Ithaca Energy Inc.
TSX : IAE
AIM : IAE

Ithaca Energy Inc.

June 25, 2012 02:00 ET

Ithaca Energy Inc.: Athena Operations Update and Second Quarter 2012 Production

LONDON, UNITED KINGDOM and CALGARY, ALBERTA--(Marketwire - June 25, 2012) -

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

Ithaca Energy Inc. (TSX:IAE)(AIM:IAE) announces an Athena field operational update and anticipated second quarter 2012 outturn production information.

Athena Operations Update: The operational programme since start-up has been focused on achieving full and stable production from the four production wells and processing plant on the BW Athena floating production, storage and offloading vessel ("FPSO") and assessing the potential of the wells and the optimal production rates for the maximisation of oil recovery from the field over the coming years. The execution of these operations has progressed as planned. All the production facilities are now fully commissioned and the BW Athena is operating as designed, with continued well optimisation activities ongoing. The first cargo of crude has been transferred from the FPSO to the storage tank at the Ithaca operated Nigg oil terminal using the Betty Knutsen shuttle tanker.

Currently only three of the four production wells on the field are flowing as a result of a suspected downhole restriction in one of the wells. Testing has shown that there are no issues with the integrity of the well or performance of the reservoir in the area of the field drained by the well. The changeable flow rates achieved from the well during testing indicate that the restriction is likely attributable to a blockage in the production tubing located within the well. Diagnostic work is ongoing to identify the nature of the blockage and the most effective course of action for eliminating it.

Gross production from the field is currently approximately 12,000 barrels of oil per day ("bopd"), 2,700 bopd net to Ithaca with three producing wells. Meanwhile, water injection is online to support the production wells. Based on the data obtained, the gross production potential of the restricted well is approximately 5,000 bopd, 1,125 bopd net to Ithaca.

The Company is currently evaluating remote intervention methods to restore the restricted well to its full production potential. This includes use of the existing facilities to hydraulically overcome the obstruction. If these methods are not successful, a rig based workover may be required. In that case, the workover is anticipated to be conducted towards the end of this year.

The co-venturers in the Athena field are: Ithaca, operator (22.5%), Dyas UK Limited (47.5%), EWE Energie AG (20%) and Zeus Petroleum Limited (10%).

Second Quarter 2012 Production

The Company's total net export production in the second quarter of 2012 ("Q2-2012") is anticipated to be 370,888 barrels of oil equivalent, representing a net average rate of 4,076 barrels of oil equivalent per day ("boepd") for the quarter. The Company's export production volumes came from the operated Beatrice, Jacky, Anglia and Athena fields and the non-operated Cook, Broom and Topaz fields.

  • The Beatrice and Jacky fields have experienced downtime in Q2-2012 as a result of activities to improve the treatment of produced water. These works are now complete and stable production has been restored.
  • The Cook field experienced downtime in April and June due to integrity issues with the gas treatment and compression equipment on the host facilities. Full production will be restored during the first week of July.
  • The Q2-2012 production contribution from the Athena field, as would be expected, has been limited as a result of the facilities commissioning, production stabilisation and optimisation activities that have been ongoing since start-up of the field on May 26th, 2012.

The Company's current net daily export production rate potential is approximately 7,200 boepd not including the expected production of the restricted Athena well. This rate will be achieved as soon as the Cook field returns to production in early July.

It should be noted that planned maintenance shutdowns are scheduled for the third quarter of this year on the Company's operated Beatrice Area infrastructure (approximately 20 days) and the Shell operated Anasuria FPSO that receives production from the Cook field (approximately 50 days) to complete scheduled asset integrity works designed to maintain the longer term operating efficiency of the facilities.

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 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 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.

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.

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 "anticipate", "continue", "estimate", "expect", "may", "will", "project", "plan", "should", "believe", "could", "target" and similar expressions, and the negatives thereof, whether used in connection with production and operation activities of the Athena field, the Company's other fields or otherwise are intended to identify forward-looking statements. Such statements are not promises or guarantees, and are subject to known and unknown risks and uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements or information. 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.

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