Ithaca's Jacky Field Continues to Exceed Expectations

Ithaca Energy announced that production from the Jacky field, located in the Greater Beatrice area, is now flowing at rates in excess of 11,000 bopd.

On the April 6, 2009, the Jacky production well started flowing without artificial lift at gross rates of around 8,800 barrels of oil per day (bopd) (5,920 bopd net to Ithaca). On May 20, 2009, the downhole pump was activated, immediately boosting the flow from the reservoir. Since then, optimization of pump performance has resulted in progressive production rate improvement and now daily rates are in excess of 11,000 bopd (7,400 bopd net to Ithaca). Daily rates continue to increase.

Average production for the month of June was approximately 9,300 bopd (6,257 bopd net to Ithaca). Combined rates from the Jacky and Beatrice fields producing to the Nigg oil terminal during June were in excess of 10,900 bopd (7,455 bopd net to Ithaca).

The Jacky field has continued to produce 'dry' oil increasing confidence in the likely ultimate production volume. Ithaca is currently proposing to drill a water injection well in the third quarter of 2009 to support and maintain production levels through 2010 and beyond. A drilling rig has been identified for this work.

John Woods, Chief Developments Officer, said,  "The continued excellent performance of the Jacky field has increased our confidence in the sustained production and associated revenue that will provide Ithaca with the financial strength necessary to realize its development portfolio."

Partners in the Jacky field are Ithaca (67.275%), Dyas UK Ltd (22.725%) and North Sea Energy Ltd (10%). Partners in the Beatrice Field are Ithaca (74.75%) and Dyas UK Ltd (25.25%).

On June 29, 2009, Ithaca announced a second transaction with Dyas UK Ltd that will reduce Ithaca's interests in Jacky and Beatrice to 47.5% and 50% respectively. Closing of that transaction remains on course to be completed before the end of the third quarter of 2009.