Ithaca Energy: Increased Reserves and Values for 2007

Ithaca Energy Inc. and its wholly owned subsidiary Ithaca Energy (UK) Limited is pleased to announce a positive reserves update and its financial results for the year ended 31 December 2007.

Reserves Summary

--31% increase in Proved plus Probable reserves to 26,264.7 thousands of barrels of oil equivalent ('Mboe')

--38% increase in Proved plus Probable plus Possible reserves to 39,359.5 Mboe

--Reclassification of Jacky and Athena reserves from Probable to Proved and Probable

The Net Present Value discounted at 10% per annum (NPV10) of the Athena Proved plus Probable ('2P') net reserves as calculated by Sproule are US$312 million using their December 2007 forecast price deck. This represents a significant portion of Ithaca Energy's value and the Corporation intends to develop the pool to first production in 2010 with further drilling in 2008.

The second most significant property is the Jacky discovery, made in 2007. The 2P net reserves attributed to Jacky are 4.7 million barrels of oil equivalent ('MMboe') of which 1.7MMboe or 37% are considered Proven. The 2P net reserves have an NPV10 of US$122.7 million. Production facilities for Jacky are under construction in anticipation of first production at the end of 2008.

The third component of the Corporation's established reserves are represented by a small interest in a gas and condensate pool in the Barbara area of the Central Basin. The 2P reserves net to the Corporation have been evaluated as 0.8MMboe having an NPV10 of US$7.1 million. The operator of this field is in the process of planning its development for first production in 2010.

In 2008, Ithaca Energy drilled a well near to the Beatrice oilfield which encountered oil and is in the process of negotiating final agreements for the purchase of a 100% interest in the Beatrice oilfield.

Commenting, Lawrie Payne, CEO of Ithaca, said, "The Corporation made significant progress in 2007 and entered 2008 in a strong position, with solid finances, greatly increased reserves and an extensive 2008 drill program. The Corporation has again made further progress in the first quarter of the current year and remains on schedule for first oil production from Beatrice (effective from January 1, 2008) and from Jacky at the end of 2008. The signing of the pre-development credit facility earlier this year is a measure of the progress made to date and further negotiations for a borrowing base facility to meet the Company's capital requirements are in hand."


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