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LONDON, UNITED KINGDOM and CALGARY, CANADA--(Marketwire - Feb. 28, 2011) -

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

Ithaca Energy Inc. (TSX VENTURE:IAE)(AIM:IAE) announces that it has successfully completed the drilling of a water injection well for the Athena field development.

Well 14/18b-A1 ("the well") intersected 325 feet (on a true vertical basis) of net reservoir, exceeding the net reservoir requirements for water injection to support initial gross production from the field at ~22,000 barrels of oil per day ("bopd")(source Sproule) from Q4 this year. The drilling unit will now proceed to drill a fourth production well and complete the three existing suspended wells on the field as well as the new producer and injector, from the same surface location.

The well has been drilled as a future water injector, down flank from three successful appraisal wells. This well is the first of a 180 day campaign of drilling and completion activities prior to subsea equipment installation and 'hook-up' of the Floating Production Storage and Offtake vessel (BW Athena). Operations on the well have met all key objectives.

Commenting, John Woods, Chief Developments Officer, said:

"This well was drilled and cased as planned and the results are inline with expectations. The success of the well represents strong progress towards first oil and is testament to the ability of the Company's development team to deliver. This is one more important step closer for the Athena field to become a significant producing asset for the Company."

The target formation (Top Scapa A, formally Upper Leek Sandstone), and principal reservoir unit of the Athena field, was encountered at 9,325 feet True Vertical Depth Subsea ("TVDSS"), in line with prognosis. Wireline logs have confirmed a multi-layer permeable sandstone and shale gross section of 820 feet of which 325 feet is net reservoir on a true vertical basis. Average porosity across the reservoir section is excellent and tests indicate good fluid mobility in all selected sandstone units tested. Formation pressure measurements lie close to known aquifer pressures recorded in earlier wells, confirming lateral and vertical communication throughout the field.

The well has been fully cased and temporarily suspended pending batch completion of all five wells (4 producers, 1 water injector) once the final production well has been drilled. The rig will return to the well towards the end of the campaign to perforate and run completion equipment in preparation for first production from the Athena field.

Athena Joint Venture Partners are Ithaca (operator, 22.5%), Dyas UK Ltd (47.5%), EWE Aktiengesellschaft (20%) and Zeus Petroleum Limited (10%).

In accordance with AIM Guidelines, Hugh Morel, BSc Physics and Geology (Durham), PhD Hydrogeology (London) and senior petroleum engineer at Ithaca Energy 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 industry.

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 "expects," "believes," "anticipate," "plans," "may," "will," "should", "scheduled", "targeted", "estimated" and similar expressions, and the negatives thereof, whether used in connection with the estimated production levels, actual production levels from the Athena development, anticipated timing of the Athena development, oil in place, hydrocarbon composition or otherwise, are intended to identify forward-looking statements. Such statements are not promises or guarantees, and are subject to risks and uncertainties that could cause actual outcome to differ materially from those suggested by any such statements. 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.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.