Further UK Exploration Portfolio Farm-Outs

Not 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 2013

Ithaca Energy Inc. (TSX: IAE, LSE AIM: IAE) ("Ithaca" or the "Company") announces further UK exploration portfolio farm-out transactions. When combined with the previously announced UK farm-outs the Company is now fully carried for the forecast cost of drilling the UK exploration well commitments transferred as part of the Valiant Petroleum plc ("Valiant") acquisition and in addition will receive over $8 million in cash 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 that the Company has achieved a cashflow positive position with respect to the Handcross and Isabella exploration wells. The Company has successfully executed upon its key post-acquisition objective of removing its UK exploration cost exposure whilst still retaining potential upside."

Handcross Exploration Well Farm-Out

Ithaca has entered into a farm-out agreement with Oyster Petroleum concerning UK licences P1631 and P1832 (blocks 204/14c, 204/18b and 204/19c), which contain the Handcross prospect. In addition Sussex Energy, an existing Handcross co-venturer, has exercised an option under 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 in the licences to Oyster Petroleum and a 5% working interest to Sussex Energy in exchange for the companies paying their working interest shares of past and future licence costs in addition to providing Ithaca with a cash payment. These transactions reduce Ithaca's working interest in the licences from 45% to 31%. Ithaca retains operatorship of the licences.

When combined with earlier farm-out transactions to RWE Dea UK SNS Limited and Edison, Ithaca is now carried for its forecast share of the planned Handcross exploration well cost and will also receive additional cash beyond the carry.

Handcross is a Palaeocene prospect located in the Judd Basin in the West of Shetland sector of the UK Continental Shelf ("UKCS"). An exploration well is to be drilled on the prospect using the Stena Carron drillship, with operations anticipated to commence in late 2013.

Completion of the transactions is subject to normal regulatory and third party consents. Following completion, the Handcross partners will be Ithaca (31%, Operator), Edison (25%), RWE Dea (20%), Sussex Energy (15%) and Oyster Petroleum (9%).

In addition, Ithaca has entered into a further agreement with Oyster Petroleum to transfer its full 33.33% non-operated interest in UK licence P2018 for a cash sum. The licence, covering West of Shetland blocks 214/24b, 214/29a and 214/30c, was awarded in the UK 27th Offshore Licensing Round. Completion of the licence transfer is subject to normal third party and regulatory consents.

Oyster Petroleum is a new UK West of Shetland focused exploration company backed by the Norwegian international oil and gas investor HitecVision. Sussex Energy is a subsidiary of Azimuth Limited, a privately owned company with assets in the UKCS, Norway, Eire and Namibia.

Isabella Exploration Well Farm-Out

Ithaca has entered into an agreement with Euroil Exploration Limited, a wholly owned subsidiary of Edison, to farm-out a 10% interest in UK licence P1820 which contains the Isabella gas condensate prospect. This transaction reduces Ithaca's non-operated working interest in the licence from 20% to 10%.

The farm-out agreement provides for Edison to pay its 10% working interest share of future licence costs in addition to a cash payment to Ithaca. When combined with the earlier Isabella farm-out transaction executed with Maersk Oil North Sea UK Limited, Ithaca is now carried for its forecast share of the Isabella exploration commitment well cost and will also receive additional cash beyond the carry.

The P1820 licence was awarded in the UK 26th Offshore Licensing Round and covers blocks 30/6b, 30/11a and 30/12d in the UK Central North Sea. The licence work programme requires an exploration well to be drilled on the Isabella prospect by early 2015.

Completion of the transaction is subject to normal third party and regulatory consents. Following completion, the Isabella partners will be Apache North Sea Limited (50%, Operator), Maersk Oil North Sea UK Limited (30%), Ithaca (10%) and Edison (10%).

Edison is a major European energy company, with operations spanning the full energy supply chain, including oil and gas activities in Europe and Africa.

- ENDS -

Enquiries:

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, 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.

About Edison:

Edison, the oldest energy company in Europe and now part of the EDF Group (Electricité de France), has about 3,200 employees in more than 10 countries across Europe, Africa and the Middle East, with activities ranging from exploration and production of crude oil and natural gas to the production and sales of electric power and the marketing of natural gas. Edison's Exploration & Production activities cover approximately 100 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 and production company focused on the UKCS. The company is financially backed and fully funded by HitecVision, a leading international oil and gas investor. HitecVision has committed funds of USD150 million to Oyster Petroleum from its HitecVision VI L.P. fund. Since 2003, HitecVision has invested in a number of highly successful start-ups in the North Sea, including Revus Energy, Noreco, Spring Energy, Core Energy and Spike Exploration.

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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, well completion times, future capital expenditures, future acquisitions 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 "anticipate", "continue", "estimate", "expect", "may", "will", "project", "plan", "should", "believe", "could", "target" and similar expressions, and the negatives thereof, whether used in connection with operational activities, production forecasts, budgetary figures, potential developments 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 and 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 and 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.