Ithaca Energy Inc.
TSX VENTURE : IAE
AIM : IAE

Ithaca Energy Inc.

January 12, 2011 02:00 ET

Ithaca Energy Inc.: Athena Field Development-Operations & FPSO Modifications Progress as Planned

LONDON, UNITED KINGDOM and CALGARY, ALBERTA--(Marketwire - Jan. 12, 2011) -

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

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, announces that the Sedco 704 drilling unit is now being anchored on location over the Athena field ready to commence an approximate 180 day campaign to drill a fourth production well and a water injector well and complete the three existing wells on the field as producers. In addition, modification and re-certification of the Floating Production Storage and Offtake ("FPSO") vessel (BW Athena) is well underway in a Dubai shipyard.

The Sedco 704 drilling unit will initially drill one water injection well, followed by a fourth production well (three suspended appraisal wells are to be completed for production as part of this campaign). The four production wells will be installed with downhole submersible pumps to maximise field production rates. Initial production from the field is estimated at a gross rate of 22,500 barrels of oil per day ("bopd") (5,062 bopd net to Ithaca). Applied Drilling Technology International (a division of Transocean Drilling UK Ltd) will manage the programme on a 'turnkey' basis which is anticipated to last approximately 180 days. Subsea work will follow in Q3 2011, to install field pipelines and subsea manifolds. The Company will update the market as and when drilling and/or completion work reaches key milestones.

The FPSO 'BW Athena' is at dockside in Dubai and preparation works have commenced to re-certify existing equipment and install new equipment. In Q2 2011 the vessel will be 'dry docked' for the installation of a turret mooring section amidships, extending the FPSO by approximately 65ft. Steelwork for the mooring section is being prepared alongside the dry dock. All work is anticipated to be completed in Q3 2011 allowing the vessel to return to UK waters and arrive on location at Athena at end Q3 2011. Installation of the FPSO vessel to the mooring buoy, as well as, hook up and commissioning will be completed in anticipation of targeted first oil in Q4 2011. Both BW Offshore's Site Office and the Ithaca Representative's Office in Dubai are manned and operational.

John Woods, Ithaca's Chief Development Officer, commented:

"The drilling programme at Athena has commenced on schedule enabling the rig to complete its scope of work ahead of other field construction activities. Work on the Athena field remains very much in line with targeted first production from the field in Q4 this year at a gross rate of 22,500 barrels of oil per day. Work on the FPSO in Dubai and the other project construction activities have also all commenced on schedule and within budget giving the project team an excellent start to the New Year."

The Athena Joint Venture Partners are Ithaca (operator, 22.5%), Dyas UK Ltd (47.5%), EWE Aktiengesellschaft (20%) and Zeus Petroleum Limited (10%).

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 the estimated production levels, actual production levels from the Athena development, anticipated timing of the Athena development, oil in place, hydrocarbon composition 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.

Neither TSX Venture Exchange 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.

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