Norvarg Appraisal Well Results

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

Ithaca Energy Inc.

Norvarg Appraisal Well Results

31 July 2013

Ithaca Energy Inc. (TSX: IAE, LSE AIM: IAE) announces that the appraisal well (7225/3-2) test programme on the Norvarg discovery located in licence PL535 in the Norwegian sector of the Barents Sea has been completed.

The appraisal well was drilled approximately 275 km north of the Hammerfest LNG plant on Melkøya, in a water depth of 377 metres, to delineate the Triassic Kobbe Formation of the Norvarg gas discovery. Two formation tests were carried out in the upper and lower parts of the Kobbe Formation, with the well flowing at a maximum gross production rate of 175,000 standard cubic metres of gas per day (approximately 6.2 million standard cubic feet per day) on a 52/64-inch choke. Extensive data acquisition, wire line logging, coring and sampling has been carried out. The well has also been completed with down hole gauges capable of transmitting data after abandonment, which will give further information about the extent of the reservoir.

The Norvarg appraisal well was drilled to test the eastern segment of the structure and to assess the quality and productivity of the Kobbe reservoir.

The results of the appraisal well have confirmed the extensive nature of the Norvarg discovery and the presence of movable gas throughout the Kobbe reservoir, with no water contacts seen. As predicted the quality of the Kobbe reservoir is variable and further analysis is required to confirm the productivity of some of the reservoir intervals. Work will now be undertaken by the partnership to analyse and interpret the acquired data and evaluate the estimated recoverable hydrocarbons on the structure and potential future development options. Moveable gas identified in the deeper levels of the reservoir than those in the exploration well will be taken into account in the evaluation of the potential reserves.

The well was drilled to a vertical depth of 2171 metres below sea level and terminated in the Klappmyss Formation in the Early Triassic. The well will now be permanently plugged and abandoned.

This is the second well on PL535. The licence was awarded in the 20th Licensing Round in 2009. Well 7225/3-2 was drilled using Ocean's Leiv Eiriksson semi-submersible rig.

The partners in the licence are Total E&P Norge (Operator, 40%), North Energy (20%), Ithaca Petroleum Norge (13%), Statoil (10%*), Det Norske (10%*), and Rocksource Exploration Norway (7%).

* Pending government approval.

Notes to Oil & Gas Disclosures

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.

The term "boe" may be misleading, particularly if used in isolation. A boe conversion of6 Mcf : 1 bbl is based on an energy equivalency 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 news 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 AIM: IAE) is an oil and gas operator focused on North Sea production, appraisal and development activities. The Company's strategy is centred on building a highly profitable North Sea oil and gas company by maximising production and cashflow from its existing assets, the appraisal and development of existing discoveries on properties held by the Company and the delivery of additional growth via acquisitions and licence round participation.

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

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.

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