Ithaca Energy Inc.
TSX VENTURE : IAE
AIM : IAE

Ithaca Energy Inc.

May 01, 2008 10:52 ET

Ithaca Energy Acquires Shell and Esso Interests In the Stella Discovery

CALGARY, ALBERTA--(Marketwire - May 1, 2008) -

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Ithaca Energy Inc ("Ithaca Energy") (TSX VENTURE:IAE)(AIM:IAE) and its wholly owned subsidiary Ithaca Energy (UK) Limited is pleased to announce the acquisition from joint owners Shell U.K. Limited ("Shell") and Esso Exploration and Production UK Limited ("Esso") of a 66.67% working interest in the Stella and Harrier Shallow discoveries which lie in UKCS Block 30/6 Rest of Block (Chalk Layers and Younger) for an initial consideration of US$15 million. A further payment of US$15 million will become payable to Shell and Esso at the time of Field Development Plan approval and proceeds from production will be subject to a 5% over-riding royalty. The acquisition is expected to close before the end of the second quarter 2008 and is subject to the usual government and partner consents.

Stella was discovered in 1979 by the 30/6-2 well and subsequently appraised by well 30/6-3 in 1983. A drill stem test carried out in the 1983 well flowed 2,750 barrels of oil per day ('bopd') of condensate and 23 million cubic feet of gas per day ('MMcfpd') from the Andrew Sandstone. The most recent appraisal well, 30/6-5, drilled by Maersk in 2004 as part of a farm-in from Shell and Esso, confirmed the presence of a gas-condensate in the Tertiary, Andrew Sandstone. A drill stem test was carried out on the 30/6-5 well and flowed 3,200 bopd of condensate and 17 MMcfpd. The 30/6-5 well also found intervals of high hydrocarbon saturation in the porous zones (up to 30% porosity) of the underlying chalk strata. A gas-water contact has not been yet been encountered but Ithaca believes the accumulation to be commercial with established reserves. A further appraisal of the Stella discovery is planned for 2008/9 which will attempt to locate the gas/water contact and confirm the nature of and volume of hydrocarbons in the accumulation.

In addition, the Harrier Shallow accumulation was discovered by well 30/6-4 in 2002 and appraised by 3 sidetracks. The discovery tested condensate and gas in the Upper Cretaceous Ekofisk and Tor formations. Further technical work is required to understand the potential of this discovery.

Lawrie Payne, Chief Executive Officer of Ithaca Energy, said: "This is another significant acquisition for Ithaca Energy that fits with our strategy of pursuing near term developments of undeveloped discoveries and represents our fourth development project. We are committed to an early appraisal of the Stella discovery and, on success, the subsequent fast-track development of this and other discoveries in the area."

READER ADVISORY

This news release contains certain forward-looking statements, including all statements which address activities, events or developments that Ithaca Energy expects, believes or anticipates will or may occur in the future. Such forward looking statements involve substantial known and unknown risks and uncertainties, certain of which are beyond Ithaca Energy's control and which are based on various assumptions (including assumptions with respect to (i) availability of funds; and (ii) future capital expenditures) which may prove incorrect. Such risks and uncertainties include, without limitation the impact of general economic conditions in the areas in which Ithaca Energy operates, civil unrest, industry conditions, changes in laws and regulations and changes in how they are interpreted and enforced, increased competition, the lack of availability of qualified personnel or management, fluctuations in commodity prices, foreign exchange or interest rates, stock market volatility and obtaining required approvals of regulatory authorities. Please refer to the company's Annual Information Form for the year ended 2006 and dated April 30th, 2007 and available for viewing at www.sedar.com, for a list of additional risk factors. Ithaca Energy's actual results, performance or achievements could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits that Ithaca Energy will derive therefrom. Readers are cautioned that the foregoing list of factors is not exhaustive. All subsequent forward-looking statements, whether written or oral, attributable to Ithaca Energy or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements. Furthermore, the forward-looking statements contained in this news release are made as at the date of this news release and Ithaca Energy does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.

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

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