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Press release from Marketwire

Ithaca Energy Inc.-Athena Project: FPSO and Installation Update

Friday, December 09, 2011

Ithaca Energy Inc.-Athena Project: FPSO and Installation Update02:00 EST Friday, December 09, 2011LONDON, UNITED KINGDOM and CALGARY, ALBERTA--(Marketwire - Dec. 9, 2011) -NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATESIthaca Energy Inc. (TSX:IAE)(AIM:IAE) announces progress on the BW Athena Floating Production, Storage and Offloading (FPSO) vessel.The FPSO conversion scope, which is the responsibility of BW Offshore, has proved to be more extensive than was envisaged at the start of the project. In spite of the increase in the amount of work required, BW Offshore and Dubai Dry Docks have completed a fast track engineering project to deliver the vessel very close to the original schedule. After very recent consultation on health and safety requirements, additional redundancy is being introduced in the vessel power and heading control systems in response to the North Sea incident in 2011 when the Gryphon FPSO suffered a mooring system failure. The additional work now being undertaken is aimed at ensuring that production startup is not delayed once the vessel has arrived at the Athena field.Payments for the vessel by the Athena Joint Venture remain unchanged and will commence, by way of a day rate to BW Offshore, only once the FPSO is moored over the Athena field and produced oil is transferred into the vessel's storage tanks. Once the vessel leaves Dubai, it will sail to the North Sea and hook up to the pre-installed production buoy. In-field commissioning will be minimized by the comprehensive dockside commissioning being undertaken in Dubai. The journey to the UK and in-field pre-startup works will take approximately 5 weeks.Accordingly, the FPSO will remain in Dubai docks to complete all commissioning work and some minor modifications to the vessel power and heading control systems. It is now anticipated that the vessel will sail from Dubai in early 2012.The installation of subsea equipment at the Athena field location has progressed well and remains within schedule. The submerged buoy mooring system and all flowlines have been laid and connection is in progress. Installation of the power and control umbilicals and the connection of flexible risers to the riser base and submerged buoy is ongoing and will be complete well before the FPSO arrives in the field.Meanwhile, all Athena development wells are now ready for production and the Sedco 704 drilling unit is off contract.Iain McKendrick, CEO, commented: "This short term delay is clearly disappointing but it does not change the fundamental value of the project. Athena is a highly valuable development that will more than double net production and further diversify the Company's production portfolio. Both Ithaca and BW Offshore want to ensure and maintain the highest standards of vessel integrity upon arrival in the field to maximize production uptime and value to the project."Joint Venture partners in the Athena field are: Ithaca, operator (22.5%), Dyas UK Limited (47.5%), EWE Aktiengesellschaft (20%) and Zeus Petroleum Limited (10%). 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 statementsSome 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, used in connection with the estimated timing for the development of the Athena field and net production estimates are intended to identify forward-looking statements. 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. FOR FURTHER INFORMATION PLEASE CONTACT: Ithaca EnergyEnquiries:John WoodsCDO+44 (0) 1224 650 273jwoods@ithacaenergy.comORGraham ForbesIthaca EnergyCFO+44 (0) 1224 652 151gforbes@ithacaenergy.comORNick MuirIthaca EnergyCTO+44 (0) 1224 650 267nmuir@ithacaenergy.comORPhilip DennisPelham Bell Pottinger Public Relations+44 (0) 207 861 3919pdennis@pelhambellpottinger.co.ukORRollo Crichton-StuartPelham Bell Pottinger Public Relations+44 (0) 207 861 3918rcrichton-stuart@pelhambellpottinger.co.ukORJon FitzpatrickCenkos Securities plc+44 (0) 207 397 8900jfitzpatrick@cenkos.comORBeth McKiernanCenkos Securities plc+44 (0) 131 220 6939bmckiernan@cenkos.comORTim ChapmanRBC Capital Markets+44 (0) 207 653 4641tim.chapman@rbccm.comORMatthew CoakesRBC Capital Markets+44 (0) 207 653 4871matthew.coakes@rbccm.com