to five years
31 March 31 Dec
Capital commitments
Capital commitments incurred jointly with other venturers (Ithaca's share)
411,384,045
(609)
22,678
3,058
(551)
25,185
30 216
2017
2016
34,233
2017
2017
In accordance with the Stella Sale and Purchase Agreement ("SPA"), Ithaca receives the right to claim a tax benefit for additional
capital allowances on certain capital expenditures incurred by Ithaca and paid for by Petrofac on the Stella project.
The tax benefit of these capital allowances is received by Ithaca as the expenditure is incurred. In recognition of the benefit Ithaca
receives from the additional capital allowances a payment is expected to be made to Petrofac 5 years after legal completion of the
SPA, in accordance with its terms, of a sum calculated at the prevailing tax rate applied to the relevant capital allowances. The
relevant capital allowances are expected to be around $250 million and implies, assuming current tax rates, a payment of
approximately $100 million. The taxation credit above includes a deferred tax charge in the quarter of $1.5 million resulting in a total
related deferred tax asset at 31 March 2017 of $93.5 million.
US$000
US$'000
US$’000
216
24,859
283
The calculation of basic earnings per share is based on the profit after tax and the weighted average number of common shares in
issue during the period. The calculation of diluted earnings per share is based on the profit after tax and the weighted average
number of potential common shares in issue during the period.
2016
2017
US$’000
6,516
US$'000
18,912
2016
2016
US$'0002017
27,812
411,384,045
-
In addition to the amounts above, in 2015 Ithaca entered into an agreement with Petrofac in respect of the FPF-1 Floating
Production facility whereby Ithaca will pay Petrofac $13.7 million in respect of final payment on variations to the contract, with
payment deferred until three and a half years after fully ramped production is achieved from the Stella field. A further payment to
Petrofac of up to $34 million was initially to be made by Ithaca dependent on the timing of sail-away of the FPF-1. This further
payment was revised to $17 million in Q3 2016. This payment will also be deferred until three and a half years after fully ramped up
production is achieved from the Stella field.
2016
US$000
US$'000
423,622,600
414,607,667
25,185
Ithaca Energy Inc. Q1 2017 Financial Statements 17
25. FINANCIAL INSTRUMENTS
Contingent consideration
Derivative financial instrument asset
Derivative financial instrument liability
Three months ended 31 March
Revaluation of forex forward contracts
Revaluation of commodity hedges
Revaluation of interest rate swaps
Realised (loss) on forex contracts
Realised gain on commodity hedges
Total gain on financial instruments
• Level 3 – inputs that are less observable, unavailable or where the observable data does not support the majority of the
instrument’s fair value.
In forming estimates, the Corporation utilises the most observable inputs available for valuation purposes. If a fair value
measurement reflects inputs of different levels within the hierarchy, the measurement is categorised based upon the lowest level of
input that is significant to the fair value measurement. The valuation of over-the-counter financial swaps and collars is based on
similar transactions observable in active markets or industry standard models that primarily rely on market observable inputs.
Substantially all of the assumptions for industry standard models are observable in active markets throughout the full term of the
instrument. These are categorised as Level 2.
(2,812)
• Level 1 – inputs represent quoted prices in active markets for identical assets or liabilities (for example, exchange-traded
commodity derivatives). Active markets are those in which transactions occur in sufficient frequency and volume to provide pricing
information on an ongoing basis.
US$'000
-
To estimate fair value of financial instruments, the Corporation uses quoted market prices when available, or industry accepted third-
party models and valuation methodologies that utilise observable market data. In addition to market information, the Corporation
incorporates transaction specific details that market participants would utilise in a fair value measurement, including the impact of
non-performance risk. The Corporation characterises inputs used in determining fair value using a hierarchy that prioritises inputs
depending on the degree to which they are observable. However, these fair value estimates may not necessarily be indicative of the
amounts that could be realised or settled in a current market transaction. The three levels of the fair value hierarchy are as follows:
Level 3
-
-
Level 1
• Level 2 – inputs other than quoted prices included within Level 1 that are observable, either directly or indirectly, as of the reporting
date. Level 2 valuations are based on inputs, including quoted forward prices for commodities, market interest rates, and volatility
factors, which can be observed or corroborated in the marketplace. The Corporation obtains information from sources such as the
New York Mercantile Exchange and independent price publications.
US$'000
2017
US$'000
38,744
The Corporation has identified that it is exposed principally to these areas of market risk.
2016
(2,175)
5,179
7,898
(10)
7,898
-
-
US$'000
(2,192)
(419)
5,706
(1,220)
The following table presents the Corporation’s material financial instruments measured at fair value for each hierarchy level as of 31
March 2017:
7,812
(8,650)
(2,812)
US$'000
7,812
The table below presents the total gain on financial instruments that has been disclosed through the statement of income at the
quarter end:
-
US$'000
Level 2
(8,650)
Total Fair Value
(33,565)
(32,335)
-
-
(17)
39,163
Ithaca Energy Inc. Q1 2017 Financial Statements 18
i) Commodity Risk
Three months ended 31 March
Revaluation of commodity hedges
Realised gain on commodity hedges
Derivative Term Volume Average price
bbls
bbls
bbls
therms
* hedged with an average floor price of $46.85/bbl and a celling price of $60/bbl.
ii) Interest Risk
Three months ended 31 March
Revaluation of interest contracts
Three months ended 31 March
Revaluation of forex forward contracts
Realised (loss) on forex forward contracts
The table below presents the total gain on commodity hedges that has been disclosed through the statement of income at the
quarter end:
Commodity price risk related to crude oil prices is the Corporation’s most significant market risk exposure. Crude oil prices and
quality differentials are influenced by worldwide factors such as OPEC actions, political events and supply and demand
fundamentals. The Corporation is also exposed to natural gas price movements on uncontracted gas sales. Natural gas prices, in
addition to the worldwide factors noted above, can also be influenced by local market conditions. The Corporation’s expenditures
are subject to the effects of inflation, and prices received for the product sold are not readily adjustable to cover any increase in
expenses from inflation. The Corporation may periodically use different types of derivative instruments to manage its exposure to
price volatility, thus mitigating fluctuations in commodity-related cash flows.
2016
Total gain on commodity hedges
7,898
Total (loss) on forex forward contracts
iii) Foreign Exchange Rate Risk
2017
2017
5,723
(17)
The below represents commodity hedges in place at the quarter end:
Calculation of interest payments for the RBL Facility agreement incorporates LIBOR. The Corporation is therefore exposed to
interest rate risk to the extent that LIBOR may fluctuate.
-
(17)
US$'000
US$'000
US$'000
(1,639)
(419)
Apr 17 - June 17 261,541
There were no foreign exchange financial instruments in place at the quarter end.
- Total (loss) on interest contracts
-
Oil puts
$46.85 - $60.0/bbl*
1,704,100 $54/bbl
812,506
$69.6/bbl
2017
2016
The table below presents the total loss on foreign exchange financial instruments that has been disclosed through the statement of
income at the quarter end:
US$'000
(1,220)
The Corporation is exposed to foreign exchange risks to the extent it transacts in various currencies, while measuring and reporting
its results in US Dollars. Since time passes between the recording of a receivable or payable transaction and its collection or
payment, the Corporation is exposed to gains or losses on non USD amounts and on balance sheet translation of monetary
accounts denominated in non USD amounts upon spot rate fluctuations from quarter to quarter.
2016
US$'000
(2,175)
Apr 17 - June 18
18,200,000Gas puts Apr 17 - June 17 58p/therm
39,163
6,828
(32,335)
(10)
(10)
There were no interest rate financial instruments in place at the quarter end.
Oil collars
Oil swaps
Apr 17 - June 18
The table below presents the total loss on interest financial instruments that has been disclosed statement of income at the quarter
end:
US$'000
Ithaca Energy Inc. Q1 2017 Financial Statements 19
Accounts payable and accrued liabilities
Other long term liabilities
Borrowings
26. DERIVATIVE FINANCIAL INSTRUMENTS
31 March 31 December
US$'000 US$'000
Oil swaps
Oil puts
Oil collars
Gas swaps
Gas puts
Other
(107,853)
(614,585)
US$'000
(187,768)
2016
The Corporation also has credit risk arising from cash and cash equivalents held with banks and financial institutions. The maximum
credit exposure associated with financial assets is the carrying values.
(187,768)
(722,437)
The Corporation may be exposed to certain losses in the event that counterparties to derivative financial instruments are unable to
meet the terms of the contracts. The Corporation’s exposure is limited to those counterparties holding derivative contracts with
positive fair values at the reporting date. As at 31 March 2017, exposure is $7.8 million (31 December 2016: $11.5 million).
v) Liquidity Risk
2017
Liquidity risk includes the risk that as a result of its operational liquidity requirements the Corporation will not have sufficient funds to
settle a transaction on the due date. The Corporation manages liquidity risk by maintaining adequate cash reserves, banking
facilities, and by considering medium and future requirements by continuously monitoring forecast and actual cash flows. The
Corporation considers the maturity profiles of its financial assets and liabilities. As at 31 March 2017 substantially all accounts
payable are current.
Within 1 year
The following table shows the timing of cash outflows relating to trade and other payables.
-
-
-
The Corporation assesses partners’ credit worthiness before entering into farm-in or joint venture agreements. In the past, the
Corporation has not experienced credit loss in the collection of accounts receivable. As the Corporation’s exploration, drilling and
development activities expand with existing and new joint venture partners, the Corporation will assess and continuously update its
management of associated credit risk and related procedures.
-
US$'000
1 to 5 years
iv) Credit Risk
The Corporation regularly monitors all customer receivable balances outstanding in excess of 90 days. As at 31 March 2017,
substantially all accounts receivables are current, being defined as less than 90 days. The Corporation has no allowance for
doubtful accounts as at 31 March 2017 (31 December 2016: $Nil).
5,000
4,350
- 17
7,786
(2,422)
(110)
3,709
The Corporation’s accounts receivable with customers in the oil and gas industry are subject to normal industry credit risks and are
unsecured. Oil production from Cook, Broom, Dons, Pierce and Fionn is sold to Shell Trading International Ltd. Wytch Farm oil
production is sold on the spot market. Cook gas is sold to Shell UK Ltd and Esso Exploration & Production UK Ltd. Prior to
cessation of production, Causeway oil was sold to Shell Trading International Ltd and Topaz gas production was sold to Hartree
Partners Oil and Gas.
7,183
(1,797)(2,679)
3,461
(132)
Ithaca Energy Inc. Q1 2017 Financial Statements 20
27. FAIR VALUES OF FINANCIAL ASSETS AND LIABILITIES
Classification
Cash and cash equivalents (Held for trading)
Derivative financial instruments (Held for trading)
Accounts receivable (Loans and Receivables)
Deposits
Long-term receivable (Loans and Receivables)
Bank debt (Loans and Receivables)
Contingent consideration
Derivative financial instruments (Held for trading)
Other long term liabilities
Accounts payable (Other financial liabilities)
28. RELATED PARTY TRANSACTIONS
Country of incorporation % equity interest at 31 March
Ithaca Energy (UK) Limited Scotland 100% 100%
Ithaca Minerals (North Sea) Limited Scotland 100% 100%
Ithaca Energy (Holdings) Limited Bermuda 100% 100%
Ithaca Energy Holdings (UK) Limited Scotland 100% 100%
Ithaca Petroleum Limited England and Wales 100% 100%
Ithaca North Sea Limited England and Wales 100% 100%
Ithaca Exploration Limited England and Wales 100% 100%
Ithaca Causeway Limited England and Wales 100% 100%
Ithaca Gamma Limited England and Wales 100% 100%
Ithaca Alpha Limited Northern Ireland 100% 100%
Ithaca Epsilon Limited England and Wales 100% 100%
Ithaca Delta Limited England and Wales 100% 100%
Ithaca Petroleum Holdings AS Norway 100% 100%
Ithaca Technology AS Norway 100% 100%
Ithaca AS Norway 100% 100%
Ithaca Petroleum EHF Iceland 100% 100%
Ithaca SPL Limited England and Wales 100% 100%
Ithaca Dorset Limited England and Wales 100% 100%
Ithaca SP UK Limited England and Wales 100% 100%
Ithaca Pipeline Limited England and Wales 100% 100%
2017 - 247
2016 - -
5,870
(2,812)
5,870
31 March 2017
US$'000
Financial instruments of the Corporation consist mainly of cash and cash equivalents, receivables, payables, loans and financial
derivative contracts, all of which are included in these financial statements. At 31 March 2017, the classification of financial
instruments and the carrying amounts reported on the balance sheet and their estimated fair values are as follows:
1,142
US$'000 US$'000
Sales
Carrying Amount
Carrying
Amount
2016
(107,853)
Accounts Payable
2017
The following table provides the total amount of transactions that have been entered into with related parties during the quarter
ending 31 March 2017 and 31 March 2016, as well as balances with related parties as of 31 March 2017 and 31 December 2016:
135,105
60,157 59,922
(618,566)
The consolidated financial statements include the financial statements of Ithaca Energy Inc. and its wholly-owned subsidiaries, listed
below, and its net share in its associates FPU Services Limited and FPF-1 Limited.
Fair Value
Purchases
Accounts
Receivable
(2,812)
1,142
US$'000
(187,768) (187,768)
(107,428)
(12,650)(12,650)
27,199
(236,928)
11,512 11,512
667
59,922
(618,566)
(8,650)
(107,853) (107,428)
(4,329)
157,912
27,199
(4,329)
667
135,105
7,812 7,812
(614,585)
31 December 2016
(614,585)
60,157
(38)125
29
Fair Value
A director of the Corporation is a partner of Burstall Winger Zammit LLP who acts as counsel for the Corporation.
US$'000
Transactions between subsidiaries are eliminated on consolidation.
US$'000
-
(8,650)
157,912
(236,928)
Burstall Winger Zammit LLP
Ithaca Energy Inc. Q1 2017 Financial Statements 21
Loans to related parties Amounts owed from related parties
FPF-1 Limited
FPU Services Limited
29. SEASONALITY
30. SUBSEQUENT EVENTS
On the 12 May 2017 the Corporation announced that DKL Investments Limited, had notified Ithaca that it intends to carry out a
compulsory acquisition of all the remaining issued and outstanding common shares of the Company that are not currently owned by
Delek at the offer proce of C$1.95 per share. The Corporation further announced that it intends to seek the cancellation of its
admission to trading on the AIM market of the London Stock Exchange and to voluntarily delist from the TSX following completion of
the Compulsory Acquisition.
On the 4 May 2017 the Corporation announced that the share tendering process had now completed for the cash takeover offer
made by Delek Group Ltd. Following payment for the common shares tendered during the mandatory extension period for the Offer
that expired on 3 May 2017, Delek own 94.2% of the issued and outstanding common shares of the Company via its affiliate DKL
Investments Limited.
60,157 60,577
On 6 February 2017 the Corporation announced that it had entered into a definitive support agreement with Delek Group Ltd on the
terms of a cash takeover bid for all of the issued and to be issued common shares of Ithaca not currently owned by Delek or any of
its affiliates for C$1.95 per share.
On 20 April 2017 the Corporation announced that the conditions of the cash takeover offer for all the common shares of the
Company not owned by Delek Group Ltd. Subsequent to the quarter end conditions of a cash takeover offer for all the common
shares of the Company not owned by Delek Group Ltd. or any of its affiliates for C$1.95 per share have been satisfied and the Offer
had been accepted by holders of approximately 70.3% of the issued and outstanding common shares, not including the common
shares already owned by Delek prior to the announcement of the Offer.
54
60,523
2017 2016
60,111
US$'000 US$'000
The effect of seasonality on the Corporation's financial results for any individual quarter is not material.
46
Ithaca Energy Inc. Q1 2017 Financial Statements 22