Ithaca Energy Inc.

Ithaca Energy Inc.

March 25, 2009 11:22 ET

Ithaca Energy Inc. Agreement Signed for Sales of North Sea Crude Oil Production Volumes

LONDON, UNITED KINGDOM and CALGARY, ALBERTA--(Marketwire - March 25, 2009) -


Ithaca Energy Inc. (TSX VENTURE:IAE)(AIM: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, is pleased to announce it has signed a 5 year agreement with BP Oil International Limited ("BP") for sales and marketing of all of its qualifying oil production from the North Sea.

As part of the development of the Jacky oilfield, Ithaca previously contracted with BP for marketing and sales of oil produced to the Nigg Oil Terminal by Ithaca and its Partners in the Beatrice and Jacky oilfields. The agreement was to access the best available current market price and was for a period of one year with extensions.

Ithaca and BP have now agreed to extend the arrangement to cover all Ithaca's UK oil production up to the end of 2014 (except where such production is already covered by an existing sales agreement). Oil produced by Joint Venture partners in fields in which Ithaca holds an interest can be included.

The co-venturers in Jacky are Ithaca (67.275%, Operator), Dyas North Sea Ltd (22.725%) and North Sea Energy Ltd (10%). The co-venturers in Beatrice are Ithaca (74.57%) and Dyas North Sea Ltd (25.25%).

Ithaca currently anticipates that Jacky and Beatrice production will amount to approximately 10,000 bopd gross during the course of 2009.

Commenting on the agreement, Iain McKendrick (Chief Executive Officer) said:

"This strategic marketing agreement with a company of such high financial and technical standing ensures that Ithaca can secure the most competitive prices for its North Sea production and access the flexibility that is associated with the volumes of oil traded by a supermajor. We look forward to working with BP to ensure the maximum return on our growing production portfolio".

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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" and similar expressions, and the negatives thereof, 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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