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Press release from Marketwire

Ithaca Energy Inc. Production and Operations Update

Thursday, January 12, 2012

Ithaca Energy Inc. Production and Operations Update02:00 EST Thursday, January 12, 2012LONDON, UNITED KINGDOM and CALGARY, ALBERTA--(Marketwire - Jan. 12, 2012) -NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATESIthaca Energy Inc. (TSX:IAE)(AIM:IAE) reports 2011 full year production, details of the 2012 CAPEX programme and a project update.Export Production 2011Full year export production for the Company in 2011 totalled 1,595,039 barrels of oil equivalent ("boe") and represents an average rate of 4,370 barrels of oil equivalent per day ("boepd") net to Ithaca. The Company's export production volumes for 2011 came from the operated Beatrice, Jacky and Anglia fields and from the non-operated Topaz, Cook and Broom fields. Cook and Broom production are included from their effective acquisition dates of January 1 and October 20 2011, respectively.The Company's current daily export production rate is approximately 5,010 boepd net. This number benefits from the result of a workover recently completed at the Beatrice Bravo platform. The Cook field suffered downtime during the last quarter due to the partial failure of a subsea control module. This was replaced and production was fully restored during the quarter. The Beatrice field experienced some downtime in December as a result of electrical power outages caused by interruption of the shore based supply and a temporary failure of the produced water treatment system. Cash PositionThe Company had over US$100 million cash at the end of 2011 having taken its first lifting of oil from the Cook field in December 2011. This cargo was sold for a net value of over US$34 million.2012 Guidance The Company anticipates 2012 net capital expenditure to total approximately US$210 million. This expenditure is almost entirely focused on the execution of the Greater Stella Area development, including approximately US$24 million to drill and test the Hurricane appraisal well that is scheduled to spud in late Q1 2012. The total net capital expenditure also includes approximately US$2.6 million on Athena to take the development to first oil.As previously indicated, the Company will provide full year production guidance for 2012 once the BW Athena Floating Production, Storage and Offtake ("FPSO") vessel is hooked up in the field. Athena Development UpdateThe Athena field development activities continue to progress. The BW Athena FPSO, is undergoing final phases of conversion work in Dubai Dry Dock World. Commissioning is underway and will be completed before sailaway from Dubai to ensure that the hook-up and offshore commissioning phase is minimised once the vessel arrives on location. Further to the Company's update of December 8, 2011, engineering work on the mooring design and associated power supply has resulted in the mooring system receiving certification for year round operation in the UK North Sea. Commissioning of the vessel power turbine is well advanced. Sailaway from Dubai is scheduled for mid-February and hardening of the vessel to add protection during its transit to the UK is now in progress. Due to security issues in the area, the Company will not be issuing further announcements on routes or sailing times.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 IthacaForward-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 expenditures and estimated timing and developments on the Athena or Stella fields 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. 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. FOR FURTHER INFORMATION PLEASE CONTACT: Iain McKendrick, CEOIthaca Energy:+44 (0) 1224 650 261imckendrick@ithacaenergy.comOR+44 (0) 1224 652 151Graham Forbes, CFOgforbes@ithacaenergy.comOR+44 (0) 1224 650 273John Woods, CDOjwoods@ithacaenergy.comORPhilip DennisPelham Bell Pottinger Public Relations:+44 (0) 207 861 3919pdennis@pelhambellpottinger.co.ukOR+44 (0) 207 861 3918Rollo Crichton-Stuartrcrichton-stuart@pelhambellpottinger.co.ukORJon FitzpatrickCenkos Securities plc:+44 (0) 207 397 8900jfitzpatrick@cenkos.comOR+44 (0) 131 220 6939Beth McKiernanbmckiernan@cenkos.comORTim ChapmanRBC Capital Markets:+44 (0) 207 653 4641tim.chapman@rbccm.comOR+44 (0) 207 653 4871Matthew Coakesmatthew.coakes@rbccm.com