Ithaca Energy Inc.

Ithaca Energy Inc.

April 07, 2011 02:00 ET

Ithaca Energy Inc.: 1st Quarter 2011 Production Update

LONDON, UNITED KINGDOM and CALGARY, ALBERTA--(Marketwire - April 7, 2011) -


Ithaca Energy Inc. (TSX VENTURE:IAE)(AIM:IAE) announces combined sales for the first quarter totalled 314,340 barrels of oil equivalent ("boe") net to Ithaca.

The Company's sales volumes in Q1 2011 include contributions from the Beatrice and Jacky oil fields and from the Anglia and Topaz gas fields and are summarised as follows:

Q1 2011 Net to Ithaca (boe)
January 131,796
February 112,051
March 70,493

Average net sales were 3,493 boe per day. As previously notified, this figure is approximately 20% below the net average daily target for Q1 due to mechanical issues with the drilling mud handling system on the contracted rig, the Energy Enhancer, drilling the J03 well, and mechanical failure of a downhole packer in the Beatrice Alpha A28 workover well. As previously announced, drilling of the J03 well has now recommenced. Operations to re-run the A28 completion have progressed; a replacement downhole packer has been successfully 'set' and the final stage of re-commissioning the well is underway.

The average realised price for oil sales in January and February was $107.40 per barrel (prior to hedging and any uplift at point of sale). Deliveries of oil for March are currently being priced.

The average realised price for gas production from Anglia and Topaz was 44.85 pence per therm ($7.56 per thousand standard cubic feet ('mcf')).

In order to benefit from the recent rise in oil price, Ithaca purchased a 'Put Option' with a floor price of $105 per barrel for 804,500 barrels of oil for the period March to December 2011. The 'Put Option' delivers a minimum price on the specified volume of oil and leaves the Company to benefit from any oil price upside above $105 per barrel.

Management anticipates that net sales will be increased in the second quarter by a sequence of operations that are scheduled to complete including an assumed successful Jacky second production well and the completion of workovers at Beatrice Alpha. Management continues to anticipate net average production for 2011 to be between 5,500 to 6,000 boepd net to Ithaca subject to a successful J03 well and Athena start up in November 2011. Further to the recent announcement of the acquisition of assets from Hess Limited, the Company will add production upon completion of that transaction, anticipated in Q3 2011.

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.

The calculation of barrels of oil equivalent ("boe") is based on a conversion rate of six thousand cubic feet of natural gas ("mcf") to one barrel of crude oil ("bbl"). Barrels of oil equivalent may be misleading, particularly if used in isolation. A boe conversion ratio 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.

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.

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," "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, 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.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this news release.

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