Northern Lights Acquisition Corp. and Iona Energy Company Limited Announce Updates Regarding Their Proposed Qualifying Transaction

CALGARY, ALBERTA--(Marketwire - May 10, 2011) - Northern Lights Acquisition Corp. ("Northern" or the "Corporation") (TSX VENTURE:NLC.P) and Iona Energy Company Limited ("Iona") today announced further details concerning their proposed qualifying transaction (the "Transaction").

Northern and Iona entered into an amalgamation agreement dated April 19, 2011 (which supersedes the earlier letter agreement dated December 13, 2010) pursuant to which Northern and Iona will amalgamate under the provisions of the ABCA to form a new company ("Amalco") to be called "Iona Energy Inc." (the "Amalgamation"). At the effective time of the Amalgamation, Amalco will issue to the holders ("Iona Shareholders") of common shares in the capital of Iona ("Iona Shares") one (1) common share in the capital of Amalco (an "Amalco Share") for each one (1) Iona Share held by an Iona Shareholder, for aggregate consideration of 60,908,398 Amalco Shares being issued to current Iona Shareholders. Similarly, at the effective time of the Amalgamation, Amalco will issue to the holders ("Northern Shareholders") of common shares in the capital of Northern ("Northern Shares") 0.342935528 Amalco Shares for each one (1) Northern Share held by a Northern Shareholder (subject to rounding), for aggregate consideration of 1,800,412 Amalco Shares being issued to current Northern Shareholders in exchange for the 5,250,000 Northern Shares which will be outstanding at the effective time of the Amalgamation. Each Amalco Share issued to Iona Shareholders or to Northern Shareholders pursuant to the Amalgamation will be issued at a deemed price of $0.60 per Amalco Share. Upon completion of the Amalgamation and the Iona Private Placement (as defined below), current Northern Shareholders will hold less than 2% of the issued and outstanding Amalco Shares. The Transaction, when completed, will constitute the qualifying transaction of the Corporation pursuant to Policy 2.4 of TSX Venture Exchange Inc. (the "TSX Venture") Corporate Finance Manual.

The Transaction is subject to the policies of TSX Venture relating to qualifying transactions, as well as shareholder approval of Northern and Iona. Additionally, the Corporation has made an application to TSX Venture for an exemption from Sponsorship, but there is no assurance that such an exemption will be granted. Upon completion of the Transaction, Amalco will be a Canadian company focused on oil and gas development and exploration in the United Kingdom's North Sea.

Iona Energy and Northern Lights Shareholders' Meetings

Iona and Northern jointly announce that they each will hold an annual general and special shareholder meeting on May 27, 2011 to vote on the Transaction and Amalgamation to form Iona Energy Inc. The Iona and Northern joint management information circular and proxy statement dated April 19, 2011 in respect of the Transaction (the "Information Circular") has been distributed to shareholders of both companies and a copy has also been filed on SEDAR under Northern's profile at www.sedar.com. The Iona and Northern boards of directors have recommended that their respective shareholders vote in favor of the Transaction at their respective shareholder meetings. Upon successful completion of the Transaction and TSX Venture approval, it is anticipated Amalco will resume trading as Iona Energy Inc. shortly thereafter.

Iona Private Placement

On March 10, 2011, Iona issued 116,485,090 subscription receipts (the "Subscription Receipts") for gross proceeds of $69,891,054 (the "Iona Private Placement"). Each Subscription Receipt is convertible into one Iona Share and 0.2 of one right to acquire an Iona Share without further action or consideration if Iona does not complete the Amalgamation or a going public transaction by June 30, 2011 (a "Liquidity Right"), automatically in two tranches upon the occurrence of specified conversion events (as described below). Each holder of Subscription Receipts also has the right, at any time prior to the satisfaction of all of the Escrow Conditions (as described below), to elect to exchange their Subscription Receipts for one Iona Share (or one Amalco Share if the Amalgamation has been completed) and 0.2 of one Liquidity Right for each Subscription Receipt converted. The subscription proceeds of the Iona Private Placement were placed into escrow pending completion of the conversion events described below. If Iona completes the Amalgamation or a going public transaction on or before June 30, 2011, any issued and outstanding Liquidity Rights shall immediately terminate, be of no force or effect and shall not entitle the holder thereof to receive any additional Iona Shares.

In connection with completion of Iona's previously-announced acquisition of the Orlando Assets (as defined below) on March 10, 2011 (which constituted the first conversion event), gross proceeds of $23,000,000 (the "Orlando Funds") were released from escrow to Iona and 38,333,333 Subscription Receipts were automatically converted into 38,333,333 Iona Shares and 7,666,667 Liquidity Rights.

The second conversion event will take place upon the later to occur of: (a) the satisfaction of all conditions (other than financing) necessary to complete Iona's previously-announced acquisition of the Trent & Tyne Assets (as defined below); and (b) the satisfaction of all conditions necessary to complete the Amalgamation (or a going public transaction) (collectively, the "Escrow Conditions"). Upon completion of the later of such events, the remaining Subscription Receipts held by each holder will be deemed to have been automatically converted into Iona Shares (or Amalco Shares in the event that the Amalgamation has occurred) in such amount as determined by each Subscription Receipt holders' remaining Subscription Receipts.

The Iona Private Placement was undertaken by a syndicate of agents on behalf of Iona led by Wellington West Capital Markets Ltd. and including Mackie Research Capital Corp. and National Bank Financial Inc. The agents are entitled to a cash commission of 6.5% of the gross proceeds of the Iona Private Placement in accordance with the Subscription Receipt Agreement and the Agency Agreement.

Iona Energy's UK North Sea Properties

Orlando

The Orlando Assets are located in Block 3/3b in the North Sea UK Sector in a three-way fault closed structure approximately 2.5 km long by 0.5 km wide stratigraphically positioned within the Upper Jurassic Brent Group Reservoirs beneath the Base Cretaceous Unconformity. Pursuant to a sale and purchase agreement dated December 17, 2010 between Wintershall (E&P) Limited ("Wintershall") and Iona's wholly-owned subsidiary, Iona Energy Company (UK) Limited ("Iona UK"), Iona acquired a 35% equity interest (the "Orlando Assets") in UKCS Licence P.1606, Block 3/3b for consideration of US$3,000,000, which requires Iona to pay 42.5% of the cost of the appraisal leg of the development well to earn a 35% interest in the field. As part of its due diligence, Iona obtained a legal title opinion from a U.K.-based law firm independent to Iona. A portion of the Orlando Funds were utilized for the acquisition of the Orlando Assets, and the remainder is intended to be utilized to develop the Orlando Assets as described in the Information Circular, which was filed on SEDAR under Northern's profile at www.sedar.com.

Trent and Tyne

Iona's proposed interest in the Tyne gas field is located offshore in Block 44/18 of the Southern North Sea and is comprised of Carboniferous reservoirs within a setting of five fault blocks. Four of these fault blocks have been drilled; Tyne North, Tyne South, Tyne West and Tyne East the remaining fault block, Tyne North West has not been drilled. Iona's proposed interest in the Trent gas field is located nearby in Block 43/24a of the Southern North Sea.

Pursuant to a sale and purchase agreement dated April 15, 2011 between a large UK-based private company and Iona UK, Iona has the right, subject to completion of certain conditions, including approval of the U.K. Department of Energy and Climate Change, to acquire a 20% interest in Trent Field Block 43/24a Licence P.685, a 20% interest in Tyne Field Block 44/18 Licence P.609, together with certain assets and facilities relating thereto, as well as a right of first refusal to certain assets (collectively, the "Trent & Tyne Assets"), in exchange for Iona agreeing to fund a work program on the Trent and Tyne Field Blocks in an aggregate amount up to GBP 20,000,000. As part of its due diligence, Iona obtained a legal title opinion from a U.K.-based law firm independent to Iona. Iona currently intends to complete the acquisition of the Trent & Tyne Assets on or about May 31, 2011.

The agreement for the Trent & Tyne Assets also provides that Iona may elect to earn a further 17.5% interest in the Trent & Tyne Assets through a further commitment of up to GBP 22,000,000, being the cost of a second well and 37.5% of any second well costs which exceed GBP 22,000,000 but do not exceed GBP 24,650,000. The funds to be utilized for the acquisition of the Trent & Tyne Assets are from the Iona Private Placement. If the proposed acquisition of the Trent & Tyne Assets is a "significant acquisition" under applicable securities laws, approval by TSX Venture of such acquisition will be conditional on provision to the Exchange of an audited statement of revenues, royalties, and operating costs in respect of the Trent & Tyne Assets, or on Iona obtaining an exemption from such requirement.

Reserve Report

A reserve report effective as of December 31, 2010 and dated March 9, 2011 has been prepared in accordance with National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities by Gaffney, Cline & Associates Ltd. ("GCA"), an international energy advisory group which is independent of Iona, which evaluated Iona's proposed interests in the Orlando Assets and in the Trent & Tyne Assets (the "GCA Report"). Further details regarding the GCA Report are contained in the Information Circular, which was filed on SEDAR under Northern's profile at www.sedar.com.

A summary of the gross and net reserves as of December 31, 2010 attributable by GCA in the GCA Report to Iona's interest in the Orlando Assets and proposed interest in the Trent & Tyne Assets is shown below. The summary below is qualified in its entirety by the GCA Report and the qualifications and assumptions set forth therein, which are described in the Information Circular.

Gross Oil Reserves (MMstb)

Proved Reserves

                      Proved          Proved                                
                   Developed       Developed          Proved                
Field              Producing   Non-Producing     Undeveloped    Total Proved
----------------------------------------------------------------------------
Orlando                    -               -             6.8             6.8


Probable and Possible Reserves and Cumulative Reserves

                                                                 Proved Plus
                                 Proved Plus                   Probable Plus
Field               Probable        Probable        Possible        Possible
----------------------------------------------------------------------------
Orlando                  3.4            10.2             5.2            15.4


Net Oil Reserves (MMstb)

Proved Reserves

                      Proved          Proved                                
                   Developed       Developed          Proved                
Field              Producing   Non-Producing     Undeveloped    Total Proved
----------------------------------------------------------------------------
Orlando                                                                     
                           -               -             2.4             2.4


Probable and Possible Reserves and Cumulative Reserves

                                                                 Proved Plus
                                 Proved Plus                   Probable Plus
Field               Probable        Probable        Possible        Possible
----------------------------------------------------------------------------
Orlando                                                                     
                         1.2             3.6             1.8             5.4


Gross Gas Reserves (Bscf) 

Proved Reserves

                      Proved          Proved                                
                   Developed       Developed          Proved                
Field              Producing   Non-Producing     Undeveloped    Total Proved
----------------------------------------------------------------------------
Orlando                    -               -             2.1             2.1
Trent & Tyne            24.1             6.0               -            30.1


Probable and Possible Reserves and Cumulative Reserves

                                                                 Proved Plus
                                 Proved Plus                   Probable Plus
Field               Probable        Probable        Possible        Possible
----------------------------------------------------------------------------
Orlando                  1.0             3.1             1.6             4.7
Trent & Tyne            32.8            62.9            17.9            80.0


Net Gas Reserves (Bscf) 

Proved Reserves

                      Proved          Proved                                
                   Developed       Developed          Proved                
Field              Producing   Non-Producing     Undeveloped    Total Proved
----------------------------------------------------------------------------
Orlando                    -               -             0.7             0.7
Trent & Tyne             4.6             1.4               -             6.0


Probable and Possible Reserves and Cumulative Reserves

                                                                 Proved Plus
                                 Proved Plus                   Probable Plus
Field               Probable        Probable        Possible        Possible
----------------------------------------------------------------------------
Orlando                  0.4             1.1             0.5             1.6
Trent & Tyne             6.6            12.6             3.6            16.2

Possible reserves are those additional reserves that are less certain to be recovered than probable reserves. There is a 10% probability that the quantities actually recovered will equal or exceed the sum of proved plus probable plus possible reserves.

Financial Information of Iona

Based on the financial statements of Iona for the financial year ended December 31, 2010 (which do not include Iona's subsequent completion of the acquisition of the Orlando Assets or the proposed acquisition of the Trent & Tyne Assets), Iona had revenue of $1,529 and incurred a net loss of $362,064. In addition, as at December 31, 2010, Iona had total assets of $3,401,586, current liabilities of $243,138, deficit of $621,776 and shareholders' equity of $3,158,448.

Currently, the Orlando Assets are non-producing properties.

Based on unaudited data provided by the seller of such assets, during the financial year ended December 31, 2010, (Iona's proposed share of) the Trent and Tyne Assets generated $4,502,674 of revenue from gas production, and operating expenses of $3,260,875, for total operating income of $1,241,799.

Note: As used in this news release as well as in the news release of Northern and Iona dated January 6, 2011, "Boe" means barrel of oil equivalent on the basis of 6 mcf of natural gas to 1 bbl of oil. Boes may be misleading, particularly if used in isolation. A boe conversion ratio 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.

Additionally, this news release uses certain abbreviations as follows:

Oil and Natural Gas Liquids            Natural Gas                          
-------------------------------------  -------------------------------------
bbls    barrels                        scf     standard cubic foot          
MMstb   millions of stock tank         Bscf    billion standard cubic feet  
        barrels                                                             
bopd    barrels of oil per day                                              

As indicated above, completion of the Transaction is subject to a number of conditions, including but not limited to, TSX Venture acceptance and shareholder approval. The Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the Information Circular of the Corporation to be prepared in connection with the Transaction, any information released or received with respect to the Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of the Corporation should be considered highly speculative.

Except for historical information contained herein, this news release contains forward-looking statements that involve risks and uncertainties. Actual results may differ materially. Neither Iona nor Northern will update these forward-looking statements to reflect events or circumstances after the date hereof. More detailed information about potential factors that could affect financial results is included in the documents filed from time to time with the Canadian securities regulatory authorities by Northern and Iona.

The securities of Northern being offered have not been, nor will be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons absent U.S. registration or an applicable exemption from U.S. registration requirements. This release does not constitute an offer for sale of securities in the United States.