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Press release from Marketwire

Production and Operations Update-Clarification

Wednesday, October 10, 2012

Production and Operations Update-Clarification15:22 EDT Wednesday, October 10, 2012ABERDEEN, SCOTLAND--(Marketwire - October 10, 2012) -TSX-V:IAEThe Production and Operations Update announcement for Ithaca Energy Inc.released today at 07.00 under RNS No 3298O has been re-released tofacilitate onward transmission by third party vendors.The announcement is unchanged and is reproduced in full below. Not for Distribution to U.S. Newswire Services or for Dissemination in the United States Ithaca Energy Inc. Q3-2012 Production, Athena Operations Update and Q4-2012 Production Outlook 10th October 2012Ithaca Energy reports third quarter 2012 ("Q3-2012" or the "quarter")production results and provides an update on Athena operations.Highlightso Q3-2012 average production of 5,061 barrels of oil equivalent per day ("boepd"), an increase of 28% on the second quarter of 2012 ("Q2-2012").o Production performance in Q3-2012 reflects the first full quarter's contribution from the Athena field and strong performance from the Beatrice and Jacky fields, which have compensated for the anticipated reduction in Cook and Broom production during the quarter due to planned maintenance shutdowns.o Production from the Athena field has now stabilised at a gross daily rate of between 10,000 and 11,000 barrels of oil per day ("bopd"), 2,250 to 2,475 bopd net to Ithaca. The field continues to produce "dry" oil, and a total of over 1.2 million barrels have been produced since field start-up.o The Company's net production in the fourth quarter of 2012 ("Q4-2012") is forecast to be in the range of 6,300 to 6,900 boepd, including the net contribution anticipated from the Cook and MacCulloch field interests being acquired from Noble Energy Inc.Q3-2012 ProductionProduction volumes in the quarter came from the operated Athena,Beatrice, Jacky and Anglia fields and the non-operated Cook, Broom andTopaz fields. Total net export production in Q3-2012 was 465,612barrels of oil equivalent, resulting in an average rate of 5,061 boepd,with approximately 90% being oil production. This represents a 28%increase on production in the second quarter of 2012 (Q2-2012: 3,966boepd).Production from the Beatrice complex during Q3-2012 has benefited fromvarious activities undertaken in the second quarter of 2012.Performance of produced water treatment facilities has been improvedand the overall platform uptime enhanced through the completion of welloptimisation activities at the Beatrice Alpha and Bravo platforms.Total production during the quarter was impacted by a major plannedmaintenance shutdown of the Shell operated Anasuria FloatingProduction, Storage and Offloading vessel ("FPSO"), the host facilityfor the Cook field. The shutdown has recently ended in early October2012, having taken approximately 70 days to complete, rather than theOperator's estimated duration of approximately 50 days. In addition,production during the quarter was impacted by the commencement of aplanned maintenance shutdown of the host facility serving the Broomfield in late-September and unplanned downtime at both the Topaz andAnglia fields. In total, the shutdowns have reduced the potential netaverage export production over the quarter by approximately 1,100boepd.Athena Operations UpdateThe Athena field commenced production in late May 2012. The early partof Q3-2012 was focused on completing and optimising the post start-upactivities required to deliver stable and efficient operations from thewells and the BW Athena FPSO. As previously announced, wellintervention activities were performed on the "P1" well during thequarter to eliminate a blockage in the production tubing of the well.Well operations were partially successful and P1 is now onstream. Adecision has been made by the Athena co-venturers not to perform a rigbased workover on P1 to fully remove the blockage as the reservesassociated with the well are anticipated to be recovered by theexisting wells on the field.Reservoir performance, including the continued production of dry oil,provides a positive signal for the longer term potential of the field.The timing of water breakthrough at the Athena wells, along with theefficiency of the sweep of oil through the reservoir assisted by waterinjection, will be key to predicting the ultimate field productionprofile.Q4-2012 Production OutlookFourth quarter net average export production is anticipated to be inthe range of 6,300 to 6,900 boepd, including approximately 1,000 boepdof net production anticipated from the interests in the Cook andMacCulloch fields that are being acquired from Noble Energy Inc. Theproduction guidance range reflects the impact of the scheduled Beatriceand Jacky maintenance shutdown (forecast to be approximately 20 days)in Q4-2012 and both the ongoing Broom field maintenance shutdown andactivities on the facilities serving the Anglia field, which areanticipated to curtail production until late October.Enquiries:Ithaca Energy:Iain McKendrick, CEO imckendrick@ithacaenergy.com +44 (0) 1224 650 261Graham Forbes, CFO gforbes@ithacaenergy.com +44 (0) 1224 652 151John Woods, CDO jwoods@ithacaenergy.com +44 (0) 1224 650 273FTI Consulting:Billy Clegg billy.clegg@fticonsulting.com +44 (0) 207 269 7157Edward Westropp edward.westropp@fticonsulting.com +44 (0) 207 269 7230Georgia Mann georgia.mann@fticonsulting.com +44 (0) 207 269 7212Cenkos Securities plc:Jon Fitzpatrick jfitzpatrick@cenkos.com +44 (0) 207 397 8900Ken Fleming kfleming@cenkos.com +44 (0) 131 220 6939RBC Capital Markets:Tim Chapman tim.chapman@rbccm.com +44 (0) 207 653 4641Matthew Coakes matthew.coakes@rbccm.com +44 (0) 207 653 4871Notes to oil and gas disclosure:In accordance with AIM Guidelines, John Horsburgh, BSc (Hons)Geophysics (Edinburgh), MSc Petroleum Geology (Aberdeen) and SubsurfaceManager at Ithaca is the qualified person that has reviewed thetechnical information contained in this press release. Mr Horsburgh hasover 15 years operating experience in the upstream oil industry.The term "boe" may be misleading, particularly if used in isolation. Aboe conversion of 6 Mcf: 1 bbl is based on an energy equivalencyconversion method primarily applicable at the burner tip and does notrepresent a value equivalency at the wellhead.About Ithaca Energy:Ithaca Energy Inc. (TSX: IAE, LSE AIM: IAE) and its wholly ownedsubsidiary Ithaca Energy (UK) Limited ("Ithaca" or "the Company"), isan oil and gas operator focused on production, appraisal anddevelopment activities on the United Kingdom Continental Shelf. Thegoal of Ithaca, in the near term, is to maximize production and achieveearly production from the development of existing discoveries onproperties held by Ithaca, to originate and participate in explorationand appraisal on properties held by Ithaca when capital permits, and toconsider other opportunities for growth as they are identified fromtime to time by Ithaca.Not for Distribution to U.S. Newswire Services or for Dissemination inthe United StatesForward-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 officerswith respect to various matters. When used in this announcement, thewords "anticipate", "continue", "estimate", "expect", "may", "will","project", "plan", "should", "believe", "could", "target" and similarexpressions, and the negatives thereof, whether used in connection withproduction and operation activities or otherwise are intended toidentify forward-looking statements. Such statements are not promisesor guarantees, and are subject to known and unknown risks anduncertainties and other factors that may cause actual results or eventsto differ materially from those anticipated in such forward-lookingstatements or information. These forward-looking statements speak onlyas of the date of this announcement. Ithaca Energy Inc. expresslydisclaims any obligation or undertaking to release publicly any updatesor revisions to any forward-looking statement contained herein toreflect any change in its expectations with regard thereto or anychange in events, conditions or circumstances on which anyforward-looking statement is based except as required by applicablesecurities laws. -ENDS- This information is provided by RNS The company news service from the London Stock ExchangeENDFOR FURTHER INFORMATION PLEASE CONTACT: CustomerRNSServices0044-207797-4400rns@londonstockexchange.comhttp://www.rns.com