Ithaca & Lochard fall on news of delay

published 9 December 2011

Both Ithaca and Lochard, AIM-listed oil firms, fell on news that one of its Athena project has had to be slightly delayed.

The project, a floating production, storage and offloading (FPSO) vessel, which is the responsibility of BW Offshore, has proven to be more extensive than was originally envisaged.

To combat this, BW Offshore and Dubai Dry Docks have completed a fast track engineering project to deliver the vessel, which is destined for the North Sea, very close to the original schedule, the firm said.

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"This short term delay is clearly disappointing, but it does not change the fundamental value of the project," chief executive officer Iain McKendrick said.

"Athena is a highly valuable development that will more than double net production and further diversify the company's production portfolio. Both Ithaca and BW Offshore want to ensure and maintain the highest standards of vessel integrity upon arrival in the field to maximize production uptime and value to the project."

Payments will commence, as planned, only once the FPSO is moored over the Athena field and produced oil is transferred into the vessel's storage

tanks.

Once the vessel leaves Dubai, it will sail to the North Sea and hook up to the pre-installed production buoy. It is now anticipated that the vessel will sail from Dubai in early 2012.

Ithaca operates the zone and has a 22.5% stake in the project, alongside Dyas UK (47.5%), EWE ktiengesellschaft (20%) and Zeus Petroleum (10%). Lochard has a net 10% interest in this field through its 100% ownership of Zeus Petroleum.

Ithaca's share price fell 4.05% to 124.25p by 13:41, while Lochard's share price fell 2.2% to 11.12p by 13:40.