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The Aim 100 2015: 100-91

In the first 10-company segment of our analysis of Aim's top 100 companies, we give our verdict on Ithaca Energy, Tissue Regenix, Hargreaves Services, Utilitywise, Jelf, Sprue Aegis, Dolphin Capital, Conygar, Plexus, DX Group
The Aim 100 2015: 100-91


Few North Sea drillers could have experienced a more troubling year than Ithaca Energy (IAE). The company’s share price has lost nearly 70 per cent of its value over the past 12 months due to plummeting crude oil prices and delays to a modification programme on its FPF-1 floating production facility. These delays have pushed back first oil from the Greater Stella offshore hub - Ithaca’s key expansion project - but Greater Stella will eventually add around 16,000 barrels a day (bopd) to production. This year, Ithaca hopes to average around 12,000 bopd, so the step up in scale is obvious.

The good news for shareholders is that the effects of the oil price slump should be mitigated by Ithaca’s aggressive hedging policy. Some 8,500 bopd have been hedged at $91 (£61) a barrel through to June 2016, while another 4,000 bopd have been covered at $69 a barrel until June 2017. And the fallaway in oil prices has at least contributed to a significant decline in operating costs. Despite taking a heavy write-down on the oil price, Ithaca produced underlying cash flow of $182m in 2014 and is fully funded through to first production at Greater Stella.

Ithaca’s shares trade at a 76 per cent discount to broker Westhouse’s sum-of-the-parts valuation of 176p a share. Even if you decide to eschew North Sea plays at the moment, it’s likely that some of the big industry players are looking to snap up assets at knockdown prices. Buy. MR

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