FPF-1 Contract Update

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

Ithaca Energy Inc.

FPF-1 Modifications Contract Update

28 September 2015

Ithaca Energy Inc. (TSX: IAE, LSE AIM: IAE) ("Ithaca" or the "Company") announces that the Greater Stella Area co-venturers have entered into an agreement with Petrofac in respect of the "FPF -1" floating production facility.

The agreement provides enhanced incentivisation for the timely delivery of the vessel, which remains on track for sail-away from the shipyard in Poland at the end of the first quarter of 2016. The agreement also provides important contract cost clarity, thereby ensuring efficient execution of the remaining FPF-1 modification works.

Highlights

· All costs of modifying the FPF-1 above the contract cost cap will continue to be fully paid by Petrofac as incurred

· Ithaca will pay Petrofac $13.7 million in respect of final payment on variations to the contract, with payment deferred until three and a half years after first production from the Stella field

· A further payment to Petrofac of up to $34 million will be made by Ithaca dependent on the timing of sail-away of the FPF-1. The maximum payment can be achieved for delivering sail-away of the vessel from the shipyard prior to the end of March 2016, with this incentive payment eroding on a daily basis to zero by 31 July 2016. This payment will also be deferred until three and a half years after first production from the Stella field

· Commissioning operations have commenced on the FPF-1. Sail-away of the vessel remains on track for the end of the first quarter of 2016, with first production from the Stella field anticipated at the end of the second quarter

Les Thomas, Chief Executive Officer, commented:

"Delivery of first hydrocarbons from the Greater Stella Area is the next key operational priority of the Company. This agreement introduces a significant additional incentive for Petrofac to provide timely delivery of the FPF-1, without affecting the liquidity position of the Company."

Additional Information

The FPF-1 modifications programme is being completed by Petrofac in the Remontowa shipyard in Gdansk, Poland. The transition from construction activities and into commissioning operations continues on the vessel. The main construction works are nearing completion and handover of the various topsides processing, utilities and accommodation sub-systems for pre-commissioning is progressing. Initial commissioning operations are underway, with electrical loop checking on the process control and safety systems and equipment package interface testing having commenced.

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Enquiries:

Ithaca Energy

Les Thomas [email protected] +44 (0)1224 650 261

Graham Forbes [email protected] +44 (0)1224 652 151

Richard Smith [email protected] +44 (0)1224 652 172

FTI Consulting

Edward Westropp [email protected] +44 (0)203 727 1521

Tom Hufton [email protected] +44 (0)203 727 1625

Cenkos Securities

Neil McDonald [email protected] +44 (0)207 397 8900

Nick Tulloch [email protected] +44 (0)131 220 6939

RBC Capital Markets

Daniel Conti [email protected] +44 (0)207 653 4000

Matthew Coakes [email protected] +44 (0)207 653 4000

About Ithaca Energy

Ithaca Energy Inc. (TSX: IAE, LSE AIM: 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 and the exploitation of its existing UK producing asset portfolio. 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.

Forward-looking statements

Some of the statements and information in this press release are forward-looking. Forward-looking statements and forward-looking information (collectively, "forward-looking statements") are based on the Company's internal expectations, estimates, projections, assumptions and beliefs as at the date of such statements or information, including, among other things, assumptions with respect to production, drilling, construction and maintenance times, well completion times, risks associated with operations including expected third-party performance of contractual obligations, future capital expenditures, continued availability of financing for future capital expenditures, future acquisitions and dispositions and cash flow. The reader is cautioned that assumptions used in the preparation of such information may prove to be incorrect. When used in this press release, the words and phrases like "anticipate", "continue", "estimate", "expect", "may", "will", "project", "plan", "should", "believe", "could", "target", "in the process of" and similar expressions, and the negatives thereof, whether used in connection with operational activities, sail-away of the FPF-1 floating production facility, Stella first hydrocarbons, drilling plans, anticipated costs to be incurred and payments to be made by the Company and its co-venturers in respect of the completion of the FPF-1 floating production facility including amounts and timing thereof, potential developments including the timing and anticipated benefits of acquisitions and dispositions or otherwise, are intended to identify forward-looking statements. Such statements are not promises or guarantees, and are subject to known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. The Company believes that the expectations reflected in those forward-looking statements are reasonable but no assurance can be given that these expectations, or the assumptions underlying these expectations, will prove to be correct and such forward-looking statements included in this press release should not be unduly relied upon. These forward-looking statements speak only as of the date of this press release. 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.

Additional information on these and other factors that could affect Ithaca's operations and financial results are included in the Company's Management's Discussion and Analysis for the quarter ended June 30, 2015, and the Company's Annual Information Form for the year ended December 31, 2014 and in reports which are on file with the Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com).