LONDON, UNITED KINGDOM and CALGARY, ALBERTA--(Marketwire - May 28, 2012) -

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Ithaca Energy Inc. (AIM:IAE)(TSX:IAE) announces that it has mandated BNP Paribas ("BNPP") as Lead Arranger for the provision of a fully underwritten US$400 million Senior Secured Borrowing Base Facility ("the Facility").

The Company has executed a term sheet and mandate agreement with BNPP for the provision of a fully underwritten facility of US$400 million, plus a US$30 million cost overrun tranche. BNPP has obtained full credit approval for the Facility and in excess of US$380 million will be available for immediate drawdown upon execution of the Facility agreements, which is anticipated in the coming weeks.

This Facility replaces the current undrawn US$140 million debt facility and is on similar conventional oil and gas industry borrowing base financing terms, with a loan term of up to five years.

The Facility is available to fund ongoing development activities and future asset acquisitions.

The Facility, combined with an existing cash balance of US$110.6 million (end Q1-2012) and the Company's projected cashflow from operations profile, means that Ithaca has the financial capacity to continue delivering material growth from both its existing asset portfolio and from new asset additions. More specifically, the enhanced size of the debt facility increases the Company's ability to build upon its track record for completing accretive asset acquisitions and creating long term shareholder value.

Graham Forbes, Chief Financial Officer, commented:

"Establishment of the significantly increased debt facility highlights the intrinsic value of Ithaca's existing portfolio of assets and the immediate availability of over 95% of the Facility provides substantially enhanced financial resources with which to continue driving forward the Company's growth plans. The financial strength of the Company has been transformed over recent years and establishment of the new facility marks the start of the next phase".

Xavier Venereau, Global Head of Structured Debt, Upstream Oil & Gas BNP Paribas commented:

"We are delighted to support Ithaca Energy's growth plans with the provision of this new facility. Thanks to its attractive portfolio combining producing fields and highly promising development assets, we are confident the Company will continue to grow its production and deliver attractive returns. The full underwriting of this Facility demonstrates our confidence in Ithaca's management team to further grow the Company and more generally is a good example of BNP Paribas' commitment to the UK North Sea Oil and Gas industry."

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.

About BNP Paribas:

BNP Paribas ([ www.bnpparibas.com ]) has a presence in 80 countries with nearly 200,000 employees, including more than 150,000 in Europe. It ranks highly in its three core activities: Retail Banking, Investment Solutions and Corporate & Investment Banking. In Europe, the Group has four domestic markets (Belgium, France, Italy and Luxembourg) and BNP Paribas Personal Finance is the leader in consumer lending. BNP Paribas is rolling out its integrated retail banking model across Mediterranean basin countries, in Turkey, in Eastern Europe and a large network in the western part of the United States. In its Corporate & Investment Banking and Investment Solutions activities, BNP Paribas also enjoys top positions in Europe, a strong presence in the Americas and solid and fast-growing businesses in Asia.

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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 including the entering in to the Facility. When used in this announcement, the words "anticipate", "anticipated", "continue", "estimate", "expect", "may", "will", "project", "plan", "should", "believe", "could", "target", "scheduled" and similar expressions, and the negatives thereof, 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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