Ithaca Energy Inc. (TSX: IAE, LSE AIM: IAE) ('Ithaca' or the 'Company') provides an update on the status of the on-going Greater Stella Area ('GSA') development programme ahead of today's Annual General Meeting ('AGM'). The AGM will be held today, Wednesday 22 June 2016, at 2pm (Calgary time) at the Metropolitan Conference Centre in Calgary, Canada.

Highlights

• Good progress has been made on the final stages of the 'FPF-1' commissioning programme and completion of the various system handovers to operations is imminent. Preparation of the FPF-1 for departure from the shipyard in Poland is well advanced and the vessel is expected to be ready for sail-away to the Stella field by the end of this month or early in July 2016
• Access has been secured to a major oil export pipeline for future GSA production, allowing a switch from tanker loading during 2017. The move to pipeline exports significantly enhances the long term value of the GSA production hub, reducing fixed operating costs, enhancing operational uptime and improving reserves recovery

Greater Stella Area Update

The FPF-1 modifications programme, which is being completed by Petrofac in the Remontowa shipyard in Poland is in the final stages of completion, with only a limited number of commissioning activities requiring close out prior to sail-away.

Commissioning operations on the FPF-1 have continued to progress well over recent weeks and are now materially complete. The operations team have been living on the vessel since May, the marine works have been finished and the engineering teams are in the process of closing out handover of the various processing and utilities systems to the operations team. The planned vessel inclination test remains to be performed, following which the FPF-1 will be moved to a location off the coast of Gdansk for the final marine system trials prior to being towed to the field.

It is anticipated that the period from sail-away to first hydrocarbons will be approximately three months. Following towing of the FPF-1 to the field, the vessel will be moored on location using twelve pre-installed anchor chains. The dynamic risers and umbilicals that connect the subsea infrastructure to the vessel will then be installed. Thereafter, commissioning of the various processing and utility systems requiring hydrocarbons from the field will be completed. First production from the Stella field is anticipated in late September 2016.

Greater Stella Area Oil Export Pipeline

Access has been secured to the Norpipe oil pipeline system, allowing oil exports from the GSA to transfer from tanker export to pipeline export during 2017. This will significantly reduce the fixed operating costs of the GSA facilities and enhance operational uptime, resulting in improved reserves recovery and increasing the long term value of the GSA as a production hub.

The key work associated with creating a connection to the system has been successfully executed as part of a fast-track operational programme undertaken during the planned 2016 pipeline maintenance shutdown. Acceleration of this work was made possible as a result of a conventional tie-in point on the system being vacated by a third-party field disconnecting from the pipeline. This provided a unique opportunity for a lower cost, lower risk connection to be made.

Norpipe runs approximately 350 kilometres from the Ekofisk offshore production facilities on the Norwegian Continental Shelf to a dedicated oil processing facility at Teesside in the UK, with various UK fields exporting into the system via a spurline.

In addition the Company has taken advantage of the downturn in industry activity to secure attractive contracting terms, including a lump sum contract for the installation of the 44 kilometre pipeline required from the FPF-1 to the Norpipe system.

The net capital expenditure associated with the work programme is approximately $20 million, with the majority being paid in 2017.

Annual General Meeting

The AGM will be held today, Wednesday 22 June 2016, at 2pm (Calgary time) in the Strand/Tivoli Room at the Metropolitan Conference Centre, 333 - 4th Avenue S.W., Calgary, Alberta, Canada. It should be noted that this is an hour earlier than the time given in the press release titled 'AGM Notice & Board Changes ' issued on 27 May 2016.

A short presentation covering the Company's on-going operational and corporate activities will be given at the AGM. The presentation will be available on the Company's website (www.ithacaenergy.com) prior to commencement of the meeting.

- ENDS -

Enquiries:

Ithaca Energy
Graham Forbes
[email protected]
+44 (0)1224 652 151

Richard Smith
[email protected]
+44 (0)1224 652 172

FTI Consulting
Edward Westropp
[email protected]
+44 (0)203 727 1521

Tom Hufton
[email protected]
+44 (0)203 727 1625

Cenkos Securities
Neil McDonald
[email protected]
+44 (0)207 397 1953

Nick Tulloch
[email protected]
+44 (0)131 220 9772

Beth McKiernan
[email protected]
+44 (0)131 220 9778

RBC Capital Markets
Daniel Conti
[email protected]
+44 (0)207 653 4000

Matthew Coakes
[email protected]
+44 (0)207 653 4000

About Ithaca Energy

Ithaca Energy Inc. (TSX: IAE, LSE AIM: 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 and the exploitation of its existing UK producing asset portfolio. 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.

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, construction and maintenance times, well completion times, risks associated with operations, future capital expenditures, continued availability of financing for future capital expenditures, future acquisitions and dispositions 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 and phrases like 'anticipate', 'continue', 'estimate', 'expect', 'may', 'will', 'project', 'plan', 'should', 'believe', 'could', 'target', 'in the process of', 'on track' ,'set to' and similar expressions, and the negatives thereof, whether used in connection with operational activities, sail-away of the FPF-1 vessel, Stella first hydrocarbons, timing between sail-away of the FPF-1 vessel and Stella first hydrocarbons, remaining FPF-1 work programme activities prior to completion, expected costs and benefits of the move to pipeline exports for GSA production, drilling plans including ramp up timing, production forecasts, budgetary figures, future operating costs, anticipated net debt and continued deleveraging, anticipated funding requirements, anticipated characteristics of the Company's future investment programme, planned capital expenditures, potential investment opportunities including the expected development costs thereof, potential developments including the timing and anticipated benefits of acquisitions and dispositions 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 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 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.

Additional information on these and other factors that could affect Ithaca's operations and financial results are included in the Company's Management Discussion and Analysis for the quarter ended 31 March 2016 and the Company's Annual Information Form for the year ended 31 December 2015 and in reports which are on file with the Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com).

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