Stella Development Well -- Successful Test Results ABERDEEN, SCOTLAND -- (Marketwired) -- 09/11/13 -- *T (TSX VENTURE: IAE) (LSE: IAE) TSX VENTURE: IAE Not for Distribution to U.S. Newswire Services or for Dissemination in the United States Ithaca Energy Inc. Stella Development Well - Successful Test Results 11 September 2013 Ithaca Energy Inc. (TSX: IAE, LSE: IAE) ("Ithaca" or the "Company") announces completion of a highly successful flow test on the first development well drilled on the Stella field and provides a progress update on the Greater Stella Area development activities. Highlights - The first Stella field development well, "A1", flowed at a maximum rate of 10,835 barrels of oil equivalent per day ("boepd") on a 7/ 8-inch choke, with the full production potential of the well limited by the capacity of the well test equipment on the drilling rig. - Fluid samples have confirmed the high oil content of the hydrocarbons that will be produced from the well. The maximum rate of 10,835 boepd corresponds to 6,499 barrels of oil per day ("bopd") and 26 million standard cubic feet per day ("MMscf/d") of "liquids rich" gas. - The well intersected a high quality net reservoir interval of 1312 feet, with reservoir properties in line with previous wells drilled on the field. The oil is of high quality, approximately 42degrees API. - The facilities that will be used on the "FPF-1" floating production facility to separate and export oil and gas produced from the field will increase the overall oil relative to gas production rate associated with the A1 well, by processing more efficiently than the simple separation facilities available for the purposes of the well test. - Following suspension of the A1 well, the ENSCO 100 will move on to drilling of the second Stella development well from the same drilling centre location. - Excellent progress continues to be made by Technip UK Limited ("Technip") with execution of the 2013 subsea infrastructure installation works. The most weather sensitive activities in this year's work programme have now been completed. - Completion of the dry dock works being undertaken by Petrofac Facilities Management Limited ("Petrofac") on the FPF-1 are progressing well and the focus of fabrication activities is moving on to the initial works required to commence installation of the new processing plant on the vessel. - The capital expenditure and start-up target schedule for the GSA hub remain unchanged from that previously issued. Iain McKendrick, Chief Executive Officer, commented:"This well and the highly successful test are outstanding results for the Company. This is an enormous leap forward in de-risking of the Greater Stella Area development and the creation of a major new production hub in the UK Central North Sea. The well has accessed the reserves it was designed to recover and the test confirms the presence and extremely high quality and deliverability of the reservoir sands. When these results are combined with progress that has been made on both the successful execution of the 2013 subsea installation works and the FPF-1 modifications programme, the development can be seen to be confidently driving forward at pace." Further Information Greater Stella Area Development Strategy Ithaca's focus on the Greater Stella Area ("GSA") is driven by the monetisation of reserves within the existing portfolio and the generation of additional value via the wider opportunities provided by the range of undeveloped discoveries surrounding the production hub. The development involves the creation of a production hub based on deployment of the FPF-1 floating production facility located over the Stella field, with onward export of oil and gas. The FPF-1 will serve as the processing hub for production from the Stella and Harrier fields, plus potential incremental production from Hurricane and other tie-back opportunities in the area. Ithaca's GSA joint venture partners are Dyas UK Limited (25.34%), a long established privately owned North Sea oil and gas producer, and Petrofac GSA Limited (20%), a subsidiary of Petrofac plc, the leading international oil and gas services provider listed in the FTSE 100 in London. Drilling Well 30/6a-A1Z ("A1") is the first of four development wells that are to be drilled on the Stella field prior to the start-up of production. The well was drilled to a total vertical depth subsea of 9739 feet, with a 2499 foot horizontal reservoir section completed in the Palaeocene Andrew sandstone reservoir, close to the targeted transition between the oil rim and gas condensate cap. As anticipated prior to drilling, the reservoir quality encountered bythe well was in line with previous appraisal wells drilled on the field. The well intersected a net reservoir interval of 1312 feet. A clean-up and production flow test has been performed on the well. The purpose of this was to clean out the drilling fluids used to complete the well, to ensure that it is configured for the immediate start-up of production following the hook-up of the FPF-1, gain further information on the productivity of the well and obtain hydrocarbon fluid samples. The well flowed at a maximum rate of 10,835 boepd on a 7/8-inch choke, with the full production potential of the well limited by the capacity of the well test equipment on the drilling rig. Fluid samples show that the oil is of high quality, approximately 42degrees API. The maximum flow rate of 10,835 boepd corresponds to 6,499 bopd of oil and 26 MMscf/d of liquids rich gas. The processing facilities that will be used on the FPF-1 to separate and export oil and gas produced from the field will increase the overall oil relative to gas production rate associated with the A1 well, compared to that which can be achieved from the simple separation facilities available for the purposes of the well test. This will be taken into account in finalising the decision on the most appropriate oil export route that is to be installed for the development. The A1 well is in the process of being suspended. The suspension configuration is such that the well can be brought on to production without the requirement for any further well intervention activity once the FPF-1 is on location and hooked up. Following completion of the A1 well suspension operations the ENSCO 100 will commence drilling of the second development well on the Stella field, the 30/6a-A2 ("A2") well. The well will be drilled from the same drill centre location as the A1 well, which means that no rig move is required to commence operations. The high-spec ENSCO 100 heavy duty jack-up drilling rig that is being used for the GSA development drilling campaign commenced operations on the Stella field in June 2013. Management of the drilling and completion operations is being performed by Applied Drilling Technology International ("ADTI") under "turnkey" contract arrangements. Subsea Infrastructure Execution of the main subsea infrastructure manufacturing and installation programme is being completed by Technip UK Limited under an integrated Engineering, Procurement, Installation and Construction contract. Significant progress has been made since the start of the year with execution of the subsea infrastructure work programme. Initial infrastructure fabrication works were completed in the second quarter of 2013 and the first offshore installation operations commenced in June 2013. The 60km 10-inch gas export pipeline and main subsea structures have been installed and infield flowline trenching completed. Since the update provided at the time of the second quarter financial results in early August 2013, trenching of the 60km gas export pipeline has been completed and the trench backfill and as laid survey activities are now in progress. The offshore operations that have been performed have benefited from excellent weather conditions in the North Sea. The most weather sensitive activities in the 2013 programme have now been completed. The milestones to be completed in the next two months are installation of the flexible infield flowlines and static umbilicals that will connect the Stella field drill centres to the FPF-1 riser base and the associated diving operations required to complete the tie-in of the gas export pipeline and flowlines, umbilicals and manifolds. FPF-1 Modification Works Execution of the FPF-1 modifications work programme is being performed by Petrofac under the terms of a lump sum incentivised contract with the GSA co-venturers. Following removal of the old processing equipment on the vessel, Petrofac transferred the FPF-1 to the Remontowa shipyard in Gdansk, Poland, in late 2012 for completion of the required modifications work programme. The two main aspects of the modification programme involve the completion of marine system refurbishment and hull life extension works and the installation of new oil and gas processing facilities and living quarters. Good progress has been made on execution of the FPF-1 marine system works following the transfer of the vessel to the "Remlift" dry dock facility at Remontowa in April 2013. The hull tank refurbishment operations are nearing completion; involving inspection, repair and coating of the tanks. Construction and installation of the steelwork blocks that will form the additional sponsons being added to the pontoons of the FPF-1 for enhanced buoyancy is advancing. Fabrication of the additional buoyancy "blisters" being added to the columns of the vessel is progressing. Equipment required at the start of the topsides installation phase continues to flow to the shipyard from various manufacturing locations around the world. Key long lead packages, including the gas export compressors, gas turbine equipment, production separators and exotic pipework and valves, are all now on-site. Central to the construction execution methodology for the initial phase of the topsides processing plant fabrication and installation works is the construction of pre-assembled units and racks, in which structural steel, pipework spools, cable trays and various equipment will be installed. Construction of these racks and associated pipework has commenced and installation operations will take place once the FPF-1 is returned to the water in the fourth quarter of 2013. Additional Information A presentation summarising the recent activities that have been completed on the GSA development is available on the Company's website, www.ithacaenergy.com. - ENDS - Enquiries: Ithaca Energy Iain McKendrick, firstname.lastname@example.org +44(0) 1224 650 261 Graham Forbes, CFO email@example.com +44(0) 1224 652 151 FTI Consulting: Billy Clegg firstname.lastname@example.org +44 (0) 207 269 7157 Edward Westropp email@example.com +44 (0) 207 269 7230 Georgia Mann firstname.lastname@example.org +44 (0) 207 269 7212 Cenkos Securities plc: Jon Fitzpatrick email@example.com +44 (0) 207 397 8900 Neil McDonald firstname.lastname@example.org +44 (0) 131 220 6939 RBC Capital Markets: Tim Chapman email@example.com +44 (0) 207 653 4641 Matthew Coakes firstname.lastname@example.org +44 (0) 207 653 4871 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 "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. The well test results disclosed in this press release represent short-term results, which may not necessarily be indicative of long-term well performance or ultimate hydrocarbon recovery therefrom. About Ithaca Energy Ithaca Energy Inc. (TSX: IAE, LSE: 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, the exploitation of its existing UK producing asset portfolio and a Norwegian exploration and appraisal business centred on the generation of discoveries capable of monetisation prior to development. 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. Not for Distribution to U.S. Newswire Services or for Dissemination in the United States 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, well completion times, future capital expenditures, future acquisitions 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"anticipate", "continue", "estimate", "expect", "may", "will","project", "plan", "should", "believe", "could", "target" and similar expressions, and the negatives thereof, whether used in connection with operational activities, production forecasts, budgetary figures, potential developments 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 and 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 and 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 information is provided by RNS The company news service from the London Stock Exchange END Contacts: RNS Customer Services 0044-207797-4400 email@example.com http://www.rns.com
Stella Development Well -- Successful Test Results
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