Ithaca Energy Inc. and its wholly owned subsidiary Ithaca Energy (UK) Limited reports a further significant increase in reserves in the current year post the success of the recent Stella well.

Total Proved ('1P') reserves have increased 30.6% from 15.99 million barrels of oil equivalent ('mmboe') to 20.88 mmboe and total Proved plus Probable ('2P') reserves have increased 12.8% from 37.19 mmboe to 41.96 mmboe. The increase in reserves is due to the updated evaluation of the Stella field based on the results of a successful appraisal well (30/6a-8) drilled in Q1 2010.

In the latest reserves report (as at April 30 2010) prepared by Sproule International Limited, net 1P reserves associated with the Stella field increased c. 118% from 4.69 mmboe to 10.23 mmboe and net 2P reserves increased c. 61%, from 8.94 mmboe to 14.37 mmboe. Combined net 2P reserves for the Greater Stella Area, which also includes the satellite Harrier and Hurricane fields, now totals more than 30 mmboe.

The overall uplift in Stella reserves is attributed to the additional hydrocarbon column height, the nature of the fluids found within the structure and the larger area now defined by the appraisal well. In detail, Sproule's report defines net 2P reserves in the Andrew reservoir of 3.32 million barrels of oil, 8.47 mmboe of gas and 2.58 mmboe of associated condensate. The oil column height is assessed as 222 feet with over 500 feet of overlying gas and condensate. These results mean that development of the Stella field will include the production of a significant quantity of light oil as well as condensate and gas.

The Stella field contains two reservoirs, the Andrew and the Ekofisk. The initial vertical Stella appraisal well and its sidetrack (30/6a-8Z) has provided delineation of hydrocarbons in place. Drill stem testing flowed light oil (39° API) and some water. Information acquired during drilling allows the Company to progress planning of the development of both the Stella field and the satellite fields, Harrier and Hurricane.

Over the period, January 1st to April 30 2010, Sproule have estimated that 620,000 barrels of stock tank oil net to Ithaca were produced from Beatrice and Jacky fields to the Nigg storage facility and the Reserves Report reflects this reduction in reserves. No further evaluation of Ithaca's other assets was required post December 31, 2009 for the purposes of the Reserves Report other than a reflection in the Net Present Value calculations of the acceleration of Harrier and Hurricane, and the revised oil and gas price assumptions from Sproule.

Iain McKendrick, CEO commented,'The successful appraisal of Stella, particularly the confirmation of a significant oil column, and the additional proved and probable recoverable reserves now provides the Company with the confidence to develop Stella and Harrier as a combined development, targeting first oil and gas in late 2012. The development will ensure available capacity for other opportunities to be tied in, such as Hurricane in which Ithaca currently holds 100% equity interest. A project team has been established which is concentrating on the optimisation of the development plan and is considering all export routes in the area'.

'The very significant increase in net reserves and value attributable to Ithaca since November last year, as underlined by this report, is a testament to the ability of the Company's technical and operational team to successfully find and develop hydrocarbons in the UK sector of the North Sea'

Tags: Ithaca Energy Inc.