Ithaca Chooses Bluewater FPSO for Athena Development

Ithaca Energy Inc and its wholly owned subsidiary, Ithaca Energy (UK) Limited, announced that it has entered into an exclusivity agreement with Bluewater Energy Services BV to develop the Athena Field using the Uisge Gorm Floating Production, Storage and Offloading vessel(FPSO).

Developing the field using an FPSO offers a significant reduction in capital outlay of approximately US$200 million and accelerates first oil production from Athena by up to 1 year, as compared to a subsea tie-back to the Talisman operated Claymore facility that the Company had previously explored.

In addition, an FPSO can accommodate higher flow rates allowing more rapid depletion of the field and provides Ithaca Energy with control of its own destiny in design, execution and timing of the project.

Ithaca Energy anticipates that initial production should be realized at the end of 2009 at an approximate rate of 21,000 barrels per day, gross.

The agreement with Bluewater provides for an exclusivity period of 90 days in which to finalize engineering and negotiation of a detailed contract under terms already agreed. Bluewater will modify the FPSO, and then deploy it at the Athena Field from late 2009.

Ithaca Energy is the operator and holds a 70% working interest in the Athena field, with partners EWE Akteingesellschaft (EWE) holding 20% and Zeus Petroleum holding 10%.

Ithaca Energy COO, Iain McKendrick said,"This is an excellent opportunity for the Athena Partnership to significantly improve the field economics. Securing this agreement is an example of how the new generation of North Sea oil companies can react quickly when opportunities present themselves. The immediate availability of the FPSO and the fact that its capabilities are already very well suited to the Athena Field make it an excellent opportunity for us. We are looking forward to working with Bluewater to bring the field on stream before the end of 2009."