Ithaca Energy Inc.
LSE : IAE

April 26, 2011 02:00 ET

Challenger Minerals Inc. Signs Earn-In Agreement for Hurricane Discovery

FOR: ITHACA ENERGY INC.

TSX VENTURE, AIM SYMBOL: IAE

April 26, 2011

Ithaca Energy Inc.: Challenger Minerals Inc. Signs Earn-In Agreement for Hurricane Discovery

LONDON, UNITED KINGDOM and CALGARY, ALBERTA--(Marketwire - April 26, 2011) -

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

Ithaca Energy Inc. (TSX VENTURE:IAE)(AIM:IAE) announces today that it has signed an Earn In agreement with

Challenger Minerals (North Sea) Limited ("CMI") on the Hurricane discovery ("Hurricane") in Block 29/10b,

within the Ithaca operated Greater Stella Development Area.

Hurricane was discovered in 1995 by well 29/10-4Z which tested the western lobe of a mapped structure and

encountered light oil (41 degrees API) in a 62 foot section of reservoir sands; no drill stem test was

undertaken at that time. The Hurricane appraisal well is being designed to confirm hydrocarbons in the eastern

lobe of the structure characterized by high porosity (up to 30%) channelised Paleocene Rogaland sandstones. On

successful appraisal of Hurricane by the initial well, the intention is to drill a sidetrack 'keeper' well up

structure in anticipation of future development and tie back to the Stella hub.

Under the terms of the Earn In agreement, CMI is committed to pay a share of costs of the initial well in Block

29/10b. In consideration for this commitment CMI is provided with an option, exercisable no later than 90 days

following abandonment or suspension of the initial appraisal and any sidetrack well, to take an interest in

Block 29/10b. Under the Earn In arrangements, CMI will pay 40% of gross Hurricane initial appraisal well costs

in exchange for a 31% equity interest in Block 29/10b, thereby carrying a part of Ithaca's share of all costs

of drilling an initial appraisal well. In addition, upon successful appraisal, CMI will pay 40% of gross costs

of a drill stem well test of any sidetrack. All additional costs, including those for planned sidetrack

drilling, shall be apportioned such that CMI shall pay its 31% pro rata share.

The transaction is subject to agreeing 'turnkey' terms with Applied Drilling Technology International ("ADTI")

(a subsidiary of Transocean Inc.) for the provision of a suitable drilling unit and well management services.

Upon agreement of 'turnkey' terms and provision of a suitable rig, Ithaca anticipates that the appraisal well

will be commenced in Q4 2011.

Ithaca currently holds 100% equity interest in the Hurricane discovery and Block 29/10b.

Notes to oil and gas disclosure:

In accordance with AIM Guidelines, Hugh Morel, BSc Physics and Geology (Durham), PhD Hydrogeology (London) and

senior petroleum engineer at Ithaca Energy is the qualified person that has reviewed the technical information

contained in this press release. Dr Morel has 30 years operating experience in the upstream oil industry.

About Ithaca Energy:

Ithaca Energy Inc. and its wholly owned subsidiary Ithaca Energy (UK) Limited ("Ithaca" or "the Company"), is

an oil and gas exploration, development and production company active in the United Kingdom's Continental Shelf

("UKCS"). The goal of Ithaca, in the near term, is to maximize production and achieve early production from the

development of existing discoveries on properties held by Ithaca, to originate and participate in exploration

and appraisal on properties held by Ithaca when capital permits, and to consider other opportunities for growth

as they are identified from time to time by Ithaca

Not for Distribution to U.S. Newswire Services or for Dissemination in the United States

Forward-looking statements

Some of the statements in this announcement are forward-looking. Forward-looking statements include statements

regarding the intent, belief and current expectations of Ithaca Energy Inc. or its officers with respect to

various matters, including the earn-in with CMI. When used in this announcement, the words "expects,"

"believes," "anticipates," "plans," "may," "will," "should", scheduled, targeted, estimated and similar

expressions, and the negatives thereof, whether used in connection with estimated production levels,

anticipated drilling operations and results therefrom, CMI's option to earn-in to Hurricane or otherwise are

intended to identify forward-looking statements. Such statements are not promises or guarantees, and are

subject to risks and uncertainties that could cause actual outcome to differ materially from those suggested by

any such statements. These forward-looking statements speak only as of the date of this announcement. Ithaca

Energy Inc. expressly disclaims any obligation or undertaking to release publicly any updates or revisions to

any forward-looking statement contained herein to reflect any change in its expectations with regard thereto or

any change in events, conditions or circumstances on which any forward-looking statement is based except as

required by applicable securities laws.

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FOR FURTHER INFORMATION PLEASE CONTACT:

Enquiries:

Ithaca Energy:

Iain McKendrick

CEO

+44 (0) 1224 650 261

imckendrick@ithacaenergy.com

OR

Ithaca Energy:

John Woods

CDO

+44 (0) 1224 650 273

jwoods@ithacaenergy.com

OR

Ithaca Energy:

Nick Muir

CXO

+44 (0) 1224 650 267

nmuir@ithacaenergy.com

OR

Pelham Bell Pottinger Public Relations:

Philip Dennis

+44 (0) 207 861 3919

pdennis@pelhambellpottinger.co.uk

OR

Pelham Bell Pottinger Public Relations:

Elena Dobson

+44 (0) 207 861 3147

edobson@pelhambellpottinger.co.uk

OR

Cenkos Securities plc:

Jon Fitzpatrick

+44 (0) 131 220 9773

jfitzpatrick@cenkos.com

OR

Cenkos Securities plc:

Ken Fleming

+44 (0) 131 220 9772

kfleming@cenkos.com

Neither the TSX Venture Exchange nor its Regulatory Service Provider (as that term is defined in the polices of

the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.

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