IAE Ithaca Energy Inc.

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE
UNITED STATES


Ithaca Energy Inc. (TSX VENTURE:IAE)(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").


Terms of the Acquisition

The Acquisition will be effected through a sale and purchase agreement ("SPA")
between Ithaca Energy (UK) Limited, as the purchaser, and Hess Limited, as the
seller. The SPA contains customary provisions for a transaction of this nature
in the oil and gas sector and is subject to DECC and co-venturer approvals.


The Acquisition is expected to complete in Q3 2011 with an effective date of
January 1, 2011.


Financing of the Acquisition

The Acquisition will be funded from existing cash. Evaluation of the Acquisition
with Lloyds Bank Corporate Markets (previously referred to as 'HBOS') indicates
that the Acquisition should support an increase in Ithaca's debt capacity of
approximately US$45 million. In line with previous announcements on the
Company's debt facilities, the overall size of the Company's debt facility is
reasonably anticipated to increase from US$140 million to US$185 million. The
Company has not drawn from this facility.


Iain McKendrick, CEO, commented:

"This acquisition strengthens the Company's portfolio of producing oil assets
and diversifies Ithaca's existing UK North Sea production base, whilst keeping
decommissioning liabilities to a minimum. Significant non-operated interests,
particularly in the Cook field, are highly strategic for the Company. It permits
the Company to focus on extracting value from its existing operated portfolio,
whilst being underpinned by additional non-operated production and cash flow
being generated though the acquisition. Final negotiations to crystallise the
transaction were conducted after the recent changes to the UK Fiscal system.
Once again this demonstrates our capability to be opportunistic, execute
accretive deals and build value for our shareholders".


Notes to oil and gas disclosure:

In accordance with AIM Guidelines, Hugh Morel, BSc Physics and Geology (Durham),
PhD Hydrogeology (London) and senior petroleum engineer at Ithaca Energy is the
qualified person that has reviewed the technical information contained in this
press release. Dr Morel has 30 years operating experience in the upstream oil
industry.


The calculation of barrels of oil equivalent ("boe") is based on a conversion
rate of six thousand cubic feet of natural gas ("mcf") to one barrel of crude
oil ("bbl"). Barrels of oil equivalent may be misleading, particularly if used
in isolation. A boe conversion ratio 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. and its wholly owned subsidiary Ithaca Energy (UK) Limited
("Ithaca" or "the Company"), is an oil and gas exploration, development and
production company active in the United Kingdom's Continental Shelf ("UKCS").
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.


Forward-looking statements:

Some of the statements in this press release 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, including, without limitation, the potential benefits of the
Acquisition, estimates of production and oil and gas reserves and associated
future production and plans of the Company in connection with the Acquisition.
When used in this press release, the words "expects," "believes," "anticipate,"
"plans," "may," "will," "should", "scheduled", "targeted", "estimated" and
similar expressions, and the negatives thereof, whether used in connection with
the estimated production levels, anticipated time of completion of the
Acquisition, oil in place, hydrocarbon composition or otherwise, are intended to
identify forward-looking statements. Such statements are not promises or
guarantees, and are subject to risks and uncertainties that could cause actual
outcome to differ materially from those suggested by any such statements,
including the risk that the Acquisition may not be completed on the terms
described herein or at all and the risk that the future benefits and anticipated
production by the Company are not realized.. 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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