Ithaca Energy Inc.
TSX VENTURE : IAE
AIM : IAE

Ithaca Energy Inc.

April 26, 2011 02:00 ET

Ithaca Energy Inc.: Challenger Minerals Inc. Signs Earn-In Agreement for Hurricane Discovery

LONDON, UNITED KINGDOM and CALGARY, ALBERTA--(Marketwire - April 26, 2011) -

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

Ithaca Energy Inc. (TSX VENTURE:IAE)(AIM:IAE) announces today that it has signed an Earn In agreement with Challenger Minerals (North Sea) Limited ("CMI") on the Hurricane discovery ("Hurricane") in Block 29/10b, within the Ithaca operated Greater Stella Development Area.

Hurricane was discovered in 1995 by well 29/10-4Z which tested the western lobe of a mapped structure and encountered light oil (41°API) in a 62 foot section of reservoir sands; no drill stem test was undertaken at that time. The Hurricane appraisal well is being designed to confirm hydrocarbons in the eastern lobe of the structure characterized by high porosity (up to 30%) channelised Paleocene Rogaland sandstones. On successful appraisal of Hurricane by the initial well, the intention is to drill a sidetrack 'keeper' well up structure in anticipation of future development and tie back to the Stella hub.

Under the terms of the Earn In agreement, CMI is committed to pay a share of costs of the initial well in Block 29/10b. In consideration for this commitment CMI is provided with an option, exercisable no later than 90 days following abandonment or suspension of the initial appraisal and any sidetrack well, to take an interest in Block 29/10b. Under the Earn In arrangements, CMI will pay 40% of gross Hurricane initial appraisal well costs in exchange for a 31% equity interest in Block 29/10b, thereby carrying a part of Ithaca's share of all costs of drilling an initial appraisal well. In addition, upon successful appraisal, CMI will pay 40% of gross costs of a drill stem well test of any sidetrack. All additional costs, including those for planned sidetrack drilling, shall be apportioned such that CMI shall pay its 31% pro rata share.

The transaction is subject to agreeing 'turnkey' terms with Applied Drilling Technology International ("ADTI") (a subsidiary of Transocean Inc.) for the provision of a suitable drilling unit and well management services. Upon agreement of 'turnkey' terms and provision of a suitable rig, Ithaca anticipates that the appraisal well will be commenced in Q4 2011.

Ithaca currently holds 100% equity interest in the Hurricane discovery and Block 29/10b.

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.

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, including the earn-in with CMI. 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, CMI's option to earn-in to Hurricane 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 the TSX Venture Exchange nor its Regulatory Service Provider (as that term is defined in the polices of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.

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