Ithaca Announces UK North Sea Asset Acquisitions

Ithaca Energy Inc. (TSX Venture: IAE, LSE AIM: IAE) announces that the Company has entered into an agreement to acquire a 28.46% non-operated interest in the Cook oil field (“Cook”) and a 7.41% non-operated interest in the Maclure oil field (“Maclure”) from Hess Limited (“Hess”) for a consideration of US$74.5 million and the transfer from Ithaca to Hess of a 10% interest in each of exploration Blocks 42/25b, 43/16a and 43/21c (“the SNS blocks”) in the Southern North Sea (the "Acquisition").

Cook, operated by Shell, lies in Block 21/20a in the Central North Sea.   Gross average production from the field for 2010 was 7,940 barrels of oil equivalent per day (“boepd”) of mainly oil (2,260 boepd net to Hess interest) (source: Hess and Department of Energy and Climate (“DECC”), Note : Gas production figures have been converted using the oil equivalent conversion factor below).

Maclure, operated by BP, is located in Block 9/19 in the Northern North Sea. The field produces mainly oil; gross average production from the field for 2010 was 5,857 boepd (434 boepd net to Hess interest) (source: Hess and DECC, Note : Gas production figures have been converted using the oil equivalent conversion factor below).

Maclure production is temporarily suspended.  Production is routed through the third party owned Gryphon Floating Production Storage and Offloading vessel (the “FPSO”), which broke some of its moorings in February 2011.  The operator of the FPSO is taking measures to investigate and repair the mooring system.

The acquisition of Maclure is subject to pre-emption within 30 days of notification of the transaction by other parties in the Maclure field.

The Company has commissioned Sproule International  Ltd (“Sproule”) to provide a Reserves Audit Opinion on Cook and Maclure.  The opinion from Sproule is anticipated in approximately 40 days from this announcement and, on receipt, the Company expects to make a further, more detailed announcement including information on reserves and other potential upsides associated with the Acquisition together with details, if any, of pre-emption by any Maclure parties.

Following completion of the transaction, Ithaca plans to engage Sproule to undertake a further comprehensive evaluation of the new assets in accordance with the Canadian Oil and Gas Evaluation Handbook (“COGEH”) reserves definitions and evaluation practices and procedures as specified by National Instrument 51-101 (“NI 51-101”).
Source: Ithaca