UK Govt Approves FDPs for Stella, Harrier Fields

Ithaca Energy Inc. announced that the Company has received Field Development Plan ("FDP") approval for the Stella and Harrier fields from the UK government.

• The joint development of the Stella and Harrier fields, located in the Central North Sea, will involve the drilling of subsea horizontal wells tied back to the "FPF-1" floating production unit, with the export of processed hydrocarbons to nearby oil and gas transportation pipelines. Transportation and onshore processing of oil and liquid rich gas arrangements will be announced when finalized.
• A contract for use of the Ensco 100 heavy duty jack-up rig on the development drilling campaign to commence in 2H 2012 was executed in November 2011.
• The packages for procurement and installation of the subsea infrastructure will shortly be awarded, following completion of a competitive tendering process.
• A contract was awarded to Petrofac in October 2011 to upgrade and modify the FPF-1, with associated cost and vessel performance incentivization mechanisms. Specification of the yard for the conversion works will be announced following completion of the ongoing front end engineering and design.

The Stella and Harrier fields will benefit fully from the Supplementary Charge shelter provided by the amendments to Small Field Allowances recently announced by the UK Government.

Energy Minister Charles Hendry said: "This investment from Ithaca Energy is excellent news and an example of plans coming forward to develop new oil and gas fields in the UK Continental Shelf.

"Last month's Budget announced changes to the field allowance for small fields to encourage exploration activity and enhance the case for development of technically challenging fields. It is vitally important we encourage a vibrant industry for these smaller fields to maximize the benefit to the UK of our offshore oil and gas reserves."

The Partners in Stella and Harrier are Ithaca Energy (UK) Ltd (operator), Ithaca Minerals (North Sea) Ltd, Dyas UK Ltd and ultimately, under an Earn-In type arrangement, Petrofac GSA Limited.

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