Ithaca Energy Acquires Beatrice Oilfield

Ithaca Energy has entered into an agreement effective from January 1, 2008, to acquire Talisman Energy (UK) Limited's 100% interest in the Beatrice oilfield on the United Kingdom's Continental Shelf for a cash consideration of 10 million (US$21 million). The purchase is subject to the usual government and third party consents and due diligence.

Beatrice currently produces approximately 1,800 barrels of oil per day (bopd). Discovered by Mesa Petroleum in 1979, Beatrice has produced more than 165 million barrels of oil to date out of an estimated 495 million barrels in place. Talisman retains the obligation for decommissioning. Wood Group Engineering (North Sea) will be appointed as Duty Holder and operator, an extension of their current role as engineering contractor.

The acquisition of the Beatrice field provides Ithaca with its first oil production and control of the producing infrastructure in the area. The Inner Moray Firth area became a core area with the successful drilling of the 90% owned Jacky oil discovery in May of this year, Ithaca owns a 100% interest in a 114,500 acre license surrounding the Beatrice field on which the Company has identified several exploration prospects the first of which will be drilled before year end.

Included in the transaction are the offshore facilities of three platforms, Alpha, Bravo and Charlie, operatorship of the Nigg onshore storage and transshipment terminal and a 16 inch diameter pipeline from the Alpha platform to the Nigg facility. The pipeline was substantially replaced in 2001 and has the capacity for over 60,000 barrels per day. The Bravo platform is currently shut-in and it is Ithaca's intention to resume operations during the process of connecting Jacky to the Alpha platform. Bravo was producing approximately 800 bopd prior to being shut-in.

Final Transaction Agreements are expected to be signed by January 31, 2008 with complete transfer of the interests by June 30, 2008.

Lawrie Payne, CEO of Ithaca commented:

"This acquisition not only establishes Ithaca as a producer, but has major strategic value to the Company. The purchase of Beatrice brings immediate production of approximately 1,800 bopd, the opportunity to increase production by restoring production from the Bravo platform, the opportunity to tie-in our Jacky discovery and to provide processing facilities for any future discoveries in the area".


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