Ithaca Energy Inc.
LSE : IAE

May 16, 2011 02:00 ET

North Sea Assets Acquisition - Confirmation of Cook Reserves and Pre-Emption on Maclure Field

FOR:  ITHACA ENERGY INC.

TSX VENTURE, AIM SYMBOL:  IAE

May 16, 2011

Ithaca Energy Inc.: North Sea Assets Acquisition-Confirmation of Cook Reserves and Pre-Emption on Maclure Field

LONDON, UNITED KINGDOM AND CALGARY, ALBERTA--(Marketwire - May 16, 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 further to the announcement of the Sale and
Purchase Agreement ("SPA") with Hess Limited ("Hess"):

--  The Company has been informed that Hess has received an exercising
    notice in relation to the existing Maclure field coventurers' rights to
    pre-empt the Maclure part of the Transaction
--  Sproule International Limited ("Sproule") has completed its Reserves
    Audit Opinion on the Cook field and considers Management's view of
    combined remaining Proved plus Probable ("2P") reserves of 5.75 million
    barrels of oil equivalent ("mmboe") net to Ithaca as at 1st January 2011
    to be reasonable
--  Adjusted consideration of US$62.5 million and the transfer from Ithaca
    to Hess of a 10% interest in three Southern North Sea exploration blocks

As announced on April 4, 2011, Ithaca entered into the SPA to acquire interests in the Cook oil field ("Cook")
and Maclure oil field ("Maclure") from Hess and to transfer certain blocks to Hess (the "Transaction"). Subject
to completed documentation being executed by Hess and any pre-empting parties, the interest in the Maclure
field will be removed from the Transaction and the consideration will be adjusted accordingly such that Ithaca
shall acquire a 28.46% non-operated interest in only Cook from Hess. The effective date of the Transaction
remains 1st January 2011.

The Company commissioned Sproule to undertake an independent audit of Management's estimate of remaining oil
and gas reserves in the Cook field. Management estimate that the acquisition of the Cook interest will increase
the Company's remaining 2P net reserves by 5.75 mmboe from 46.05 to 51.80 mmboe and this estimate has been
considered reasonable by the findings of the audit. The audit was performed in accordance with the Canadian Oil
and Gas Evaluation Handbook ("COGEH") reserves definitions and evaluation practices and procedures as specified
by National Instrument 51-101 ("NI 51-101").

Based on 5.75 mmboe of 2P reserves remaining in Cook, the acquisition is priced at 10.87 US$ per boe.
Management anticipates that average production from Cook for 2011 to be approximately 1,900 boepd net to
Ithaca.

The Transaction is anticipated to complete in Q3 2011 and is subject to DECC and co-venturer approvals. At
completion, the consideration will be subject to normal industry adjustments to reflect the income and costs
incurred since the effective date.

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. 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, anticipated time of
completion of the Transaction or reserves associated with the Transaction 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.


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FOR FURTHER INFORMATION PLEASE CONTACT:

Enquiries:
Ithaca Energy:
Iain McKendrick
CEO
+44 (0) 1224 650 261
imckendrick@ithacaenergy.com

OR

Ithaca Energy:
Graham Forbes
CFO
+44 (0) 1224 652 151
gforbes@ithacaenergy.com

OR

Ithaca Energy:
Nick Muir
CXO
+44 (0) 1224 650 267
nmuir@ithacaenergy.com

OR

Pelham Bell Pottinger Public Relations:
Philip Dennis
+44 (0) 207 861 3919
pdennis@pelhambellpottinger.co.uk

OR

Pelham Bell Pottinger Public Relations:
Elena Dobson
+44 (0) 207 861 3147
edobson@pelhambellpottinger.co.uk

OR

Cenkos Securities plc:
Jon Fitzpatrick
+44 (0) 131 220 9773
jfitzpatrick@cenkos.com

OR

Cenkos Securities plc:
Ken Fleming
+44 (0) 131 220 9772
kfleming@cenkos.com

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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