Ithaca Energy Inc (LON:IAE) , the oil and gas group with exploration, development and production assets in the UK sector of the North Sea, has received approval for its Field Development Plan of the Athena oil field from the UK Department for Energy and Climate Change. Ithaca, which operates the field, said the approval was a very significant step towards securing first production, which is planned for the third quarter of 2011 at 22,000 barrels of oil per day (4,950 bopd net to Ithaca).

Iain McKendrick, Ithaca’s chief executive, said: “Since announcing the launch of the Athena development in February of 2010, Ithaca and its joint venture partners have worked tirelessly to negotiate contracts that secure a robust development. Ithaca Energy is now in a great position to deliver the next phase of the Athena project, which will involve development drilling and fabrication to meet first production targeted in Q3 2011. FDP approval is a major milestone for any development and testament to the ability and dedication of the company's development team and exceptional cooperation between the joint venture partners.”

The Athena joint venture partners are Ithaca (22.5%), Dyas UK Ltd (47.5%), EWE Aktiengesellschaft (20%) and Zeus Petroleum (10%). Ithaca is now set to push ahead with the project, which involves engineering and fabrication, and installation in the North Sea, 180km north-east from Aberdeen. The initial development consists of four production wells supported by one water injection well. Production will be routed via the subsea manifold and a 2km, 8 inch flowline to a stand-alone floating production, storage and offloading (FPSO) vessel. Oil production will be exported via shuttle tankers. Produced gas will be used to generate power on the FPSO.

Separate to today’s announcement, Rheochem (LON:RHEP) , which controls Zeus Petroleum, said it had signed a US$14m drawdown loan facility with Gemini Oil & Gas Fund II, LP. in order to fund its share of the Atena field development costs. Loan interest and repayments are to be paid out of Zeus’s future share of the Athena gross oil revenues. Rheochem said it was confident that together with other funding strategies currently under consideration which include but are not limited to other debt instruments; farm out or trade sale of E&P assets; trade sale…

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