Ithaca Energy starts Jacky field production

2009-07-22 05:05 ET - News Release

Mr. Iain McKendrick reports

ITHACA ENERGY INC.: JACKY FIELD PERFORMANCE CONTINUES TO EXCEED EXPECTATIONS

Ithaca Energy Inc. and its wholly owned subsidiary Ithaca Energy (U.K.) Ltd., an independent oil and gas company with exploration, development and production assets in the United Kingdom sector of the North Sea, has commenced production from the Jacky field, which is now flowing at rates in excess of 11,000 barrels of oil per day.

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 (barrels of oil per day) (5,920 barrels of oil per day net to Ithaca). On May 20, 2009, the downhole pump was activated, immediately boosting the flow from the reservoir. Since then, optimisation of pump performance has resulted in progressive production rate improvement and now daily rates are in excess of 11,000 barrels of oil per day (7,400 barrels of oil per day net to Ithaca). Daily rates continue to increase.

Average production for the month of June was approximately 9,300 barrels of oil per day (6,257 barrels of oil per day 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 barrels of oil per day (7,455 barrels of oil per day 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 realise its development portfolio."

Partners in the Jacky field are Ithaca (67.275 per cent), Dyas U.K. Ltd. (22.725 per cent) and North Sea Energy Ltd. (10 per cent)

Partners in the Beatrice field are Ithaca (74.75 per cent) and Dyas U.K. Ltd. (25.25 per cent).

On June 29, 2009, Ithaca announced (see news issued in Stockwatch) a second transaction with Dyas U.K. Ltd. that will reduce Ithaca's interests in Jacky and Beatrice to 47.5 per cent and 50 per cent respectively. Closing of that transaction remains on course to be completed before the end of the third quarter of 2009.

In accordance with AIM Guidelines, Lawrie Payne, MA, marine geology (Alberta and Columbia) and chairman of Ithaca Energy, is the qualified person that has reviewed the technical information contained in this press release.

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