Ithaca Energy ups reserves estimates

North sea oil explorer, Ithaca Energy (IAE) today reported a rise in total reserves following the successful appraisal of its Stella well which will come into production in 2012. At April 30, the company's total proved reserves stood at 20.9 million barrels of oil equivalent (mmboe), up 30.6 percent from Dec. 31, while total proved and probable reserves grew 12.8 percent to 41.96 mmboe. Proved reserves associated with the Stella field more than doubled to 10.2 mmboe, while proved plus probable reserves rose 61 percent to 14.4 mmboe.

After falling from close to £2 over the last month or so to hit 145p yesterday, the shares rose 7p or 5% to 152p today. Given the progress the company has made over the last 2 years with production now averaging 5100 bpd from the existing Jacky and Beatrice fields, the increase in reserves gives further impetus for strength in the price over coming months. This is a well managed, debt free and well financed company which with the right acquisitions could become a signficant North sea producer over the next 3 years.