Not for Distribution to U.S. Newswire Services or for Dissemination in the United States

Ithaca Energy Inc. (“Ithaca” or “the Company”)Q1 2011 Financial Results, Jacky (J01) Well Update and Production GuidanceQ2 2011 and Full Year 2011Profit before tax US$13 millionLondon, UK - Calgary, Canada, June 27 2011 – Ithaca Energy Inc. (TSX Venture: IAE, LSE AIM: IAE) announces its financial results for the three months ended March 31, 2011.HIGHLIGHTS - For the three months ended March 31, 2011Financial

• Profit before tax US$13.0 million (Q1 2010: US$12.1 million)

• Cashflow from Operations of US$22.1 million (Q1 2010: US$19.6 million)

• Cash US$198.9 million, inclusive of US$7.6 million restricted cash (Q4 2010: US$201.9 million)

• Undrawn US$140 million senior debt facility

• Tax losses of US$221 million (Q4 2010 $216 million)

• Results and comparatives are now reported under International Financial Reporting

Standards (“IFRS”)

Operational

• Sales averaged 3,493 barrels of oil equivalent per day (“boepd”) net to Ithaca over the period to March 31.

• Successfully completed the drilling of the water injection well for the Athena field and commenced drilling of the final production well (drilling was successfully concluded post period end)

• Significant progress made on modification and recertification works of the Athena FPSO vessel "BW Athena" following arrival in a Dubai shipyard. The works are on schedule and anticipated to be completed in Q3 2011 ahead of first production in Q4

2011.

Corporate

• Lawrie Payne, Non-Executive Chairman of the Board, retired from the Board of Directors. Jack C. Lee assumed the position of Non-Executive Chairman of the Board.

SIGNIFICANT POST Q1 EVENTS

• Entered into an agreement to acquire a 28.46% non-operated interest in the Cook oil field from Hess Limited (“Hess”) for a consideration of $62.5 million and the transfer from Ithaca to Hess of a 10% interest in each of exploration blocks 42/25b, 43/16a and 43/21c in the Southern North Sea (the “Cook Acquisition”). The transaction is expected to complete in Q3 2011 with an effective date of January 1, 2011. Sproule International Limited subsequently confirmed management’s estimate of Cook Proved plus Probable (“2P”) reserves of 5.75 mmboe.

• Signed an earn in agreement with Challenger Minerals (North Sea) Limited ("CMI") to drill an appraisal well on the Hurricane discovery. Subject to agreeing ‘turnkey’ terms for the provision of a drilling rig and well management services, CMI will pay 40% of gross Hurricane initial appraisal well costs in exchange for a 31% equity interest in Block 29/10b. In addition, upon successful appraisal, CMI will pay 40% of gross costs of a drill stem well test of any sidetrack.

• The Electrical Submersible Pump (“ESP”) units in the Jacky production well, J01, encountered faults, requiring the ESP units to be replaced. A rig based workover ESP replacement and reperforation operation was undertaken which has recently been completed and J01 production, under ESP support, has been reinstated. The Company will report J01 production rates once production is fully stabilized and the well flow has completely cleaned up.

• Drilling of the Jacky J03 well was suspended due to the well encountering a smaller than anticipated oil column in the Beatrice ‘A’ Sand reservoir. Technical work is ongoing to determine whether to re-enter the well and complete it as a water injector to maximise oil recovery from the Jacky field.

• Development drilling on the Athena field was completed with the conclusion of drilling on the final production well. The rig is currently in the process of batch completing all five development wells. First oil is on schedule for Q4 2011 at 22,000 bopd (gross) and the project remains on budget. The FPSO is in dry dock with modification and recertification works well advanced. The vessel has been successfully separated for installation of a turret docking section which has been welded into the structure amidships.

PRODUCTION UPDATE

As a result of the Jacky well issues highlighted above, average daily production from existing assets in Q2 2011 is expected to be approximately 2,100 boepd. With less than 4 days remaining in the quarter no further production update will be announced ahead of the Q2

Financial Results which are expected to breakeven or possibly show a small loss for the quarter.

Although Ithaca benefits from the production associated with the Cook Acquisition from January 1, 2011, the production reported for Q1-2011 and the forecast for Q2-2011 highlighted above exclude such volumes. Adding anticipated Cook volumes from January 1,

2011 to that of the existing assets, full year production is forecast to be approximately

5,000boepd, with a forecast 2011 exit rate of around 10,000 boepd following first oil from the

Athena field.

Looking ahead, the Company expects to update its longer range production profiles once it has first production from the Athena field, closed the Cook Acquisition, and submitted its FDP on the Stella development.

Iain McKendrick, CEO, commented,

“Despite the short term set-backs that caused production shortfalls on Jacky in the first half of the year, Q1 has delivered a strong set of results. With completion of the Cook acquisition and Athena first oil in the second half of 2011 the vulnerability of the company’s production to single well upsets has been addressed. This reduction of risk concentration will continue as we look to add further quality production acquisitions. With J01 production now restored, we look forward with confidence to first oil on Athena following the successful drilling program and the excellent progress being made elsewhere on the project.”

Notes:

Further details on the above are provided in the Interim Consolidated Financial Statements and Management’s Discussion and Analysis for the three months ended March 31, 2011, below which have been filed with securities regulatory authorities in Canada. These documents are also available on the System for Electronic Document Analysis and Retrieval at www.sedar.comand on the Company’s website: www.ithacaenergy.com.

Enquiries:

Ithaca Energy:

Iain McKendrick, CEO

imckendrick@ithacaenergy.com

+44 (0) 1224 650 261

Graham Forbes, CFO

Nick Muir, CXO

gforbes@ithacaenergy.com

nmuir@ithacaenergy.com

+44 (0) 1224 652 151

+44 (0) 1224 650 267

Pelham Bell Pottinger Public Relations:

Philip Dennis pdennis@pelhambellpottinger.co.uk+44 (0) 207 861 3919

Elena Dobson edobson@pelhambellpottinger.co.uk+44 (0) 207 861 3147

Cenkos Securities plc:

Jon Fitzpatrick

Ken Fleming

jfitzpatrick@cenkos.com

kfleming@cenkos.com

+44 (0) 131 220 9773

+44 (0) 131 220 9772

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 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.

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 UnitedStates

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, but not limited to future production levels and the benefits of the Cook Acquisition. 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, 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. Please refer to the risk factors affecting Ithaca as set out in the Company's Annual Information Form and the Company's Q1 MD&A filed on SEDAR at www.sedar.com. 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.

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.

Neither TSX Venture 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.

-ENDS-