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Press release from Marketwire

Recommended Acquisition of Valiant Petroleum plc by Ithaca Energy Holdings (UK) Limited (A Wholly-Owned Subsidiary of Ithaca Energy Inc.)

Friday, March 01, 2013

Recommended Acquisition of Valiant Petroleum plc by Ithaca Energy Holdings (UK) Limited (A Wholly-Owned Subsidiary of Ithaca Energy Inc.)04:34 EST Friday, March 01, 2013ABERDEEN, SCOTLAND--(Marketwire - March 01, 2013) - Ithaca Energy Inc. (TSX VENTURE: IAE)(LSE: IAE)Not for Distribution to U.S. Newswire Services or for Dissemination inthe United StatesNOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART,DIRECTLY OR INDIRECTLY IN OR INTO OR FROM ANY JURISDICTION WHERE TO DOSO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OFSUCH JURISDICTION.1 March 2013 RECOMMENDED ACQUISITION OF VALIANT PETROLEUM PLC BY ITHACA ENERGY HOLDINGS (UK) LIMITED (A WHOLLY-OWNED SUBSIDIARY OF ITHACA ENERGY INC.)(TO BE EFFECTED BY MEANS OF A SCHEME OF ARRANGEMENT UNDER PART 26 OFTHE COMPANIES ACT 2006)- The Boards of Ithaca Energy Inc. ("Ithaca") and of ValiantPetroleum plc ("Valiant") are pleased to announce that they havereached agreement on the terms of a recommended acquisition under whichIthaca Energy Holdings (UK) Limited ("Ithaca Bidco") will acquire theentire issued and to be issued share capital of Valiant (the"Acquisition").The Acquisition is to be effected by means of aCourt-sanctioned scheme of arrangement under Part 26 of the CompaniesAct.- Under the terms of the Acquisition, Valiant Shareholders will beentitled to receive 307 pence in cash and 1.33 Ithaca ConsiderationShares for each Valiant Share held at the Scheme Record Time.- Based on the Closing Price of an Ithaca Share of C$1.97 (126pence) on 28 February 2013, the Acquisition values the entire issuedand to be issued share capital of Valiant at approximately GBP203million (equivalent to approximately US$309 million and C$318 million)and each Valiant Share at approximately 475 pence.- The consideration payable under the Acquisition represents apremium of approximately:- 37% to the Closing Price of 346.5 pence per Valiant Share on 28February 2013, the last Business Day prior to the date of thisannouncement;- 31% to the average Closing Price of 361.1 pence per Valiant Sharefor the 20 Business Days ended on 28 February 2013, the last BusinessDay prior to the date of this announcement; and- 3% to the Closing Price of 460.0 pence per Valiant Share on 5September 2012, the last Business Day prior to the announcement byValiant of the commencement of a 'formal sale process' as defined inthe Code.- The Valiant Board, which has been so advised by Morgan Stanley &Co. Limited ("Morgan Stanley", as the independent financial adviser forthe purposes of Rule 3 of the Code), considers the terms of theAcquisition to be fair and reasonable. In providing its advice to theValiant Board, Morgan Stanley has taken into account the commercialassessments of the Valiant Board.- Accordingly, the Valiant Board intends to recommend that ValiantShareholders vote in favour of the resolutions to be proposed at theCourt Meeting and the General Meeting which are to be convened toapprove the Acquisition. The Valiant Directors have irrevocablyundertaken to approve the Acquisition in respect of their ownbeneficial holdings in Valiant, which amount in aggregate to 433,695Valiant Shares, representing approximately 1.06% of the entire issuedshare capital of Valiant (as described in Appendix III). Theseirrevocable undertakings do not lapse in the event of a highercompeting offer being made for Valiant. As previously announced byValiant on 15 November 2012, Peter Buchanan has ceased to participatein meetings of the Valiant Board relating to the Strategic Review andformal sale process initiated on 6 September 2012, including relatingto the Acquisition and has not given an irrevocable undertaking.- In aggregate, Ithaca Bidco has received irrevocable undertakingsand non-binding letters of intent to vote in favour of the Scheme andthe resolutions at the Court Meeting and the General Meeting in respectof 16,930,479 Valiant Shares, representing approximately 41.35% ofValiant's issued share capital. Further details of these irrevocableundertakings and letters of intent are set out at paragraph 7 andAppendix III to this announcement.- In addition, although no shareholder approval of Ithaca or IthacaBidco is required in connection with the Acquisition, Ithaca Bidco hasreceived non-binding letters from the following Ithaca shareholders (orinvestment managers), confirming their support for Ithaca and IthacaBidco making the Acquisition in line with Ithaca's stated strategy:Artemis Investment Management LLP; Four Capital Partners Limited; HSBCGlobal Asset Management; JP Morgan Asset Management (UK) Limited;Salida Capital; and SLZ Capital Management, LLC.- Ithaca, through its wholly-owned subsidiary, Ithaca Energy (UK)Limited, is an oil and gas operator focused on production, appraisaland development activities in the North Sea. Ithaca's strategy is togrow shareholder value by building a highly cash-generative North Seaoil and gas Business. Execution of the strategy is centred on:maximising cash flow and production from existing assets; deliveringmaterial growth by appraising and developing existing hydrocarbondiscoveries; and continuing to increase and diversify Ithaca'sportfolio and cash flows via acquisitions. The Ithaca Shares are listedon the Toronto Stock Exchange and admitted to trading on AIM, a marketoperated by the London Stock Exchange. Ithaca Bidco is a wholly-ownedsubsidiary of Ithaca incorporated under the laws of Scotland for thepurpose of making the Acquisition. Ithaca Bidco has not traded sinceincorporation, nor has it entered into any obligations, other than inconnection with the Acquisition and the financing of the Acquisition.- Valiant has a balanced portfolio of production, development andexploration assets with a primary focus on the UK and Norway. Formed in2004, Valiant has developed a stable production foundation providing itwith sustained cash flows which fund on-going investment. Valiant hasbuilt a broad and attractive portfolio in stable geographies where ithas deep knowledge of the geology and regulatory environment.- The announcement of this recommended Acquisition follows theannouncement by Valiant on 6 September 2012 that it had decided tolaunch a 'Strategic Review' in the context of a 'formal sale process'as defined in the Code, which process has now been successfullyconcluded with the announcement of this recommended Acquisition. Theend of the formal sale process means that the data room which has beenopen to participants will be closed with effect from 7.00 a.m. on 1March 2013. Other potential offerors can still nonetheless announcecompeting offers for Valiant.- The Acquisition is anticipated to result in:- the establishment of Ithaca as a leading mid cap North Sea oil andgas operator, with 2P reserves of approximately 74MMboe(1), of whichapproximately 50% relates to currently producing assets;- a more than doubling of Ithaca's current forecast 2013 productionto 14-16kboe/d (90% oil), rising to approximately 27kboe/d in 2015; and- approximately a four fold increase in Ithaca's anticipated 2013cash flow from operations to US$400 million, rising to over US$700million in 2015.- Ithaca is pleased to confirm that, on completion of theAcquisition, two existing Valiant Directors, Mr Jannik Lindbaek and MrMichael Bonte-Friedheim, will be appointed to the Board of Ithaca asNon-Executive Directors. Both Mr Lindbaek and Mr Bonte-Friedheim haveconsiderable oil and gas industry experience, both in the North Sea andinternationally, and will be central to ensuring a seamless andefficient integration of Valiant's assets into Ithaca's existingoperations. Mr Lindbaek was previously Chairman of the Norwegianinternational oil and gas company Statoil ASA, prior to its merger withNorsk Hydro in 2007. Mr Bonte-Friedheim, an investment banker bybackground, was previously Non-Executive Chairman and subsequently CEOof Mediterranean Oil and Gas plc, a UK AIM-traded company, and iscurrently co-CEO of NextEnergy Capital, a merchant bank focused on therenewable energy sector, as well as acting CEO of Valiant.- The Ithaca Consideration Shares to be issued pursuant to theAcquisition are expected to represent approximately 18% of the issuedshare capital of Ithaca as enlarged by the Acquisition.- The Ithaca Consideration Shares will rank equally in all respectswith the existing Ithaca Shares and will be entitled to all dividendsand/or other distributions declared or paid by Ithaca in respect ofcommon shares of Ithaca by reference to a record date falling after theEffective Date.- The cash consideration payable under the terms of the Acquisitionwill be funded from a bridge credit facility provided to Ithaca Bidcoby Banc of America Securities Limited, BNP Paribas and The Bank of NovaScotia, together with Ithaca's existing cash resources.- The Panel has consented to Valiant entering into a break feearrangement with Ithaca Bidco as a participant in Valiant's announcedformal sale process under Note 2 of Rule 21.2 of the Code. As such,Valiant has agreed to pay Ithaca Bidco a break fee of GBP2,034,944(subject to adjustment for VAT) if a Competing Offer is announced priorto the Acquisition lapsing or being withdrawn and such Competing Offerbecomes or is declared unconditional in all respects or otherwisebecomes effective.- The Acquisition is conditional on, among other things, certainregulatory approvals and the sanction of the Scheme by the Court. TheAcquisition is also conditional upon a Brent Failure Event not havingoccurred. In addition, in order to become Effective, the Scheme must beapproved by a majority in number of Scheme Shareholders voting at theCourt Meeting representing not less than 75% in value of the SchemeShares held by the Scheme Shareholders present and voting in person orby proxy. It is currently expected that the Scheme Document, containingfurther information about the Acquisition and notices of the CourtMeeting and the General Meeting, together with the Forms of Proxy, willbe posted on or around 12 March 2013 and that, subject to thesatisfaction, or where relevant, waiver of all relevant Conditions(including regulatory clearances), the Scheme is expected to becomeEffective on or around 19 April 2013.Commenting on the Acquisition, Jack Lee, Non-Executive Chairman ofIthaca said:"This proposed acquisition represents a significant stepforward in theexecution of Ithaca's strategy to build a highly profitable 25kboe/dNorth Sea oil and gas company. The combined assets of the two groupshave a strong strategic fit, with the acquisition materially increasingand broadening Ithaca's producing asset base and reserves portfolio.The highly cash generative nature of the enlarged portfolio and furtherenhancement of Ithaca's existing financial strength provides anexciting springboard from which to continue driving forward theBusiness and accelerating value from Ithaca's production anddevelopment-led growth strategy.I am also delighted to announce that as part of the acquisition, Ithacawill be further strengthening its Board of Directors with the additionof two of Valiant's existing Non-Executive Directors, Mr Jannik Lindbaekand Mr Michael Bonte-Friedheim. Jannik and Michael are two extremelyexperienced oil and gas industry executives, who bring both a wealth ofNorth Sea knowledge and will be central to ensuring a seamless andefficient integration."Commenting on the Acquisition, Kevin Lyon, Non-Executive Chairman ofValiant said:"We are pleased to announce Ithaca's recommended offer to ourshareholders. The Board feels the offer recognises the value inValiant's portfolio and provides our shareholders with the opportunityto both realise a proportion of this value in cash today whilstretaining exposure to the enlarged portfolio. The combination withIthaca will create a leading North Sea oil and gas operator with adiverse production and reserves asset base from which to pursue new andexciting growth opportunities.On behalf of the Board, I would like to take this opportunity to thankour employees, staff and partners whose hard work and dedication havehelped build Valiant over the past nine years into a full-cycle E&Pcompany with a portfolio of licences across four countries."This summary should be read in conjunction with the full text of thisannouncement. Appendix I to this announcement contains the conditionsto, and certain further terms of, the Acquisition. Appendix II to thisannouncement contains further details of the sources of information andbases of calculations set out in this announcement. Appendix IIIcontains a summary of the irrevocable undertakings and letters ofintent given by the Valiant Directors and by certain institutionalshareholders. Appendix IV contains definitions of certain expressionsused in this summary and in this announcement.EnquiriesIthacaIain McKendrick,Chief Executive Officer +44 (0) 1224 650 261Graham Forbes, Chief Financial Officer +44 (0) 1224 652 151Cenkos Securities plc (Financial Adviser, Nominated Adviser and Brokerto Ithaca)Jon Fitzpatrick +44 (0) 207 397 8900Neil McDonald +44 (0) 131 220 6939Joe Nally (Corporate Broking) +44 (0) 207 397 8900FTI Consulting (Public Relations Adviser to Ithaca)Billy Clegg +44 (0) 207 269 7157Edward Westropp +44 (0) 207 269 7230Georgia Mann +44 (0) 207 269 7212ValiantKevin Lyon, Non-Executive Chairman +44 (0) 1483 755 666Michael Bonte-Friedheim, Acting Chief Executive Officer andNon-Executive DirectorMark Lewis, Chief Financial OfficerNick Ingrassia, Investor RelationsMorgan Stanley (Financial Adviser to Valiant)Ian Hart +44 (0) 207 425 8000Andrew FosterBrunswick Group (Public Relations Adviser to Valiant)Patrick Handley +44 (0) 207 404 5959Oriel Securities Limited (Nominated Adviser to Valiant)Michael Shaw +44 (0) 207 710 7600Jefferies Hoare Govett (Joint Broker to Valiant)Chris Zeal +44 (0) 207 029 8000Graham HertrichThe Acquisition will be made on the terms and subject to the conditionsand further terms set out herein and in Appendix I to this announcementand the further terms and conditions to be set out in the SchemeDocument and Forms of Proxy when issued. The bases and sources ofcertain financial information contained in this announcement are setout in Appendix II to this announcement. A summary of the irrevocableundertakings given by the Valiant Directors and the irrevocableundertakings and letters of intent given by certain other ValiantShareholders is contained in Appendix III to this announcement. Certainterms used in this announcement are defined in Appendix IV to thisannouncement.This announcement is not intended to and does not constitute, or formpart of, any offer to sell or subscribe for or an invitation topurchase or subscribe for any securities or the solicitation of anyvote or approval in any jurisdiction pursuant to the Acquisition orotherwise, nor shall there be any sale, issuance or transfer ofsecurities of Valiant or Ithaca in any jurisdiction in contravention ofapplicable law. This announcement does not constitute a prospectus or aprospectus equivalent document.Any vote by Valiant Shareholders in respect of the Acquisition shouldonly be made on the basis of the information contained in the SchemeDocument, which will contain the full terms and conditions of theAcquisition (including details of how to vote in favour of the Scheme).Valiant Shareholders are advised to read the formal documentation inrelation to the Acquisition which will be distributed to ValiantShareholders in due course (with the exception of certain ValiantShareholders in Restricted Jurisdictions), as it will contain importantinformation relating to the Acquisition.Please be aware that addresses, electronic addresses and certain otherinformation provided by Valiant Shareholders, persons with informationrights and other relevant persons in connection with the receipt ofcommunications from Valiant may be provided to Ithaca during the offerperiod as required under Section 4 of Appendix 4 to the Code.Cenkos, which is authorised and regulated in the United Kingdom by theFSA, is acting for Ithaca and Ithaca Bidco and no-one else inconnection with the Acquisition and will not be responsible to anyoneother than Ithaca and Ithaca Bidco for providing the protectionsafforded to clients of Cenkos nor for providing advice in relation tothe Acquisition. Neither Cenkos nor any of its subsidiaries, branchesor affiliates owes or accepts any duty, liability or responsibilitywhatsoever (whether direct or indirect, whether in contract, in tort,under statute or otherwise) to any person who is not a client of Cenkosin connection with this announcement, any statement contained herein orotherwise. In addition, in accordance with, and to the extent permittedby, the Code, normal UK market practice and Section 14(e) of, andRegulation 14E under, the US Securities Exchange Act of 1934, asamended (the "Exchange Act") subject to the exemptions provided by Rule14d-1 under the Exchange Act, Cenkos will continue to act as exemptprincipal traders in Valiant Shares and Ithaca Shares on the LondonStock Exchange and engage in certain other purchasing activitiesconsistent with their respective normal and usual practice andapplicable law.Scotia Capital Inc is acting for Ithaca and Ithaca Bidco and no-oneelse in connection with the Acquisition and will not be responsible toanyone other than Ithaca and Ithaca Bidco for providing the protectionsafforded to clients of Scotia Capital Inc nor for providing advice inrelation to the Acquisition. Neither Scotia Capital Inc nor any of itssubsidiaries, branches or affiliates owes or accepts any duty,liability or responsibility whatsoever (whether direct or indirect,whether in contract, in tort, under statute or otherwise) to any personwho is not a client of Scotia Capital Inc in connection with thisannouncement, any statement contained herein or otherwise.Morgan Stanley, which is authorised and regulated in the United Kingdomby the FSA, is acting for Valiant and no-one else in connection withthe Acquisition and will not be responsible to anyone other thanValiant for providing the protections afforded to clients of MorganStanley or for providing advice in relation to the Acquisition. NeitherMorgan Stanley nor any of its subsidiaries, branches or affiliates owesor accepts any duty, liability or responsibility whatsoever (whetherdirect or indirect, whether in contract, in tort, under statute orotherwise) to any person who is not a client of Morgan Stanley inconnection with this announcement, any statement contained herein orotherwise.Oriel, which is authorised and regulated in the United Kingdom by theFSA, is acting for Valiant and no-one else in connection with theAcquisition and will not be responsible to anyone other than Valiantfor providing the protections afforded to clients of Oriel nor forproviding advice in relation to the Acquisition. Neither Oriel nor anyof its subsidiaries, branches or affiliates owes or accepts any duty,liability or responsibility whatsoever (whether direct or indirect,whether in contract, in tort, under statute or otherwise) to any personwho is not a client of Oriel in connection with this announcement, anystatement contained herein or otherwise.Jefferies Hoare Govett, a division of Jefferies International Limited,which is authorised and regulated in the United Kingdom by the FSA, isacting for Valiant and no-one else in connection with the Acquisitionand will not be responsible to anyone other than Valiant for providingthe protections afforded to clients of Jefferies Hoare Govett or forproviding advice in relation to the Acquisition. Neither JefferiesHoare Govett nor any of its subsidiaries, branches or affiliates owesor accepts any duty, liability or responsibility whatsoever (whetherdirect or indirect, whether in contract, in tort, under statute orotherwise) to any person who is not a client of Jefferies Hoare Govettin connection with this announcement, any statement contained herein orotherwise.Overseas jurisdictionsThe availability of the Ithaca Consideration Shares in, and therelease, publication or distribution of this announcement in or into,jurisdictions other than the United Kingdom may be restricted by lawand therefore persons into whose possession this announcement comes whoare not resident in the United Kingdom should inform themselves about,and observe, any applicable restrictions. Valiant Shareholders who arein any doubt regarding such matters should consult an appropriateindependent adviser in the relevant jurisdiction without delay. Anyfailure to comply with such restrictions may constitute a violation ofthe securities laws of any such jurisdiction.This announcement has been prepared for the purposes of complying withEnglish law and the Code and the information disclosed may not be thesame as that which would have been disclosed if this announcement hadbeen prepared in accordance with the laws of jurisdictions outside theUnited Kingdom.The Acquisition relates to the shares of an English company (a "foreignprivate issuer" as defined under Rule 3b-4 under the Exchange Act) andis proposed to be made by means of a scheme of arrangement provided forunder, and governed by, English law. Neither the proxy solicitationrules nor the tender offer rules under the Exchange Act will apply tothe Scheme. Accordingly, the Ithaca Consideration Shares to be issuedpursuant to the Scheme have not been and will not be registered underthe US Securities Act of 1933 (as amended) (the "Securities Act") orunder the relevant securities laws of any state or territory or otherjurisdiction of the United States, but are expected to be offered inthe United States in reliance upon the exemption from the registrationrequirements of the Securities Act provided by Section 3(a)(10) thereofand exemptions provided under the laws of each state of the UnitedStates in which eligible Valiant Shareholders may reside.The Scheme will be subject to the disclosure requirements and practicesapplicable in the UK to schemes of arrangement, which differ from thedisclosure requirements of the US and Canadian proxy solicitation rulesand tender offer rules. However, if Ithaca Bidco were to elect (inaccordance with the condition in paragraph (a) of Part B of Appendix I)to implement the Acquisition by means of a Takeover Offer, such offerwill be made in compliance with the US and Canadian tender offer rules,to the extent applicable, or an exemption therefrom.Financial information included in this announcement and the SchemeDocument has been or will be prepared in accordance with accountingstandards applicable in the UK and may not be comparable to financialinformation of US and Canadian companies or companies whose financialstatements are prepared in accordance with generally acceptedaccounting principles in the United States and Canada.None of the securities referred to in this document have been approvedor disapproved by the US Securities and Exchange Commission, any statesecurities commission in the United States or any other US regulatoryauthority, nor have such authorities passed upon or determined theadequacy or accuracy of this document. Any representation to thecontrary is a criminal offence in the United States. This document doesnot constitute an offer to sell, or the solicitation of any offer tobuy, any Ithaca Consideration Shares in any jurisdiction in which suchan offer or solicitation would be unlawful.Valiant is incorporated under the laws of England and Wales, IthacaBidco is organised under the laws of Scotland, and Ithaca is organisedunder the laws of Alberta, Canada. Some or all of the officers anddirectors of Valiant, Ithaca Bidco and Ithaca may be residents ofcountries other than the United States. It may not be possible to sueValiant, Ithaca Bidco and Ithaca in a non-US court for violations of USsecurities laws. It may be difficult to compel Valiant, Ithaca Bidco,Ithaca and their respective affiliates to subject themselves to thejurisdiction and judgment of a US court.In accordance with normal UK practice and pursuant to Rule 14e-5(b) ofthe Exchange Act, Ithaca Bidco or its nominees, or its brokers (actingas agents), may from time to time make certain purchases of, orarrangements to purchase Valiant Shares outside of the United States,other than pursuant to the Acquisition, until the Effective Date,lapses or is otherwise withdrawn. These purchases may occur either inthe open market at prevailing prices or in private transactions atnegotiated prices. Any information about such purchases will bedisclosed as required in the UK, will be reported to the RegulatoryInformation Service of the London Stock Exchange and will be availableon the London Stock Exchange website athttp://www.londonstockexchange.com/exchange/news/market-news/market-news-home.html. This information will also be publicly disclosedin the United States to the extent that such information is made publicin the United Kingdom.The Ithaca Consideration Shares to be issued pursuant to the Schemehave not been and will not be registered under the relevant securitieslaws of Japan and the relevant clearances have not been, and will notbe, obtained from the securities commission or similar regulatoryauthority of any province or territory of Canada or Australia.Accordingly, the Ithaca Consideration Shares are not being, and may notbe, offered, sold, resold, delivered or distributed, directly orindirectly in or into the Canada, Australia or Japan or any otherjurisdiction if to do so would constitute a violation of relevant lawsof, or require registration thereof in, such jurisdiction (exceptpursuant to an exemption, if available, from any applicableregistration or prospectus requirements or otherwise in compliance withall applicable laws). No prospectus in relation to the IthacaConsideration Shares has been, or will be, lodged or filed with, orregistered by, the securities commission or similar regulatoryauthority of any province or territory of Canada or the AustralianSecurities and Investments Commission.The Ithaca Consideration Shares to be issued pursuant to the Schemewill be issued in reliance upon exemptions from the prospectusrequirements of securities legislation in each province and territoryof Canada. Subject to certain disclosure and regulatory requirementsand to customary restrictions applicable to distributions of sharesthat constitute "control distributions", Ithaca Consideration Sharesmay be resold in each province and territory in Canada, subject incertain circumstances, to the usual conditions that no unusual efforthas been made to prepare the market or to create demand, noextraordinary commission or consideration is paid and, if the sellingshareholder is an insider or officer of Ithaca, such shareholder has noreasonable grounds to believe that Ithaca is in default of securitieslegislation.Forward-looking statementsForward-looking statements include statements regarding the intent,belief and current expectations of Ithaca, Ithaca Bidco and Valiant ortheir directors or officers with respect to various matters. When usedin this announcement, the words "anticipate", "continue","estimate","expect", "may", "will", "project", "plan", "should","believe","could", "target" and similar expressions, and the negativesthereof,whether used in connection with operational activities, productionforecasts, budgetary figures contained in this announcement orotherwise, are intended to identify forward-looking statements.This announcement contains certain forward-looking statements which arebased on internal expectations, estimates, projections and beliefs,including assumptions regarding Ithaca Bidco's and Valiant's plans,objectives and expected performance. Such statements relate to eventsand depend on circumstances that will occur in the future and aresubject to risks, uncertainties and assumptions. There are a number offactors which could cause actual results and developments to differmaterially from those expressed or implied by such forward-lookingstatements including, among others, the enactment of legislation orregulation that may impose costs or restrict activities; there-negotiation of contracts or licences; fluctuations in demand andpricing in the oil and gas industry; fluctuations in exchange controls;changes in government policy and taxation; industrial disputes; war andterrorism. These forward-looking statements speak only as at the dateof this announcement.In the view of Ithaca's, Ithaca Bidco's and Valiant's management, thisinformation was prepared by management on a reasonable basis, reflectsthe best currently available estimates and judgements, and presents, tothe best of management's knowledge and belief, the expected course ofaction and the expected future performance of Ithaca, Ithaca Bidco andValiant. However, this information is not fact and should not be reliedupon as being necessarily indicative of future results, and recipientsof this announcement are cautioned not to place undue reliance on thisinformation. Ithaca, Ithaca Bidco and Valiant do not undertake anyobligation to publicly update or revise any forward-looking statementor information, except as required by applicable laws.Statements relating to reserves are deemed to be forward-lookingstatements, as they involve the implied assessment, based on certainestimates and assumptions, that the reserves described can beprofitably produced in the future. Many of these risk factors, otherspecific risks, uncertainties and material assumptions are discussed infurther detail throughout Ithaca's annual information form andmanagement's discussion and analysis for the year ended 31 December2011. Readers are specifically referred to the risk factors describedin the annual information form under "Risk Factors" and in otherdocuments Ithaca files from time to time with securities regulatoryauthorities. Copies of these documents are available without chargefrom Ithaca or electronically on the internet on Ithaca's SEDAR profileat www.sedar.com.No statement in this announcement is intended as a profit forecast orprofit estimate and no statement in this announcement should beinterpreted to mean that the future earnings per share of the IthacaGroup as enlarged by the Acquisition, Ithaca and/or Valiant for currentor future financial years will necessarily match or exceed thehistorical or published earnings per share of Ithaca or Valiant.BOE PresentationReferences herein to "boe" mean barrels of oil equivalent derived byconverting gas to oil in the ratio of six thousand cubic feet (Mcf) ofgas to one barrel (bbl) of oil. Boe may be misleading, particularly ifused in isolation. A boe conversion ratio of 6 Mcf: 1 bbl is based onan energy conversion method primarily applicable at the burner tip anddoes not represent a value equivalency at the wellhead.Note regarding oil and gas disclosure (1)With respect to Ithaca's reserves, the figures are derived from areport prepared by Sproule International Limited ("Sproule"), anindependent qualified reserves evaluator, evaluating the reserves ofIthaca as of 31 December 2011 and forming the basis for the Statementof Reserves Data and Other Oil and Gas Information of Ithaca dated 28March 2012 (the "Statement"). The reserves for the South West HeatherField included in the Statement are those estimated by Ithaca andreviewed by Sproule. In respect of the MacCulloch field only(representing 1.4 MMboe proved plus probable reserves as at the sameeffective date, with Ithaca's previously announced acquisition of suchfield interest anticipated to be completed in Q1-2013), Ithacamanagement prepared information reviewed by a qualified person underAIM guidelines. With respect to Valiant reserves, the figures arederived from an Audit of Certain Reserves as at 31 December 2012prepared by RPS Energy Consultants Limited, an independent qualifiedreserves evaluator, dated 24 January 2013. The reserves estimates ofIthaca are based on the Canadian Oil and Gas Evaluation Handbook("COGEH") pursuant to Canadian National Instrument 51-101 Standards ofDisclosure for Oil and Gas Activities. The reserves estimates ofValiant are based on the 2007 SPE /AAPG/WPC/SPEE Petroleum ResourceManagement System which is not materially different from COGEH. TheIthaca reserves correspond to those in the Statement adjusted toreflect the increased Carna and Cook field equities acquired followingthe date of issue of the Statement and Ithaca management's estimate ofMacCulloch field reserves. The Valiant reserves have been adjusted toreflect the increased Fionn field interest being transferred to Valiantby Antrim Resources (N.I.) Limited.Disclosure requirements of the Takeover Code (the "Code")Under Rule 8.3(a) of the Code, any person who is interested in 1% ormore of any class of relevant securities of Valiant or of any paperofferor (being any offeror other than an offeror in respect of which ithas been announced that its offer is, or is likely to be, solely incash) must make an Opening Position Disclosure following thecommencement of the offer period and, if later, following theannouncement in which any paper offeror is first identified.An Opening Position Disclosure must contain details of the person'sinterests and short positions in, and rights to subscribe for, anyrelevant securities of each of (i) Valiant; and (ii) any paperofferor(s).An Opening Position Disclosure by a person to whom Rule 8.3(a) appliesmust be made by no later than 3.30 pm (London time) on the 10thBusiness Day following the commencement of the offer period and, ifappropriate, by no later than 3.30 pm (London time) on the 10thBusiness Day following the announcement in which any paper offeror isfirst identified. Relevant persons who deal in the relevant securitiesof Valiant or of a paper offeror prior to the deadline for making anOpening Position Disclosure must instead make a Dealing Disclosure.Under Rule 8.3(b) of the Code, any person who is, or becomes,interested in 1% or more of any class of relevant securities of Valiantor of any paper offeror must make a Dealing Disclosure if the persondeals in any relevant securities of Valiant or of any paper offeror. ADealing Disclosure must contain details of the dealing concerned and ofthe person's interests and short positions in, and rights to subscribefor, any relevant securities of each of (i) Valiant; and (ii) any paperofferor, save to the extent that these details have previously beendisclosed under Rule 8.A Dealing Disclosure by a person to whom Rule 8.3(b) applies must bemade by no later than 3.30 pm (London time) on the Business Dayfollowing the date of the relevant dealing.If two or more persons act together pursuant to an agreement orunderstanding, whether formal or informal, to acquire or control aninterest in relevant securities of Valiant or a paper offeror, theywill be deemed to be a single person for the purpose of Rule 8.3.Opening Position Disclosures must also be made by Valiant and by anyofferor and Dealing Disclosures must also be made by Valiant, by anyofferor and by any persons acting in concert with any of them (seeRules 8.1, 8.2 and 8.4).Details of the offeree and offeror companies in respect of whoserelevant securities Opening Position Disclosures and DealingDisclosures must be made can be found in the Disclosure Table on theTakeover Panel's website at www.thetakeoverpanel.org.uk, includingdetails of the number of relevant securities in issue, when the offerperiod commenced and when any offeror was first identified. If you arein any doubt as to whether you are required to make an Opening PositionDisclosure or a Dealing Disclosure, you should contact the Panel'sMarket Surveillance Unit on +44 (0)20 7638 0129.Publication of this announcementA copy of this announcement will be made available, free of chargesubject to certain restrictions relating to persons resident inRestricted Jurisdictions, at www.ithacaenergy.com andwww.valiant-petroleum.com by no later than 12 noon (London time) on theBusiness Day following the date of this announcement.Neither the content of any website referred to in this announcement northe content of any website accessible from hyperlinks on Ithaca orValiant's website (or any other website) is incorporated into, or formspart of, this announcement.Rule 2.10 DisclosureIn accordance with Rule 2.10 of the Code, Ithaca confirms that it has259,953,336 Ithaca Shares (without par value) in issue and listed onthe Toronto Stock Exchange and admitted to trading on AIM under ISINCA4656761042.NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART,DIRECTLY OR INDIRECTLY IN OR INTO OR FROM ANY JURISDICTION WHERE TO DOSO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OFSUCH JURISDICTION.1 March 2013 RECOMMENDED ACQUISITION OF VALIANT PETROLEUM PLC BY ITHACA ENERGY HOLDINGS (UK) LIMITED (A WHOLLY-OWNED SUBSIDIARY OF ITHACA ENERGY INC.)(TO BE EFFECTED BY MEANS OF A SCHEME OF ARRANGEMENT UNDER PART 26 OFTHE COMPANIES ACT 2006)1. IntroductionThe Boards of Ithaca and Valiant are pleased to announce that they havereached agreement on the terms of a recommended acquisition under whichIthaca Bidco will acquire the entire issued and to be issued sharecapital of Valiant.2. Summary of TermsIt is intended that the Acquisition will be effected by way of aCourt-sanctioned scheme of arrangement under Part 26 of the CompaniesAct, further details of which are contained in paragraph 12 below. TheScheme requires approval by Valiant Shareholders at the Court Meetingand the General Meeting which are to be convened to approve theAcquisition. Further details of the Court-sanctioned scheme ofarrangement and the requisite level of Valiant Shareholder approvalsare contained in paragraph 12 below. The Acquisition is alsoconditional on, among other things, certain regulatory approvals.Pursuant to the terms of the Acquisition, Valiant Shareholders will beentitled to receive: for each Valiant Share 307 pence in cash and 1.33 Ithaca Consideration SharesBased on the Closing Price of an Ithaca Share of C$1.97 (126 pence) on28 February 2013, the Acquisition values the entire issued and to beissued share capital of Valiant at approximately GBP203 million(equivalent to approximately US$309 million and C$318 million) and eachValiant Share at approximately 475 pence.The consideration payable under the Acquisition represents a premium ofapproximately:- 37% to the Closing Price of 346.5 pence per Valiant Share on 28February 2013, the last Business Day prior to the date of thisannouncement;- 31% to the average Closing Price of 361.1 pence per Valiant Sharefor the 20 Business Days ended on 28 February 2013, the last BusinessDay prior to the date of this announcement; and- 3% to the Closing Price of 460.0 pence per Valiant Share on 5September 2012, the last Business Day prior to the announcement byValiant of the commencement of a 'formal sale process' as defined inthe Code.The Ithaca Consideration Shares to be issued pursuant to theAcquisition are expected to represent approximately 18% of the issuedshare capital of Ithaca as enlarged by the Acquisition.The Ithaca Consideration Shares will rank equally in all respects withthe existing Ithaca Shares and will be entitled to receive anydividends and/or other distributions declared or paid by Ithaca inrespect of common shares of Ithaca with a record date falling after theEffective Date.Fractions of Ithaca Consideration Shares will not be allotted toValiant Shareholders pursuant to the Acquisition. However, theentitlements of Valiant Shareholders will be rounded up or down (with0.5 of an Ithaca Consideration Share being rounded up) to the nearestwhole number of Ithaca Consideration Shares.3. Background to and reasons for the AcquisitionThe Acquisition is in line with Ithaca's stated strategy of growingshareholder value by building a highly-cash generative North Sea oiland gas Business via one of its key objectives, the delivery ofcontinued growth of cash flow per share and expansion of the cash flowbase through accretive acquisitions.Ithaca's strong balance sheet position enables it to deliver a highlyaccretive acquisition that materially increases and diversifies itsproduction and reserves base. Ithaca, post acquisition, maintains afully funded capital programme and Business plan. Based on the taxfree forecast cash flows of Ithaca and the implementation of an oilprice hedging programme, the additional debt used to finance theAcquisition is anticipated to be repaid within approximately two years,with the full cost repaid within approximately two and a half years.Three key metrics by which the Acquisition can be measured are outlinedbelow:(a) Assets Tax Allowances2 TotalEnterprise Value1/2P Reserves US$11.1/bbl US$13.2bbl US$24.3/bbl1 Enterprise Value defined as Acquisition price plus debtand associated working capital2 US$500M UK tax allowances plus US$23 million Norwegiantax refund from 2012 expenditure, present value US$251million(b)Cash Flow Per Share 2013 2014Pre-Acquisition US$0.4/sh US$1.5/shPost-Acquisition US$1.3/sh US$2.1/sh(c) Enterprise Value/2013 Average Production: Over US$48,000per flowing barrelThe assets of Ithaca and Valiant have a strong strategic fit, with thesubstantial immediate increase in oil production from the acquiredValiant assets complementing Ithaca's near term production growthprofile.Specifically, the Acquisition is anticipated to:- more than double Ithaca's 2013 forecast production from 6-6.7kboe/d to 14-16kboe/d, rising thereafter to an upper range productionoutlook of approximately 25kboe/d in 2014 and 27kboe/d in 2015;- increase high netback oil production as a proportion of totalproduction in both 2013 and 2014 to approximately 90% (such productionpriced at or around the Brent benchmark);- broaden Ithaca's 2013 producing asset base to 11 fields, with afurther operated field scheduled to start-up in H2-2013;- increase Ithaca's production per Ithaca Share by approximately100% in 2013 and 33% in 2014;- increase total 2P reserves by approximately 35% to 74MMboe(1),with approximately 65% of total 2P reserves being oil;- produce a balanced 2P reserves portfolio by increasing 2Pproducing asset reserves to approximately 37MMboe(1), representingapproximately 50% of total 2P reserves;- increase forecast 2013 cash flow from operations to approximatelyUS$400 million, rising to over US$700 million in 2015;- increase forecast 2013 cash flow per Ithaca Share by 225% and 2014cash flow per Ithaca Share by 40%;- add approximately US$500 million in UK tax allowances (end-2012balance) and a US$23 million Norwegian tax refund relating toexpenditure incurred in 2012;- create a combined entity with estimated UK tax allowances ofapproximately US$915 million (end-2012 balance), which will sheltercombined cash flows from the payment of UK tax over the medium term;- result in an enhanced pro forma 2013 balance sheet, with forecastIthaca net debt to cash flow pre-Acquisition of approximately 2.1xreducing to approximately 1.2x post-Acquisition;- continue to maintain low decommissioning liability exposures;- provide strategic entry into Norway, a geography with significantremaining hydrocarbon potential;- add assets with upside potential from appraisal drilling as wellas production enhancement programmes;- provide cost synergies through the removal of administrative andoperational overlaps; and- enable an on-going farm-out campaign to allow a focused andreduced commitment exploration programme in the context of an enlargedgroup.The Acquisition will establish Ithaca as a leading mid-cap North Seaoil and gas operator with the strategy continuing to remain firmlycentred on the delivery of production and development-led growth.In summary, the impact of the Acquisition in respect of:(a) cash flows from operations ("CFFO") are:CFFO1,2 2013 (US$m) 2014(US$m) 2015(US$m)Pre-Acquisition 118 390 506Post-Acquisition 420 662 731Increase 302 272 225(b) the 2P reserves are:2P Reserves1 MMboeWithout Valiant 55With Valiant 74Increase 19(c) anticipated production profiles are:Production Profiles1 2013 (kboe/d) 2014(kboe/d) 2015(kboe/d)Pre-Acquisition 6.0 -6.7 13.0 - 15.5 16.5 - 19.5Post-Acquisition 14.0 - 16.2 21.0- 25.0 23.0- 27.0Increase 8.0 - 9.5 8.0 - 9.5 6.5 - 7.51 (a), (b) and (c) above include the anticipatedcontribution from the yet to be completed MacCulloch acquisition.2 The CFFO is derived from US$100/bbl Brent and 55p/thermgas price, 3% per annum inflation and anticipated hedging. The CFFOdoes not take into account Ithaca's assumption of capital expenditureassociated with Valiant's existing assets of approximately US$210million over the next two years (including Norwegian capitalexpenditure net of the applicable 78% tax refund).4. RecommendationThe Valiant Board, which has been so advised by Morgan Stanley (as theindependent financial adviser for the purposes of Rule 3 of the Code),considers the terms of the Acquisition to be fair and reasonable. Inproviding its advice to the Valiant Board, Morgan Stanley has takeninto account the commercial assessments of the Valiant Board.Accordingly, the Valiant Board intends to recommend that ValiantShareholders vote in favour of the resolutions to be proposed at theCourt Meeting and the General Meeting which are to be convened toapprove the Acquisition. The Valiant Directors have irrevocablyundertaken to approve the Acquisition in respect of their ownbeneficial holdings in Valiant, which amount in aggregate, to 433,695Valiant Shares, representing approximately 1.1% of the entire issuedshare capital of Valiant (as described in Appendix III).Theseirrevocable undertakings do not lapse in the event of a highercompeting offer being made for Valiant. As previously announced byValiant on 15 November 2012, Peter Buchanan has ceased to participatein meetings of the Valiant Board relating to the Strategic Review andformal sale process initiated on 6 September 2012, including relatingto the Acquisition and has not given an irrevocable undertaking.5. Background to and reasons for the RecommendationFounded in 2004 and admitted to trading on AIM in March 2008, Valianthas built a balanced and attractive portfolio of production,development and exploration assets, which combined with its strongcashflow, provides a solid foundation to deliver growth and shareholdervalue.Recognising this position of strength and the alternative directionsavailable to Valiant and the near term upside potential from awell-developed 2013 exploration programme, the Valiant Board initiatedthe Strategic Review on 6 September 2012 with the aim of identifyingthe full range of strategic options available to Valiant and maximisingvalue created from the existing asset base.During the Strategic Review, it became clear that there were advantagesto Valiant in enlarging the Valiant Group with better access to capitaland diversification of risks across a broader portfolio and a furtherrange of options. Thus after thorough evaluation of the full range ofavailable strategic options and taking into account the more limitedflexibility for growth on a standalone basis, the Valiant Boardconsiders the proposed acquisition by Ithaca to be the most attractiveopportunity for Valiant Shareholders with compelling strategic andfinancial rationale.The formal sale process has now been concluded. The end of the formalsale process means that the data room which has been open toparticipants will be closed with effect from 7.00 am on 1 March 2013.Other potential offerors can still nonetheless announce competingoffers for Valiant.The Valiant Board believes that the acquisition by Ithaca, which at theClosing Price of an Ithaca Share on 28 February 2013 (the last BusinessDay prior to the date of this announcement), represents a significantpremium to Valiant's current and recent share prices, recognises thevalue of Valiant's producing asset base and enables ValiantShareholders to realise a proportion of this value in cash, whilstretaining exposure to future growth of the Business through anownership of approximately 18% of Ithaca.6. Break feeThe Panel has consented to Valiant entering into a break feearrangement with Ithaca Bidco as a participant in Valiant's announcedformal sale process under Note 2 of Rule 21.2 of the Code. As such,Valiant has agreed to pay Ithaca Bidco a break fee of GBP2,034,944(subject to adjustment for VAT) if a Competing Offer is announced priorto the Acquisition lapsing or being withdrawn and such Competing Offerbecomes or is declared unconditional in all respects or otherwisebecomes effective.7. Irrevocable undertakings and letters of intentIthaca Bidco has received irrevocable undertakings to vote in favour ofthe Scheme and the resolutions at the Court Meeting and the GeneralMeeting from the following Valiant Shareholders in respect of anaggregate of 2,537,695 Valiant Shares, representing approximately 6.20%of Valiant's issued share capital:- Valiant Directors in respect of 433,695 Valiant Shares,representing approximately 1.06% of Valiant's issued share capital; and- Artemis Investment Management LLP in respect of 2,104,000 ValiantShares, representing approximately 5.14% of Valiant's issued sharecapital.In addition, Ithaca Bidco has received non-binding letters of intent tovote in favour of the Scheme and the resolutions at the Court Meetingand the General Meeting from the following Valiant Shareholders inrespect of an aggregate amount of 14,392,784 Valiant Shares,representing approximately 35.15% of Valiant's issued share capital:- AXA Investment Managers UK Limited in respect of 5,582,436Valiant Shares, representing approximately 13.63% of Valiant's issuedshare capital;- GLG Partners LP in respect of 4,025,585 Valiant Shares,representing approximately 9.83% of Valiant's issued share capital;- Praxient Capital LLP in respect of 2,717,137 Valiant Shares,representing approximately 6.64% of Valiant's issued share capital; and- Aviva Investors Global Services Limited in respect of 2,067,626Valiant Shares, representing approximately 5.05% of Valiant's issuedshare capital.Ithaca Bidco has therefore received irrevocable undertakings andnon-binding letters of intent to vote in favour of the Scheme and theresolutions at the Court Meeting and the General Meeting in respect ofan aggregate of 16,930,479 Valiant Shares, representing approximately41.35% of Valiant's issued share capital.Further details of these irrevocable undertakings (including thecircumstances in which they may cease to be binding) and letters ofintent are set out in Appendix III to this announcement.In addition, although no shareholder approval of Ithaca or Ithaca Bidcois required in connection with the Acquisition, Ithaca Bidco hasreceived non-binding letters from the following Ithaca shareholders (orinvestment managers), confirming their support for Ithaca and IthacaBidco making the Acquisition in line with Ithaca's stated strategy:Artemis Investment Management LLP; Four Capital Partners Limited; HSBCGlobal Asset Management; JP Morgan Asset Management (UK) Limited;Salida Capital; and SLZ Capital Management, LLC.8. Information on Ithaca and Ithaca BidcoIthaca, through its wholly-owned subsidiary, Ithaca Energy (UK)Limited, is an oil and gas operator focused on production, appraisaland development activities in the North Sea.Ithaca's strategy is to grow shareholder value by building a highlycash-generative North Sea oil and gas Business. Execution of thestrategy is centred on: maximising cash flow and production fromexisting assets; delivering material growth by appraising anddeveloping existing hydrocarbon discoveries; and continuing to increaseand diversify Ithaca's portfolio and cash flows via acquisitions.Ithaca is incorporated in Alberta, Canada and Ithaca Shares are listedon the Toronto Stock Exchange and admitted to trading on AIM. IthacaBidco is a wholly-owned subsidiary of Ithaca incorporated under thelaws of Scotland for the purpose of making the Acquisition. IthacaBidco has not traded since incorporation, nor has it entered into anyobligations, other than in connection with the Acquisition and thefinancing of the Acquisition.9. Information on ValiantValiant has a balanced portfolio of producing, development andexploration assets with a primary focus on the UK and Norway. Formed in2004, Valiant has developed a stable production foundation providing itwith sustained cash flows which fund on-going investment. Valiant hasbuilt a broad and attractive portfolio in stable geographies where ithas deep knowledge of the geology and regulatory environment. ValiantShares were admitted to trading on AIM in March 2008 (AIM: VPP).The Valiant Group's production foundation provides sustained cashflows, which funds investment and limits downside risk. Valiant investsin exploration and development projects which are individually materialcompared to the size of Valiant, giving significant upside exposure.Valiant's proved plus probable reserves as at 31 December 2012 are 18.9million(3) barrels of oil. This figure is inclusive of:- a re-categorisation of 6.6 million barrels of oil associated withthe Crawford and Porter fields from proved plus probable reserves intocontingent resources;- a write-off of the small amount of reserves associated with theConrie well; and- a downward adjustment on the Causeway Field to 3.6 MMstb net toValiant.Valiant has today announced that it has completed drilling of the Timonprospect (Valiant, 10%) located in the UK Northern North Sea in Blocks211/11b and 211/16b. The Upper Jurassic sands were found to be poorlydeveloped in the target location and the well will now be plugged andabandoned as a dry hole.Valiant's interests in currently producing oilfields are:- Don Southwest (UK P236, 211/18a Don Southwest Area): 40%- West Don (UK P236, 211/18a West Don Area): 17.275% (unitised)- Causeway (UK P1383, 211/23d): 64.5% (operator)Valiant also has the following on-going operated development project:- Fionn (UK P201, 211/22a South East Area): 64.5% (expected toincrease in due course to 100%, the transfer of which remains subjectto certain documentation and consent from the Department of Energy andClimate Change)Additionally, over the past few years, Valiant has built a substantialexploration licence portfolio in its core areas of UK and Norwaythrough a combination of active participation in the UK offshorelicensing rounds and selected farm-in opportunities. Valiant seeks totake high equity interests in blocks during the prospect identification/evaluation phase farming-down its overall holdings, if appropriate,prior to drilling to manage the Valiant Group's financial exposure toany single well. During 2011, Valiant acquired Sagex Petroleum ASA tobuild and grow a Business in Norway to expand its overall geographicfootprint and thereby gain access to a substantial additionalexploration and development opportunity. The acquisition of Sagex alsoprovided Valiant with substantial expertise and local knowledge as animportant key to unlocking early success and maximising value forshareholders.Valiant's interests in key near-term exploration and appraisalprospects include:UK- Handcross (UK P.1631, 204/18b): 90% - formal farm-out processunderway- Isabella (UK P.1820, 30/6c, 11a & 12d): 20%4 - farm-out agreed inprinciple- Beverley (UK P.1792, 21/30f & 22/26c): 40% - farm-out underconsiderationNorway- Storbarden (Norway PL506 S, BS, CS, DS 26/5, 26/8, 26/2): 25% -drilling March 2013- Norvarg (Norway PL535, 7225/3, 7226/1): 13% - appraisal well ofan existing discovery- Matrosen (Norway PL659, 7121/3; 7122/1, 2; 7221/10, 12; 7222/11,12): 5%3 This assumes 100% working interest in the Fionn field, thetransfer of which remains subject to certain documentation and consentfrom the Department of Energy and Climate Change.4 Valiant's interest is expected to reduce from 50% to 20%on farm-out.10. Management, employees and locationsIthaca confirms that, upon completion of the Acquisition, two existingValiant Directors, Mr Jannik Lindbaek and Mr Michael Bonte-Friedheim,will be appointed to the Board of Ithaca as Non-Executive Directors.Both Mr Lindbaek and Mr Bonte-Friedheim have considerable oil and gasindustry experience, both in the North Sea and internationally, andwill be central to ensuring a seamless and efficient integration ofValiant's assets into Ithaca's existing operations. Mr Lindbaek waspreviously Chairman of the Norwegian international oil and gas companyStatoil ASA, prior to its merger with Norsk Hydro in 2007. MrBonte-Friedheim, an investment banker by background, was previouslyChairman and subsequently CEO of Mediterranean Oil and Gas plc, a UKAIM-traded company, and is currently co-CEO of NextEnergy Capital, amerchant bank focused on the renewable energy sector, as well as actingCEO of Valiant.Ithaca expects that the other members of the Valiant Board will ceaseto have any involvement with the Ithaca Business from the EffectiveDate and that they will resign as directors from Valiant at such time.Within one month of the Scheme becoming Effective, Ithaca willinstigate a thorough review of the Business and locations of theCombined Group to identify and achieve operational synergies. Ithacacurrently expects this review to result in a reduction of head count ofthe Valiant Group and places of Business where there is opportunity toachieve efficiencies in respect of the Combined Group's administrativeor operational functions, including the proposed closure of Valiant'sWoking office. Ithaca has agreed that appropriate employee outplacementprogrammes will be provided in the event that any redundancies areimplemented after the Scheme has become effective.Ithaca confirms that, following completion of the Acquisition, theexisting contractual and statutory employment rights, including inrelation to pensions, of all Valiant employees will be honoured.11. Valiant Share SchemesParticipants in the Valiant Share Schemes will be contacted regardingthe effect of the Acquisition on their rights under the Valiant ShareSchemes in accordance with the terms of the relevant plan rules andappropriate proposals will be made to such participants in due coursein accordance with the Co-operation Agreement (as summarised inparagraph 16 below).12. Structure of the AcquisitionIt is intended that the Acquisition will be effected by means of aCourt-sanctioned scheme of arrangement of Valiant under Part 26 of theCompanies Act (including the Capital Reduction under section 641 of theCompanies Act).The purpose of the Scheme is to provide for Ithaca Bidco to become theowner of the entire issued and to be issued share capital of Valiant.This is to be achieved by the cancellation of the Scheme Shares and theapplication of the reserve arising from such cancellation in paying upin full a number of new ordinary shares in Valiant which is equal tothe number of Scheme Shares so cancelled, and issuing such new Valiantordinary shares to Ithaca Bidco. In consideration for this, the SchemeShareholders will receive cash consideration and Ithaca ConsiderationShares on the basis set out in paragraph 2 of this announcement. Thecancellation of those Scheme Shares and the subsequent issue of newValiant Shares to Ithaca Bidco will result in Valiant becoming awholly-owned subsidiary of Ithaca Bidco.To become Effective, the Scheme must be approved by a majority innumber of those Scheme Shareholders entitled to vote and present andvoting at the Court Meeting (either in person or by proxy) representingat least 75% in value of the Scheme Shares held by such SchemeShareholders. In addition, the implementation of the Scheme requiresapproval by the passing of a special resolution by Valiant Shareholdersat the General Meeting to be held immediately after the Court Meeting.The Scheme and the Capital Reduction must also be sanctioned by theCourt. All Shareholders are entitled to attend the Court Hearing inperson or through counsel to support or oppose the sanctioning of theScheme. The Scheme and Capital Reduction will only become Effectiveupon delivery to the Registrar of Companies of a copy of the CourtOrder(s) and associated statement of capital (and, if the Court soorders, upon registration by him of them).The Scheme will also be subject to certain Conditions and further termsreferred to in Appendix I to this announcement and to be set out in theScheme Document.Ithaca Bidco reserves the right to switch from implementing theAcquisition by means of a scheme of arrangement under Part 26 of theCompanies Act to a Takeover Offer, in accordance with paragraph 8 ofAppendix 7 of the Code, with the consent of the Panel and the ValiantBoard (save that Ithaca Bidco need not obtain the consent of theValiant Board if the election is made within ten days of the date afirm intention to announce an offer for the entire issued and to beissued share capital of Valiant is announced by a third party).Subject to satisfaction of the Conditions, the Scheme is expected tobecome Effective on or around 19 April 2013. The Acquisition will lapseif the Scheme does not become Effective by 1 September 2013 (or suchlater date as may, with the consent of the Panel (if required), beagreed between Ithaca Bidco and Valiant), provided however that thisdeadline may be waived by Ithaca Bidco.Upon the Scheme becoming Effective, it will be binding on all ValiantShareholders, irrespective of whether or not they were present or votedat the Court Meeting or the General Meeting and, if they did vote,whether or not they voted in favour of or against the resolutionsproposed at those meetings.Further details of the Scheme will be set out in the Scheme Document,together with notices of the Court Meeting and the General Meeting andthe accompanying Forms of Proxy, which are expected to be despatched toValiant Shareholders as soon as reasonably practicable and in any eventwithin 28 days of this announcement, unless otherwise agreed with thePanel.13. Financing the AcquisitionThe cash consideration payable under the terms of the Acquisition willbe funded by utilising funds made available to Ithaca Bidco pursuant toa bridge credit agreement entered into between Ithaca, Ithaca Bidco,Banc of America Securities Limited, BNP Paribas and The Bank of NovaScotia together with Ithaca's existing cash resources, which will bemade available to Ithaca Bidco. The bridge credit facility provides a12 month facility of US$350 million to bridge the transfer of Valiant'sassets into Ithaca's existing (enlarged) borrowing base facility, suchfunds to be utilised to satisfy the cash consideration payable underthe terms of the Acquisition (approximately $US200 million) and therepayment of all outstanding Valiant debt and associated workingcapital requirements (approximately US$150 million). Cenkos, financialadviser to Ithaca and Ithaca Bidco, is satisfied that sufficientresources are available to satisfy in full the cash considerationpayable to Valiant Shareholders under the terms of the Acquisition.14. Delisting and re-registrationIt is intended that dealings in Valiant Shares will be suspended at theScheme Record Time and that no transfers of Valiant Shares will beregistered after that time. Application will be made to the LondonStock Exchange for the cancellation of the admission to trading of theValiant Shares to AIM upon or shortly after the Effective Date.When the Scheme becomes effective in accordance with its terms, theValiant Shares will be cancelled. At that point, share certificates inrespect of Valiant Shares will cease to be valid and entitlements toValiant Shares held within the CREST system will be cancelled.It is also intended that Valiant will be re-registered as a privatecompany under the relevant provisions of the Companies Act, with effectfrom the Scheme becoming Effective.15. Settlement, listing and dealing of Ithaca ConsiderationSharesIt is intended that applications will be made for the IthacaConsideration Shares to be listed on the Toronto Stock Exchange andadmitted to trading on AIM. It is expected that listing of the IthacaConsideration Shares on the Toronto Stock Exchange and the admission totrading on AIM will become effective once Ithaca has fulfilled all ofthe listing requirements of the Toronto Stock Exchange and that tradingof the Ithaca Consideration Shares on AIM will become effective, andthat dealings for normal settlement in the Ithaca Consideration Sharestraded on AIM will commence, not later than the Business Day after theEffective Date.Shares of non-UK companies (such as Ithaca) cannot be held andtransferred directly into the CREST system. Holders of Scheme Shareswho hold Valiant Shares in uncertificated form (that is, in CREST) willbe entitled to Ithaca Depository Interests, representing the IthacaConsideration Shares to which the relevant Valiant Shareholder isentitled under the terms of the Scheme. The Ithaca Depository Interestscan be held and transferred through the CREST system. It is expectedthat the Ithaca Depository Interests will trade under ISIN CA4656761042in the same way as existing Ithaca Shares.Further details on listing, dealing and settlement will be included inthe Scheme Document.The Ithaca Consideration Shares will be subject to the provisions ofcertain Canadian securities laws and regulations.16. Offer Related ArrangementsConfidentiality agreementOn 1 March 2013, Valiant and Ithaca entered into a confidentialityagreement in a customary form in relation to the Acquisition, pursuantto which they each undertook, subject to certain exceptions, to keepinformation relating to Valiant and Ithaca confidential and to notdisclose it to third parties. Unless terminated earlier, theconfidentiality obligations will remain in force for three years fromthe date of the agreement.Co-operation AgreementOn 1 March 2013, Valiant, Ithaca Bidco and Ithaca entered into theCo-operation Agreement pursuant to which, in relation to the ValiantShare Schemes, the parties have agreed that:- Awards granted in 2010 under the LTIP will vest, subject to thesatisfaction of the applicable performance target, on 9 April 2013 inaccordance with the terms of the LTIP;- Awards granted in 2011 and 2012 under the LTIP will vestimmediately following Court sanction of the Scheme in accordance withthe terms of the LTIP with the effect that 100% of the awards grantedin 2011 will vest and approximately 67% of the awards granted in 2012will vest; and- Options granted under the Option Schemes, all of which will eitheralready be exercisable immediately before or become exercisable as aresult of the Scheme, may be exercised in accordance with the rules ofthose schemes.Valiant Shares issued prior to the Scheme Record Time, either pursuantto such awards or options or to an employee benefit trust for theexpress purpose of satisfying those awards or options at that time,shall be subject to the Scheme.Ithaca has agreed that appropriate employee outplacement programmeswill be provided in the event that any redundancies are implementedafter the Scheme has become effective.The Co-operation Agreement also includes reciprocal obligations on thepart of Valiant, Ithaca and Ithaca Bidco to use their reasonableendeavours to provide each other with information or assistance for thepurposes of obtaining any official authorisation or regulatoryclearance required in connection with the implementation of theAcquisition, including in respect of any consents required from thegranting authorities of exploration or production licences in Norway,Iceland or the Faroe Islands in accordance with the applicable laws andregulations of those territories.17. Opening Position Disclosures and interestsIthaca and Ithaca Bidco will each be making an Opening PositionDisclosure, setting out the details required to be disclosed by itunder Rule 8.1(a) of the Code.Valiant will make an Opening Position Disclosure, setting out detailsrequired to be disclosed by it under Rule 8.2(a) of the Code.18. Expected TimetableFurther details of the Scheme will be contained in the Scheme Documentwhich is currently expected to be posted to Valiant Shareholders on oraround 12 March 2013, and in any event within 28 days of thisannouncement unless otherwise agreed with the Panel.Further details on the timetable for implementation of the Scheme willbe set out in the Scheme Document, which will also include the noticesof the Court Meeting and the General Meeting and specify the necessaryactions to be taken by Valiant Shareholders. It is currently expectedthat the Scheme Document will be posted on or around 12 March 2013 andthat the Court Meeting and General Meeting will be held on or around 2April 2013.If the Scheme does not become Effective by 1 September 2013, theAcquisition will lapse except where the approval of ValiantShareholders at the Court Meeting and General Meeting is obtainedbefore this date, in which case the longstop date for the Acquisitionmay be extended to such later date as Ithaca Bidco and Valiant mayagree and, if appropriate, the Court may approve.19. ConditionsThe Acquisition will be subject to the conditions and further terms setout in Appendix I and the full terms and conditions which will be setout in the Scheme Document. Prior approval for the Acquisition will berequired from certain government or regulatory bodies including, amongothers, the Secretary of State for Energy and Climate Change in the UK,the Norwegian Ministry of Petroleum and Energy and the NorwegianMinistry of Finance.In addition, as set out in Condition 3(j)(i) in Appendix I, theAcquisition will be conditional upon a Brent Failure Event not havingoccurred. Accordingly, if a Brent Failure Event does occur, IthacaBidco may, subject to the consent of the Panel, be entitled not toproceed with the Acquisition. The Ithaca Board believes that thecontinuing operation of the Brent System is of fundamental importanceto Valiant's Business. The Brent System failing to function or beingmaterially restricted will impact on Valiant Production and couldsignificantly reduce Valiant's cash flow.20. Overseas ShareholdersThe availability of the Ithaca Consideration Shares under the terms ofthe Acquisition to persons not resident in the United Kingdom may beprohibited or affected by the laws and regulations of the relevantjurisdictions. Such persons should inform themselves about and observeany applicable requirements. Further details in relation to OverseasShareholders will be contained in the Scheme Document.This announcement does not constitute an offer or invitation topurchase any securities.21. Documents on displayCopies of the following documents will be available on the websites ofIthaca and Valiant at, respectively, www.ithacaenergy.com andwww.valiant-petroleum.com by not later than 12 noon on 4 March 2013(being the Business Day following the date of this announcement):- the break fee agreement referred to at paragraph 6 above;- the irrevocable undertakings and letters of intent referred to atparagraph 7 above and summarised in Appendix III to this announcement;- the bridge credit facility referred to at paragraph 13 above;- the confidentiality agreement referred to at paragraph 16 above;and- the Co-operation Agreement referred to at paragraph 16 above.22. GeneralThe Acquisition will be made subject to the Conditions and on the termsset out in Appendix I to this announcement and on the further terms andConditions to be set out in the Scheme Document. The Scheme will begoverned by English law and subject to the applicable rules andregulations of the London Stock Exchange, the Panel and the FSA.The Conditions and certain further terms of the Acquisition are set outin Appendix I to this announcement. Appendix II sets out the sourcesand bases of certain financial and other information contained in thisannouncement. Appendix III contains details of the irrevocableundertakings and letters of intent given to Ithaca Bidco. Appendix IVcontains the definitions of certain terms used in this announcement.Enquiries:IthacaIain McKendrick,Chief Executive Officer +44 (0) 1224 650 261Graham Forbes, Chief Financial Officer +44 (0) 1224 652 151Cenkos Securities plc (Financial Adviser, Nominated Adviser and Brokerto Ithaca)Jon Fitzpatrick +44 (0) 207 397 8900Neil McDonald +44 (0) 131 220 6939Joe Nally (Corporate Broking) +44 (0) 207 397 8900FTI Consulting (Public Relations Adviser to Ithaca)Billy Clegg +44 (0) 207 269 7157Edward Westropp +44 (0) 207 269 7230Georgia Mann +44 (0) 207 269 7212ValiantKevin Lyon, Non-Executive Chairman +44 (0) 1483 755 666Michael Bonte-Friedheim, Acting Chief Executive Officer andNon-Executive DirectorMark Lewis, Chief Financial OfficerNick Ingrassia, Investor RelationsMorgan Stanley (Financial Adviser to Valiant)Ian Hart +44 (0) 207 425 8000Andrew FosterBrunswick Group (Public Relations Adviser to Valiant)Patrick Handley +44 (0) 207 404 5959Oriel Securities Limited (Nominated Adviser to Valiant)Michael Shaw +44 (0) 207 710 7600Jefferies Hoare Govett (Joint Broker to Valiant)Chris Zeal +44 (0) 207 029 8000Graham HertrichThis summary should be read in conjunction with the full text of thisannouncement. Appendix I to this announcement contains the conditionsto,and certain further terms of, the Acquisition. Appendix II to thisannouncement contains further details of the sources of information andbases of calculations set out in this announcement. Appendix IIIcontains a summary of the irrevocable undertakings and letters ofintent given by the Valiant Directors and by certain institutionalshareholders. Appendix IV contains definitions of certain expressionsused in this summary and in this announcement.The Acquisition will be made on the terms and subject to the conditionsand further terms set out herein and in Appendix I to this announcementand the further terms and conditions to be set out in the SchemeDocument and Forms of Proxy when issued. The bases and sources ofcertain financial information contained in this announcement are setout in Appendix II to this announcement. A summary of the irrevocableundertakings given by the Valiant Directors and the irrevocableundertakings and letters of intent given by certain other ValiantShareholders is contained in Appendix III to this announcement. Certainterms used in this announcement are defined in Appendix IV to thisannouncement.This announcement is not intended to and does not constitute, or formpart of, any offer to sell or subscribe for or an invitation topurchase or subscribe for any securities or the solicitation of anyvote or approval in any jurisdiction pursuant to the Acquisition orotherwise, nor shall there be any sale, issuance or transfer ofsecurities of Valiant or Ithaca in any jurisdiction in contravention ofapplicable law. This announcement does not constitute a prospectus or aprospectus equivalent document.Any vote by Valiant Shareholders in respect of the Acquisition shouldonly be made on the basis of the information contained in the SchemeDocument, which will contain the full terms and conditions of theAcquisition (including details of how to vote in favour of the Scheme).Valiant Shareholders are advised to read the formal documentation inrelation to the Acquisition which will be distributed to ValiantShareholders in due course (with the exception of certain ValiantShareholders in Restricted Jurisdictions), as it will contain importantinformation relating to the Acquisition.Please be aware that addresses, electronic addresses and certain otherinformation provided by Valiant Shareholders, persons with informationrights and other relevant persons in connection with the receipt ofcommunications from Valiant may be provided to Ithaca during the offerperiod as required under Section 4 of Appendix 4 of the Code.Cenkos, which is authorised and regulated in the United Kingdom by theFSA, is acting for Ithaca and Ithaca Bidco and no-one else inconnection with the Acquisition and will not be responsible to anyoneother than Ithaca and Ithaca Bidco for providing the protectionsafforded to clients of Cenkos nor for providing advice in relation tothe Acquisition. Neither Cenkos nor any of its subsidiaries, branchesor affiliates owes or accepts any duty, liability or responsibilitywhatsoever (whether direct or indirect, whether in contract, in tort,under statute or otherwise) to any person who is not a client of Cenkosin connection with this announcement, any statement contained herein orotherwise. In addition, in accordance with, and to the extent permittedby, the Code, normal UK market practice and Section 14(e) of, andRegulation 14E under, the US Securities Exchange Act of 1934, asamended (the "Exchange Act") subject to the exemptions provided by Rule14d-1 under the Exchange Act, Cenkos will continue to act as exemptprincipal traders in Valiant Shares and Ithaca Shares on the LondonStock Exchange and engage in certain other purchasing activitiesconsistent with their respective normal and usual practice andapplicable law.Scotia Capital Inc is acting for Ithaca and Ithaca Bidco and no-oneelse in connection with the Acquisition and will not be responsible toanyone other than Ithaca and Ithaca Bidco for providing the protectionsafforded to clients of Scotia Capital Inc nor for providing advice inrelation to the Acquisition. Neither Scotia Capital Inc nor any of itssubsidiaries, branches or affiliates owes or accepts any duty,liability or responsibility whatsoever (whether direct or indirect,whether in contract, in tort, under statute or otherwise) to any personwho is not a client of Scotia Capital Inc in connection with thisannouncement, any statement contained herein or otherwise.Morgan Stanley, which is authorised and regulated in the United Kingdomby the FSA, is acting for Valiant and no-one else in connection withthe Acquisition and will not be responsible to anyone other thanValiant for providing the protections afforded to clients of MorganStanley or for providing advice in relation to the Acquisition. NeitherMorgan Stanley nor any of its subsidiaries, branches or affiliates owesor accepts any duty, liability or responsibility whatsoever (whetherdirect or indirect, whether in contract, in tort, under statute orotherwise) to any person who is not a client of Morgan Stanley inconnection with this announcement, any statement contained herein orotherwise.Oriel, which is authorised and regulated in the United Kingdom by theFSA, is acting for Valiant and no-one else in connection with theAcquisition and will not be responsible to anyone other than Valiantfor providing the protections afforded to clients of Oriel nor forproviding advice in relation to the Acquisition. Neither Oriel nor anyof its subsidiaries, branches or affiliates owes or accepts any duty,liability or responsibility whatsoever (whether direct or indirect,whether in contract, in tort, under statute or otherwise) to any personwho is not a client of Oriel in connection with this announcement, anystatement contained herein or otherwise.Jefferies Hoare Govett, a division of Jefferies International Limited,which is authorised and regulated in the United Kingdom by the FSA, isacting for Valiant and no-one else in connection with the Acquisitionand will not be responsible to anyone other than Valiant for providingthe protections afforded to clients of Jefferies Hoare Govett or forproviding advice in relation to the Acquisition. Neither JefferiesHoare Govett nor any of its subsidiaries, branches or affiliates owesor accepts any duty, liability or responsibility whatsoever (whetherdirect or indirect, whether in contract, in tort, under statute orotherwise) to any person who is not a client of Jefferies Hoare Govettin connection with this announcement, any statement contained herein orotherwise.Overseas jurisdictionsThe availability of the Ithaca Consideration Shares in, and therelease, publication or distribution of this announcement in or into,jurisdictions other than the United Kingdom may be restricted by lawand therefore persons into whose possession this announcement comes whoare not resident in the United Kingdom should inform themselves about,and observe, any applicable restrictions. Valiant Shareholders who arein any doubt regarding such matters should consult an appropriateindependent adviser in the relevant jurisdiction without delay. Anyfailure to comply with such restrictions may constitute a violation ofthe securities laws of any such jurisdiction.This announcement has been prepared for the purposes of complying withEnglish law and the Code and the information disclosed may not be thesame as that which would have been disclosed if this announcement hadbeen prepared in accordance with the laws of jurisdictions outside theUnited Kingdom.The Acquisition relates to the shares of an English company (a "foreignprivate issuer" as defined under Rule 3b-4 under the Exchange Act) andis proposed to be made by means of a scheme of arrangement provided forunder, and governed by, English law. Neither the proxy solicitationrules nor the tender offer rules under the Exchange Act will apply tothe Scheme. Accordingly, the Ithaca Consideration Shares to be issuedpursuant to the Scheme have not been and will not be registered underthe US Securities Act of 1933 (as amended) (the "Securities Act") orunder the relevant securities laws of any state or territory or otherjurisdiction of the United States, but are expected to be offered inthe United States in reliance upon the exemption from the registrationrequirements of the Securities Act provided by Section 3(a)(10) thereofand exemptions provided under the laws of each state of the UnitedStates in which eligible Valiant Shareholders may reside.The Scheme will be subject to the disclosure requirements and practicesapplicable in the UK to schemes of arrangement, which differ from thedisclosure requirements of the US and Canadian proxy solicitation rulesand tender offer rules. However, if Ithaca Bidco were to elect (inaccordance with the condition in paragraph (a) of Part B of Appendix I)to implement the Acquisition by means of a Takeover Offer, such offerwill be made in compliance with the US and Canadian tender offer rules,to the extent applicable, or an exemption therefrom.Financial information included in this announcement and the SchemeDocument has been or will be prepared in accordance with accountingstandards applicable in the UK and may not be comparable to financialinformation of US and Canadian companies or companies whose financialstatements are prepared in accordance with generally acceptedaccounting principles in the United States and Canada.None of the securities referred to in this document have been approvedor disapproved by the US Securities and Exchange Commission, any statesecurities commission in the United States or any other US regulatoryauthority, nor have such authorities passed upon or determined theadequacy or accuracy of this document. Any representation to thecontrary is a criminal offence in the United States. This document doesnot constitute an offer to sell, or the solicitation of any offer tobuy, any Ithaca Consideration Shares in any jurisdiction in which suchan offer or solicitation would be unlawful.Valiant is incorporated under the laws of England and Wales, IthacaBidco is organised under the laws of Scotland, and Ithaca is organisedunder the laws of Alberta, Canada. Some or all of the officers anddirectors of Valiant, Ithaca Bidco and Ithaca may be residents ofcountries other than the United States. It may not be possible to sueValiant, Ithaca Bidco and Ithaca in a non-US court for violations of USsecurities laws. It may be difficult to compel Valiant, Ithaca Bidco,Ithaca and their respective affiliates to subject themselves to thejurisdiction and judgment of a US court.In accordance with normal UK practice and pursuant to Rule 14e-5(b) ofthe Exchange Act, Ithaca Bidco or its nominees, or its brokers (actingas agents), may from time to time make certain purchases of, orarrangements to purchase Valiant Shares outside of the United States,other than pursuant to the Acquisition, until the Effective Date,lapses or is otherwise withdrawn. These purchases may occur either inthe open market at prevailing prices or in private transactions atnegotiated prices. Any information about such purchases will bedisclosed as required in the UK, will be reported to the RegulatoryInformation Service of the London Stock Exchange and will be availableon the London Stock Exchange website athttp://www.londonstockexchange.com/exchange/news/market-news/market-news-home.html. This information will also be publicly disclosedin the United States to the extent that such information is made publicin the United Kingdom.The Ithaca Consideration Shares to be issued pursuant to the Schemehave not been and will not be registered under the relevant securitieslaws of Japan and the relevant clearances have not been, and will notbe, obtained from the securities commission or similar regulatoryauthority of any province or territory of Canada or Australia.Accordingly, the Ithaca Consideration Shares are not being, and may notbe, offered, sold, resold, delivered or distributed, directly orindirectly in or into the Canada, Australia or Japan or any otherjurisdiction if to do so would constitute a violation of relevant lawsof, or require registration thereof in, such jurisdiction (exceptpursuant to an exemption, if available, from any applicableregistration or prospectus requirements or otherwise in compliance withall applicable laws). No prospectus in relation to the IthacaConsideration Shares has been, or will be, lodged or filed with, orregistered by, the securities commission or similar regulatoryauthority of any province or territory of Canada or the AustralianSecurities and Investments Commission.The Ithaca Consideration Shares to be issued pursuant to the Schemewill be issued in reliance upon exemptions from the prospectusrequirements of securities legislation in each province and territoryof Canada. Subject to certain disclosure and regulatory requirementsand to customary restrictions applicable to distributions of sharesthat constitute "control distributions", Ithaca Consideration Sharesmay be resold in each province and territory in Canada, subject incertain circumstances, to the usual conditions that no unusual efforthas been made to prepare the market or to create demand, noextraordinary commission or consideration is paid and, if the sellingshareholder is an insider or officer of Ithaca, such shareholder has noreasonable grounds to believe that Ithaca is in default of securitieslegislation.Forward-looking statementsForward-looking statements include statements regarding the intent,belief and current expectations of Ithaca, Ithaca Bidco and Valiant ortheir directors or officers with respect to various matters. When usedin this announcement, the words "anticipate", "continue","estimate","expect", "may", "will", "project", "plan", "should","believe","could", "target" and similar expressions, and the negativesthereof,whether used in connection with operational activities, productionforecasts, budgetary figures contained in this announcement orotherwise, are intended to identify forward-looking statements.This announcement contains certain forward-looking statements which arebased on internal expectations, estimates, projections and beliefs,including assumptions regarding Ithaca Bidco's and Valiant's plans,objectives and expected performance. Such statements relate to eventsand depend on circumstances that will occur in the future and aresubject to risks, uncertainties and assumptions. There are a number offactors which could cause actual results and developments to differmaterially from those expressed or implied by such forward-lookingstatements including, among others, the enactment of legislation orregulation that may impose costs or restrict activities; there-negotiation of contracts or licences; fluctuations in demand andpricing in the oil and gas industry; fluctuations in exchange controls;changes in government policy and taxation; industrial disputes; war andterrorism. These forward-looking statements speak only as at the dateof this announcement.In the view of Ithaca's, Ithaca Bidco's and Valiant's management, thisinformation was prepared by management on a reasonable basis, reflectsthe best currently available estimates and judgements, and presents, tothe best of management's knowledge and belief, the expected course ofaction and the expected future performance of Ithaca, Ithaca Bidco andValiant. However, this information is not fact and should not be reliedupon as being necessarily indicative of future results, and recipientsof this announcement are cautioned not to place undue reliance on thisinformation. Ithaca, Ithaca Bidco and Valiant do not undertake anyobligation to publicly update or revise any forward-looking statementor information, except as required by applicable laws.Statements relating to reserves are deemed to be forward-lookingstatements, as they involve the implied assessment, based on certainestimates and assumptions, that the reserves described can beprofitably produced in the future. Many of these risk factors, otherspecific risks, uncertainties and material assumptions are discussed infurther detail throughout Ithaca's annual information form andmanagement's discussion and analysis for the year ended 31 December2011. Readers are specifically referred to the risk factors describedin the annual information form under "Risk Factors" and in otherdocuments Ithaca files from time to time with securities regulatoryauthorities. Copies of these documents are available without chargefrom Ithaca or electronically on the internet on Ithaca's SEDAR profileat www.sedar.com.No statement in this announcement is intended as a profit forecast orprofit estimate and no statement in this announcement should beinterpreted to mean that the future earnings per share of the IthacaGroup as enlarged by the Acquisition, Ithaca and/or Valiant for currentor future financial years will necessarily match or exceed thehistorical or published earnings per share of Ithaca or Valiant.BOE PresentationReferences herein to "boe" mean barrels of oil equivalent derived byconverting gas to oil in the ratio of six thousand cubic feet (Mcf) ofgas to one barrel (bbl) of oil. Boe may be misleading, particularly ifused in isolation. A boe conversion ratio of 6 Mcf: 1 bbl is based onan energy conversion method primarily applicable at the burner tip anddoes not represent a value equivalency at the wellhead.Note regarding oil and gas disclosure(1)With respect to Ithaca's reserves, the figures are derived from areport prepared by Sproule International Limited ("Sproule"), anindependent qualified reserves evaluator, evaluating the reserves ofIthaca as of 31 December 2011 and forming the basis for the Statementof Reserves Data and Other Oil and Gas Information of Ithaca dated 28March 2012 (the "Statement"). The reserves for the South West HeatherField included in the Statement are those estimated by Ithaca andreviewed by Sproule. In respect of the MacCulloch field only(representing 1.4 MMboe proved plus probable reserves as at the sameeffective date, with Ithaca's previously announced acquisition of suchfield interest anticipated to be completed in Q1-2013), Ithacamanagement prepared information reviewed by a qualified person underAIM guidelines. With respect to Valiant reserves, the figures arederived from an Audit of Certain Reserves as at 31 December 2012prepared by RPS Energy Consultants Limited, an independent qualifiedreserves evaluator, dated 24 January 2013. The reserves estimates ofIthaca are based on the Canadian Oil and Gas Evaluation Handbook("COGEH") pursuant to Canadian National Instrument 51-101 Standards ofDisclosure for Oil and Gas Activities. The reserves estimates ofValiant are based on the 2007 SPE/AAPG/WPC/SPEE Petroleum ResourceManagement System which is not materially different from COGEH. TheIthaca reserves correspond to those in the Statement adjusted toreflect the increased Carna and Cook field equities acquired followingthe date of issue of the Statement and Ithaca management's estimate ofMacCulloch field reserves. The Valiant reserves have been adjusted toreflect the increased Fionn field interest being transferred to Valiantby Antrim Resources (N.I.) Limited.Disclosure requirements of the Takeover Code (the "Code")Under Rule 8.3(a) of the Code, any person who is interested in 1% ormore of any class of relevant securities of Valiant or of any paperofferor (being any offeror other than an offeror in respect of which ithas been announced that its offer is, or is likely to be, solely incash) must make an Opening Position Disclosure following thecommencement of the offer period and, if later, following theannouncement in which any paper offeror is first identified.An Opening Position Disclosure must contain details of the person'sinterests and short positions in, and rights to subscribe for, anyrelevant securities of each of (i) Valiant; and (ii) any paperofferor(s).An Opening Position Disclosure by a person to whom Rule 8.3(a) appliesmust be made by no later than 3.30 pm (London time) on the 10thBusiness Day following the commencement of the offer period and, ifappropriate, by no later than 3.30 pm (London time) on the 10thBusiness Day following the announcement in which any paper offeror isfirst identified. Relevant persons who deal in the relevant securitiesof Valiant or of a paper offeror prior to the deadline for making anOpening Position Disclosure must instead make a Dealing Disclosure.Under Rule 8.3(b) of the Code, any person who is, or becomes,interested in 1% or more of any class of relevant securities of Valiantor of any paper offeror must make a Dealing Disclosure if the persondeals in any relevant securities of Valiant or of any paper offeror. ADealing Disclosure must contain details of the dealing concerned and ofthe person's interests and short positions in, and rights to subscribefor, any relevant securities of each of (i) Valiant; and (ii) any paperofferor, save to the extent that these details have previously beendisclosed under Rule 8.A Dealing Disclosure by a person to whom Rule 8.3(b) applies must bemade by no later than 3.30 pm (London time) on the Business Dayfollowing the date of the relevant dealing.If two or more persons act together pursuant to an agreement orunderstanding, whether formal or informal, to acquire or control aninterest in relevant securities of Valiant or a paper offeror, theywill be deemed to be a single person for the purpose of Rule 8.3.Opening Position Disclosures must also be made by Valiant and by anyofferor and Dealing Disclosures must also be made by Valiant, by anyofferor and by any persons acting in concert with any of them (seeRules 8.1, 8.2 and 8.4).Details of the offeree and offeror companies in respect of whoserelevant securities Opening Position Disclosures and DealingDisclosures must be made can be found in the Disclosure Table on theTakeover Panel's website at www.thetakeoverpanel.org.uk, includingdetails of the number of relevant securities in issue, when the offerperiod commenced and when any offeror was first identified. If you arein any doubt as to whether you are required to make an Opening PositionDisclosure or a Dealing Disclosure, you should contact the Panel'sMarket Surveillance Unit on +44 (0)20 7638 0129.Publication of this announcementA copy of this announcement will be made available, free of chargesubject to certain restrictions relating to persons resident inRestricted Jurisdictions, at www.ithacaenergy.com andwww.valiant-petroleum.com by no later than 12 noon (London time) on theBusiness Day following the date of this announcement.Neither the content of any website referred to in this announcement northe content of any website accessible from hyperlinks on Ithaca orValiant's website (or any other website) is incorporated into, or formspart of, this announcement.Rule 2.10 DisclosureIn accordance with Rule 2.10 of the Code, Ithaca confirms that it has259,953,336 Ithaca Shares (without par value) in issue and listed onthe Toronto Stock Exchange and admitted to trading on AIM under ISINCA4656761042. APPENDIX ICONDITIONS AND FURTHER TERMS OF THE SCHEME AND THE ACQUISITIONPART A: Conditions of the Acquisition1. The Acquisition will be conditional upon the Schemebecoming unconditional and becoming Effective by not later than 1September 2013, or such later date (if any) as Ithaca Bidco and Valiantmay, with the consent of the Panel (if required), agree and (ifrequired) the Court may allow.2. The Scheme will be conditional upon:(a) (i) its approval by a majority in number, representing75% or more in value, of Scheme Shareholders present, entitled to voteand voting, either in person or by proxy, at the Court Meeting (or atany adjournment of such meeting); and (ii) such Court Meeting beingheld on or before the date that is the twenty-second day after theexpected date of the Court Meeting to be set out in the Scheme Document(or such later date as may be agreed by Ithaca Bidco and Valiant);(b) (i) the special resolution required to approve andimplement the Scheme (including, without limitation, to amend Valiant'sarticles of association) being duly passed by the requisite majority ofValiant Shareholders at the General Meeting (or at any adjournment ofsuch meeting); and (ii)such General Meeting being held on or before thedate that is the twenty-second day after the expected date of theGeneral Meeting to be set out in the Scheme Document (or such laterdate as may be agreed by Ithaca Bidco and Valiant);(c) the sanction of the Scheme and the confirmation of theCapital Reduction by the Court being obtained (in both cases with orwithout modification, any such modification being on terms acceptableto Valiant and Ithaca Bidco); and(d) the delivery of office copies of the Court Order(s) andthe requisite statement of capital to the Registrar of Companies and,if so ordered by the Court, the registration of the Court Order(s) andsuch statement of capital by the Registrar of Companies.3. In addition, Ithaca Bidco and Valiant have agreed thatthe Acquisition is also conditional on the following conditions havingbeen satisfied or, where applicable, waived and accordingly thenecessary actions to make the Scheme Effective will not be taken unlesssuch conditions have been so satisfied or waived:(a) the London Stock Exchange having acknowledged to Ithacaor its agent (and such acknowledgement not having been withdrawn) thatthe Ithaca Consideration Shares will be admitted to trading on AIM;(b) the Toronto Stock Exchange having confirmed acceptanceof the listing of the Ithaca Consideration Shares on the Toronto StockExchange (and such acceptance not having been withdrawn), subject onlyto the satisfaction of customary conditions of the Toronto StockExchange;(c) without prejudice to Conditions 3(e) or 3(f) below,Ithaca Bidco having obtained the consent of the Norwegian Ministry ofPetroleum and Energy and the Norwegian Ministry of Finance to thechange of control of the relevant Licensee or its ultimate holdingcompany in accordance with the applicable laws and regulations of thatterritory;(d) without prejudice to Conditions 3(e) or 3(f) below, theSecretary of State for Energy and Climate Change not having indicatedan intention to: (i) revoke or recommend the revocation of anyexploration or production licence held by any member of the WiderValiant Group (as defined below); or (ii) require a further change ofcontrol of any such member as a result of the Scheme becomingEffective;(e) no government or governmental, quasi-governmental,supranational, statutory, administrative or regulatory body, authority,court, trade agency, association, institution, environmental body orany other person or body in any jurisdiction (each a "RelevantAuthority") having decided to take, instituted, implemented orthreatened any action, proceedings, suit, investigation, enquiry orreference, or made, proposed or enacted any statute, regulation, orderor decision or taken any other steps and there not continuing to beoutstanding any statute, regulation, order or decision, which would ormight:(i) make the Acquisition or the acquisition of any ValiantShares, or control of Valiant or any member of the Valiant Group, byIthaca or any member of the Ithaca Group void, illegal and/orunenforceable under the laws of any jurisdiction or otherwisematerially restrict, restrain, prohibit, delay or interfere with theimplementation thereof, or impose material additional conditions orobligations with respect thereto, or require material amendment thereofor otherwise challenge or interfere therewith in any such case in amanner which is material in the context of the Acquisition;(ii) require or prevent the divestiture by any member of theValiant Group or any company of which 20% or more of the voting capitalis held by any member of the Valiant Group or any partnership, jointventure, firm or company in which any member of the Valiant Group maybe interested (the "Wider Valiant Group") or by any member of theIthaca Group or any company of which 20% or more of the voting capitalis held by any member of the Ithaca Group or any partnership, jointventure, firm or company in which any member of the Ithaca Group may beinterested (the "Wider Ithaca Group") of all or a material portion oftheir respective Businesses, assets or property or impose any materiallimitation on the ability of any of them to conduct their respectiveBusinesses or own any of their material assets or property in any suchcase in a manner which is material in the context of the Acquisition;(iii) impose any limitation on or result in a delay in theability of any member of the Wider Valiant Group or the Wider IthacaGroup to acquire or to hold or to exercise effectively any rights ofownership of shares or loans or securities convertible into shares inany member of the Wider Valiant Group or of the Wider Ithaca Group heldor owned by it, or to exercise management control over any member ofthe Wider Valiant Group or of the Wider Ithaca Group to an extent whichismaterial in the context of the Valiant Group taken as a whole or, asthe case may be, the Ithaca Group taken as a whole;(iv) impose any limitation on the ability of any member of theWider Ithaca Group or any member of the Wider Valiant Group to conduct,integrate or co-ordinate all or any part of their respective Businesseswith all or any part of the Business of any other member of the WiderIthaca Group and/or the Wider Valiant Group in a manner which ismaterial in the context of the Acquisition;(v) prevent any member of the Wider Ithaca Group or the WiderValiant Group from operating all or any part of their Businesses in anyjurisdiction in which it currently does so to an extent which ismaterial in the context of the Acquisition;(vi) require any member of the Wider Ithaca Group or the WiderValiant Group to acquire or offer to acquire any shares or othersecurities (or the equivalent) in any member of the Wider Valiant Groupor any asset owned by any third party where such acquisition would bematerial in the context of the Acquisition; or(vii) otherwise adversely affect the assets, Business, profits,financial or trading position or prospects of any member of the WiderIthaca Group or of any member of the Wider Valiant Group in a mannerwhich is material in the context of the Acquisition;and all applicable waiting and other time periods (including anyextensions thereof) during which any such Relevant Authority coulddecide to take, institute, implement or threaten any such action,proceeding, suit, investigation, enquiry or reference or take any otherstep under the laws of any jurisdiction in respect of the Acquisitionor the acquisition of any Valiant Shares or otherwise intervene havingexpired, lapsed or been terminated;(f) all notifications, filings and applications which arereasonably necessary having been made, all applicable waiting periods(including any extensions thereof) under any applicable legislation orregulations of any jurisdiction having expired, lapsed or beenterminated, in each case in respect of the Acquisition and theacquisition of any Valiant Shares, or of control of Valiant, by IthacaBidco, and all authorisations, orders, recognitions, grants, consents,licences, confirmations, clearances, permissions and approvals("Authorisations") which are reasonably necessary or appropriate in anyjurisdiction for, or in respect of, the Acquisition and the proposedacquisition of any Valiant Shares, or of control of Valiant, by IthacaBidco and to carry on the Business of any member of the Wider IthacaGroup or of the Wider Valiant Group having been obtained, in terms andin a form satisfactory to Ithaca Bidco, from all appropriate RelevantAuthorities or (without prejudice to the generality of the foregoing)from any persons or bodies with whom any member of the Wider IthacaGroup or the Wider Valiant Group has entered into contractualarrangements and all such Authorisations remaining in full force andeffect as at the Effective Date and there being no intention orproposal to revoke, suspend or modify or not to renew any of the sameand all necessary statutory or regulatory obligations in anyjurisdiction having been complied with;(g) no temporary restraining order, preliminary orpermanent injunction, preliminary or permanent enjoinment, or otherorder threatened or issued and being in effect by a Relevant Authoritywhich has the effect of making the Acquisition or any acquisition orproposed acquisition of any Valiant Shares or control or management of,any member of the Wider Valiant Group by any member of the Wider IthacaGroup, or the implementation of either of them, void, voidable, illegaland/or unenforceable under the laws of any relevant jurisdiction, orotherwise directly or indirectly prohibiting, preventing, restraining,restricting, delaying or otherwise interfering with the consummation orthe approval of the Acquisition or any matter arising from the proposedacquisition of any Valiant Shares, or control or management of, anymember of the Wider Valiant Group by any member of the Wider IthacaGroup, in a manner which is material in the context of the Acquisition;(h) except as publicly announced by Valiant prior to thedate of this announcement (by the delivery of an announcement to aRegulatory Information Service), there being no provision of anyarrangement, agreement, licence, permit, franchise, lease, or otherinstrument to which any member of the Wider Valiant Group is a party orby or to which any such member or any of their assets is or may bebound, entitled or be subject to and which, in consequence of theAcquisition or the acquisition or proposed acquisition of any ValiantShares, or because of a change in the control of Valiant by IthacaBidco or otherwise would or might, to an extent which is material inthe context of the Acquisition, result in:(i) any monies borrowed by, or other indebtedness (actual orcontingent) of, or grant available to, any member of the Wider ValiantGroup being or becoming repayable or being capable of being declaredimmediately repayable or prior to its or their stated maturity or theability of any such member to borrow monies or incur any indebtednessbeing withdrawn or inhibited or becoming capable of being withdrawn orinhibited;(ii) the creation or enforcement of any mortgage, charge orother security interest over the whole or any part of the Business,property or assets of any member of the Wider Valiant Group or any suchsecurity (whenever arising or having arisen) being enforced or becomingenforceable;(iii) any such arrangement, agreement, licence, permit orinstrument of any member of the Wider Valiant Group being terminated oradversely modified or any obligation or liability arising or any actionbeing taken of an adverse nature thereunder;(iv) any assets of any member of the Wider Valiant Group beingdisposed of or charged, or any right arising under which any such assetcould be required to be disposed of or charged, other than in theordinary course of Business;(v) the rights, liabilities, obligations, interests orBusiness of any member of the Wider Valiant Group in or with any firmor body or person, or any agreements or arrangements relating to suchinterest or Business, being terminated or adversely modified oraffected;(vi) any member of the Wider Valiant Group ceasing to be ableto carry on Business under any name under which it presently does so;(vii) the creation or acceleration of any liabilities (actual orcontingent) by any member of the Wider Valiant Group;(viii) except as agreed between Ithaca or Ithaca Bidco andValiant, any liability of any member of the Wider Valiant Group to makeany severance, termination, bonus or other payment to any of itsdirectors or officers; or(ix) the Business, assets, profits, financial or tradingposition of any member of the Wider Valiant Group being prejudiced oradversely affected;(i) except as publicly announced by Valiant prior to thedate of this announcement (by the delivery of an announcement to aRegulatory Information Service), no member of the Wider Valiant Grouphaving, since 30 June 2012:(i) issued, or agreed to issue or proposed the issue ofadditional shares or securities of any class, or securities convertibleinto, or exchangeable for or rights, warrants or options to subscribefor or acquire, any such shares, securities or convertible securities(save as between Valiant and wholly-owned subsidiaries of Valiant andsave for options granted, and for any Valiant Shares allotted uponexercise of options granted under the Valiant Share Schemes before thedate of this announcement in the ordinary course of Business or asagreed between Ithaca or Ithaca Bidco and Valiant), or redeemed,purchased or reduced any part of its share capital;(ii) recommended, declared, paid or made or proposed torecommend, declare, pay or make any bonus, dividend or otherdistribution (whether payable in cash or otherwise) other than toValiant or a wholly-owned subsidiary of Valiant;(iii) agreed, authorised, proposed or announced its intentionto propose any material change in its share or loan capital or mergeror demerger or acquisition or disposal of assets (other than in theordinary course of trading) or shares, other than as disclosed toIthaca and Ithaca Bidco in connection with the Valiant Groupintra-group reorganisation completed in December 2012;(iv) issued, authorised or proposed the issue of anydebentures, or incurred any indebtedness or contingent liability whichis material in the context of the Acquisition;(v) acquired or disposed of or transferred, mortgaged, chargedor encumbered any asset or any right, title or interest in any asset(other than in the ordinary course of trading) in a manner which ismaterial in the context of the Acquisition;(vi) entered into or varied or announced its intention to enterinto or vary any contract, arrangement or commitment (whether inrespect of capital expenditure or otherwise) which is of a long-term orunusual nature or involves or could involve an obligation of a natureor magnitude, which in any such case is material in the context of theAcquisition;(vii) entered into or proposed or announced its intention toenter into any reconstruction, amalgamation, scheme, transaction orarrangement (otherwise than in the ordinary course of Business) whichis material in the context of the Acquisition;(viii) made any amendment to its articles of association or otherconstitutional documents, except as required in the context of theScheme;(ix) entered into any licence or other disposal of intellectualproperty rights of any such member which are material in the context ofthe Acquisition;(x) taken any action nor having had any steps taken or legalproceedings started or threatened against it for its winding-up(voluntarily or otherwise) or dissolution or striking-off or for it toenter into any arrangement or composition for the benefit of itscreditors, or for the appointment of a receiver, administrator, trusteeor similar officer of all or any of its assets or revenues (or anyanalogous proceedings or appointment in any overseas jurisdiction);(xi) been unable, or admitted in writing that it is unable, topay its debts or having stopped or suspended (or threatened to stop orsuspend) payment of its debts generally or ceased or threatened tocease carrying on all or a substantial part of its Business;(xii) entered into or varied or made any offer to enter into orvary the terms of any service agreement or arrangement with any of thedirectors of Valiant, save in respect of the amendments to the terms ofthe service agreements of Michael Bonte-Friedheim (on 12 December2012), Kevin Lyon (on 27 November 2012), and Peter Buchanan (on 2November 2012);(xiii) proposed, agreed to provide or modified the terms of anyshare option scheme, incentive agreement, pension scheme obligations orother benefit relating to employment or termination of employment ofany employee of the Wider Valiant Group, except as agreed pursuant tothe Co-operation Agreement;(xiv) waived, compromised or settled any claim which is materialin the context of the Acquisition; or(xv) entered into or made an offer (which remains open foracceptance) to enter into any agreement, arrangement or commitment orpassed any resolution with respect to any of the transactions or eventsreferred to in this Condition 3(i);(j) since 30 June 2012, except as publicly announced byValiant prior to the date of this announcement (by the delivery of anannouncement to a Regulatory Information Service):(i) there having been no adverse change in the Business,assets, financial or trading position or profits or prospects of anymember of the Wider Valiant Group which in any such case is material inthe context of the Acquisition (a "Material Adverse Change"). It isagreed between Ithaca Bidco and Valiant that the occurrence of a BrentFailure Event shall constitute a Material Adverse Changenotwithstanding any public announcement by Valiant prior to the date ofthis announcement or any other Condition;(ii) no litigation, arbitration proceedings, prosecution orother legal proceedings having been instituted, announced or threatenedby or against or remaining outstanding in respect of any member of theWider Valiant Group (whether as claimant, defendant or otherwise) whichin any such case is material in the context of the Acquisition;(iii) no enquiry, review or investigation by or complaint orreference to any Relevant Authority against or in respect of any memberof the Wider Valiant Group having been threatened, announced orinstituted or remaining outstanding which in any such case is materialin the context of the Acquisition;(iv) no steps having been taken and no omissions having beenmade which would or might result in the withdrawal, cancellation,termination or adverse modification of any licence or insurance policyheld by any member of the Wider Valiant Group which is necessary forthe proper carrying on of its Business which in any such case ismaterial in the context of the Acquisition;(v) no contingent or other liability having arisen, increasedor been incurred which might reasonably be expected to adversely affectany member of the Valiant Group in a manner which is material in thecontext of the Acquisition; and(k) save as publicly announced by Valiant prior to the dateof this announcement (by the delivery of an announcement to aRegulatory Information Service), Ithaca and Ithaca Bidco not havingdiscovered that:(i) the financial, Business or other information concerningthe Wider Valiant Group which has been disclosed at any time by or onbehalf of any member of the Wider Valiant Group whether publicly (bythe delivery of an announcement to a Regulatory Information Service) orto Ithaca Bidco or its professional advisers, either contains amaterial misrepresentation of fact or omits to state a fact necessaryto make the information contained therein not materially misleading inany such case in a manner which is material in the context of theAcquisition;(ii) any member of the Wider Valiant Group is subject to anyliability, contingent or otherwise, which is not disclosed in theannual report and accounts of Valiant for the financial year ended 31December 2011 or in the interim report for the six months ended 30 June2012 and which is material in the context of the Acquisition;(iii) any past or present member of the Wider Valiant Group hasnot complied with all applicable legislation or regulations of anyjurisdiction or any notice or requirement of any Relevant Authoritywith regard to the storage, disposal, discharge, spillage, leak oremission of any waste or hazardous substance or any substance likely toimpair the environment or harm human health which non-compliance wouldbe likely to give rise to any liability (whether actual or contingent)on the part of any member of the Wider Valiant Group which is materialin the context of the Acquisition;(iv) there has been a disposal, spillage, emission, dischargeor leak of waste or hazardous substance or any substance likely toimpair the environment or harm human health on, or from, any land orother asset now or previously owned, occupied or made use of by anypast or present member of the Wider Valiant Group, or in which any suchmember may now or previously have had an interest, which would belikely to give rise to any liability (whether actual or contingent) onthe part of any member of the Wider Valiant Group in any such case in amanner which is material in the context of the Acquisition;(v) there is or is likely to be any material obligation orliability (whether actual or contingent) to make good, remediate,repair, reinstate or clean up any property or asset now or previouslyowned, occupied or made use of by any past or present member of theWider Valiant Group or in which any such member may now or previouslyhave had an interest under any environmental legislation or regulationor notice, circular or order of any Relevant Authority in anyjurisdiction in any such case in a manner which is material in thecontext of the Acquisition, other than any obligation or liabilitywhich is not disclosed in the annual report and accounts of Valiant forthe financial year ended 31 December 2011 or in the interim report ofValiant for the six months ended 30 June 2012, relating to anyliability under Part IV of the Petroleum Act 1998 for an asset owned orformerly owned by the Wider Valiant Group;(vi) circumstances exist (whether as a result of theAcquisition or otherwise) which would be reasonably likely to lead toany Relevant Authority instituting, or whereby any member of the WiderIthaca Group or any present or past member of the Wider Valiant Groupwould be likely to be required to institute, an environmental audit ortake any other steps which would in any such case be reasonably likelyto result in any liability (whether actual or contingent) to improve,modify existing or install new plant, machinery or equipment or carryout changes in the processes currently carried out or make good,remediate, repair, re-instate, decommission or clean up any land orother asset currently or previously owned, occupied, operated or madeuse of or controlled by any past or present member of the Wider ValiantGroup (or on its behalf) or by any person for which a member of theWider Valiant Group is or has been responsible, or in which any suchmember may have or previously has had or is deemed to have had aninterest, in any such case which is material in the context of theAcquisition;(vii) circumstances exist whereby a person or class of personswould be likely to have any claim or claims in respect of any productor process of manufacture or materials used therein now or previouslymanufactured, sold or carried out by any past or present member of theWider Valiant Group, which claim or claims would be likely to affectadversely any member of the Wider Valiant Group to an extent which ismaterial in the context of the Acquisition;(viii) there are no adequate procedures in place to preventpersons associated with Valiant from engaging in any activity, practiceor conduct which would constitute an offence under the Bribery Act 2010or any other applicable anti-corruption legislation; and(ix) any asset of any member of the Wider Valiant Groupconstitutes criminal property as defined in section 340(3) of theProceeds of Crime Act 2002 (but disregarding paragraph (b) of thatdefinition) to an extent which is material in the context of theAcquisition.Conditions 3(c) to (k) inclusive must be fulfilled, be determined byIthaca Bidco to be or remain satisfied or (if capable of waiver) bewaived by Ithaca Bidco by 11.59 p.m. on the date immediately precedingthe Court Hearing, failing which the Scheme shall lapse.To the extent permitted by law and subject to the requirements of thePanel, Ithaca Bidco reserves the right to waive all or any ofConditions 3(c) to (k), in whole or in part. Ithaca Bidco shall beunder no obligation to waive or treat as fulfilled any of Conditions 3(c) to (k) by a date earlier than the date specified above in Condition1 for the fulfilment thereof notwithstanding that the other Conditionsof the Acquisition may at such earlier date have been waived orfulfilled and that there are at such earlier date no circumstancesindicating that any of such Conditions may not be capable offulfilment.Save with the consent of the Panel, the Scheme will not proceed if theEuropean Commission either initiates proceedings under Article 6(1)(c)of Council Regulation (EEC) 4064/89 (the "Regulation") or makes areferral to a competent authority of the United Kingdom under Article 9(1) of the Regulation and there is then a reference to the CompetitionCommission or there is a reference to the Competition Commission beforethe date of the Court Meeting. In such event, neither Valiant, IthacaBidco nor any Valiant Shareholder will be bound by any term of theScheme.PART BCertain further terms of the Acquisition(a) Ithaca Bidco reserves the right to elect, with theconsent of the Valiant Board (save that Ithaca Bidco need not obtainthe consent of the Valiant Board if the election is made within tendays of the date a firm intention to announce an offer for the entireissued and to be issued share capital of Valiant is announced by athird party), to implement the Acquisition by way of a Takeover Offer.In such event, such offer will (unless otherwise determined by IthacaBidco and subject to the consent of the Panel) be effected on the sameterms and conditions subject to appropriate amendments to reflect thechange in method of effecting the Acquisition, which may includechanging the consideration structure under the terms of the Acquisitionand (without limitation and subject to the consent of the Panel) anacceptance condition set at 90% (or such lesser percentage, being morethan 50% as Ithaca Bidco may decide), of the voting rights thenexercisable at a general meeting of Valiant, including, for thispurpose, any such voting rights attaching to Valiant Shares that areunconditionally allotted or issued, and to any Treasury Shares whichare unconditionally transferred or sold by Valiant, before the TakeoverOffer becomes or is declared unconditional as to acceptances, whetherpursuant to the exercise of any outstanding subscription or conversionrights or otherwise.(b) If Ithaca Bidco is required by the Panel to make anoffer for Valiant Shares under the provisions of Rule 9 of the Code,Ithaca Bidco may make such alterations to any of the above conditionsas are necessary to comply with the provisions of that Rule.(c) The Acquisition and the Scheme and any dispute orclaim arising out of, or in connection with, them (whether contractualor non-contractual in nature) will be governed by English law and willbe subject to the exclusive jurisdiction of the Courts of England.(d) Save to the extent cancelled pursuant to the Scheme,the Valiant Shares will be acquired under the Acquisition fully paidand free from all liens, charges and encumbrances, rights ofpre-emption and any other third party rights of any nature whatsoeverand together with all rights attaching thereto, including the right toreceive and retain all dividends and other distributions declared, paidor made after the date of this announcement. If any dividend or otherdistribution or return of capital is proposed, declared, made, paid orbecomes payable by Valiant in respect of a Valiant Share on or afterthe date of this announcement and prior to the Scheme becomingEffective, Ithaca Bidco reserves the right to reduce the value of theconsideration payable for each Valiant Share under the Acquisition byup to the amount per Valiant Share of such dividend, distribution orreturn of capital except where the Valiant Share is or will be acquiredpursuant to the Acquisition on a basis which entitled Ithaca Bidco toreceive the dividend and/or distribution and/or return of capital andto retain it.(e) The availability of the Ithaca Consideration Shares topersons not resident in the United Kingdom may be affected by the lawsof the relevant jurisdictions. Persons who are not resident in theUnited Kingdom should inform themselves about and observe anyapplicable requirements.(f) The Ithaca Consideration Shares to be issued under theScheme will be issued credited as fully paid and will rank equally inall respects with the existing Ithaca Shares, including the right toreceive in full all dividends and other distributions, if any,declared, made or paid by reference to a record date falling after theEffective Date.(g) Fractions of Ithaca Consideration Shares will not beallotted to Valiant Shareholders pursuant to the Acquisition. However,the entitlements of Valiant Shareholders will be rounded up or down(with 0.5 of an Ithaca Consideration Share being rounded up) to thenearest whole number of Ithaca Consideration Shares. APPENDIX II SOURCES OF INFORMATION AND BASES OF CALCULATIONIn this announcement:(a) as at the close of Business on 28 February 2013, beingthe last Business Day prior to the date of this announcement, Ithacahad in issue 259,953,336 Ithaca Shares and Valiant had in issue40,945,225 Valiant Shares. The ISIN for Ithaca Shares is CA4656761042and for Valiant Shares is GB00B2NJD643;(b) the value placed on the issued and to be issued sharecapital of Valiant (approximately GBP203 million) is based on 40,945,225Valiant Shares in issue on 28 February 2013, being the last BusinessDay prior to the date of this announcement, and options being exercisedprior to the Scheme Record Time, together with LTIP shares to beissued, in respect of a further 1,919,149 new Valiant Shares;(c) the closing share price of Ithaca Shares of C$1.97(126 pence) on 28 February 2013, being the last Business Day prior tothe date of this announcement, is derived from Bloomberg;(d) the closing share price of Valiant Shares of 346.5pence on 28 February 2013, being the last Business Day prior to thedate of this announcement, is derived from Bloomberg;(e) unless otherwise stated, the financial informationrelating to Valiant is extracted or derived from the annual report andaccounts of Valiant for the financial year ended 31 December 2011 andthe interim report of Valiant for the six months ended 30 June 2012(without any adjustment);(f) unless otherwise stated, the financial informationrelating to Ithaca is extracted or derived from the annual report andaccounts of Ithaca for the financial year ended 31 December 2011(without any adjustment);(g) the exchange rate between Canadian Dollars and UKSterling of 1.5620 at 5.00 p.m. on 28 February 2013, being the lastBusiness Day prior to the date of this announcement, is derived fromBloomberg; and(h) the exchange rate between US Dollars and UK Sterling of1.5188 at 5.00 p.m. on 28 February 2013, being the last Business Dayprior to the date of this announcement, is derived from Bloomberg. APPENDIX III IRREVOCABLE UNDERTAKINGS AND LETTERS OF INTENTDetails of irrevocable undertakingsIthaca Bidco has received irrevocable undertakings to vote in favour ofthe Scheme and the resolutions at the Court Meeting and the GeneralMeeting in respect of a total of 2,537,695 Valiant Shares,representing, in aggregate, approximately 6.20% of Valiant's existingissued share capital, comprised as follows:(a) from the Valiant Directors in respect of their entirebeneficial holdings. Those holdings amount to 433,695 Valiant Shares,representing, in aggregate, approximately 1.06% of the existing issuedshare capital of Valiant. These irrevocable undertakings do not lapsein the event of a higher competing offer being made for Valiant; and(b) from Artemis Investment Management LLP in respect of itsentire holding of 2,104,000 Valiant Shares, representing approximately5.14% of the existing issued share capital of Valiant. This undertakingwill cease to be binding if a third party makes a proposal to acquirethe whole of the issued and to be issued share capital of Valiant onterms which represent (in the reasonable opinion of Cenkos) animprovement of 10% on the consideration payable to Valiant Shareholderspursuant to the terms of the Acquisition.Details of letters of intentIn addition, Ithaca Bidco has also received non-binding letters ofintent to vote in favour of the Scheme and the resolutions at the CourtMeeting and the General Meeting in respect of a total of 14,392,784Valiant Shares, representing, in aggregate, approximately 35.15% ofValiant's existing issued share capital, comprised as follows:(a) from AXA Investment Managers UK Limited, in respect of5,582,436 Valiant Shares, representing 13.63% of the existing issuedshare capital of Valiant;(b) from GLG Partners LP, in respect of 4,025,585 ValiantShares, representing 9.83% of the existing issued share capital ofValiant;(c) from Praxient Capital LLP, in respect of 2,717,137Valiant Shares, representing 6.64% of the existing issued share capitalof Valiant; and(d) from Aviva Investors Global Services Limited, in respectof 2,067,626 Valiant Shares, representing 5.05% of the existing issuedshare capital of Valiant. APPENDIX IV DEFINITIONSThe following definitions apply throughout this announcement unless thecontext requires otherwise:"2P" proven and probable"Acquisition"the recommended acquisition by Ithaca Bidco of the entire issued and to be issued share capital of Valiant, to be effected by means of the Scheme (or if Ithaca Bidco validly elects in accordance with the condition in paragraph (a) of Part B of Appendix I, by means of a Takeover Offer) on and subject to the Conditions"AIM"AIM, a market operated by the London Stock Exchange"Brent the BrentSystem failing to function or being materiallyFailure restricted (for any reason other than a planned shutdown)Event" on the Business Day immediately preceding the Scheme Record Time and Valiant having been formally notified by the relevant Operator of the same (or where Valiant is aware of the same from its daily production reports from SVT) and: a. such failure to function or such restriction is unlikely to be remedied for a period of four months commencing on the Business Day immediately preceding the Scheme Record Time provided the same can be ascertained from and validated by reference to the relevant Operator's opinion or estimates; or b. where such relevant Operator's opinion or estimates as described in (a) above are not available on the Business Day immediately preceding the Scheme Record Time, the Brent Failure Event shall be deemed to have occurred if: (i) Valiant Production during the 30 calendar days prior to the Scheme Record Time is on average (excluding any day(s) on which a planned shutdown occurs) less than 5,400 barrels per day; unless (ii) Valiant can provide third party expert opinions or estimates from reputable independent experts qualified to opine on matters related to North Sea oil and gas production issues who have been engaged by Valiant (or the relevant Operator, where such report is shared with Valiant) to provide such an opinion/estimate having been provided with all facts and information available to Valiant in order to make such determination which demonstrate that production from the Dons fields facilities and the Causeway fields facilities will, or is reasonably likely to, be restored to a level where Valiant Production is not less than 5,400 barrels per day, within a period of four months commencing on the Business Day immediately preceding the Scheme RecordTime"Brent the offshore storage and pumping station on the platformSystem" known as "Cormorant Alpha" and the pipeline extending from the Cormorant Alpha platform up to and including the insulating flange where such pipeline joins the scraper trap at the SVT"Business any day (excluding any day whichis a Saturday, Sunday orDay" public holiday in England and Wales) on which banks in the City of London are open for general bankingBusiness"Canada" Canada, its provinces and territories and all areas subject to its jurisdiction and any political sub-division thereof"Capital the proposed reduction ofthe ordinary share capital ofReduction" Valiant provided for in the Scheme under section 641 of the Companies Act"Cenkos" Cenkos Securities plc"Closingthe closing middle market quotation of a Valiant Share orPrice" an Ithaca Share (as appropriate) as derived from the AIM appendix to the Daily Official List"Code" the CityCode on Takeovers and Mergers"Combined the Ithaca Group and the ValiantGroup followingGroup" completion of the Acquisition"Companies the Companies Act2006Act""Competing an offer (as defined in the Code) (whether or not on aOffer" pre-conditional basis) for the entire issued and to be issued share capital of Valiant which is or has been announced, made or entered into by a person (other than Ithaca Bidco and/or Ithaca) who is not acting in concert (as defined in the Code) with Ithaca Bidco and/orIthaca"Conditions" the conditions to the implementation of the Scheme asset out in Appendix I to this announcement and to be set out in the Scheme Document"Co-operation the co-operationagreement dated 1 March 2013 enteredAgreement" into between Ithaca, Ithaca Bidco and Valiant"Court"Her Majesty's High Court of Justice in England and Wales"Court thehearing of the Court to sanction the SchemeHearing""Court the meeting of Scheme Shareholders to be convenedMeeting" pursuant to an order of the Court under Part 26 of the Companies Act for the purposing of considering and, if thought fit, approving the Scheme (with or without amendment) including any adjournment thereof"Court theorder(s) of the Court sanctioning the Scheme andOrder(s)" confirming the Capital Reduction under the CompaniesAct"CREST" the relevant system, as defined in the Uncertificated Securities Regulations 2001 (SI 2011/3755, as amended), for paperless settlement of share transfers and the holding of shares in uncertificated form (in respect of which Euroclear UK & Ireland Limited is the operator)"Dailythe daily record setting out the prices of all trades inOfficial shares and other securities conducted on the London StockList" Exchange, published by the London Stock Exchange"Dealinghas the same meaning as in Rule 8 of the CodeDisclosure""Effective" the Scheme having become effective pursuant to itsterms"Effective the date on which the Scheme becomes effective inDate" accordance with its terms"Forms of the forms of proxy for theCourt Meeting and the GeneralProxy" Meeting"FSA" the United Kingdom Financial ServicesAuthority and any successor or replacement regulatory body or bodies"FSMA"the Financial Services and Markets Act 2000 and any subordinate legislation made under it, or any applicable successor or replacement regulatory regime in the UK"Generalthe general meeting of Valiant Shareholders to beMeeting" convened in connection with the Scheme (including any adjournment thereof)"Ithaca" Ithaca Energy Inc."IthacaIthaca Energy Holdings (UK) LimitedBidco""Ithaca the Ithaca Shares to be issued pursuant to theConsideration AcquisitionShares""Ithaca Ithaca and its subsidiary undertakingsGroup""Ithaca common shares in the capital of Ithaca, without nominalShares" or par value"kboe/d" thousand barrels of oil equivalentper day"Licensee" means any member of the Valiant Group that, as at the date of this announcement, is the legal or beneficial owner of the rights under any exploration or production licence issued by the granting authority of Norway"LondonStock London Stock Exchange plcExchange""LTIP" the Valiant Petroleum Long-Term IncentivePlan"MMboe" millions barrels of oil equivalent"MMboe/d" millionsbarrels of oil equivalent per day"MMstb" million stock tankbarrels"Morgan Morgan Stanley & Co. LimitedStanley""Opening has the same meaning as in Rule 8 of the CodePositionDisclosure""Option the Valiant Petroleum Limited Share Option SchemeSchemes" (including the terms of the Enterprise Management Incentive agreements and the terms of the unapproved agreements), the Valiant Petroleum plc Share Option Scheme and the Valiant Petroleum plc Non-Executive Share Option Scheme"Oriel" Oriel Securities Limited"OverseasScheme Shareholders who are resident in, ordinarilyShareholders" resident in, or citizens of, jurisdictions outside the United Kingdom"Panel" the Panel on Takeovers andMergers"Registrar of the Registrar of Companies in England and WalesCompanies""Regulatory any information service authorised from time totime byInformation the FSA for the purpose of disseminating regulatoryService" announcements"Restricted any jurisdiction where local lawsor regulations mayJurisdiction" result in a significant risk of civil, regulatory or criminal exposure if information concerning the Acquisition is sent or made available to Valiant Shareholders in that jurisdiction"Scheme" the scheme ofarrangement proposed to be made under Part 26 of the Companies Act between Valiant and the Scheme Shareholders in connection with the Acquisition, the full terms of which will be set out in the Scheme Document, with, or subject to, any amendment, modification or condition which Valiant and Ithaca Bidco agree, andifrequired, the Court may approve or impose"Scheme the formaldocument to be sent to Valiant ShareholdersDocument" containing, among other things, the Scheme, the terms and conditions of the Acquisition and the notices convening the Court Meeting and General Meeting"Schemeanticipated to be 6.00 p.m. on the Business DayRecord Time" immediately preceding the date of the Court Hearing"Schemeholders of Scheme SharesShareholders""Scheme Valiant Shares:Shares" c. in issue as at the date of the Scheme Document and which remain in issue at the Scheme Record Time; d. (if any) issued after the date of the Scheme Document and prior to the Scheme Voting Record Time and which remain in issue at the Scheme Record Time; or e. (if any) issued at or after the Scheme Voting Record Time but at or prior to the Scheme Record Time either on terms that the original or any subsequent holders thereof shall be bound by the Scheme and/or in respect of which the original or any subsequent holders thereof are, or shall have agreed in writing to be, bound by the Scheme, and, in each case, which remain in issue at the Scheme Record Time in each case, excluding any Valiant Shares of which any member of the Ithaca Group is the holder or in which any member of the Ithaca Group is beneficially interested"Schemethe time and date specified in the Scheme Document byVoting Record reference to which entitlement to vote on the Scheme willTime" be determined"SVT" the petroleum receiving,treatment, storage and tanker loading complex located at Sullom Voe, Shetland"Takeoverhas the meaning given to it in Part 28 of the CompaniesOffer" Act"UK" or the United Kingdom of Great Britain andNorthern Ireland"UnitedKingdom""US" or the United States of America, its territoriesand"United possessions, any state of the United States of America,States" the District of Columbia, and all other areas subject to its jurisdiction"Valiant" Valiant Petroleum plc"Valiantthe board of directors of ValiantBoard""Valiant Kevin Lyon (Non-Executive Chairman), Mark Lewis (ChiefDirectors" Financial Officer), Sandy Shaw (Director Corporate & Commercial), Paul Mann (Chief Operating Officer), Michael Bonte-Friedheim (Non-Executive Director and Acting Chief Executive Officer), Jannik Lindbaek (Non-Executive Director), Philip Vingoe (Non-Executive Director) and Steve Horton (Non-Executive Director) and "Valiant Director" means any one of them, but does not include Peter Buchanan (Chief Executive Officer)"Valiant Valiantand its subsidiary undertakingsGroup""Valiant net production attributable to the Valiant Group at theProduction" SVT (as allocated under the relevant SVT tariff agreement and evidenced by relevant daily SVT production reports) from the Dons fields facilities and the Causeway fields facilities"Valiant holders of Valiant SharesShareholders""Valiant the LTIP and the Option SchemesShareSchemes""Valiant ordinary shares of GBP0.02555556 each in the capitalofShares" ValiantFor the purposes of this announcement, "subsidiary", "subsidiaryundertaking", "undertaking" and "associated undertaking" have therespective meanings given thereto by the Companies Act.All references to "pounds", "pounds Sterling", "Sterling", "GBP","pence","penny" and "p" are to the lawful currency of the UnitedKingdom.All references to "C$" and "Canadian Dollars" are to the lawfulcurrency of Canada.All references to "US$" and "US Dollars" are to the lawful currency ofthe United States.Unless otherwise stated, all times referred to in this announcement arereferences to the time in London.Any reference to any provision of any legislation shall include anyamendment, modification, re-enactment or extension thereof.Reference to the singular shall include the plural and vice versa. 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