Ithaca Energy Inc.
TSX VENTURE : IAE
AIM : IAE

Ithaca Energy Inc.

May 27, 2009 07:13 ET

Ithaca Energy Inc. Operational and Production Update

LONDON, UNITED KINGDOM and CALGARY, ALBERTA--(Marketwire - May 27, 2009) -

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, is pleased to announce it has started operating the downhole pump on the Jacky field, increasing gross production rates to approximately 10,000 barrels of dry oil per day (bopd) (6,728 bopd net to Ithaca). This rate is significantly above the levels expected from the field with both the well and the reservoir performing strongly.

The Jacky field came on stream on the 6th April at initial rates of approximately 8,800 bopd (gross). Downhole pressures and deliverability were above expectations and as a result the activation of the downhole pump was delayed in order to protect it. With the pressure having now fallen it has been possible to start operating the pump.

Average production in April and May (to date) from Jacky and Beatrice (Bravo and Alpha facilities) was lower than the initial rates experienced due to the fall in downhole pressure from Jacky; constraints from ongoing commissioning and well maintenance work at Beatrice; and a portion of initial Jacky production contributing to fill the infield and export pipelines. As such in April the average Jacky and Beatrice volumes arriving at the Nigg Oil Terminal were 4,740 bopd (3,294 net to Ithaca) and in May, prior to switching on the downhole pump at Jacky, production from Jacky and Beatrice was approximately 5,390 bopd (3,710 bopd net to Ithaca). These numbers compare with expectations, prior to Jacky field startup, of 7,500 bopd gross (5,054 bopd net to Ithaca).

Commissioning and maintenance work is now drawing to a close and the Beatrice and Jacky facilities are currently producing at combined rates of approximately 11,500 bopd (7,850 bopd net to Ithaca) and will quickly make up the production deficit from April and May.

An update on capital expenditure for Jacky will be included in the Company's report on results for the first quarter to March 31, 2009.

Partners in the Jacky field are Ithaca (67.275%), Dyas UK Ltd (22.725%) and North Sea Energy (UK) Ltd (10%).

Partners in the Beatrice Field are Ithaca (74.75%) and Dyas UK Ltd (25.25%).

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," "anticipates," "plans," "may," "will," "should" and similar expressions, and the negatives thereof, 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.

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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