Production and Operations Update

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

Ithaca Energy Inc.

Q3-2012 Production, Athena Operations Update and Q4-2012 Production Outlook

10th October 2012

Ithaca Energy reports third quarter 2012 ("Q3-2012" or the "quarter") production results and provides an update on Athena operations.

Highlights

o Q3-2012 average production of 5,061 barrels of oil equivalent per day ("boepd"), an increase of 28% on the second quarter of 2012 ("Q2-2012").

o Production performance in Q3-2012 reflects the first full quarter's contribution from the Athena field and strong performance from the Beatrice and Jacky fields, which have compensated for the anticipated reduction in Cook and Broom production during the quarter due to planned maintenance shutdowns.

o Production from the Athena field has now stabilised at a gross daily rate of between 10,000 and 11,000 barrels of oil per day ("bopd"), 2,250 to 2,475 bopd net to Ithaca. The field continues to produce "dry" oil, and a total of over 1.2 million barrels have been produced since field start-up.

o The Company's net production in the fourth quarter of 2012 ("Q4-2012") is forecast to be in the range of 6,300 to 6,900 boepd, including the net contribution anticipated from the Cook and MacCulloch field interests being acquired from Noble Energy Inc.

Q3-2012 Production

Production volumes in the quarter came from the operated Athena, Beatrice, Jacky and Anglia fields and the non-operated Cook, Broom and Topaz fields. Total net export production in Q3-2012 was 465,612 barrels of oil equivalent, resulting in an average rate of 5,061 boepd, with approximately 90% being oil production. This represents a 28% increase on production in the second quarter of 2012 (Q2-2012: 3,966 boepd).

Production from the Beatrice complex during Q3-2012 has benefited from various activities undertaken in the second quarter of 2012. Performance of produced water treatment facilities has been improved and the overall platform uptime enhanced through the completion of well optimisation activities at the Beatrice Alpha and Bravo platforms.

Total production during the quarter was impacted by a major planned maintenance shutdown of the Shell operated Anasuria Floating Production, Storage and Offloading vessel ("FPSO"), the host facility for the Cook field. The shutdown has recently ended in early October 2012, having taken approximately 70 days to complete, rather than the Operator's estimated duration of approximately 50 days. In addition, production during the quarter was impacted by the commencement of a planned maintenance shutdown of the host facility serving the Broom field in late-September and unplanned downtime at both the Topaz and Anglia fields. In total, the shutdowns have reduced the potential net average export production over the quarter by approximately 1,100 boepd.

Athena Operations Update

The Athena field commenced production in late May 2012. The early part of Q3-2012 was focused on completing and optimising the post start-up activities required to deliver stable and efficient operations from the wells and the BW Athena FPSO. As previously announced, well intervention activities were performed on the "P1" well during the quarter to eliminate a blockage in the production tubing of the well. Well operations were partially successful and P1 is now onstream. A decision has been made by the Athena co-venturers not to perform a rig based workover on P1 to fully remove the blockage as the reserves associated with the well are anticipated to be recovered by the existing wells on the field.

Reservoir performance, including the continued production of dry oil, provides a positive signal for the longer term potential of the field. The timing of water breakthrough at the Athena wells, along with the efficiency of the sweep of oil through the reservoir assisted by water injection, will be key to predicting the ultimate field production profile.

Q4-2012 Production Outlook

Fourth quarter net average export production is anticipated to be in the range of 6,300 to 6,900 boepd, including approximately 1,000 boepd of net production anticipated from the interests in the Cook and MacCulloch fields that are being acquired from Noble Energy Inc. The production guidance range reflects the impact of the scheduled Beatrice and Jacky maintenance shutdown (forecast to be approximately 20 days) in Q4-2012 and both the ongoing Broom field maintenance shutdown and activities on the facilities serving the Anglia field, which are anticipated to curtail production until late October.

Enquiries:

Ithaca Energy:

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

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

John Woods, CDO [email protected] +44 (0) 1224 650 273

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 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) 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 production and operation 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.

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