Ithaca Boosts N. Sea Assets with Challenger Acquisition

Ithaca has acquired Challenger Minerals (North Sea) Limited ("CMNSL"), thereby increasing its interests in the Stella/Harrier fields, obtaining a non-operated interest in the producing Broom field and access to additional undeveloped North Sea discoveries.

The Company has acquired the entire share capital of CMNSL from Transocean Drilling U.K. Limited for a consideration of US $35 million; US $25 million payable immediately and US $10 million upon approval of the Stella/Harrier Field Development Plan by the Department of Energy and Climate Change ("DECC").

Through this transaction the Company has acquired:

• An additional 18% interest in the Stella/Harrier fields.
• An 8% non-operated interest in the Broom producing field. Management estimate that net average production from Broom is currently approx. 470 barrels of oil per day ("bopd"), with net remaining proved plus probable reserves of approximately 0.9 million barrels of oil ("Mbbl").
• A 10% interest in two undeveloped discoveries, Scolty and Torphins (Block 21/8a), located adjacent to the Forties field in the Central North Sea, plus a 10% interest in the nearby Crathes prospect (straddling Blocks 21/12c & 21/13a).
• US $15 million of UK tax losses.

The full portfolio acquired by the Company is summarized as follows: