Ithaca Energy PLC (LSE:ITH) shares rose 7% on Wednesday after the North Sea oil and gas producer delivered stronger-than-expected first-half results and raised its output guidance for the rest of the year.
Shore Capital said the company generated adjusted EBITDAX of around $1.1 billion. EBITDAX is a profit measure commonly used in oil and gas that strips out financing costs.
Average production was 124,000 barrels of oil equivalent per day (boe/d), with about 41% coming from natural gas. Net debt fell to 671 million US dollars at the end of June from $792 million in March.
A first interim dividend of just over 10 cents was declared, keeping Ithaca on track to return $500 million to investors this year.
Management has lifted full-year production guidance by around 7% at the midpoint, to 119,000–125,000 boe/d.
Operating costs are now expected to be $17–19 per barrel, slightly lower than previously indicated.
Shore Capital noted that capital spending will rise by about 10% to $860–940 million, reflecting accelerated work on the Rosebank project, foreign exchange effects and additional development activity.
Peel Hunt highlighted that Ithaca ended the half with $1.2 billion of available liquidity, underlining a strong balance sheet.
Assuming $70 oil and 85 pence per therm gas, Peel forecasts free cash flow of $1 billion in 2025, more than enough to cover the planned dividend and reduce debt. The broker reaffirmed its “buy” rating and 200p target price.
The shares rose 17.6 pence to 195.8 pence.