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Ithaca Energy Inc.

Third Quarter 2015 Operations Update

5 October 2015

Ithaca Energy Inc. (TSX: IAE, LSE AIM: IAE) ("Ithaca" or the "Company") provides an operations update following the end of the third quarter of the year ("Q3-2015" or the "Quarter"). The Company is scheduled to issue its financial results for Q3-2015 on 16 November 2015.

Highlights

· Average year to date production to the end of Q3-2015 was 12,300 barrels of oil equivalent per day ("boepd")

· Commissioning operations have commenced on the "FPF-1" floating production facility and sail-away of the vessel remains on track for the end of the first quarter of 2016

· Forecast full year 2015 capital expenditure reduced to $120 million, a reduction of approximately $30 million against previous guidance

· Further reduction in forecast net debt at the end of 2015 to approximately $750 million, down from previous guidance of under $800 million as a result of cost savings across the business

Production & Operations

Average production in Q3-2015 was approximately 12,000 boepd, resulting in average production for the first nine months of the year of 12,300 boepd. Full year guidance is reiterated at 12,000 boepd (95% oil).

The Company's producing assets continued to perform well over the course of Q3-2015, with solid operational uptime achieved across the main fields. The planned maintenance shutdown activities scheduled for the Quarter have all been completed efficiently, with the duration of the outage on the Cook field less than forecast.

Greater Stella Area Development

Good progress has been made during the Quarter on the execution of the Greater Stella Area ("GSA") development programme.

As recently reported, the transition from construction activities into commissioning operations continues on the FPF-1 modifications programme. The main construction works are nearing completion and handover of the various topsides processing, utilities and accommodation sub-systems for pre-commissioning is progressing. Initial commissioning operations are underway, with electrical loop checking on the process control and safety systems and equipment package interface testing having commenced. Sail-away of the vessel from the shipyard in Poland remains on track for the end of the first quarter of 2016, with first production from the Stella field anticipated at the end of the second quarter.

The main 2015 subsea infrastructure installation works have now been successfully completed. Installation of the three kilometre oil export pipeline from the FPF-1 riser base to the Single Anchor Loading structures was completed in August and the associated pipeline tie-ins closed out in September. The only remaining subsea activity to be completed this year involves a small amount of pipeline rock-dumping operations, which are scheduled for later this month.

Financials

Hedging

During Q3-2015 the Company benefitted from approximately 9,600 barrels of oil per day hedged, equating to 80% of production in the Quarter, at an average price of $92/bbl. This compares to an average Brent price for the period of $50/bbl.

Capital Expenditure

With the majority of the planned 2015 investment programme now completed, it is anticipated that total expenditure for the full year will be around $120 million, being $30 million lower than previously guided. This saving is primarily driven by reduced GSA subsea infrastructure installation costs, resulting from efficient execution of the various offshore campaigns, as well as the removal of expenditure following the sale of the Norwegian business.

Net Debt

Net debt at 30 September 2015 was $750 million, down from $788 million at the end of the second quarter of 2015. This was lower than anticipated as a result of cost savings being achieved across the business and also the timing of payments for the GSA capital expenditure programme.

It is anticipated that net debt at the end of 2015 will remain broadly unchanged from the level at the end of the Quarter of $750 million, substantially lower than the previous guidance of under $800 million. With the level of oil hedges in place, this position is largely insensitive to prevailing Brent prices. The Company has $950 million of debt funding facilities, comprising $300 million unsecured senior notes and $650 million bank debt facilities.

Q3-2015 Financial Results Conference Call

The Company is scheduled to release its Q3-2015 financial results on 16 November 2015. A conference call and webcast for investors and analysts will be held on the same day at 12.00 BST (07.00 EST), with a playback facility being made available on the Company's website later that day. Dial-in details for the call will be included in the press release that accompanies the financial results documentation.

- ENDS -

Enquiries:

Ithaca Energy

Les Thomas lthomas@ithacaenergy.com +44 (0)1224 650 261

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

Richard Smith rsmith@ithacaenergy.com +44 (0)1224 652 172

FTI Consulting

Edward Westropp edward.westropp@fticonsulting.com +44 (0)203 727 1521

Tom Hufton tom.hufton@fticonsulting.com +44 (0)203 727 1625

Cenkos Securities

Neil McDonald nmcdonald@cenkos.com +44 (0)207 397 8900

Nick Tulloch ntulloch@cenkos.com +44 (0)131 220 6939

RBC Capital Markets

Daniel Conti daniel.conti@rbccm.com +44 (0)207 653 4000

Matthew Coakes matthew.coakes@rbccm.com +44 (0)207 653 4000

Notes

In accordance with AIM Guidelines, John Horsburgh, BSc (Hons) Geophysics (Edinburgh), MSc Petroleum Geology (Aberdeen) and Subsurface Manager at Ithaca is the qualified person that has reviewed the technical information contained in this press release. Mr Horsburgh has over 15 years operating experience in the upstream oil and gas industry.

References herein to barrels of oil equivalent ("boe") are derived by converting gas to oil in the ratio of six thousand cubic feet ("Mcf") of gas to one barrel ("bbl") of oil. Boe may be misleading, particularly if used in isolation. A boe conversion ratio of 6 Mcf: 1 bbl is based on an energy conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency of 6 Mcf: 1 bbl, utilising a conversion ratio at 6 Mcf: 1 bbl may be misleading as an indication of value.

About Ithaca Energy

Ithaca Energy Inc. (TSX: IAE, LSE AIM: IAE) is a North Sea oil and gas operator focused on the delivery of lower risk growth through the appraisal and development of UK undeveloped discoveries and the exploitation of its existing UK producing asset portfolio. Ithaca's strategy is centred on generating sustainable long term shareholder value by building a highly profitable 25kboe/d North Sea oil and gas company. For further information please consult the Company's website www.ithacaenergy.com.

Forward-looking Statements

Some of the statements and information in this press release are forward-looking. Forward-looking statements and forward-looking information (collectively, "forward-looking statements") are based on the Company's internal expectations, estimates, projections, assumptions and beliefs as at the date of such statements or information, including, among other things, assumptions with respect to production, drilling, construction and maintenance times, well completion times, risks associated with operations, future capital expenditures, continued availability of financing for future capital expenditures, future acquisitions and dispositions and cash flow. The reader is cautioned that assumptions used in the preparation of such information may prove to be incorrect. When used in this press release, the words and phrases like "anticipate", "continue", "estimate", "expect", "may", "will", "project", "plan", "should", "believe", "could", "target", "in the process of", "on track" and similar expressions, and the negatives thereof, whether used in connection with operational activities, sail-away of the FPF-1 vessel, Stella first hydrocarbons, drilling plans, production forecasts, budgetary figures, anticipated net drawn debt, planned maintenance shutdowns, anticipated timing for the release of financial results for the Quarter, potential developments including the timing and anticipated benefits of acquisitions and dispositions or otherwise, are intended to identify forward-looking statements. Such statements are not promises or guarantees, and are subject to known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. The Company believes that the expectations reflected in those forward-looking statements are reasonable but no assurance can be given that these expectations, or the assumptions underlying these expectations, will prove to be correct and such forward-looking statements included in this press release should not be unduly relied upon. These forward-looking statements speak only as of the date of this press release. 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.

This press release contains a non-International Financial Reporting Standards ("IFRS") industry term, "net drawn debt". This term does not have any standardised meaning within IFRS and therefore is unlikely to be comparable to similar measures presented by other companies. The Company uses net drawn debt as a measure to assess its financial position. Net drawn debt includes amounts outstanding under the Company's debt facilities and senior notes, less cash and cash equivalents. Net drawn debt noted above excludes any amounts outstanding under the Norwegian tax rebate facility, which were repaid upon the sale of the Company's Norwegian operations.

Additional information on these and other factors that could affect Ithaca's operations and financial results are included in the Company's Management's Discussion and Analysis for the quarter ended June 30, 2015, and the Company's Annual Information Form for the year ended December 31, 2014 and in reports which are on file with the Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com).