Ed's Thread

[Rocketred]

Ithaca Energy begins downhole pump on Jacky field

2009-05-27 07:35 ET - News Release
Shares issued 161,934,475
IAE Close 2009-05-26 C$ 0.71


Mr. Iain McKendrick reports

ITHACA ENERGY INC. OPERATIONAL AND PRODUCTION UPDATE

Ithaca Energy Inc. and its wholly owned subsidiary Ithaca Energy (U.K.) Ltd. have started operating the downhole pump on the Jacky field, increasing gross production rates to approximately 10,000 barrels of dry oil per day (bopd) (6,728 barrels of dry oil per day net to Ithaca). This rate is significantly above the levels expected from the field with both the well and the reservoir performing strongly.

The Jacky field came on stream on the April 6 at initial rates of approximately 8,800 barrels of dry oil per day (gross). Downhole pressures and deliverability were above expectations and as a result the activation of the downhole pump was delayed in order to protect it. With the pressure having now fallen it has been possible to start operating the pump.

Average production in April and May (to date) from Jacky and Beatrice (Bravo and Alpha facilities) was lower than the initial rates experienced due to the fall in downhole pressure from Jacky; constraints from ongoing commissioning and well maintenance work at Beatrice; and a portion of initial Jacky production contributing to fill the infield and export pipelines. As such in April the average Jacky and Beatrice volumes arriving at the Nigg Oil Terminal were 4,740 barrels of dry oil per day (3,294 net to Ithaca) and in May, prior to switching on the downhole pump at Jacky, production from Jacky and Beatrice was approximately 5,390 barrels of dry oil per day (3,710 barrels of dry oil per day net to Ithaca). These numbers compare with expectations, prior to Jacky field startup, of 7,500 barrels of dry oil per day gross (5,054 barrels of dry oil per day net to Ithaca).

Commissioning and maintenance work is now drawing to a close and the Beatrice and Jacky facilities are currently producing at combined rates of approximately 11,500 barrels of dry oil per day (7,850 barrels of dry oil per day net to Ithaca) and will quickly make up the production deficit from April and May.

An update on capital expenditure for Jacky will be included in the company's report on results for the first quarter to March 31, 2009.

Partners in the Jacky field are Ithaca (67.275 per cent), Dyas U.K. Ltd. (22.725 per cent) and North Sea Energy (U.K.) Ltd (10 per cent).

Partners in the Beatrice field are Ithaca (74.75 per cent) and Dyas U.K. Ltd. (25.25 per cent).

In accordance with AIM (Alternative Investment Market) guidelines, Lawrie Payne, MA, marine geology (Alberta and Columbia), and chairman of Ithaca Energy, is the qualified person that has reviewed the technical information contained in this press release.

We seek Safe Harbor.