Ithaca Energy Inc.
TSX VENTURE : IAE
AIM : IAE

Ithaca Energy Inc.

March 05, 2009 09:00 ET

Ithaca Energy Inc.: Gas Encountered in Carna Prospect and Testing Commences

Rig Contract Awarded to Complete Jacky Well on Schedule and as Planned

LONDON, UNITED KINGDOM and CALGARY, ALBERTA--(Marketwire - March 5, 2009) -

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

Ithaca Energy Inc. ("Ithaca" or "the Company") (TSX VENTURE:IAE)(AIM:IAE) and its wholly owned subsidiary Ithaca Energy (UK) Limited, an independent oil & gas company with exploration, development and production assets in the UK sector of the North Sea, announces that:

- the 42/21b-5z well (the "Carna Well") has encountered a gas bearing reservoir and is currently being completed for testing, and

- the "Energy Enhancer" rig has been contracted to begin completion of the Jacky production well on schedule and as planned.

Carna Well

The Carna Well is currently being cased for further evaluation and drill stem testing. Electric logs indicate the well intersected gas bearing Namurian Millstone Grit Formation (Carboniferous) at 10029 feet TVDSS and indications of formation gas are seen from mudlogs down to 11440ft TVDSS. The well reached TD at 11519ft TVDSS. Net pay over this interval is estimated from preliminary log interpretation to be 127 feet on a true vertical basis within a 1490 foot gross section of Millstone Grit Formation.

Porosities in the four distinct gas bearing sections of the reservoir range from 14% to 7%. A 294 foot core was recovered and early analysis of the core indicates that permeability ranges from 10mD to 0.1mD. The well results to date indicate that the reservoir and its properties bear similarities to the producing Kilmar field which lies approximately 10km to the northwest of Carna.

Testing will commence in approximately 7 days time. It is anticipated that the well test will take a further 6 days after which the well will be suspended pending further analysis of the results.

The Carna Well was spudded on 26th December 2008 utilising the rig, Ensco 92, and was mechanically sidetracked at 2,918 ft TVDSS on 23rd January 2009.

The co-venturers involved in the Carna prospect are Venture (56%, operator), Ithaca Energy (UK) Limited (29.9%), Dyas UK Limited (10.1%) and EWE Aktiengesellschaft (4%).

Jacky Field Development

The Ensco 92 rig was contracted to conduct the Jacky completion work, but due to the Ensco 92 rig working on the Carna Well and the planned test, agreement has been reached with Ensco to defer the commitment to the Ensco 92 for up to one year and Ithaca has contracted with Northern Offshore for the immediate mobilisation of the Energy Enhancer jack-up rig to conduct the Jacky completion. The Jacky field production facilities have been installed, pipelines have been laid and modifications to the Ithaca operated Beatrice reception facilities 10km to the southwest of the Jacky field are nearing completion. Ithaca currently anticipates that Jacky production will commence at the end of March at rates of approximately 7,500 bopd.

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

John Woods, Chief Development Officer of Ithaca said

"This is good news for Ithaca. Subject to a successful test on Carna, we will have added another asset to our portfolio in which we hold a material stake. By securing the Energy Enhancer we will be able to deliver first Jacky production in line with our forecasts to the market. It is a testament to Ithaca's Operatorship skills and strong partner support that we have been able to manage the logistics between these two positive events."

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.

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Forward-looking statements

This announcement contains certain forward-looking statements and forward-looking information which are based on the Company's internal expectations, estimates, projections, assumptions and beliefs as at the date of such statements or information, including, among other things, assumptions with respect to production, future capital expenditures and cash flow. The reader is cautioned that assumptions used in the preparation of such information may prove to be incorrect. The use of any of the words "anticipate", "continue", "estimate", "expect", "may", "will", "project", "plan", "should", "believe" and similar expressions are intended to identify forward-looking statements and forward-looking information. These statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements or information. The Company believes that the expectations reflected in such forward-looking statements and information are reasonable but no assurance can be given that these expectations, or the assumptions underlying these expectations, will prove to be correct and such forward-looking statements and information included in this announcement should not be unduly relied upon. Such forward-looking statements and information speak only as of the date of this announcement, and the Company does not undertake any obligation to publicly update or revise any forward-looking statements or information, except as required by applicable laws. The forward looking statements or information contained in this announcement are expressly qualified by this cautionary statement.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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