Ithaca Energy Inc.
AIM : IAE
TSX VENTURE : IAE

Ithaca Energy Inc.

October 06, 2011 06:20 ET

Ithaca Energy Inc.: Third Quarter 2011 Production

LONDON, UNITED KINGDOM and CALGARY, ALBERTA--(Marketwire - Oct. 6, 2011) -

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

Ithaca Energy Inc. (TSX VENTURE:IAE)(AIM:IAE) reports 2011 third quarter production, as well as changes to production reporting following the acquisition of the Cook field and in anticipation of first production from the Athena field.

The Company will present the Athena project in London on October 11 2011; after which the presentation will be available on the Company's website (www.ithacaenergy.com).

Export Production Q3 2011

Combined export production for the third quarter 2011 totalled 331,383 barrels of oil equivalent ("boe") and averaged 3,602 barrels of oil equivalent per day ("boepd") net to Ithaca. The Company's export production volumes in Q3 2011 comprise production from the Beatrice and Jacky oil fields, the Anglia and Topaz gas fields and oil and gas from the recently acquired Cook field. Export production is summarised as follows:

Q3 2011 Net to Ithaca (boe) Net to Ithaca (boepd)
July 75,477 2,435
August 114,339 3,688
September 141,567 4,719
TOTAL 331,383 3,602 (Average)

During the third quarter of 2011 certain events and activities had an impact on the export production levels of the Company.

  • In July, strong production was restored in the Jacky, J01 well. The production figures for Jacky do not represent a full quarter; Electrical Submersible Pump ("ESP") support for the well was fully restored at the end of the first week in July

  • In early August, the replacement of an ESP was successfully completed on well A21 at the Beatrice Alpha platform

  • From September 23, Beatrice production was shut in for 7 days to allow maintenance of the produced water treatment system. Production is now re-instated and Jacky production was not restricted.

  • The Company reports production from midday August 25 onwards for the Cook field following completion of the transaction with Hess Limited to acquire a 28.46% interest in the field. The Cook field produces approximately 1,900 boepd net to Ithaca on a daily basis. Production levels have been steady since reporting commenced although 4 days shut down were incurred due to repairs on board the Anasuria Floating Production Storage and Offtake ("FPSO") vessel; this is reflected in the quarterly figure

  • Currently, the Company's daily export production rate is around 4,800 boepd net

Export Production Method of Reporting

Due to the addition of Cook production into the Company's portfolio and the anticipated addition of Athena production in Q4 2011, the Company has revised its method of reporting hydrocarbon production volumes.

The Company has previously reported sales volumes of oil and gas as historically the sales volumes and export production volumes were effectively equivalent due to all Company oil and gas being transported to shore by pipe and sold on a monthly basis. However, this method of reporting now requires revision to correctly reflect the Company's net production.

Oil produced by the Cook field is sold through liftings from the Anasuria Floating Production Storage and Offtake ("FPSO") vessel via shuttle tanker. The Company is entitled to record sales when liftings are made, on a regular but not monthly basis. In addition, future oil production from the Athena field will be transported via regular shuttle tankers to Ithaca's operated Nigg oil terminal. Sales will only be recorded when the oil is transferred into the storage tank at the Nigg terminal.

The Company will now report "export production", being volumes produced, adjusted for shrinkage, fuel and flare contribution and any normal oil and gas losses.

The Company is adopting a standard method of reporting, utilised by many oil and gas producers, for all future quarterly production updates. Sales volumes and valuations of inventory will continue to be disclosed in the Company's quarterly accounts.

Q3 2011 Financial Results

The Company will announce Q3 2011 Financial Results on November 14 2011.

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.

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 the estimated production levels of the Athena or Stella fields, anticipated time of first oil from the Athena or Stella fields or reserves associated with the Athena field are intended to identify forward-looking statements. The reserves for individual properties may not reflect the same confidence level as estimates of reserves of all properties, due to the effects of aggregation. 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.

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.

Neither TSX Venture Exchange 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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