Ithaca Awaits First Production at Athena, Updates 3Q11 Production

Ithaca reported 2011 third quarter production, as well as changes to production reporting following the acquisition of the Cook field and in anticipation of first production from the Athena field.

Export Production 3Q 2011

Combined export production for the third quarter 2011 totalled 331,383 barrels of oil equivalent ("boe") and averaged 3,602 barrels of oil equivalent per day ("boepd") net to Ithaca. The Company's export production volumes in 3Q 2011 comprise production from the Beatrice and Jacky oil fields, the Anglia and Topaz gas fields and oil and gas from the recently acquired Cook field. Export production is summarized as follows:

3Q 2011 Net to Ithaca (boe) Net to Ithaca (boepd)
July 77,477 2,435
August 114,339 3,688
September 141,567 4,719
Total 331,383 3,602 (Average)

During the third quarter of 2011 certain events and activities had an impact on the export production levels of the Company.

In July, strong production was restored in the Jacky J01 well. The production figures for Jacky do not represent a full quarter; Electrical Submersible Pump ("ESP") support for the well was fully restored at the end of the first week in July.

In early August, the replacement of an ESP was successfully completed on well A21 at the Beatrice Alpha platform

From September 23, Beatrice production was shut in for 7 days to allow maintenance of the produced water treatment system. Production is now re-instated and Jacky production was not restricted.

The Company reports production from midday August 25 onwards for the Cook field following completion of the transaction with Hess Limited to acquire a 28.46% interest in the field. The Cook field produces approximately 1,900 boepd net to Ithaca on a daily basis. Production levels have been steady since reporting commenced although 4 days shut down were incurred due to repairs on board the Anasuria Floating Production Storage and Offtake ("FPSO") vessel; this is reflected in the quarterly figure
Currently, the Company's daily export production rate is around 4,800 boepd net

Export Production Method of Reporting

Due to the addition of Cook production into the Company's portfolio and the anticipated addition of Athena production in 4Q 2011, the Company has revised its method of reporting hydrocarbon production volumes.

The Company has previously reported sales volumes of oil and gas as historically the sales volumes and export production volumes were effectively equivalent due to all Company oil and gas being transported to shore by pipe and sold on a monthly basis. However, this method of reporting now requires revision to correctly reflect the Company's net production.

Oil produced by the Cook field is sold through liftings from the Anasuria Floating Production Storage and Offtake ("FPSO") vessel via shuttle tanker. The Company is entitled to record sales when liftings are made, on a regular but not monthly basis. In addition, future oil production from the Athena field will be transported via regular shuttle tankers to Ithaca's operated Nigg oil terminal. Sales will only be recorded when the oil is transferred into the storage tank at the Nigg terminal.

The Company will now report "export production", being volumes produced, adjusted for shrinkage, fuel and flare contribution and any normal oil and gas losses.

The Company is adopting a standard method of reporting, utilized by many oil and gas producers, for all future quarterly production updates. Sales volumes and valuations of inventory will continue to be disclosed in the Company's quarterly accounts.