Ithaca Energy Inc.
LSE : IAE

Ithaca Energy Inc.

February 12, 2010 02:57 ET

Galaxy II Mobilises to Drill Stella Appraisal Well

  NEWS RELEASE

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


                                            Ithaca Energy Inc.
                                                     
                            Galaxy II Mobilises to Drill Stella Appraisal Well

LONDON, U.K. - CALGARY, ALBERTA, February 11, 2010 - Ithaca Energy Inc. (LSE-AIM: IAE, TSX-V: IAE) and  its
wholly  owned subsidiary Ithaca Energy (UK) Limited ("Ithaca" or the "Company"), an independent oil  &  gas
company  with  exploration, development and production assets in the UK sector of the North Sea,  announces
today  that  the Galaxy II heavy duty jack-up rig, contracted by Ithaca to drill an appraisal well  on  the
Stella field, has now come on hire and been mobilised to the spud location and will commence drilling  this
month.

In November 2009, Ithaca Energy became operator of the rich gas-condensate, Stella field and two additional
discoveries, namely Hurricane and Harrier.   The Company has since contracted the Galaxy II drilling  unit,
owned  by Transocean, and the services of ADTI to manage appraisal well operations under 'turnkey' contract
arrangements.  The well programme, which is scheduled to take around 79 days to complete, has been designed
to  satisfy  three  primary  objectives that will influence development.  The  primary  objectives  are  as
follows:

i)      Confirm Ithaca's assessment of the in-place volume of hydrocarbons
ii)     Understand changes in composition of hydrocarbon fluids with depth
iii)    Verify the distribution and quality of the reservoir

The  drilling  schedule  includes drill stem testing and a contingent sidetrack to  ensure  that  the  well
objectives are fully satisfied and field upside is appraised prior to development. A further update will be
provided when the initial bore has been completed and prior to commencement of any sidetrack.

The  appraisal  well  is planned to reach total depth in the Cretaceous chalk layers which  lie  below  the
principal  Stella  (Andrew) reservoir target.  An earlier well (30/6-3Z) encountered  hydrocarbons  in  the
Ekofisk  chalk  reservoir and tested further rich gas-condensate reserves which could be developed  at  the
same time as the main pool.

Timely  development  of  Stella  will  allow  the Company to consider  the  potential  development  of  the
neighbouring  Harrier  and Hurricane discoveries as additional tiebacks to Stella  in  this  prolific  gas-
condensate area.

As  reported in October 2009, Challenger Minerals Inc. ("CMI") will pay 27% of gross Stella appraisal  well
costs in exchange for an 18% equity interest in the Stella and Harrier discoveries, thereby carrying a part
of  Ithaca's share of drilling costs and leaving Ithaca with a 50.33% interest. Upon successful  appraisal,
CMI will also disproportionately fund a further Stella or Harrier development well.

The  latest  reserves  report  issued by Sproule International Limited for year  ended  December  31  2009,
ascribed  Proved  and  Probable reserves to Stella (both Andrew and Ekofisk  reservoirs)  of  8.94  million
barrels of oil equivalent net to Ithaca after consideration of the CMI farmout.

The  Company's petroleum and natural gas reserves (the "reserves") were independently evaluated by  Sproule
(www.sproule.com)  in  accordance  with  the Canadian Oil and Gas Evaluation  Handbook  ("COGEH")  reserves
definitions  and  evaluation  practices and procedures which abide by the standards  set  by  the  Canadian
Institute of Mining, Metallurgy and Petroleum ("CIM"), as specified by National Instrument 51-101 ("NI  51-
101"). The evaluation uses Sproule's forecast prices and costs at December 31, 2009.

Current Joint Venture Partners in block 30/6 (Stella and Harrier) are Ithaca (68.33%), Dyas UK Ltd (31.67%)
but post completion of the farm out to CMI will be Ithaca (50.33%), Dyas UK Ltd (31.67%), CMI (18.00%).


Enquiries:

Ithaca Energy:
Iain McKendrick, CEO     imckendrick@ithacaenergy.com     +44 (0) 1224 650 261
John Woods, CDO          jwoods@ithacaenergy.com          +44 (0) 1224 650 273
Nick Muir, CXO           nmuir@ithacaenergy.com           +44 (0) 1224 650 267

Pelham Bell Pottinger:
Philip Dennis            pdennis@pelhambellpottinger.co.uk +44 (0) 207 337 1516
Elena Dobson             edobson@pelhambellpottinger.co.uk +44 (0) 207 337 1517

Cenkos Securities plc:
Jon Fitzpatrick          jfitzpatrick@cenkos.com          +44 (0) 131 220 9773
Ken Fleming              kfleming@cenkos.com              +44 (0) 131 220 9772

In  accordance  with AIM Guidelines, Lawrie Payne, MA Marine Geology (Alberta & Columbia) and  Chairman  of
Ithaca  Energy is the qualified person that has reviewed the technical information contained in this  press
release.

             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. When used in this announcement, the words "expects," "believes," "anticipate,"
"plans,"  "may,"  "will," "should", "scheduled", "targeted", "estimated" and similar expressions,  and  the
negatives  thereof, whether used in connection with development and future production rates  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.

The  term "boe" may be misleading, particularly if used in isolation. A boe conversion of 6 Mcf: 1  bbl  is
based  on  an  energy equivalency conversion method primarily applicable at the burner  tip  and  does  not
represent a value equivalency at the wellhead.

Neither TSX Venture nor it's Regulation Services Provider (as that term is defined in the policies  of  the
TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

                                                  -ENDS-

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