Ithaca Ups Stake, Takes Reins at Carna Discovery

Ithaca Energy Inc. has agreed to take over operatorship and increase its working interest in the Carna discovery, located in the Southern Gas Basin of the UK North Sea. The transaction with Centrica North Sea Gas Limited ("Centrica") (the "Acquisition") increases the Company's working interest in the Carna discovery to a material level from 16 percent to 32 percent. The financial terms of the transaction remain confidential between the parties.

The Carna discovery straddles blocks 43/21b and 43/22c and lies adjacent to the producing Garrow and Kilmar gas fields, which constitute the Tors facilities. The discovery was made in early 2009 when a gas column in excess of 1,490 feet TVD (true vertical depth) and net pay of 127 feet TVD was encountered in well 43/21b-5Z. The well tested gas at a gross stabilized rate of 8.8 million cubic feet per day (MMcfpd) on a 48/64th choke from a vertical well penetrating the Carboniferous.

The Company has agreed to a work program with all of the Joint Venture partners to accelerate development studies of the Carna discovery and, if appropriate to submit a Field Development Plan for approval to the Department of Energy and Climate Change before the end of 2012.

The effective date of the Acquisition is January 1, 2012. The transaction and transfer is conditional upon government and partner consents, as is customary.

Joint Venture partners (and their respective interests) in the Carna discovery, post the transaction, are: Ithaca Energy (UK) Limited, operator (32%), Dyas UK Limited (24%), Centrica (40%), EWE Energie AG (4%).