q3 2016 consolidated financial · pdf fileq3 2016 consolidated financial statements 1. ... no...

Ithaca Energy Inc. Q3 2016 Financial Statements

Q3 2016CONSOLIDATED FINANCIAL STATEMENTS

1


Consolidated Statement of IncomeFor the three and nine months ended 30 September 2016 and 2015

(unaudited)

Three months ended 30 Sept Nine months ended 30 Sept

Note

Revenue 5

- Operating costs

- Movement in oil and gas inventory

- Depletion, depreciation and amortisation EXP04

Cost of sales

Gross (Loss)

Exploration and evaluation expenses 10

Gain on disposal

Gain/ (Loss) on financial instruments 26

Administrative expenses 6

Foreign exchange

Finance costs 7

Interest income

(Loss)/Profit Before Tax

Taxation 24

(Loss)/Profit After Tax

Earnings per share

Basic 23

Diluted 23

The accompanying notes on pages 6 to 23 are an integral part of the financial statements.

19,475(12,728)

42,108

2,354

(2,747)

(52,030)

(9,464)

1,034

(620)

0.17

0.17

2,953

11

55,540

0.13 (0.16)

42,812

58

(64,448)

(0.16)0.13

No separate statement of comprehensive income has been prepared as all such gains and losses have been incorporated in the

consolidated statement of income above.

(9,094)

(6,799)

(185,035)

(30,360)

(29,720)

(8,238)(4,303)

62

37,144

56,619

(13,400)

102,345

(114,829)

US$'000

26,271

(839)

171,635

US$'000

2016 2015

US$'000

2015 2016

US$'000

44,585

(93,205)

-

(19,112)

(21,705)

(83,383)

(59,088)

(46,403)

(1,818)

3,036

74,894

(9,922)

-

(20)

(12,484)

8

(25,268) 94,185

2,130

(1,011)

(1,656)

(27,601)

(67,401)

3,006

(0.17)

(63,895)

(70,694)

(0.17)

(61,145)

(30,946)

4,676

(25,760)

5,404 (5,586) (8,447)

2


(unaudited)

Note

Current assets

Cash and cash equivalents CAS01

Accounts receivable 8 CAS02

Deposits, prepaid expenses and other CAS04

Inventory 9 CAS06

Derivative financial instruments 27 CAS10

Non current assets

Long-term receivable 29

Long-term inventory 9

Investment in associate 13 CAS07

Exploration and evaluation assets 10

Property, plant & equipment 11 CAS08

Deferred tax assets

Goodwill 12 CAS11

Total assets

LIABILITIES AND EQUITY

Current liabilities

Trade and other payables 15 CLB01

Exploration obligations 16

Contingent consideration 20

Derivative financial instruments 27

Non current liabilities

Borrowings 14 CLB02

Decommissioning liabilities 17 CLB04

Other long term liabilities 18 CLB03

Derivative financial instruments 27 CLB07

Net Assets

Shareholders' equity

Share capital 21 SEQ01

Share based payment reserve 22 SEQ02

Retained earnings SEQ03

Total equity


11,223

1,102,046

18,337

11,543

223,006

743

20,900

126,887

61,052

7,908

153,136

22,678

(985,785)

(197)

123,510

355,726

2,062,881

617,375

1,679,802

(226,915)

(4,000)

(4,000)

(275,907)

-

(283,907)

(2,175)

(666,130)

(92,543)

25,012

793,189

"Alec Carstairs"

(4,000)

123,510

(4,000)

Director

2016

(961,100)

(298,578)

60,136

26,162

(233,200)

29,772

314,459

224,229

30 September 31 December

2015

383,079

18,337

16,883

1,686,815

(308,753)

1,103,284

2,001,274

356,757

(620,427)

731,421

The financial statements were approved by the Board of Directors on 11 November 2016 and signed on its behalf by:

ASSETS

731,421

617,721

US$'000

7,908

1,747

-

32,549

US$'000

Consolidated Statement of Financial Position

88,688

793,189

(107,473)

"Les Thomas"

Director

3


Consolidated Statement of Changes in Equity(unaudited)

Balance, 1 Jan 2015

Share based payment

Profit for the period

Balance, 30 September 2015

Balance, 1 Jan 2016

Share based payment

Shares exercised

(Loss) for the period

Balance, 30 September 2016


(64,448)

19,234 551,632

-

22,678 793,189

56,619

-

153,136

346 - - 346

731,421

330,760

88,688 25,012

(64,448)- -

56,619

2,334

US$'000

22,323

- -

3,089

617,375

2,334

617,721

-

551,632

-

Share based

payment reserve

Retained

Earnings

US$'000US$'000

845,007

3,089

904,715

Share Capital Total

US$'000

274,141

4


Consolidated Statement of Cash FlowFor the three and nine months ended 30 September 2016 and 2015

(unaudited)


Operating activities

(Loss)/Profit Before Tax

Adjustments for:

Depletion, depreciation and amortisation 11

Exploration and evaluation expenses 10

Onerous contracts

Share based payment

Loan fee amortisation

Revaluation of financial instruments 26

Gain on disposal

Accretion 17

Bank interest & charges

Cashflow from operations

Petroleum Revenue Tax refunded/(paid)

Corporation Tax refunded

Net cash from operating activities

Investing activities

Capital expenditure

Loan to associate

Decommissioning 17

Proceeds on disposal

Net cash (used)/from investing activities

Financing activitiesProceeds from issuance of shares

Loan (repayment)/draw down

Bank interest and charges

Net cash from financing activities

Currency translation differences relating to cash

Increase / (decrease) in cash & cash equivalents

Cash and cash equivalents, beginning of period

Cash and cash equivalents, end of period


120,748

502

-

(914) (20,916)

(916)- 1,140

(48,875)

18,229

-

839

32,521

116,726

2,316

1,126

21,797

(63,890)

(11,557)

(37,765)

(7,682)

(57,612)

-

(1,071)

4,324

(6,799)

21,705

10,944

59,088

(67,401)

CASH PROVIDED BY (USED IN):

2016 2015

238

20

627

37,144

(17,890) (141,830)

(26,271)

6,784

(43,844)

(67,182)

5,871

(14,969)

-

(1,063)

2015

33,668

5,913

(40,283)

(15,682)

32,521

17,599

-

55,540

(1,034)

(39,129)

1,267

170

96,097

3,119

-

US$'000 US$'000

35,134 55,732

5,738

2,285 6,883

30,946

US$'000

29,721

93,206

195,958

-

20,462

(1,466) (10,353)

13,450

183

157,218

(35,437)

(3,303)

52,088

620

1,040

2016

(26,993)

11,543

(3,875)

10,454 29,772

25,852

(8,927)

(1,010)

-

25,423

3,920

(301)

-

(23,305)

3,688

346

(9,083)

19,252

(158,229)

(279)

(15,843)

-

(51,500)

125

Changes in receivables and payables relating to

investing activities

29,772

Changes in inventory, receivables and payables

relating to operating activities

(177)

-

19,381

10,454

US$'000

(712) (2,877)-

- - 6,009

46,519

5


1. NATURE OF OPERATIONS

2. BASIS OF PREPARATION

3. SIGNIFICANT ACCOUNTING POLICIES, JUDGEMENTS AND ESTIMATION UNCERTAINTY

Basis of measurement

Basis of consolidation

The consolidated financial statements have been prepared on a going concern basis using the historical cost convention, except for

financial instruments which are measured at fair value.

The condensed interim consolidated financial statements should be read in conjunction with the Corporation’s annual financial

statements for the year ended 31 December 2015.

The consolidated financial statements are presented in US dollars and all values are rounded to the nearest thousand (US$'000),

except when otherwise indicated.

Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the fair value of the

assets acquired, equity instruments issued and liabilities incurred or assumed at the date of completion of the acquisition. Acquisition

costs incurred are expensed and included in administrative expenses. Identifiable assets acquired and liabilities and contingent

liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. The excess of the cost of

acquisition over the fair value of the Corporation's share of the identifiable net assets acquired is recorded as goodwill. If the cost of

the acquisition is less than the Corporation's share of the net assets acquired, the difference is recognised directly in the statement of

income as negative goodwill.

Subsidiaries are all entities, including structured entities, over which the group has control. The group controls an entity when the

group is exposed to or has rights to variable returns from its investments with the entity and has the ability to affect those returns

through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the group. They

are deconsolidated on the date that control ceases.

Ithaca Energy Inc. (the “Corporation” or “Ithaca”), incorporated and domiciled in Alberta, Canada on 27 April 2004, is a publicly traded

company involved in the exploration, development and production of oil and gas in the North Sea. The Corporation's registered office

is 1600, 333 - 7th Avenue S.W., Calgary, Alberta, Canada, T2P 2Z1. The Corporation's shares trade on the Toronto Stock Exchange

in Canada and the London Stock Exchange’s Alternative Investment Market in the United Kingdom under the symbol “IAE”.

These interim consolidated financial statements have been prepared in accordance with International Financial Reporting Standards

(IFRS) applicable to the preparation of interim financial statements, including IAS 34 Interim Financial Reporting. These interim

consolidated financial statements do not include all the necessary annual disclosures in accordance with IFRS.

The policies applied in these condensed interim consolidated financial statements are based on IFRS issued and outstanding as of 11

November 2016, the date the Board of Directors approved the statements. Any subsequent changes to IFRS that are given effect in

the Corporation’s annual consolidated financial statements for the year ending 31 December 2016 could result in restatement of these

interim consolidated financial statements.

The interim consolidated financial statements of the Corporation include the financial statements of Ithaca Energy Inc. and all wholly-

owned subsidiaries as listed per note 29. Ithaca has twenty wholly-owned subsidiaries. All inter-company transactions and balances

have been eliminated on consolidation.

The consolidated financial statements have been prepared under the historical cost convention, except for the revaluation of certain

financial assets and financial liabilities (under IFRS) to fair value, including derivative instruments.

Business Combinations

6


Goodwill

Capitalisation

Impairment

Interest in joint operations

Revenue

Foreign currency translation

Goodwill is tested annually for impairment and also when circumstances indicate that the carrying value may be at risk of being

impaired. Impairment is determined for goodwill by assessing the recoverable amount of each cash generating unit ("CGU") to which

the goodwill relates. Where the recoverable amount of the CGU is less than its carrying amount, an impairment loss is recognised in

the statement of income. Impairment losses relating to goodwill cannot be reversed in future periods.

Goodwill acquired through business combinations is initially measured at cost, being the excess of the aggregate of the consideration

transferred and the amount recognised as the fair value of the Corporation's share of the identifiable net assets acquired and liabilities

assumed. If this consideration is lower than the fair value of the identifiable assets acquired, the difference is recognised in the

statement of income.

Items included in the financial statements are measured using the currency of the primary economic environment in which the

Corporation and its subsidiaries operate (the ‘functional currency’). The consolidated financial statements are presented in United

States Dollars, which is the Corporation’s functional and presentation currency.

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the

transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year

end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the statement of income.

The Corporation's interests in joint operations (eg exploration and production arrangements) are accounted for by recognising its

assets (including its share of assets held jointly), its liabilities (including its share of liabilities incurred jointly), its revenue from the sale

of its share of the output arising from the joint operation, its share of revenue from the sale of output by the joint operation and its

expenses (including its share of any expenses incurred jointly).

Under the equity method, investments are carried at cost plus post-acquisition changes in the Corporation's share of net assets, less

any impairment in value in individual investments. The consolidated statement of income reflects the Corporation's share of the results

and operations after tax and interest.

Under IFRS 11, joint arrangements are those that convey joint control which exists only when decisions about the relevant activities

require the unanimous consent of the parties sharing control. Investments in joint arrangements are classified as either joint operations

or joint ventures depending on the contractual rights and obligations of each investor. Associates are investments over which the

Corporation has significant influence but not control or joint control, and generally holds between 20% and 50% of the voting rights.

Interest income is recognised on an accruals basis and is separately recorded on the face of the statement of income.

Oil, gas and condensate revenues associated with the sale of the Corporation’s crude oil and natural gas are recognised when title

passes to the customer. This generally occurs when the product is physically transferred into a vessel, pipe or other delivery

mechanism. Revenues from the production of oil and natural gas properties in which the Corporation has an interest with joint venture

partners are recognised on the basis of the Corporation’s working interest in those properties (the entitlement method). Differences

between the production sold and the Corporation’s share of production are recognised within cost of sales at market value .

7


Share based payments

Cash and cash equivalents

Financial instruments

Inventory

Trade receivables

Trade payables

Transaction costs that are directly attributable to the acquisition or issue of a financial asset or liability and original issue discounts on

long-term debt have been included in the carrying value of the related financial asset or liability and are amortised to consolidated net

earnings over the life of the financial instrument using the effective interest method.

The Corporation has a share based payment plan as described in note 21 (c). The expense is recorded in the statement of income or

capitalised for all options granted in the year, with the gross increase recorded in the share based payment reserve. Compensation

costs are based on the estimated fair values at the time of the grant and the expense or capitalised amount is recognised over the

vesting period of the options. Upon the exercise of the stock options, consideration paid together with the amount previously

recognised in share based payment reserve is recorded as an increase in share capital. In the event that vested options expire

unexercised, previously recognised compensation expense associated with such stock options is not reversed. In the event that

unvested options are forfeited or expired, previously recognised compensation expense associated with the unvested portion of such

stock options is reversed.

Held-for-trading financial instruments are subsequently measured at fair value with changes in fair value recognised in net earnings.

All other categories of financial instruments are measured at amortised cost using the effective interest method. Cash and cash

equivalents are classified as held-for-trading and are measured at fair value. Accounts receivable are classified as loans and

receivables. Accounts payable, accrued liabilities, certain other long-term liabilities, and long-term debt are classified as other financial

liabilities. Although the Corporation does not intend to trade its derivative financial instruments, they are classified as held-for-trading

for accounting purposes.

Inventories of materials and product inventory supplies are stated at the lower of cost and net realisable value. Cost is determined on

the first-in, first-out method. Current oil and gas inventories are stated at fair value less cost to sell. Non-current oil and gas inventories

are stated at historic cost.

All financial instruments are initially recognised at fair value in the statement of financial position. The Corporation’s financial

instruments consist of cash, accounts receivable, deposits, derivatives, accounts payable, accrued liabilities, contingent consideration

and borrowings. The Corporation classifies its financial instruments into one of the following categories: held-for-trading financial

assets and financial liabilities; held-to-maturity investments; loans and receivables; and other financial liabilities. All financial

instruments are required to be measured at fair value on initial recognition. Measurement in subsequent periods is dependent on the

classification of the respective financial instrument.

Analysis of the fair values of financial instruments and further details as to how they are measured are provided in notes 26 to 28.

For the purpose of the statement of cash flow, cash and cash equivalents include investments with an original maturity of three

months or less.

Trade payables are measured at cost.

Trade receivables are recognised and carried at the original invoiced amount, less any provision for estimated irrecoverable amounts.

8


Property, plant and equipment

Oil and gas expenditure – exploration and evaluation assets

Capitalisation

Impairment

Oil and gas expenditure – development and production assets

Capitalisation

Depreciation

Impairment

Pre-acquisition costs on oil and gas assets are recognised in the statement of income when incurred. Costs incurred after rights to

explore have been obtained, such as geological and geophysical surveys, drilling and commercial appraisal costs and other directly

attributable costs of exploration and evaluation including technical, administrative and share based payment expenses are capitalised

as intangible exploration and evaluation (“E&E”) assets.

The Corporation’s oil and gas assets are analysed into CGUs for impairment review purposes, with E&E asset impairment testing

being performed at a grouped CGU level. The current E&E CGU consists of the Corporation’s whole E&E portfolio. E&E assets are

reviewed for impairment when circumstances arise which indicate that the carrying value of an E&E asset exceeds the recoverable

amount. When reviewing E&E assets for impairment, the combined carrying value of the grouped CGU is compared with the grouped

CGU's recoverable amount. The recoverable amount of a grouped CGU is determined as the higher of its fair value less costs to sell

and value in use. Impairment losses resulting from an impairment review are written off to the statement of income.

E&E costs are not amortised prior to the conclusion of evaluation activities. At completion of evaluation activities, if technical feasibility

is demonstrated and commercial reserves are discovered then, following development sanction, the carrying value of the E&E asset is

reclassified as a development and production (“D&P”) asset, but only after the carrying value is assessed for impairment and where

appropriate its carrying value adjusted. If after completion of evaluation activities in an area, it is not possible to determine technical

feasibility and commercial viability or if the legal right to explore expires or if the Corporation decides not to continue exploration and

evaluation activity, then the costs of such unsuccessful exploration and evaluation is written off to the statement of income in the

period the relevant events occur.

A review is carried out each reporting date for any indication that the carrying value of the Corporation’s D&P assets may be impaired.

For D&P assets where there are such indications, an impairment test is carried out on the CGU. Each CGU is identified in accordance

with IAS 36. The Corporation’s CGUs are those assets which generate largely independent cash flows and are normally, but not

always, single developments or production areas. The impairment test involves comparing the carrying value with the recoverable

value of an asset. The recoverable amount of an asset is determined as the higher of its fair value less costs to sell and value in use,

where the value in use is determined from estimated future net cash flows. Any additional depreciation resulting from the impairment

testing is charged to the statement of income.

All costs relating to a development are accumulated and not depreciated until the commencement of production. Depreciation is

calculated on a unit of production basis based on the proved and probable reserves of the asset. Any re-assessment of reserves

affects the depreciation rate prospectively. Significant items of plant and equipment will normally be fully depreciated over the life of

the field. However, these items are assessed to consider if their useful lives differ from the expected life of the D&P asset and should

this occur a different depreciation rate would be charged.

Costs of bringing a field into production, including the cost of facilities, wells and sub-sea equipment, direct costs including staff costs

and share based payment expense together with E&E assets reclassified in accordance with the above policy, are capitalised as a

D&P asset. Normally each individual field development will form an individual D&P asset but there may be cases, such as phased

developments, or multiple fields around a single production facility when fields are grouped together to form a single D&P asset.

9


Non oil and natural gas operations

Borrowings

Decommissioning liabilities

Onerous contracts

Contingent consideration

Taxation

Current income tax

All interest-bearing loans and other borrowings with banks are initially recognised at fair value net of directly attributable transaction

costs. After initial recognition, interest-bearing loans and other borrowings are subsequently measured at amortised cost using the

effective interest method. Amortised cost is calculated by taking into account any issue costs, discount or premium.

Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities.

The tax rates and tax laws used to compute the amounts are those that are enacted or substantively enacted by the reporting date.

Deferred income tax

Contingent consideration is accounted for as a financial liability and measured at fair value at the date of acquisition with any

subsequent remeasurements recognised either in the statement of income or in other comprehensive income in accordance with IAS

39.

Loan origination fees are capitalised and amortised over the term of the loan. Borrowing costs directly attributable to the acquisition,

construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their

intended use or sale, are added to the cost of those assets until such time as the assets are substantially ready for their intended use

of sale. All other borrowing costs are expensed as incurred.

Onerous contract provisions are recognised where the unavoidable costs of meeting the obligations under a contract exceed the

economic benefits expected to be received under it.

Senior notes are measured at amortised cost.

Deferred tax assets and liabilities are offset only when a legally enforceable right of offset exists and the deferred tax assets and

liabilities arose in the same tax jurisdiction.

Deferred tax is recognised for all deductible temporary differences and the carry-forward of unused tax losses. Deferred tax assets and

liabilities are measured using enacted or substantively enacted income tax rates expected to apply to taxable income in the years in

which temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in

rates is included in earnings in the period of the enactment date. Deferred tax assets are recorded in the consolidated financial

statements if realisation is considered more likely than not.

The Corporation records the present value of legal obligations associated with the retirement of long term tangible assets, such as

producing well sites and processing plants, in the period in which they are incurred with a corresponding increase in the carrying

amount of the related long term asset. The obligation generally arises when the asset is installed or the ground/environment is

disturbed at the field location. In subsequent periods, the asset is adjusted for any changes in the estimated amount or timing of the

settlement of the obligations. The carrying amounts of the associated assets are depleted using the unit of production method, in

accordance with the depreciation policy for development and production assets. Actual costs to retire tangible assets are deducted

from the liability as incurred.

Computer and office equipment is recorded at cost and depreciated over its estimated useful life on a straight-line basis over three

years. Furniture and fixtures are recorded at cost and depreciated over their estimated useful lives on a straight-line basis over five

years.

10


Operating leases

Finance leases

Maintenance expenditure

Recent accounting pronouncements

Significant accounting judgements and estimation uncertainties

4. SEGMENTAL REPORTING

5. REVENUE


Oil sales REV01

Gas sales REV02

Condensate sales REV03

Other income REV04

102,345

1,039

PRT is accounted for under IAS 12 since it has the characteristics of an income tax as it is imposed under Government authority and

the amount payable is based on taxable profits of the relevant field. Deferred PRT is accounted for on a temporary difference basis.

US$'000

43,404 167,054

81

2,934

US$'000

392

2015

98,938

US$'000

42,108

28

44,585

101

85

41,380

Finance leases that transfer substantially all the risks and benefits incidental to ownership of the leased item to the Corporation, are

capitalised at the commencement of the lease at the fair value of the leased property or, if lower, at the present value of the minimum

lease payments. Lease payments are apportioned between finance charges and reduction of the lease liability so as to achieve a

constant rate of interest on the remaining balance of the liability. Finance charges are recognised in finance costs in the income

statement. A leased asset is depreciated over the useful life of the asset. However, if there is no reasonable certainty that the

Corporation will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life of

the asset and the lease term.

US$'000

Expenditure on major maintenance refits or repairs is capitalised where it enhances the life or performance of an asset above its

originally assessed standard of performance; replaces an asset or part of an asset which was separately depreciated and which is

then written off, or restores the economic benefits of an asset which has been fully depreciated. All other maintenance expenditure is

charged to the statement of income as incurred.

542

2016

171,635

424

3,782

Petroleum Revenue Tax

114 375

New and amended standards and interpretations need to be adopted in the first interim financial statements issued after their effective

date (or date of early adoption). There are no new IFRSs or IFRICs that are effective for the first time for this interim period that would

be expected to have a material impact on the Corporation.

2015

The amounts recorded for depletion, depreciation of property and equipment, long-term liability, stock-based compensation, contingent

consideration, decommissioning liabilities, derivatives and deferred taxes are based on estimates. The depreciation charge and any

impairment tests are based on estimates of proved and probable reserves, production rates, prices, future costs and other relevant

assumptions. By their nature, these estimates are subject to measurement uncertainty and the effect on the financial statements of

changes in such estimates in future periods could be material. Further information on each of these estimates is included within the

notes to the financial statements.

2016

In addition to corporate income taxes, the Corporation's financial statements also include and disclose Petroleum Revenue Tax (PRT)

on net income determined from oil and gas production.

The preparation of financial statements in conformity with IFRS requires management to make estimates and assumptions regarding

certain assets, liabilities, revenues and expenses. Such estimates must often be made based on unsettled transactions and other

events and a precise determination of many assets and liabilities is dependent upon future events. Actual results may differ from

estimated amounts.

The Company operates a single class of business being oil and gas exploration, development and production and related activities in

a single geographical area presently being the North Sea.

Rentals under operating leases are charged to the statement of income on a straight line basis over the period of the lease.

11


6. ADMINISTRATIVE EXPENSES


General & administrative EXP01

Share based payment EXP16

7. FINANCE COSTS


Bank charges

Senior notes interest

Finance lease interest

Non-operated asset finance fees

Prepayment interest

Loan fee amortisation

Accretion

8. ACCOUNTS RECEIVABLE

Trade debtors

Accrued income

9. INVENTORY

Current

Crude oil inventory

Materials inventory

Non-current

Crude oil inventory

The non-current portion of inventory relates to long term stocks at the Sullom Voe Terminal.

10. EXPLORATION AND EVALUATION ASSETS

At 1 January 2015

Additions

Disposals

Release of exploration obligations

Write offs/relinquishments

Impairment

At 31 December 2015 and 1 January 2016

Additions

Write offs/relinquishments

At 30 September 2016

18,721

US$'000

20,900

996

(44,005)

16,883

(32,926)

(1,431)

26,162

2016

223,006

US$'000

30 Sept

910

7,908

US$'000

2,179

2016

2015

222,010

2015

1,861

(1,630)

(2,747)

(838)

US$'000

30,263

224,229

2015

7,908

(4,324)(3,119)

2015

(238) (501) (627)

(7,611)

US$'000

(61)

(8,238)

2015

US$'000

(3,228)

(3,802)

US$'000

(791)

(6,258)

US$'000

2016

2016

2015

Following completion of geotechnical evaluation activity, certain North Sea licences were declared unsuccessful and certain prospects

were declared non-commercial. This resulted in the carrying value of these licences being fully written off to nil with $0.8 million being

expensed in the period to 30 September 2016.

US$'000

US$'000

US$'000

(841)

(1,040) (1,267)

(2,509)

(963)

2016

31 Dec

31 Dec

(1,011)

(9)

(4,303)

(30,360)

2015

(3,830)

US$'000

(170)

2016

US$'000

(946)

(11)

2016

6,498

(260)

(3,830) (11,489)

30 Sept

30 Sept

(11,179)

(27,601)(9,464)

(751)(247)

24,301

US$'000

31 Dec

(2,316) (2,285)

(9,094)

US$'000

89,844

(6,784)

223,319

(6,883)

(2,110)

(21)

(181)(706)

(30,522)

11,223

12


11. PROPERTY, PLANT AND EQUIPMENT

Development & Production Other fixed

Cost

At 1 January 2015

Additions

Disposals

Release of onerous contract provision


Additions


DD&A and Impairment

At 1 January 2015

DD&A charge for the period

Disposals

Impairment charge for the period


DD&A charge for the period


NBV at 1 January 2015

NBV at 1 January 2016

NBV at 30 September 2016

12. GOODWILL 30 Sept 31 Dec

Closing balance

13. INVESTMENT IN ASSOCIATES

Investment in FPF-1 and FPU Services

(59,088)

1,435,209 1,433,764

US$'000

assets

US$'000

141,318

(1,451)

717 142,035

613

2,545,742

2,482,010

1,101,184 1,102,046

2,341,069

(377)

613

-

(1,451)

(907,305)

(119,768)

862

4,140

Total

(120,230)(462)

2,345,209

1,445

-

(353,753)

(1,380,826)

-

- (353,753)

31 Dec

(1,442,458)

Investment in associates comprises shares, acquired by Ithaca Energy (Holdings) Limited, in FPF-1 Limited and FPU Services Limited

as part of the completion of the Greater Stella Area transactions in 2012. There has been no change in value during the period with

the above investment reflecting the Company's share of the associates' results.

(2,751)

18,337

20152016

3,406

60,326

US$'000

3

18,337

30 Sept

2,485,416

US$'000

3,409

$123.5 million goodwill represents $136.1 million recognised on the acquisition of Summit Petroleum Limited ("Summit") in July 2014

as a result of recognising a $136.9 million deferred tax liability as required under IFRS 3 fair value accounting for business

combinations. Absent the deferred tax liability the price paid for the Summit assets equated to the fair value of the assets. $1.0 million

represented goodwill recognised on the acquisition of gas assets from GDF in December 2010. As at 31 December 2015 a non-

taxable impairment of $13.6 million was recorded relating to goodwill.

1,102,626

123,510

US$'000US$'000

(58,881)

Oil and Gas assets

The net book amount of property, plant and equipment includes $28.9 million (31 December 2015: $30.2 million) in respect of the

Pierce FPSO lease held under finance lease.

658

US$'000

2,542,333

(910,000)

20152016

123,510

1,103,284

(2,695)

(2,544) (1,383,370)

(1,439,707)

(377)

60,323

(207)

13


14. BORROWINGS30 Sept

RBL facility

Senior notes

Long term bank fees

Long term senior notes fees

Bank debt facilities

Senior Reserves Based Lending Facility

Junior Reserves Based Lending Facility

Senior Notes

Covenants

The key covenants in both the Senior and Junior RBLs are:

15. TRADE AND OTHER PAYABLES30 Sept 31 Dec

Trade payablesAccruals and deferred income

The Corporation is subject to financial and operating covenants related to the facilities. Failure to meet the terms of one or more of

these covenants may constitute an event of default as defined in the facility agreements, potentially resulting in accelerated repayment

of the debt obligations.

US$'000

(666,130)

3,884

The availability to draw upon the facilities is reviewed by the bank syndicate on a semi-annual basis, with the results of the October

2016 redetermination resulting in debt availability of over $410 million.

(620,427)

4,452 6,779

(376,793)

(300,000)

(128,232)

2015

3,039

US$'000

(300,000)

Security provided against the facilities

US$'000

(298,578)

(170,346)

As at 30 September 2016, the Corporation had $300 million 8.125% senior unsecured notes due July 2019, with interest payable semi-

annually. $3.0 million of loan fees (31 December 2015: $3.9 million) have been capitalised and remain to be amortised.

As at 30 September 2016, the Corporation had a Junior Reserved Based Lending ("Junior RBL") Facility of $60 million. The facility

remains undrawn at the quarter end.

2016

The RBL facilities are secured by the assets of the guarantor member of the Ithaca Group, such security including share pledges,

floating charges and/or debentures.

The Senior notes are unsecured senior debt of Ithaca Energy Inc, guaranteed by certain members of the Ithaca Group and

subordinated to existing and future secured obligations.

(275,907)

The Corporation was in compliance with all its relevant financial and operating covenants during the period.

(129,719)(146,188)

- A corporate cashflow projection showing total sources of funds must exceed total forecast uses of funds for the later of the following

12 months or until forecast first oil from the Stella field.

- The ratio of the net present value of cashflows secured under the RBL for the economic life of the fields to the amount drawn under

the facility must not fall below 1.15:1

- The ratio of the net present value of cashflows secured under the RBL for the life of the debt facility to the amount drawn under the

facility must not fall below 1.05:1.

There are no financial maintenance covenants tests under the senior notes.

As at 30 September 2016, the Corporation has a Senior Reserved Based Lending ("Senior RBL") Facility of $475 million. As at 30

September 2016, $327.9 million (31 December 2015: $377 million) was drawn down under the Senior RBL. $4.5 million (31 December

2015: $6.8 million) of loan fees relating to the RBL have been capitalised and remain to be amortised.

31 Dec

The Company's bank debt facilities are sized at $535 million: a $475 million senior RBL and a $60 million junior RBL. Both RBL

facilities are based on conventional oil and gas industry borrowing base financing terms, with loan maturities in September 2018, and

are available to fund on-going development activities and general corporate purposes. The combined interest rate of the two bank

debt facilities, fully drawn, is LIBOR plus 3.4% prior to Stella coming on-stream, stepping down to LIBOR plus 2.9% after Stella

production has been established.

2016 2015

(327,918)

US$'000

14


16. EXPLORATION OBLIGATIONS

Exploration obligations

17. DECOMMISSIONING LIABILITIES

30 Sept 31 Dec

US$'000 US$'000

Balance, beginning of period

Additions

Accretion

Revision to estimates

Decommissioning provision utilised

Balance, end of period

18. OTHER LONG TERM LIABILITIES

Shell prepayment

BP gas prepayment

Finance lease acquired


19. FINANCE LEASE LIABILITIES

30 Sept 31 Dec

US$'000 US$'000

Total minimum lease payments

Less than 1 year

Between 1 and 5 years

5 years and later

Interest

Less than 1 year


5 years and later

Present value of minimum lease payments

Less than 1 year


5 years and later

31 Dec

(3,569)

(2,602)

(30,316)

2015

(226,915)

(213,105)

(9,092)

-

(4,718)

(92,543)

The total future decommissioning liability was calculated by management based on its net ownership interest in all wells and facilities,

estimated costs to reclaim and abandon wells and facilities and the estimated timing of the costs to be incurred in future periods. The

Corporation uses a risk free rate of 4.0 percent (31 December 2015: 4.0 percent) and an inflation rate of 2.0 percent (31 December

2015: 2.0 percent) over the varying lives of the assets to calculate the present value of the decommissioning liabilities. These costs

are expected to be incurred at various intervals over the next 21 years.

The economic life and the timing of the obligations are dependent on Government legislation, commodity price and the future

production profiles of the respective production and development facilities.

(23,502)

(994)

(4,000)

(12,570)

2016US$'000

30 Sept

(8,447)

(233,200)

(4,000)

2016

-

(4,123)(3,907)

2015

The finance lease relates to the Pierce FPSO acquired as part of the Summit acquisition in July 2014.

US$'000

(1,642)

(8,561)

(2,595)

(953)

(19,933)

(1,608)

US$'000

(63,629)

2,877

US$'000

The prepayment balances relate to cash advances under the Shell oil sales agreement and BP gas sales agreement which have been

classified as long-term liabilities as short-term repayment is not due in the current oil price environment. The finance lease relates to

the Pierce FPSO acquired as part of the Summit acquisition.

31 Dec

(226,915)

2015

30 Sept

(6,883)

2015

-

2016

(13,687)

(62,227)

(107,473)

(30,157)

(3,076)

2016

(21,663)

(12,468)

(18,587)

(2,279)

The above reflects the fair value of E&E commitments assumed as part of the Valiant transaction.

-

15


20. CONTINGENT CONSIDERATION

30 Sept 31 Dec

US$'000 US$'000

Balance outstanding

21. SHARE CAPITAL

Amount

Authorised share capital common shares US$'000

At 30 September 2016 and 31 December 2015 Unlimited -

(a) Issued

The issued share capital is as follows:

Issued Number of common shares Amount US$'000

Balance 1 January 2016

Issued for cash - options exercised

Balance 30 September 2016

(b) Stock options


Granted

Forfeited / expired

Exercised

The following is a summary of stock options as at 30 September 2016.

Options Outstanding Options Exercisable

Wt. Avg. Wt. Avg. Wt. Avg. Wt. Avg.

Life Exercise Life Exercise

(Years) Price * (Years) Price *

1.2 $2.47 1.2 $2.47

1.6 $1.20 1.1 $1.47

$0.40 (C$0.55) 3.2 $0.40 $0.40 (C$0.55) 0.7 $0.40

2.2 $1.16 1.1 $1.89

$0.84950,000

(5,966,222) $2.05

$1.81

2015

No. of Options

19,216,206 24,232,428

No. of Options

12,000,000

$1.63

-

Wt. Avg Exercise

Price *

Changes to the Corporation’s stock options are summarised as follows:

$1.70

-

The contingent consideration at the end of the period relates to the acquisition of the Stella field and is payable upon first oil.

(4,000)(4,000)

The Corporation’s stock options and exercise prices are denominated in Canadian Dollars when granted. As at 30 September 2016,

28,313,137 stock options to purchase common shares were outstanding, having an exercise price range of $0.40 to $2.51 (C$0.55 to

C$2.71) per share and a vesting period of up to 3 years in the future.

11,450,000 200,000

Range of

Exercise Price

Options

10,490,001

6,373,136

$2.46-$2.51

(C$2.53-C$2.71)

No. of Options

$0.84-$2.03

(C$1.04-C$1.99)

In the nine months ended 30 September 2016, the Corporation's Board of Directors granted 12,000,000 options at an exercise price of

$0.40 (C$0.55).

$1.16

$0.84-$2.03

(C$1.04-C$1.99)

* The weighted average exercise price has been converted into U.S. dollars based on the foreign exchange rate in effect at the date of

issuance.

5,380,001

(2,503,069)

$0.62

400,000

4,503,136

$2.46-$2.51

(C$2.53-C$2.71)

No. of Options

Range of

Exercise Price

Wt. Avg Exercise

Price *

28,313,137 19,216,206

$0.40

(400,000)

Number of

$1.70

346

617,375 411,384,045

617,721 411,784,045

31 December 201530 September 2016

2016

28,313,137 10,083,137

16


The following is a summary of stock options as at 31 December 2015.

Wt. Avg. Wt. Avg. Wt. Avg. Wt. Avg.

Life Exercise Life Exercise

(Years) Price * (Years) Price *

1.9 $2.46 1.6 $2.44

2.4 $1.22 1.7 $1.54

2.2 $1.70 1.7 $1.84

(c) Share based payment

Risk free interest rate

Expected stock volatility

Expected life of options

Weighted Average Fair Value

22. SHARE BASED PAYMENT RESERVE

30 Sept 31 Dec


Share based payment cost


23. EARNINGS PER SHARE


Wtd av. number of common shares (basic)

Wtd av. number of common shares (diluted)

2,334

2015

329,518,620411,784,045

418,627,887 412,945,290329,518,620

329,518,620

329,518,620

411,519,811

The calculation of basic earnings per share is based on the profit after tax and the weighted average number of common shares in

issue during the period. The calculation of diluted earnings per share is based on the profit after tax and the weighted average number

of potential common shares in issue during the period.

2016

2016

2016

US$’000

No. of Options

Options granted are accounted for using the fair value method. The compensation cost during the three months and nine months

ended 30 September 2016 for total stock options granted was $0.7 million and $2.4 million respectively (Q3 2015: $1.1 million, Q3

YTD 2015: $3.1 million). $0.2 million and $0.3 million were charged through the income statement for share based payment for the

three and nine months ended 30 September 2016 respectively, being the Corporation’s share of share based payment chargeable

through the income statement. The remainder of the Corporation’s share of share based payment has been capitalised. The fair value

of each stock option granted was estimated at the date of grant, using the Black-Scholes option pricing model with the following

assumptions:

22,678

2015

3,444

22,678

3 years

For the nine months ended 30

September 2016

US$’000

3 years

59%60%

2015

C$0.43C$0.22

0.53%

25,012

No. of Options

7,326,205

11,890,001

$0.84-$2.03

(C$1.04-C$1.99)

Range of

Exercise Price

$2.28-$2.52

(C$2.31-C$2.71)

19,234

5,800,001

2,953,333

Range of

Exercise Price

Options Exercisable

8,753,334

$0.84-$2.03

(C$1.04-C$1.99)

19,216,206

$2.28-$2.52

(C$2.31-C$2.71)

Options Outstanding

0.65%

For the year ended 31

December 2015

17


24. TAXATION


Taxation (charge)/credit

25. COMMITMENTS

30 Sept 31 Dec

Operating lease commitments

Within one year

Two to five years

Capital commitments 30 Sept 31 Dec

Capital commitments incurred jointly with other venturers (Ithaca's share)

Further, it was also announced that the Supplementary Charge in respect of ring fence trades ("SCT") would be reduced from 20% to

10% with effect from 1 January 2016. This has reduced the Company's future SCT charge charge accordingly. The rate change was

enacted in September 2016 and the impact of the 10% reduction in the Supplementary Charge was to reduce the net deferred tax

assets by $74.7 million. Coupled with the CT impact of the PRT rate change noted above of $11.2 million this gives an overall rate

change driven CT charge for the nine months to 30 September 2016 of $85.9 million

It was announced in the UK Budget on 16 March 2016 that the rate of Petroleum Revenue Tax ("PRT") was effectively abolished from

1 January 2016 with the introduction of a 0% PRT rate. This eliminated the Company's future PRT tax charge from 1 January 2016.

The PRT rate change was enacted in March 2016 and resulted in a credit of $24.2 million in the Q1 2016 results.

9,534

US$'000

2016 2015

15,756

US$000 US$000

US$'000

19,475

US$'000

240

2,953(12,728)

US$'000

2016 2015

The tax benefit of these capital allowances is received by Ithaca as the expenditure is incurred. In recognition of the benefit Ithaca

receives from the additional capital allowances a payment is expected to be made to Petrofac 5 years after Stella first oil of a sum

calculated at the prevailing tax rate applied to the relevant capital allowances, in accordance with the SPA. The taxation charge above

includes a deferred tax credit of $9.0 million for the three months ended 30 September 2016. The related deferred tax asset (adjusting

for the SCT rate change) as at 30 September 2016 is $81.0 million.

2015

US$000

2016

(63,895)

2015

120

Ithaca will pay Petrofac $13.7 million in respect of final payment on variations to the contract, with payment deferred until three and a

half years after first production from the Stella field. A further payment to Petrofac of up to $34 million was to be made by Ithaca

dependent on the timing of sail-away of the FPF-1. This further payment has been revised to $17 million. This payment will also be

deferred until three and a half years after first production from the Stella field.

240

300

US$000

2016

In accordance with the Stella Sale and Purchase Agreement ("SPA"), Ithaca receives the right to claim a tax benefit for additional

capital allowances on certain capital expenditures incurred by Ithaca and paid for by Petrofac on the Stella project.

In addition to the amounts above, during the year Ithaca has entered into an agreement with Petrofac in respect of the FPF-1 Floating

Production facility.

18


26. FINANCIAL INSTRUMENTS

Derivative financial instrument assets


Derivative financial instrument liability


Revaluation of forex forward contracts

Revaluation of other long term liability

Revaluation of commodity hedges

Revaluation of interest rate swaps

Realised (loss)/gain on forex contracts

Realised gain on commodity hedges

Realised (loss)/gain on interest rate swaps

Total gain/(loss) on financial instruments

• Level 1 – inputs represent quoted prices in active markets for identical assets or liabilities (for example, exchange-traded commodity

derivatives). Active markets are those in which transactions occur in sufficient frequency and volume to provide pricing information on

an ongoing basis.

To estimate fair value of financial instruments, the Corporation uses quoted market prices when available, or industry accepted third-

party models and valuation methodologies that utilise observable market data. In addition to market information, the Corporation

incorporates transaction specific details that market participants would utilise in a fair value measurement, including the impact of non-

performance risk. The Corporation characterises inputs used in determining fair value using a hierarchy that prioritises inputs

depending on the degree to which they are observable. However, these fair value estimates may not necessarily be indicative of the

amounts that could be realised or settled in a current market transaction. The three levels of the fair value hierarchy are as follows:

-

74,894 94,185

13,950

145,238 18,104 35,132

-

1,785

• Level 2 – inputs other than quoted prices included within Level 1 that are observable, either directly or indirectly, as of the reporting

date. Level 2 valuations are based on inputs, including quoted forward prices for commodities, market interest rates, and volatility

factors, which can be observed or corroborated in the marketplace. The Corporation obtains information from sources such as the

New York Mercantile Exchange and independent price publications.

2,955 (3,254)

US$'000

32,549

The table below presents the total gain/(loss) on financial instruments that has been disclosed through the statement of

comprehensive income:

102

Level 2 Level 3

-

In forming estimates, the Corporation utilises the most observable inputs available for valuation purposes. If a fair value measurement

reflects inputs of different levels within the hierarchy, the measurement is categorised based upon the lowest level of input that is

significant to the fair value measurement. The valuation of over-the-counter financial swaps and collars is based on similar

transactions observable in active markets or industry standard models that primarily rely on market observable inputs. Substantially all

of the assumptions for industry standard models are observable in active markets throughout the full term of the instrument. These are

categorised as Level 2.

US$'000

32,549

The following table presents the Corporation’s material financial instruments measured at fair value for each hierarchy level as at 30

September 2016:

(78)

2015

US$'000

614

307

2016

(4,076)

-

(93,919)

(2,322)

Level 1

US$'000

Total Fair Value

• Level 3 – inputs that are less observable, unavailable or where the observable data does not support the majority of the instrument’s

fair value.

(4,000)

-

(52,088)

35,765

41,769

(4,000)

614

(14,001)

39,129

(54,529)

2016

1,221

146,273

3,006

US$'000

19

US$'000

2015

(186)

(25,268)

70,829

(96,097)

(5,027)

76,091

(235)

-

144 349

(2,175)

-

(10,944)

US$'000

-

-

(2,175)

US$'000

19


The Corporation has identified that it is exposed principally to these areas of market risk.

i) Commodity Risk


Revaluation of commodity hedges

Realised gain on commodity hedges

Total gain/(loss) on commodity hedges

Derivative Term Volume Average price

bbls

therms

ii) Interest Risk


Revaluation of interest contracts

Realised (loss)/gain on interest contracts

Total gain/(loss) on interest contracts

Derivative Value Rate

1.24%


Revaluation of foreign exchange forward contracts

Realised (loss)/gain on foreign exchange forward contracts

Total (loss)/gain on forex forward contracts

The below represents interest rate financial instruments in place:

Calculation of interest payments for the RBL agreement incorporates LIBOR. The Corporation is therefore exposed to interest rate risk

to the extent that LIBOR may fluctuate. The Corporation evaluates its annual forward cash flow requirements on a rolling monthly

basis.

The table below presents the total (loss)/gain on foreign exchange financial instruments that has been disclosed through the statement

of comprehensive income:

1,785

(7,349)(2,640)

2015

US$'000

(1,121) 3,006

(3,254)

iii) Foreign Exchange Rate Risk

2,955

The table below presents the total gain/(loss) on commodity hedges that has been disclosed through the statement of income at the

quarter end:

2016

US$'000

2016

The below represents commodity hedges in place at the quarter end:

Term

$50 millionOct 16 - Dec 16

633

144

(186)

(91)

(4,076) 614

(235)

1,037,744

Commodity price risk related to crude oil prices is the Corporation’s most significant market risk exposure. Crude oil prices and quality

differentials are influenced by worldwide factors such as OPEC actions, political events and supply and demand fundamentals. The

Corporation is also exposed to natural gas price movements on uncontracted gas sales. Natural gas prices, in addition to the

worldwide factors noted above, can also be influenced by local market conditions. The Corporation’s expenditures are subject to the

effects of inflation, and prices received for the product sold are not readily adjustable to cover any increase in expenses from inflation.

The Corporation may periodically use different types of derivative instruments to manage its exposure to price volatility, thus mitigating

fluctuations in commodity-related cash flows.

Interest rate swap

Oct 16 - June 17

(2,322)

1,221 (5,027)

2015

US$'000

2016

2016

US$'000

20152016

The table below presents the total gain/(loss) on interest financial instruments that has been disclosed statement of income at the

quarter end:

2015

US$'000US$'000 US$'000US$'000

2015

In mid October 2016 the Company entered into additional hedging contracts for 1.5 million barrels of 2017 oil production. 750,002

barrels have been hedged using collars with a floor price of $46/bbl and a celling price of $60/bbl and 750,000 barrels have been

hedged using put options with a floor price of $53/bbl.

163

(78)

614

24

349

19

102

$68.75/bblOil swaps

90,709

Gas puts

Oct 16 - Mar 17Gas swaps therms 47p/therm

4,103

63p/therm

2016 2015

35,132

(93,919)

(17,828)

Oct 16 - June 17

3,065,288

18,104

59,200,000

76,091

41,769

76,901

US$'000 US$'000 US$'000

(14,001) (54,529)

US$'000

145,238

20


Derivative Term Value Protection rate Trigger rate

$1.47/£1.00

$1.48/£1.00

$1.33/£1.00

Accounts payable and accrued liabilities

Other long term liabilities

Borrowings

-

v) Liquidity Risk

The Corporation may be exposed to certain losses in the event that counterparties to derivative financial instruments are unable to

meet the terms of the contracts. The Corporation’s exposure is limited to those counterparties holding derivative contracts with positive

fair values at the reporting date. As at 30 September 2016, exposure is $32.5 million (31 December 2015: $126.9 million).

(727,900)

Liquidity risk includes the risk that as a result of its operational liquidity requirements the Corporation will not have sufficient funds to

settle a transaction on the due date. The Corporation manages liquidity risk by maintaining adequate cash reserves, banking facilities,

and by considering medium and future requirements by continuously monitoring forecast and actual cash flows. The Corporation

considers the maturity profiles of its financial assets and liabilities. As at 30 September 2016, substantially all accounts payable are

current.

iv) Credit Risk

The Corporation regularly monitors all customer receivable balances outstanding in excess of 90 days. As at 30 September 2016

substantially all accounts receivables are current, being defined as less than 90 days. The Corporation has no allowance for doubtful

accounts as at 30 September 2016 (31 December 2015: $Nil).

The Corporation is exposed to foreign exchange risks to the extent it transacts in various currencies, while measuring and reporting its

results in US Dollars. Since time passes between the recording of a receivable or payable transaction and its collection or payment,

the Corporation is exposed to gains or losses on non USD amounts and on balance sheet translation of monetary accounts

denominated in non USD amounts upon spot rate fluctuations from quarter to quarter. The Corporation evaluates its foreign exchange

instrument requirements on a rolling monthly basis.

(298,578) -

-

(298,578)

US$'000

The Corporation’s accounts receivable with customers in the oil and gas industry are subject to normal industry credit risks and are

unsecured. Oil production from Cook, Broom, Dons, Pierce, Causeway and Fionn is sold to Shell Trading International Ltd. Wytch

Farm oil production is sold on the spot market. Topaz gas production was sold to Hartree Partners Oil and Gas. Cook gas is sold to

Shell UK Ltd and Esso Exploration & Production UK Ltd.

The below represents foreign exchange financial instruments in place at the quarter end:

1 to 5 years

In October 2016, the Company entered into a further forward contract to purchase £5 million at a GBP:USD exchange rate of 1.24.

(620,427)

US$'000

The Corporation assesses partners’ credit worthiness before entering into farm-in or joint venture agreements. In the past, the

Corporation has not experienced credit loss in the collection of accounts receivable. As the Corporation’s exploration, drilling and

development activities expand with existing and new joint venture partners, the Corporation will assess and continuously update its

management of associated credit risk and related procedures.

Within 1 year

(107,473)

The following table shows the timing of cash outflows relating to trade and other payables.

The Corporation also has credit risk arising from cash and cash equivalents held with banks and financial institutions. The maximum

credit exposure associated with financial assets is the carrying values.

Oct 16 - Dec 16

Oct 16

£1.6 million/month

Oct 16 - Dec 16Forward £1.6 million/month

Forward

Forward £12 million

21


27. DERIVATIVE FINANCIAL INSTRUMENTS

30 Sept 31 Dec

US$'000 US$'000

Oil swaps

Oil capped swaps

Gas swaps

Gas puts

Interest rate swaps

Foreign exchange forward contract

28. FAIR VALUES OF FINANCIAL ASSETS AND LIABILITIES

Classification

Cash and cash equivalents (Held for trading)

Derivative financial instruments (Held for trading)

Accounts receivable (Loans and Receivables)

Deposits

Long-term receivable (Loans and Receivables)

Bank debt (Loans and Receivables)


Derivative financial instruments (Held for trading)

Other long term liabilities

Accounts payable (Other financial liabilities)

29. RELATED PARTY TRANSACTIONS

Country of incorporation % equity interest at 30 Sept

Ithaca Energy (UK) Limited Scotland 100% 100%

Ithaca Minerals (North Sea) Limited Scotland 100% 100%

Ithaca Energy (Holdings) Limited Bermuda 100% 100%

Ithaca Energy Holdings (UK) Limited Scotland 100% 100%

Ithaca Petroleum Limited England and Wales 100% 100%

Ithaca North Sea Limited England and Wales 100% 100%

Ithaca Exploration Limited England and Wales 100% 100%

Ithaca Causeway Limited England and Wales 100% 100%

Ithaca Gamma Limited England and Wales 100% 100%

Ithaca Alpha (NI) Limited Northern Ireland 100% 100%

Ithaca Epsilon Limited England and Wales 100% 100%

Ithaca Delta Limited England and Wales 100% 100%

Ithaca Petroleum Holdings AS Norway 100% 100%

Ithaca Petroleum Norge AS* Norway 0% 0%

Ithaca Technology AS Norway 100% 100%

Ithaca AS Norway 100% 100%

Ithaca Petroleum EHF Iceland 100% 100%

Ithaca SPL Limited England and Wales 100% 100%

Ithaca Dorset Limited England and Wales 100% 100%

Ithaca SP UK Limited England and Wales 100% 100%

Ithaca Pipeline Limited England and Wales 100% 100%

The consolidated financial statements include the financial statements of Ithaca Energy Inc and the subsidiaries listed in the following

table:

20152016

(2,175)

(298,578)

(107,473) (107,473)

224,229

60,136

224,229

(2,175)

1,747

(620,427)

29,772

32,549

1,747

Financial instruments of the Corporation consist mainly of cash and cash equivalents, receivables, payables, loans and financial

derivative contracts, all of which are included in these financial statements. At 30 September 2016, the classification of financial

instruments and the carrying amounts reported on the balance sheet and their estimated fair values are as follows:

29,772

(620,427)

US$'000US$'000

(298,578)

Carrying

Amount

60,136

Carrying Amount

(51)

32,549

Fair Value

31 December 201530 September 2016

Fair Value

61,052

192

-

30,374

126

126,690

56,352

7,117

(2,123)

13,469

2016 2015

(275,907) (275,907)

(4,000) (4,000)

(197)

Transactions between subsidiaries are eliminated on consolidation.

(4,000) (4,000)

(92,543) (92,543)

(197) (197)

61,052

(666,130) (666,130)

743743

223,006

11,543

223,006

11,543

126,887126,887

1,690

61,602 18,887

*Ithaca Petroleum Norge AS was disposed of in Q2 2015.

22


Burstall Winger Zammit LLP 2016 - - -

2015 - 111 -

Loans to related parties Amounts owed from related parties

FPF-1 Limited

FPU Services Limited

30. SEASONALITY

The effect of seasonality on the Corporation's financial results for any individual quarter is not material.

31 Dec

20152016

(127)

(37)

30 Sept

Accounts

Receivable

Accounts

Payable

US$'000

Sales

US$'000

48 210

60,088

US$'000 US$'000

The following table provides the total amount of transactions that have been entered into with related parties during the quarter ending

30 September 2016 and 30 September 2015, as well as balances with related parties as of 30 September 2016 and 31 December

2015:

60,842

US$'000US$'000

Purchases

60,136 61,052

23

q3 2016 consolidated financial · pdf fileq3 2016 consolidated financial statements 1. ... no...

Documents