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Press release from Marketwire

Ithaca Energy-UK Exploration Portfolio Farm-Outs

Monday, June 17, 2013

Ithaca Energy-UK Exploration Portfolio Farm-Outs

02:00 EDT Monday, June 17, 2013

ABERDEEN, SCOTLAND--(Marketwired - June 16, 2013) - Ithaca Energy (TSX VENTURE: IAE)

Not for Distribution to U.S. Newswire Services or for Dissemination inthe United States Ithaca Energy Inc.Further UK Exploration Portfolio Farm-Outs to Edison International and Shell 17 June 2013Ithaca Energy Inc. (TSX: IAE, LSE AIM: IAE) ("Ithaca" or the "Company")announces the execution of further UK exploration farm-outtransactions. The Company has executed a farm-out agreement with asubsidiary of Edison International SpA ("Edison") for a 25% interest inthe licences containing the Handcross prospect and an agreement withShell UK Limited ("Shell") concerning a licence awarded in the 27th UKOffshore Licensing Round.Highlights- As a result of the two farm-outs on the Handcross prospect, toEdison and RWE Dea, Ithaca has now reduced its share of the forecastcost of the Handcross exploration well to 6%, while retaining a 45%working interest.- In line with its stated strategy, the Edison farm-out means thatIthaca has now substantially mitigated all committed UK explorationexpenditure.Iain McKendrick, Chief Executive Officer, commented:"I am delighted that,not only have the farm-out team delivered veryprompt and tangible results from the exploration farm-out effort, butalso that we have been joined by such high quality industry partnersacross our UK exploration assets. The monetisation of the UKexploration portfolio has far exceeded our expectations in terms oflevels of expenditure carry. Ithaca shareholders are now exposed tosome potentially high impact exploration at negligible cost".Handcross Exploration Well Farm-OutIthaca has entered into an agreement with Euroil Exploration Limited, awholly owned subsidiary of Edison, to farm-out a 25% interest in UKlicences P1631 and P1832 (blocks 204/14c, 204/18b and 204/19c), whichcontain the Handcross prospect. This agreement reduces Ithaca'sworking interest in the licences from 70% to 45%. Ithaca retainsoperatorship of the licences.The Edison farm-out is in exchange for a partial carry of Ithaca'sshare of the costs of an exploration well on the Handcrossprospect. Edison is a major European energy company, with operationsspanning the full energy supply chain, including oil and gas activitiesin Europe and Africa.Handcross is a Palaeocene prospect located in the Judd Basin in theWest of Shetland sector of the UK Continental Shelf. A well is to bedrilled on the prospect using the Stena Carron drillship, withoperations anticipated to commence in late 2013.The Edison agreement, in combination with the previously announcedfarm-out agreement entered into with RWE Dea in April 2013, reducesIthaca's paying interest in the Handcross well to 6%. This implies aforecast net well cost to the Company of $2.5 million, compared to thenet cost prior to the farm-outs of approximately $40 million.Completion of the transaction with Edison is subject to normalregulatory and third party consents. Following completion, theHandcross partners will be Ithaca (45%, operator), Edison (25%), RWEDea (20%) and Sussex Energy Limited (10%).UK 27th Round Licence Farm-OutIthaca has also entered into an agreement with Shell to farm-out 50% ofthe Company's 100% interest in UK licence P2048, covering blocks 29/24,29/25, 29/29 and 29/30, which was awarded in the UK 27th OffshoreLicensing Round. The firm licence work programme commitment is toobtain 500km2 of 3D seismic data.The agreement provides for Shell to pay the full cost of obtaining theseismic data. Ithaca has the option to retain its 50% interest in thelicence, subject to paying its corresponding share of the workprogramme costs on a future date. Should this option not be exercised,the Company's 50% interest in the licence will transfer to Shell, withIthaca having incurred no costs associated with execution of thecommitted work programme.Completion of the transaction with Shell is subject to normalregulatory consents.Enquiries:Ithaca Energy:Iain McKendrick, +44(0) 1224 650 261CEONick Muir, +44(0) 1224 650 267CTOFTI Consulting:Billy Clegg +44 (0) 207 269 7157Edward Westropp +44 (0) 207 269 7230Georgia Mann +44 (0) 207 269 7212Cenkos Securities plc:Jon Fitzpatrick +44 (0) 207 397 8900Neil McDonald +44 (0) 131 220 6939RBC Capital Markets:Tim Chapman +44 (0) 207 653 4641Matthew Coakes +44 (0) 207 653 4871About Edison:Edison, the oldest energy company in Europe and now part of the EDFGroup (Electricite de France), has about 3,200 employees in more than10 Countries across Europe, Africa and the Middle East, with activitiesranging from exploration and production of crude oil and natural gas tothe production and sales of electric power and the marketing of naturalgas. Edison's Exploration & Production activities cover approximately100 permits and concessions in Italy and abroad (Egypt, Norway,Falkland Islands, Algeria, Croatia, Israel, UK).About Ithaca Energy:Ithaca Energy Inc. (TSX: IAE, LSE AIM: IAE) is an oil and gas operatorfocused on North Sea production, appraisal and development activities.The Company's strategy is centred on building a highly profitableNorth Sea oil and gas company by maximising production and cashflowfrom its existing assets, the appraisal and development of existingdiscoveries on properties held by the Company and the delivery ofadditional growth via acquisitions and licence round participation.Not for Distribution to U.S. Newswire Services or for Dissemination inthe United StatesForward-looking statementsSome of the statements and information in this press release areforward-looking. Forward-looking statements and forward-lookinginformation (collectively, "forward-looking statements") are based onthe Company's internal expectations, estimates, projections,assumptions and beliefs as at the date of such statements orinformation, including, among other things, assumptions with respect toproduction, future capital expenditures, future acquisitions and cashflow. The reader is cautioned that assumptions used in the preparationof such information may prove to be incorrect. When used in thispressrelease, the words "anticipate", "continue", "estimate","expect","may", "will", "project", "plan", "should", "believe","could","target" and similar expressions, and the negatives thereof.,whetherused in connection with operational activities, production forecasts,budgetary figures contained in the corporate presentation, potentialdevelopments or otherwise, are intended to identify forward-lookingstatements. Such statements are not promises or guarantees, and aresubject to known and unknown risks, uncertainties and other factorsthat may cause actual results or events to differ materially from thoseanticipated in such forward-looking statements. The Company believesthat the expectations reflected in those forward-looking statements andare reasonable but no assurance can be given that these expectations,or the assumptions underlying these expectations, will prove to becorrect and such forward-looking statements and included in this pressrelease should not be unduly relied upon. These forward-lookingstatements speak only as of the date of this announcement. IthacaEnergy Inc. expressly disclaims any obligation or undertaking torelease publicly any updates or revisions to any forward-lookingstatement contained herein to reflect any change in its expectationswith regard thereto or any change in events, conditions orcircumstances on which any forward-looking statement is based except asrequired by applicable securities laws. -ENDS- This information is provided by RNS The company news service from the London Stock ExchangeEND


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