Ithaca's Second Well at Athena Successful

Ithaca Energy has successfully tested 28 degree API sweet oil at a peak rate of 1,375 bopd from its second well (14/18b-16) on the Athena project in the Outer Moray Firth area of the United Kingdom's continental shelf. Company analysis indicates that under full production conditions planned for the development, the well would produce approximately 5,000 bopd employing submersible pumps.

The #16 well was directionally drilled to a bottom hole location 2,500 feet northeast of the #15 well. It confirms interpretation of the extension of the field to the east of previous drilling and creates the opportunity for additional locations in an easterly direction. The Upper Leek sandstone was encountered at 8617 feet subsea, 291 feet high to the #15 well which tested at rates up to 1,330 bopd.

The well penetrated 426 feet of gross oil-bearing sandstones in the Upper Leek formation and a net pay interval of 115 feet, (92 feet vertical). Following perforation of a 233-foot (185 feet vertical) interval, the 14/18b-16 well flowed at a peak rate of 1,375 bopd and a stable rate of 1,200 bopd through a 36/64" choke in a test of 36 hours duration. No water was produced during the test period and H2S levels were very low.

Currently the well is being suspended for future use as a production well. Based on this and the success of the earlier 14/18b-15 well, Ithaca intends to continue its field development plan application with the UK's DBERR, with final submission expected prior to year-end 2007.

Both of the wells drilled will be used as production wells. The Company is in the process of negotiating a rig slot for the drilling of the third well, which could be, commenced before year-end or early next.

Ithaca owns a 70% interest in the project together with, EWE Aktiengesellschaft 20%, and Zeus Petroleum 10%.

Lawrie Payne, Ithaca's CEO, said, "The successful testing of this well confirms our geologic and geophysical interpretations and meets or exceeds all of our expectations. The oil column established by the #15 and #16 wells is in excess of 640 feet, representing a significant accumulation of oil and substantial potential for future development. While tested flow rates in both wells are not high, this is as a result of the viscosity of the oil more than reservoir quality, which can be overcome with the use of submersible pumps. "