09:50 EDT Wednesday, July 29, 2009

LONDON, UNITED KINGDOM and CALGARY, ALBERTA--(Marketwire - July 29, 2009) -

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

Ithaca Energy Inc. (TSX VENTURE:IAE)(AIM:IAE) and its wholly owned subsidiary Ithaca Energy (UK) Limited ("Ithaca" or "the Company"), an independent oil & gas company with exploration, development and production assets in the UK sector of the North Sea, is pleased to announce it has now successfully completed the sale of the majority of its assets under the second transaction with Dyas, which will leave Ithaca in a strong cash position and with no debt, reduced ongoing funding commitments and greater forward planning ability.

On the 29th June 2009, the Company issued a press release announcing the early conversion of an existing loan in exchange for cash and interests in the company's properties.

Ithaca and Dyas have now achieved early completion of this second transaction on all assets except the Stella discovery, which is anticipated to complete in August. Finalising this transaction leaves Ithaca debt free and in receipt of a further cash payment of approximately US$40.6 million, of which US$32.2 million has been paid and a further US$8.4 million will be paid on final completion (Stella discovery). The cash payment has increased from the number previously announced due to further value adjustments.

The total aggregate final consideration for this revised transaction is approximately US$101.8 million and interest payments on the loan have ceased.

Iain McKendrick, CEO of Ithaca said:

"Rapid completion on this second transaction, which brings significant financial resources into the company, combined with excellent performance at Jacky, secures the financial strength of Ithaca. The company is now well positioned to develop its existing portfolio as well as embark upon new opportunities for growth".

In addition:

- In week beginning 3rd August 2009 the company will launch a revised website: www.ithacaenergy.com

- On the same day an updated corporate presentation will be uploaded to the website.

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