Ithaca Energy Inc.
TSX VENTURE : IAE
AIM : IAE

Ithaca Energy Inc.

July 20, 2011 02:00 ET

Ithaca Energy Inc.: Establishment of Market Share Incentive Plan

LONDON, UNITED KINGDOM and CALGARY, ALBERTA--(Marketwire - July 20, 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 that it has established a Share Incentive Plan ("SIP") effective as of July 19, 2011.

The purpose of the SIP is to provide UK based officers and employees with the opportunity to acquire Common Shares ("Shares") in the Company in a tax-effective way. Approval for the SIP has been obtained from HM Revenue & Customs under Schedule 2 to the Income Tax (Earnings and Pensions) Act 2003.

The SIP is constituted by a Trust Deed and Rules. It will be administered by MM&K Share Plan Administration ("MM&K"), which is independent the Company. MM&K will also be the trustee of the SIP.

The SIP allows for UK based employees to acquire Shares in the open market in three different ways:

Partnership Shares

Employees may choose to contribute up to £1,500 each tax year (up to a limit of 10% of their taxable earnings) by deduction from their pre-tax salary. An employee may authorise monthly deductions of up to £125 per month or make a one-off contribution of up to £1,500 in a single month. The contributions are used by MM&K to purchase Shares on the open market as soon as practicable after they have been deducted.

Matching Shares

For every Partnership Share bought with employees' contributions, the Company may award the employees up to two Matching Shares. These Matching Shares are purchased by MM&K on the open market at the same time as the corresponding Partnership Shares, using funds provided by Ithaca.

Free Shares

The Company may exercise its discretion to award each employee "Free" Shares worth up to £3,000 each tax year. These shares must be awarded to all eligible employees on the same terms. These "Free" Shares are purchased by MM&K on the open market, using funds provided by Ithaca.

The SIP also provides for any dividends which may be paid in the future in respect of Shares held in the SIP either to be paid directly to the participating employees or to be reinvested to acquire further Shares, to be held in the SIP on their behalf as "Dividend Shares".

All Shares will be acquired by MM&K by purchase on the open market. Ithaca will not issue any new Shares or provide any treasury Shares for the purpose of the SIP. Based on the current number of employees and the purchasing limits noted above, the total number of shares to be purchased in any tax year is expected to be less than 250,000.

Rights of participants over Shares

Employees immediately become the beneficial owners of the Shares acquired for them or awarded to them under the SIP however the Shares are initially held in trust. Employees may instruct MM&K to sell their Partnership Shares or transfer them into their own names at any time, but Matching Shares will normally be forfeited if an employee takes the corresponding Partnership Shares out of the SIP within three years of the acquisition date.

Matching Shares and Free Shares (and any Dividend Shares) must normally be left in the SIP for at least three years after the award date.

All Shares must be taken out of the SIP immediately if the participant ceases to be employed by Ithaca or an associated company. Any Matching Shares awarded in the previous three years will be forfeited unless the participant has left employment in certain special circumstances, including injury, disability, retirement, redundancy and death.

Participants can instruct MM&K how to exercise their voting rights over shares held for them in the SIP.

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.

Neither TSX Venture nor its 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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