Operations Update

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

Ithaca Energy Inc.

Operations Update

27 June 2013

Ithaca Energy Inc. (TSX: IAE, LSE AIM: IAE) ("Ithaca" or the "Company") reports estimated second quarter 2013 production results and provides an operational update ahead of its 2013 Annual and Special Shareholders Meeting.

Highlights

·; Net average export production in the second quarter of 2013 ("Q2-2013" or the "quarter") for the combined pro-forma Ithaca and Valiant Petroleum plc ("Valiant") entities is anticipated to be approximately 14,000 barrels of oil equivalent per day ("boepd"). This includes the impact of planned shutdowns during the quarter.

·; Total forecast production for the second half of 2013 ("H2-2013") is forecast to be within the Company's guidance range of 14,000 to 16,000 boepd.

·; A number of production enhancement activities, notably on the Dons and Causeway Area fields, are scheduled to boost net production for H2-2013.

Q2-2013 Production

With three days to the end of the quarter, net export production in Q2-2013 is anticipated to be close to 14,000 boepd, including a full quarter's pro-forma contribution from the assets acquired as a result of the Valiant acquisition. Oil production is forecast to account for approximately 95% of the total.

The fields produced strongly during the quarter, although, as anticipated, production was impacted by planned maintenance shutdowns on a number of assets, including the Company's operated Beatrice Area infrastructure (approximately 25 days) and Anglia, together with the non-operated Topaz field. Scheduled shutdowns were also incurred on the Shell operated Anasuria floating production, storage and offloading vessel that serves as the host facility for the Cook field to enable the re-start of production from another field that uses the vessel.

Operations Update

Dons

Infill drilling activities are currently on-going on the EnQuest operated Don Southwest field. An additional production well on the field has just been completed and is being brought online over the next few days through the "Northern Producer" host facility infrastructure. The rig is currently preparing to commence drilling of a water injection well in the same area of the field, to support production and reserves recovery from that area.

Athena

During the quarter the Athena field completed its first full year of operations, with gross production of over 3.6 million barrels having been produced to date.

Gross daily production from the field is currently at a reduced level, primarily as a function of one of the four producing wells, the "P2" well, being temporarily shut-in awaiting a repair to the electrical cable serving that particular well. A diving support vessel has been contracted to perform the necessary operations to fix the electrical fault and reinstatement of production from the well is anticipated within the next few weeks.

During the quarter, the Athena field commenced the production of water with oil. This is significantly later than originally anticipated. As previously noted, the evolution of the water production profile will now provide important information for forecasting the ultimate field production profile and the scope for future potential upside investment opportunities.

Causeway Area

Drilling activities on the Causeway water injection well and the Fionn production well were completed in March 2013, prior to completion of the Valiant acquisition on 19 April 2013. Since taking control of the assets, the Company has completed the subsea tie-in works required to enable the Fionn well to be put into production and is working closely with Taqa, the operator of the Causeway Area host infrastructure, to facilitate start-up of the installed electrical submersible pumps ("ESPs") and (Causeway) water injection as soon as practicable.

The flow tests that have been performed on the Fionn well since completion of the subsea tie-in works have confirmed that the well has the potential to flow at considerably better rates if sidetracked to a more optimal location (the well is a re-completed appraisal well).

The Company has decided to utilise a rig option originally held by Valiant to sidetrack the Fionn well. It is anticipated that drilling operations will commence towards the end of 2013. The well will be sidetracked to a location updip of the existing well to better optimise access to the prime reservoir formation and to target potential upside reserves in a secondary reservoir.

H2-2013 Production Outlook

Total forecast production for H2-2013 is expected to be within the Company's guidance range of 14,000 to 16,000 boepd, supported by production enhancement activities notably on the Don Southwest field.

Production in H2-2013 will be impacted by the second phase of planned maintenance shutdown activity on the host facilities serving the Company's fields. Most significantly, there will an approximately six week shutdown of the Causeway Area fields as a result of maintenance activities on the Taqa operated Cormorant infrastructure that serves the fields.

Appointment of Norwegian General Manager

Building upon the Company's previously announced success in the recent Norwegian 22nd Licensing Round, the Company is also pleased to announce that it has appointed a new General Manager of its Norwegian subsidiary; details of which will be announced upon the new General Manager joining the Company. This demonstrates the Company's continuing commitment to a focused strategy on the Norwegian Continental Shelf.

Annual & Special Shareholders Meeting Presentation

A short presentation covering the Company's on-going operational and corporate activities will be given at the 2013 Annual & Special Shareholders Meeting that is scheduled to be held today at 2.p.m (local time) in Calgary, Canada. The presentation will be made available on the Company's website (www.ithacaenergy.com) immediately prior to the meeting. The presentation contains unchanged data on future production and cashflows. Updated information on the future oil price hedges executed by the Company is included in the presentation.

Enquiries:

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 of 6 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.

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 contained in the corporate presentation, 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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