Ithaca Energy drop gives opportunity to buy back

After selling half of my Ithaca Energy (IAE) holding on Friday, an 8% drop today, following a similar fall on the Toronto Stock Exchange (TSX) last night gives an opportunity to buy back. The negative impact of the Australian mining super tax on the commodity sector and a "take profits" story on thisismoney.co.uk helped to move the price down. As far as I'm aware none of Ithaca's assets are based in Australia so the "Henry tax" will not impact earnings.

However, some signifcant news on the sidetrack of the Stella field are expected any day. On 15th April, IAE said "The well will now be geologically sidetracked, as intended, to test the reservoir up-flank between this vertical bore and existing crestal wells to further investigate the quality of the reservoir and provide essential compositional information of the hydrocarbons at intermediate depths. The sidetrack will take approximately 15 days to penetrate the reservoir."

Ithaca Energy issues positive statement from Stella North Sea field

Ithaca Energy (IAE) announced today that drilling in their North Sea field Stella had found more oil than expected and confirming its viability meaning the company's reserves could be increased by up to 25%.
Ithaca's chief exploration officer Nick Muir said "The field is clearly even more significant than we thought and the results of this well and the test have exceeded all our expectations,"

The company said that it now knows the reservoir has a total hydrocarbon column of more than 820 feet, confirming oil more than 500 feet lower than that found in previous wells, and establishing the reservoir as 'fill to spill', meaning connected hydrocarbons are present throughout.

Following the news it looks like Ithaca's prospects look increasingly positive, though drilling will not start until 2012. Despite the despite 10% increase today to 162p the shares still look good value.