Ithaca Energy Inc (fka TSX:IAE)

[futrcash]

Stella Development Well - Successful Test Results

11 September 2013

Ithaca Energy Inc. (TSX: IAE, LSE: IAE) ("Ithaca" or the "Company")
announces completion of a highly successful flow test on the first
development well drilled on the Stella field and provides a progress
update on the Greater Stella Area development activities.

Highlights

- The first Stella field development well, "A1", flowed at a maximum
rate of 10,835 barrels of oil equivalent per day ("boepd") on a 7/
8-inch choke, with the full production potential of the well limited by
the capacity of the well test equipment on the drilling rig.

- Fluid samples have confirmed the high oil content of the
hydrocarbons that will be produced from the well. The maximum rate of
10,835 boepd corresponds to 6,499 barrels of oil per day ("bopd") and
26 million standard cubic feet per day ("MMscf/d") of "liquids rich"
gas.

- The well intersected a high quality net reservoir interval of 1312
feet, with reservoir properties in line with previous wells drilled on
the field. The oil is of high quality, approximately 42degrees API.

- The facilities that will be used on the "FPF-1" floating
production facility to separate and export oil and gas produced from
the field will increase the overall oil relative to gas production rate
associated with the A1 well, by processing more efficiently than the
simple separation facilities available for the purposes of the well
test.

- Following suspension of the A1 well, the ENSCO 100 will move on to
drilling of the second Stella development well from the same drilling
centre location.

- Excellent progress continues to be made by Technip UK Limited
("Technip") with execution of the 2013 subsea infrastructure
installation works. The most weather sensitive activities in this
year's work programme have now been completed.

- Completion of the dry dock works being undertaken by Petrofac
Facilities Management Limited ("Petrofac") on the FPF-1 are progressing
well and the focus of fabrication activities is moving on to the
initial works required to commence installation of the new processing
plant on the vessel.

- The capital expenditure and start-up target schedule for the GSA
hub remain unchanged from that previously issued.

Iain McKendrick, Chief Executive Officer, commented:"This well and the
highly successful test are outstanding results for
the Company. This is an enormous leap forward in de-risking of the
Greater Stella Area development and the creation of a major new
production hub in the UK Central North Sea. The well has accessed the
reserves it was designed to recover and the test confirms the presence
and extremely high quality and deliverability of the reservoir sands.
When these results are combined with progress that has been made on
both the successful execution of the 2013 subsea installation works and
the FPF-1 modifications programme, the development can be seen to be
confidently driving forward at pace."

Further Information


Greater Stella Area Development Strategy

Ithaca's focus on the Greater Stella Area ("GSA") is driven by the
monetisation of reserves within the existing portfolio and the
generation of additional value via the wider opportunities provided by
the range of undeveloped discoveries surrounding the production hub.

The development involves the creation of a production hub based on
deployment of the FPF-1 floating production facility located over the
Stella field, with onward export of oil and gas. The FPF-1 will serve
as the processing hub for production from the Stella and Harrier
fields, plus potential incremental production from Hurricane and other
tie-back opportunities in the area.

Ithaca's GSA joint venture partners are Dyas UK Limited (25.34%), a
long established privately owned North Sea oil and gas producer, and
Petrofac GSA Limited (20%), a subsidiary of Petrofac plc, the leading
international oil and gas services provider listed in the FTSE 100 in
London.

Drilling

Well 30/6a-A1Z ("A1") is the first of four development wells that are
to be drilled on the Stella field prior to the start-up of production.
The well was drilled to a total vertical depth subsea of 9739 feet,
with a 2499 foot horizontal reservoir section completed in the
Palaeocene Andrew sandstone reservoir, close to the targeted transition
between the oil rim and gas condensate cap.

As anticipated prior to drilling, the reservoir quality encountered bythe
well was in line with previous appraisal wells drilled on the
field. The well intersected a net reservoir interval of 1312 feet.

A clean-up and production flow test has been performed on the well.
The purpose of this was to clean out the drilling fluids used to
complete the well, to ensure that it is configured for the immediate
start-up of production following the hook-up of the FPF-1, gain further
information on the productivity of the well and obtain hydrocarbon
fluid samples.

The well flowed at a maximum rate of 10,835 boepd on a 7/8-inch choke,
with the full production potential of the well limited by the capacity
of the well test equipment on the drilling rig. Fluid samples show
that the oil is of high quality, approximately 42degrees API.

The maximum flow rate of 10,835 boepd corresponds to 6,499 bopd of oil
and 26 MMscf/d of liquids rich gas.

The processing facilities that will be used on the FPF-1 to separate
and export oil and gas produced from the field will increase the
overall oil relative to gas production rate associated with the A1
well, compared to that which can be achieved from the simple separation
facilities available for the purposes of the well test. This will be
taken into account in finalising the decision on the most appropriate
oil export route that is to be installed for the development.

The A1 well is in the process of being suspended. The suspension
configuration is such that the well can be brought on to production
without the requirement for any further well intervention activity once
the FPF-1 is on location and hooked up.

Following completion of the A1 well suspension operations the ENSCO 100
will commence drilling of the second development well on the Stella
field, the 30/6a-A2 ("A2") well. The well will be drilled from the
same drill centre location as the A1 well, which means that no rig move
is required to commence operations.

The high-spec ENSCO 100 heavy duty jack-up drilling rig that is being
used for the GSA development drilling campaign commenced operations on
the Stella field in June 2013. Management of the drilling and
completion operations is being performed by Applied Drilling Technology
International ("ADTI") under "turnkey" contract arrangements.

Subsea Infrastructure

Execution of the main subsea infrastructure manufacturing and
installation programme is being completed by Technip UK Limited under
an integrated Engineering, Procurement, Installation and Construction
contract.

Significant progress has been made since the start of the year with
execution of the subsea infrastructure work programme. Initial
infrastructure fabrication works were completed in the second quarter
of 2013 and the first offshore installation operations commenced in
June 2013.

The 60km 10-inch gas export pipeline and main subsea structures have
been installed and infield flowline trenching completed.

Since the update provided at the time of the second quarter financial
results in early August 2013, trenching of the 60km gas export pipeline
has been completed and the trench backfill and as laid survey
activities are now in progress.

The offshore operations that have been performed have benefited from
excellent weather conditions in the North Sea. The most weather
sensitive activities in the 2013 programme have now been completed.

The milestones to be completed in the next two months are installation
of the flexible infield flowlines and static umbilicals that will
connect the Stella field drill centres to the FPF-1 riser base and the
associated diving operations required to complete the tie-in of the gas
export pipeline and flowlines, umbilicals and manifolds.

FPF-1 Modification Works

Execution of the FPF-1 modifications work programme is being performed
by Petrofac under the terms of a lump sum incentivised contract with
the GSA co-venturers. Following removal of the old processing
equipment on the vessel, Petrofac transferred the FPF-1 to the
Remontowa shipyard in Gdansk, Poland, in late 2012 for completion of
the required modifications work programme. The two main aspects of the
modification programme involve the completion of marine system
refurbishment and hull life extension works and the installation of new
oil and gas processing facilities and living quarters.

Good progress has been made on execution of the FPF-1 marine system
works following the transfer of the vessel to the "Remlift" dry dock
facility at Remontowa in April 2013. The hull tank refurbishment
operations are nearing completion; involving inspection, repair and
coating of the tanks. Construction and installation of the steelwork
blocks that will form the additional sponsons being added to the
pontoons of the FPF-1 for enhanced buoyancy is advancing. Fabrication
of the additional buoyancy "blisters" being added to the columns of the
vessel is progressing.

Equipment required at the start of the topsides installation phase
continues to flow to the shipyard from various manufacturing locations
around the world. Key long lead packages, including the gas export
compressors, gas turbine equipment, production separators and exotic
pipework and valves, are all now on-site.



Central to the construction execution methodology for the initial phase
of the topsides processing plant fabrication and installation works is
the construction of pre-assembled units and racks, in which structural
steel, pipework spools, cable trays and various equipment will be
installed. Construction of these racks and associated pipework has
commenced and installation operations will take place once the FPF-1 is
returned to the water in the fourth quarter of 2013.

Additional Information

A presentation summarising the recent activities that have been
completed on the GSA development is available on the Company's website,
www.ithacaenergy.com.

- ENDS -

Enquiries:

Ithaca Energy
Iain McKendrick, [e-mail] [phone]
Graham Forbes, CFO [e-mail] [phone]

FTI Consulting:
Billy Clegg [e-mail] [phone]
Edward Westropp [e-mail] [phone]
Georgia Mann [e-mail] [phone]

Cenkos Securities plc:
Jon Fitzpatrick [e-mail] [phone]
Neil McDonald [e-mail] [phone]

RBC Capital Markets:
Tim Chapman [e-mail] [phone]
Matthew Coakes [e-mail] [phone]


Notes

In accordance with AIM Guidelines, John Horsburgh, BSc (Hons)
Geophysics (Edinburgh), MSc Petroleum Geology (Aberdeen) and Subsurface
Manager at Ithaca is the qualified person that has reviewed the
technical information contained in this press release. Mr Horsburgh
has over 15 years operating experience in the upstream oil and gas
industry.

References herein to "boe" are derived by converting gas to oil in the
ratio of six thousand cubic feet ("Mcf") of gas to one barrel ("bbl")
of oil. Boe may be misleading, particularly if used in isolation. A boe
conversion ratio of 6 Mcf: 1 bbl is based on an energy conversion
method primarily applicable at the burner tip and does not represent a
value equivalency at the wellhead.

The well test results disclosed in this press release represent
short-term results, which may not necessarily be indicative of
long-term well performance or ultimate hydrocarbon recovery therefrom.

About Ithaca Energy

Ithaca Energy Inc. (TSX: IAE, LSE: IAE) is a North Sea oil and gas
operator focused on the delivery of lower risk growth through the
appraisal and development of UK undeveloped discoveries, the
exploitation of its existing UK producing asset portfolio and a
Norwegian exploration and appraisal business centred on the generation
of discoveries capable of monetisation prior to development. Ithaca's
strategy is centred on generating sustainable long term shareholder
value by building a highly profitable 25kboe/d North Sea oil and gas
company. For further information please consult the Company's website
www.ithacaenergy.com.

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