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Press release from Marketwire

Ithaca Energy Inc.: Further UK Exploration Portfolio Farm-Outs

Monday, September 23, 2013

Ithaca Energy Inc.: Further UK Exploration Portfolio Farm-Outs

02:00 EDT Monday, September 23, 2013

ABERDEEN, SCOTLAND--(Marketwired - September 22, 2013) - Ithaca Energy Inc . (TSX VENTURE: IAE)

TSX VENTURE: IAENot for Distribution to U.S. Newswire Services or for Dissemination in the United States Ithaca Energy Inc. Further UK Exploration Portfolio Farm-Outs 23 September 2013Ithaca Energy Inc. (TSX: IAE, LSE AIM: IAE) ("Ithaca" or the "Company")announces further UK exploration portfolio farm-out transactions.Whencombined with the previously announced UK farm-outs the Company is nowfully carried for the forecast cost of drilling the UK exploration wellcommitments transferred as part of the Valiant Petroleum plc("Valiant") acquisition and in addition will receive over $8 million incash from the farm-out parties.Highlights -Farm-out to Oyster Petroleum Limited ("Oyster Petroleum") of a 9% working interest in the UK licences containing the Handcross prospect and a further 5% working interest to Sussex Energy Limited ("Sussex Energy").Ithaca has a fully carried 31% working interest, will receive a cash payment and has retained operatorship of the licence. -Farm-out to Euroil Exploration Limited, a subsidiary of Edison SpA ("Edison"), of a 10% working interest in the UK licence containing the Isabella prospect for cash.Ithaca has a fully carried 10% non-operated working interest and will receive a cash payment. -The farm-out agreements collectively provide for the parties to pay their working interest share of future licence costs, the reimbursement of past licence costs and the payment of certain cash considerations. -Ithaca has now offset the full $85 million of forecast UK exploration well commitment costs transferred as part of the Valiant acquisition and generated over $8 million in cash payments.Iain McKendrick, Chief Executive Officer, commented:"I am delighted thatthe Company has achieved a cashflow positiveposition with respect to the Handcross and Isabella explorationwells.The Company has successfully executed upon its keypost-acquisition objective of removing its UK exploration cost exposurewhilst still retaining potential upside."Handcross Exploration Well Farm-OutIthaca has entered into a farm-out agreement with Oyster Petroleumconcerning UK licences P1631 and P1832 (blocks 204/14c, 204/18b and 204/19c), which contain the Handcross prospect.In addition SussexEnergy, an existing Handcross co-venturer, has exercised an optionunder the terms of its original farm-out agreement to take a further 5%working interest in the licences.The agreements will result in the transfer of a 9% working interest inthe licences to Oyster Petroleum and a 5% working interest to SussexEnergy in exchange for the companies paying their working interestshares of past and future licence costs in addition to providing Ithacawith a cash payment.These transactions reduce Ithaca's workinginterest in the licences from 45% to 31%.Ithaca retains operatorshipof the licences.When combined with earlier farm-out transactions to RWE Dea UK SNSLimited and Edison, Ithaca is now carried for its forecast share of theplanned Handcross exploration well cost and will also receiveadditional cash beyond the carry.Handcross is a Palaeocene prospect located in the Judd Basin in theWest of Shetland sector of the UK Continental Shelf ("UKCS").Anexploration well is to be drilled on the prospect using the StenaCarron drillship, with operations anticipated to commence in late 2013.Completion of the transactions is subject to normal regulatory andthird party consents.Following completion, the Handcross partnerswill be Ithaca (31%, Operator), Edison (25%), RWE Dea (20%), SussexEnergy (15%) and Oyster Petroleum (9%).In addition, Ithaca has entered into a further agreement with OysterPetroleum to transfer its full 33.33% non-operated interest in UKlicence P2018 for a cash sum.The licence, covering West of Shetlandblocks 214/24b, 214/29a and 214/30c, was awarded in the UK 27thOffshore Licensing Round.Completion of the licence transfer issubject to normal third party and regulatory consents.Oyster Petroleum isa new UK West of Shetland focused explorationcompany backed by the Norwegian international oil and gas investorHitecVision.Sussex Energy is a subsidiary of Azimuth Limited, aprivately owned company with assets in the UKCS, Norway, Eire andNamibia.Isabella Exploration Well Farm-OutIthaca has entered into an agreement with Euroil Exploration Limited, awholly owned subsidiary of Edison, to farm-out a 10% interest in UKlicence P1820 which contains the Isabella gas condensateprospect.This transaction reduces Ithaca's non-operated workinginterest in the licence from 20% to 10%.The farm-out agreement provides for Edison to pay its 10% workinginterest share of future licence costs in addition to a cash payment toIthaca.When combined with the earlier Isabella farm-out transactionexecuted with Maersk Oil North Sea UK Limited, Ithaca is now carriedfor its forecast share of the Isabella exploration commitment well costand will also receive additional cash beyond the carry.The P1820 licence was awarded in the UK 26th Offshore Licensing Roundand covers blocks 30/6b, 30/11a and 30/12d in the UK Central NorthSea.The licence work programme requires an exploration well to bedrilled on the Isabella prospect by early 2015.Completion of the transaction is subject to normal third party andregulatory consents.Following completion, the Isabella partners willbe Apache North Sea Limited (50%, Operator), Maersk Oil North Sea UKLimited (30%), Ithaca (10%) and Edison (10%).Edison is a major European energy company, with operations spanning thefull energy supply chain, including oil and gas activities in Europeand Africa. - ENDS -Enquiries:Ithaca EnergyIain McKendrick +44 (0)1224 650 261Graham Forbes +44 (0)1224 652 151FTI ConsultingBilly Clegg +44 (0)207 269 7157Edward Westropp +44 (0)207 269 7230Georgia Mann +44 (0)207 269 7212Cenkos SecuritiesJon Fitzpatrick +44 (0)207 397 8900Neil McDonald +44 (0)131 220 6939RBC Capital MarketsTim Chapman +44 (0)207 653 4641Matthew Coakes +44 (0)207 653 4871About Ithaca EnergyIthaca Energy Inc. (TSX: IAE, LSE AIM: IAE) is a North Sea oil and gasoperator focused on the delivery of lower risk growth through theappraisal and development of UK undeveloped discoveries, theexploitation of its existing UK producing asset portfolio and aNorwegian exploration and appraisal business centred on the generationof discoveries capable of monetisation prior to development. Ithaca'sstrategy is centred on generating sustainable long term shareholdervalue by building a highly profitable 25kboe/d North Sea oil and gascompany. For further information please consult the Company's 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 Oyster Petroleum:Formed in summer 2013, Oyster Petroleum is a new exploration andproduction company focused on the UKCS. The company is financiallybacked and fully funded by HitecVision, a leading international oil andgas investor. HitecVision has committed funds of USD150 million toOyster Petroleum from its HitecVision VI L.P. fund. Since 2003,HitecVision has invested in a number of highly successful start-ups inthe North Sea, including Revus Energy, Noreco, Spring Energy, CoreEnergy and Spike Exploration.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, drilling, well completion times, future capitalexpenditures, future acquisitions and cash flow. The reader iscautioned that assumptions used in the preparation of such informationmay prove to be incorrect. When used in this press release, thewords"anticipate", "continue", "estimate", "expect", "may","will","project", "plan", "should", "believe", "could", "target" andsimilarexpressions, and the negatives thereof, whether used in connection withoperational activities, production forecasts, budgetary figures,potential developments or otherwise, are intended to identifyforward-looking statements. Such statements are not promises orguarantees, and are subject to known and unknown risks, uncertaintiesand other factors that may cause actual results or events to differmaterially from those anticipated in such forward-looking statements.The Company believes that the expectations reflected in thoseforward-looking statements and are reasonable but no assurance can begiven that these expectations, or the assumptions underlying theseexpectations, will prove to be correct and such forward-lookingstatements and included in this press release should not be undulyrelied upon. These forward-looking statements speak only as of the dateof this press release. Ithaca Energy Inc. expressly disclaims anyobligation or undertaking to release publicly any updates or revisionsto any forward-looking statement contained herein to reflect any changein its expectations with regard thereto or any change in events,conditions or circumstances on which any forward-looking statement isbased except as required by applicable securities laws. This information is provided by RNS The company news service from the London Stock ExchangeEND


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