Ithaca Energy Inc. (TSX VENTURE:IAE)(AIM:IAE) announces that it has acquired
Challenger Minerals (North Sea) Limited ("CMNSL"), thereby increasing its
interests in the Stella / Harrier fields, obtaining a non-operated interest in
the producing Broom field and access to additional undeveloped North Sea

The Company has acquired the entire share capital of CMNSL from Transocean
Drilling U.K. Limited for a consideration of US$35 million; US$25 million
payable immediately and US$10 million upon approval of the Stella / Harrier
Field Development Plan by the Department of Energy and Climate Change ("DECC"). 

Through this transaction the Company has acquired:

--  An additional 18% interest in the Stella / Harrier fields. 
--  An 8% non-operated interest in the Broom producing field. Management
    estimate that net average production from Broom is currently approx. 470
    barrels of oil per day ("bopd"), with net remaining proved plus probable
    reserves of approximately 0.9 million barrels of oil ("Mbbl"). 
--  A 10% interest in two undeveloped discoveries, Scolty and Torphins
    (Block 21/8a), located adjacent to the Forties field in the Central
    North Sea, plus a 10% interest in the nearby Crathes prospect
    (straddling Blocks 21/12c & 21/13a). 
--  US$15 million of UK tax losses.

The full portfolio acquired by the Company is summarised as follows:

    Block(s)         Field / Discovery             Type  Equity Interest
    2/4a & 2/5                   Broom        Producing               8%
    21/8a,            Scolty, Torphins      Undeveloped              10%
    21/12c & 21/13a            Crathes      Exploration              10%
    21/13c                           -      Exploration              10%
    29/10a & 30/6a     Stella, Harrier      Undeveloped              18%


- Mbbl    millions of barrels of oil                        
- bopd    barrels of oil per day                            

A conference call for analysts in the UK and Europe will be held at 09.00 GMT on
October 20 2011 and with North American analysts on the same day at 14.00 GMT
(07.00 EST) to provide further background information on the details presented
in this and other press releases issued today. Dial-in details for the call can
be obtained by contacting Pelham Bell Pottinger.

A presentation concerning the information covered in this press release will be
available on the Company's website ( immediately prior to
the conference call on October 20 2011. 

Notes to oil and gas disclosure: 

In accordance with AIM Guidelines, Hugh Morel, BSc Physics and Geology (Durham),
PhD Hydrogeology (London) and senior petroleum engineer at Ithaca is the
qualified person that has reviewed the technical information contained in this
press release. Dr Morel has 30 years operating experience in the upstream oil

The estimates of reserves for individual properties may not reflect the same
confidence level as estimates of reserves of all properties, due to the effects
of aggregation.

The term "boe" may be misleading, particularly if used in isolation. A boe
conversion of 6 Mcf: 1 bbl is based on an energy equivalency conversion method
primarily applicable at the burner tip and does not represent a value
equivalency at the wellhead. 

Estimates of reserves contained in this press release in connection with the
transaction may not been prepared in accordance with the COGE Handbook and have
not been prepared by a qualified reserves evaluator. Sproule International
Limited will evaluate the reserves associated with the transaction at the end of
2011 as part of their annual evaluation of the Company's assets.

About Ithaca Energy:

Ithaca Energy Inc. and its wholly owned subsidiary Ithaca Energy (UK) Limited
("Ithaca" or "the Company"), is an oil and gas exploration, development and
production company active in the United Kingdom's Continental Shelf ("UKCS").
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 the estimated production levels of in connection with
the transaction, reserves associated with the transaction and other benefits of
the transaction 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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