IAE.L Regulatory News (IAE)

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Ithaca Energy Inc.

Closure of Oversubscribed US$430M Debt Facility Syndication

11th October 2012

Ithaca Energy Inc. (TSX: IAE, LSE AIM: IAE) announces that the underwritten debt facility executed with BNP Paribas ("BNPP") in June 2012 has been successfully syndicated by BNPP, bringing six other leading international banks into the facility.

Highlights

o The Company has agreed and signed a US$430 million facility with BNPP, as Bookrunner and Mandated Lead Arranger, and six other highly experienced banks working in the international oil and gas sector.

o The facility was oversubscribed during syndication, underlining the value of the Company's existing asset portfolio and development execution strategy.

o The facility is available to fund ongoing development activities and future asset acquisitions.

A Senior Secured Borrowing Base Facility Agreement was executed with BNPP in June 2012 for the provision of a US$400 million underwritten debt facility, plus US$30 million cost overrun tranche. The subsequent syndication process run by BNPP, as Bookrunner, was oversubscribed and resulted in the Company securing agreement for a US$430 million facility.

The seven banks participating in the facility syndicate are:

o BNP Paribas and Lloyds TSB Bank plc (as Bookrunners and Mandated Arrangers);

o Bank of America N.A., Deutsche Bank AG, The Bank of Nova Scotia and The Royal Bank of Scotland (as Mandated Lead Arrangers); and,

o NIBC Bank N.V. (as Manager).

The facility, combined with an existing cash balance US$132 million (end Q2-2012) and the Company's projected cashflow from operations profile, means that Ithaca has the financial capacity to continue delivering material growth from both its existing asset portfolio and from new additions.

Graham Forbes, Chief Financial Officer, commented:

"It is very pleasing to close an over subscribed bank syndication process with such a leading group of experienced banks in the sector. We thank them for their support and look forward to working together as we grow the Company."

Enquiries:

Ithaca Energy:

Iain McKendrick, CEO imckendrick@ithacaenergy.com +44 (0) 1224 650 261

Graham Forbes, CFO gforbes@ithacaenergy.com +44 (0) 1224 652 151

FTI Consulting:

Billy Clegg billy.clegg@fticonsulting.com +44 (0) 207 269 7157

Edward Westropp edward.westropp@fticonsulting.com +44 (0) 207 269 7230

Georgia Mann georgia.mann@fticonsulting.com +44 (0) 207 269 7212

Cenkos Securities plc:

Jon Fitzpatrick jfitzpatrick@cenkos.com +44 (0) 207 397 8900

Ken Fleming kfleming@cenkos.com +44 (0) 131 220 6939

RBC Capital Markets:

Tim Chapman tim.chapman@rbccm.com +44 (0) 207 653 4641

Matthew Coakes matthew.coakes@rbccm.com +44 (0) 207 653 4871

BNP Paribas:

Xavier Venereau xavier.venereau@bnpparibas.com +33 (0) 1 4316 8212

Nick Beattie nick.beattie@uk.bnpparibas.com +44 (0) 207 595 4534

Sue Mingay sue.mingay@uk.bnpparibas.com +44 (0) 207 595 3455

About Ithaca Energy:

Ithaca Energy Inc. (TSX: IAE, LSE AIM: IAE) and its wholly owned subsidiary Ithaca Energy (UK) Limited ("Ithaca" or "the Company"), is an oil and gas operator focused on production, appraisal and development activities on the United Kingdom Continental Shelf. The goal of Ithaca, in the near term, is to maximize production and achieve early production from the development of existing discoveries on properties held by Ithaca, to originate and participate in exploration and appraisal on properties held by Ithaca when capital permits, and to consider other opportunities for growth as they are identified from time to time by Ithaca.

Not for Distribution to U.S. Newswire Services or for Dissemination in the United States

Forward-looking statements

Some of the statements in this announcement are forward-looking. Forward-looking statements include statements regarding the intent, belief and current expectations of Ithaca Energy Inc. or its officers with respect to various matters. When used in this announcement, the words "anticipate", "continue", "estimate", "expect", "may", "will", "project", "plan", "should", "believe", "could", "target" and similar expressions, and the negatives thereof, whether used in connection with production and operation activities or otherwise are intended to identify forward-looking statements. Such statements are not promises or guarantees, and are subject to known and unknown risks and uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements or information. These forward-looking statements speak only as of the date of this announcement. Ithaca Energy Inc. expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement contained herein to reflect any change in its expectations with regard thereto or any change in events, conditions or circumstances on which any forward-looking statement is based except as required by applicable securities laws.

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