Value-investing site Seeking Alpha says Ithaca Energy is a buy-and-hold opportunity.

The company is publicly listed in both Canada (TSX: IAE) and London (AIM: IAE).

It’s an international oil and gas field developer and producer focused in the UK and Norwegian North Sea region.

The  focus ia on developing previously discovered fields and their reserves.

Ithaca Energy was founded in 2004 and in April this year bought Valiant Energy.

Management is  led by CEO and board member Iain McKendrick. The board of directors also includes the former CEO of Petro Canada and the former chairman of Statoil.

The company’s aim is to become a 25,000 Barrels of Oil Equivalent Per Day producer.

Current production is 14,000 BOEPD from 11 separate production fields.

It is both the developer and operator the Greater Stella Area in the UK North Sea, which is expected to produce 30,000 BOEPD (16,000 net to Ithaca and the remainder to its partners) starting in mid 2014.

Seeking Alpha: I say it is a game changer because of the massive cash flows, and after tax earnings the company will then be generating driven by the very high net backs, huge growth in production, application of very large tax credits and low capex requirements after the field comes on line. The free cash flow will open up numerous shareholder value creation opportunities and options like further growth through accretive acquisitions, easy elimination of debt, the commencement of a dividend etc. They will be in a position to purchase producing assets and reserves that would nearly double their size again to the 40,000 to 50,000 BOEPD range.

Source: Seeking Alpha



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