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Ithaca Energy Inc.
Acquisition of UK North Sea Gas Assets Completes
London, UK - Calgary, Canada, December 17, 2010 – Ithaca Energy Inc. (TSX Venture:
IAE, LSE AIM: IAE) and its wholly owned subsidiary Ithaca Energy (UK) Limited ("Ithaca" or
the "Company"), an independent oil & gas company with exploration, development and
production assets in the UK sector of the North Sea, announces that the Company has
completed a transaction to acquire certain UK North Sea gas interests from GDF Suez E&P
UK Ltd for an adjusted cash consideration of £6.7 million (approximately US$10.5 million)
(the "Acquisition"). The adjustment accounts for free cash flow generated by strong
production throughout 2010 since the effective date of January 1, 2010.
Ithaca shall, with immediate effect, assume operatorship of the Anglia field, and the Opal
and Garnet undeveloped discoveries. The Company shall assume responsibility for ongoing
operations and gas sales nominations with immediate effect for the Anglia field. Ithaca has
also become a non-operating partner in the producing Topaz field.
Anglia and Topaz 2010 production post the completion date shall be included in the
Company’s 2010 production figures. In addition, the assets shall be independently
evaluated by Sproule International Limited and included in the 2010 year end reserves
assessment of the Company.
On August 4, 2010, Ithaca Energy (UK) Limited, as the purchaser, announced that the
Company had entered into an agreement to acquire certain UK North Sea gas interests from
GDF Suez E&P UK Ltd for an unadjusted purchase price effective January 1, 2010 of £11.25
million (approximately US$16.9 million).
Anglia Field – Operated
Ithaca has acquired a 30% interest in and become operator of the producing Anglia Field
which is located in Blocks 48/18b, 48/19b and 48/19e of the UK North Sea gas basin.
Ithaca’s gas entitlement is currently contracted for the life of the field.
Topaz Field – Non Operated
Ithaca has acquired a 35% interest in the producing Topaz Field which is located in Blocks
49/1a and 49/2a in the UK Southern North Sea. Ithaca’s gas entitlement is currently sold
under a contract set at the daily UK gas market price.
Garnet Field – Operated
Ithaca has acquired a 68.33% interest in and become operator of the undeveloped Garnet
Field which is located in Block 44/27a in the UK Southern North Sea. The Garnet Field was
discovered in 1986 and to date one well has been drilled, and one further appraisal well has
been drilled off structure.
Opal Field – Operated
Ithaca has acquired a 53.84% interest in and become operator of the pre-development Opal
Field which is located in Block 43/25a in the UK Southern North Sea. The Opal Field was
discovered in 2005 and to date one well has been drilled which was geologically sidetracked
to appraise the limits of the field.
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Notes to oil and gas disclosure:
Estimates of reserves contained in this press release in connection with the Acquisition may
not have been prepared in accordance with the COGE Handbook and have not been
prepared by a qualified reserves evaluator of the Company. Sproule International Limited
will evaluate the reserves associated with Acquisition at the end of 2010 as part of their
annual evaluation of the Company’s assets.
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"). Boes 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.
The estimates of reserves and future net revenue for individual properties may not reflect the
same confidence level as estimates of reserves and future net review for all properties, due
to effects of aggregation. Possible reserves are those additional reserves that are less
certain to be recovered than probable reserves.
Possible reserves are those additional reserves that are less certain to be recovered than
probable reserves. There is an equal probability that the quantities actually recovered will be
greater or less than the sum of proved plus probable reserves. There is a 10% probability
that at least the sum of the estimated proved reserves plus probable reserves plus possible
reserves will be recovered.
In accordance with AIM Guidelines, Lawrie Payne, MA Marine Geology (Alberta & Columbia)
and Non-Executive Chairman of Ithaca is the qualified person that has reviewed the
technical information contained in this press release.
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 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 first oil,
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.
Neither TSX Venture nor its Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy
of this release.