27th UK Licensing Round Success

Not for Distribution to U.S. Newswire Services or for Dissemination in the United States

Ithaca Energy Inc.

27th UK Licensing Round Success

29 October 2012

Ithaca Energy Inc. (TSX: IAE, LSE AIM: IAE) is pleased to announce its success in the UK's 27th Offshore Licensing Round, with the Company being offered, as Operator, two new traditional licenses.

Highlights

o Ithaca has been awarded two operated licenses; Block 29/5d in the vicinity of the Company'sexisting Greater Stella Area ("GSA") interests and Block 15/17b in the Outer Moray Firth.

o The license offers are based on the completion of technical studies, leading to a drill or dropdecision on each license within two years of formal license award.

Block 29/5d is a joint venture between Ithaca (Operator, 54.66 %), Dyas UK Ltd (25.34%) and Petrofac Energy Developments UK Ltd (20%). The Block lies in the GSA, adjacent to Block 29/10b, which contains the Company's recently appraised Hurricane discovery and close to the future location of the "FPF-1" floating production unit that will be installed as part of the ongoing development of the Stella and Harrier fields in Block 30/6a. The joint venture has identified a target in Block 29/5d analogous to the appraised Hurricane Rogaland sand interval, known as "Twister".

Block 15/17b is a joint venture between Ithaca (Operator, 50%) and Premier Oil (UK) Ltd (50%). The block lies in the Outer Moray Firth basin and is close to the Ithaca operated Athena Field and Premier license interests. The block contains four undeveloped Jurassic oil discoveries, known as the "Piper Isles". The block is adjacent to a number of oil producing fields, most notably Piper, Saltire, Iona and Chanter.

The work programme for both Blocks comprises the completion of technical (subsurface) studies, along with development concept screening analysis, to enable a decision to be made within two years of the formal award of each license on committing to the drilling of a well on each Block thereafter.

Nick Muir, Chief Technical Officer, commented:

"I am delighted that the Company's existing asset portfolio is expanding with two such promising license awards. These licenses enable the Company to further increase its GSA stock of opportunities for the FPF-1 production hub and to establish a new foothold in a prolific area of the Outer Moray Firth. The Company looks forward to driving forward these opportunities and building upon the successes of previous license round awards from which it has generated significant value, namely the appraisal and development of the now producing Jacky and Athena fields and the recently appraised Hurricane discovery"

Enquiries:

Ithaca Energy:

Iain McKendrick, CEO [email protected] +44 (0) 1224 650 261

Nick Muir, CTO [email protected] +44 (0) 1224 650 267

FTI Consulting:

Billy Clegg [email protected] +44 (0) 207 269 7157

Edward Westropp [email protected] +44 (0) 207 269 7230

Georgia Mann [email protected] +44 (0) 207 269 7212

Cenkos Securities plc:

Jon Fitzpatrick [email protected] +44 (0) 207 397 8900

Ken Fleming [email protected] +44 (0) 131 220 6939

RBC Capital Markets:

Tim Chapman [email protected] +44 (0) 207 653 4641

Matthew Coakes [email protected] +44 (0) 207 653 4871

Notes to oil and gas disclosure:

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.

About Ithaca Energy:

Ithaca Energy Inc. (TSX: IAE, LSE AIM: IAE) and its wholly owned subsidiary Ithaca Energy (UK) Limited ("Ithaca" or "the Company"),is an oil and gas operator focused on production, appraisal and development activities on the United Kingdom Continental Shelf. The goal of Ithaca, in the near term, is to maximize production and achieve early production from the development of existing discoveries on properties held by Ithaca, to originate and participate in exploration and appraisal on properties held by Ithaca when capital permits, and to consider other opportunities for growth as they are identified from time to time by Ithaca.

Not for Distribution to U.S. Newswire Services or for Dissemination in the United States

Forward-looking statements

Some of the statements in this announcement are forward-looking. Forward-looking statements include statements regarding the intent, belief and current expectations of Ithaca Energy Inc. or its officers with respect to various matters. When used in this announcement, the words "anticipate", "continue", "estimate", "expect", "may", "will", "project", "plan", "should", "believe", "could", "target" and similar expressions, and the negatives thereof., whether used in connection with potential developments, operational activities or otherwise, are intended to identify forward-looking statements. Such statements are not promises or guarantees, and are subject to known and unknown risks and uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements or information. These forward-looking statements speak only as of the date of this announcement. Ithaca Energy Inc. expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement contained herein to reflect any change in its expectations with regard thereto or any change in events, conditions or circumstances on which any forward-looking statement is based except as required by applicable securities laws.

-ENDS-