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 to Edison International and Shell

17 June 2013

Ithaca Energy Inc. (TSX: IAE, LSE AIM: IAE) ("Ithaca" or the "Company") announces the execution of further UK exploration farm-out transactions. The Company has executed a farm-out agreement with a subsidiary of Edison International SpA ("Edison") for a 25% interest in the licences containing the Handcross prospect and an agreement with Shell UK Limited ("Shell") concerning a licence awarded in the 27th UK Offshore Licensing Round.

Highlights

·; As a result of the two farm-outs on the Handcross prospect, to Edison and RWE Dea, Ithaca has now reduced its share of the forecast cost of the Handcross exploration well to 6%, while retaining a 45% working interest.

·; In line with its stated strategy, the Edison farm-out means that Ithaca has now substantially mitigated all committed UK exploration expenditure.

Iain McKendrick, Chief Executive Officer, commented:

"I am delighted that, not only have the farm-out team delivered very prompt and tangible results from the exploration farm-out effort, but also that we have been joined by such high quality industry partners across our UK exploration assets. The monetisation of the UK exploration portfolio has far exceeded our expectations in terms of levels of expenditure carry. Ithaca shareholders are now exposed to some potentially high impact exploration at negligible cost".

Handcross Exploration Well Farm-Out

Ithaca has entered into an agreement with Euroil Exploration Limited, a wholly owned subsidiary of Edison, to farm-out a 25% interest in UK licences P1631 and P1832 (blocks 204/14c, 204/18b and 204/19c), which contain the Handcross prospect. This agreement reduces Ithaca's working interest in the licences from 70% to 45%. Ithaca retains operatorship of the licences.

The Edison farm-out is in exchange for a partial carry of Ithaca's share of the costs of an exploration well on the Handcross prospect. Edison is a major European energy company, with operations spanning the full energy supply chain, including oil and gas activities in Europe and Africa.

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

The Edison agreement, in combination with the previously announced farm-out agreement entered into with RWE Dea in April 2013, reduces Ithaca's paying interest in the Handcross well to 6%. This implies a forecast net well cost to the Company of $2.5 million, compared to the net cost prior to the farm-outs of approximately $40 million.

Completion of the transaction with Edison is subject to normal regulatory and third party consents. Following completion, the Handcross partners will be Ithaca (45%, operator), Edison (25%), RWE Dea (20%) and Sussex Energy Limited (10%).

UK 27th Round Licence Farm-Out

Ithaca has also entered into an agreement with Shell to farm-out 50% of the Company's 100% interest in UK licence P2048, covering blocks 29/24, 29/25, 29/29 and 29/30, which was awarded in the UK 27th Offshore Licensing Round. The firm licence work programme commitment is to obtain 500km2 of 3D seismic data.

The agreement provides for Shell to pay the full cost of obtaining the seismic data. Ithaca has the option to retain its 50% interest in the licence, subject to paying its corresponding share of the work programme costs on a future date. Should this option not be exercised, the Company's 50% interest in the licence will transfer to Shell, with Ithaca having incurred no costs associated with execution of the committed work programme. 

Completion of the transaction with Shell is subject to normal regulatory consents.

Enquiries:

Ithaca Energy:

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 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, 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 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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