Option Award Exercise and SIP Purchase

ABERDEEN, SCOTLAND--(Marketwire - Oct 12, 2012) -

TSX-V:IAE Not for Distribution to U.S. Newswire Services or for Dissemination in the United States Ithaca Energy Inc. Grant of Share Options, Exercise of Existing Options and Market Share Incentive Plan Purchases 12 October, 2012 Ithaca Energy Inc (TSX: IAE, LSE AIM: IAE) announces that in accordance with the Company's Stock Option Plan, the Board of Directors has approved the grant of 5,645,000 share options to Directors and employees at a price of C$1.99, which was the closing price on the TSX Exchange on Wednesday, 10th October, 2012. The options shall be granted effective 11th October, 2012 and may be exercised for a period of four years from that date. One third of the options will vest at the end of each of the first, second and third years from the effective date. Of the recipients, a total of 2,900,000 share options were granted to Directors and Officers as follows: Iain McKendrick Officer and Director 800,000 Graham Forbes Officer 600,000 Nicholas Muir Officer 300,000 Mike Travis Officer 300,000 John Woods Officer 300,000 Jack Lee Director and Chairman 100,000 Ron Brenneman Director 100,000 Brad Hurtubise Director 100,000 John Summers Director 100,000 Frank Wormsbecker Director 100,000 Jay Zammit Director 100,000 Options Exercises On 11th October the following Directors and Officers exercised expiring options at a price of C$1.80 per Common Share: Iain McKendrick Officer and Director 150,000 Nicholas Muir Officer 100,000 John Woods Officer 100,000 On the same day, those same Officers sold the following shares at a price of GBP1.22 per Common Share in order to cover the associated costs of the purchases reported above, including income taxes. Iain McKendrick Officer and Director 142,800 Nicholas Muir Officer 95,200 John Woods Officer 95,200 The balance of shares acquired following completion of the transactions reported above has been retained by each of those Officers in order to increase their individual shareholdings. A further 223,875 of options have also been exercised by other employees of the Company. As a result of the option exercises reported above, the Company has applied for a total of 573,875 Common Shares to be admitted to trading on AIM. Each new Common Share will rank pari passu with the existing Common Shares. Share purchase under the Market Share Incentive Plan by Officers On 11th October the Company was informed that MM&K Share Plan Administration, the trustee of the Company's Market Share Incentive Plan ("SIP"), had on that same day made purchases of the Company's Common Shares under the terms of the SIP on behalf of employees and officers of the Company. As a result, the Officers of the Company increased their beneficial shareholdings in the Company by a total of 18,435 shares at a price of GBP1.22 per Common Share as follows: Iain McKendrick Officer and Director 3,687 Graham Forbes Officer 3,687 Nicholas Muir Officer 3,687 John Woods Officer 3,687 Mike Travis Officer 3,687 Summary Following completion of all the transactions noted above, the revised shareholdings of the Directors and Officers of the Company are as follows: No. of shares held % of voting rights represented by shares held Iain McKendrick 175,465 0.07% Graham Forbes 49,645 0.02% Nicholas Muir 16,445 0.01% John Woods 111,445 0.04% Mike Travis 53,687 0.02% Jack Lee 700,000 0.27% Brad Hurtubise 100,000 0.04% John Summers 214,700 0.08% Frank Wormsbecker 200,000 0.08% Jay Zammit 448,332 0.17% Ron Brenneman 60,000 0.02% The total number of shares under option is now 20,347,964 Common Shares, representing approximately 7.8% of total shares outstanding and under option. The Company will have 259,920,003 Common Shares outstanding with one voting right per Common Share. There are no Common Shares held by Ithaca in treasury. The total number of voting shares in the Company is therefore 259,920,003. This figure may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, the share capital of the Company under the UK Financial Services Authority's Disclosure and Transparency Rules. Fully diluted, the Company now has 280,267,967 Common Shares on issue. Enquiries: Ithaca Energy: Iain McKendrick, CEO imckendrick@ithacaenergy.com +44 (0) 1224 650 261 Nick Muir, CTO nmuir@ithacaenergy.com +44 (0) 1224 650 267 FTI Consulting: Billy Clegg billy.clegg@fticonsulting.com +44 (0) 207 269 7157 Edward Westropp edward.westropp@fticonsulting.com +44 (0) 207 269 7230 Georgia Mann georgia.mann@fticonsulting.com +44 (0) 207 269 7212 Cenkos Securities plc: Jon Fitzpatrick jfitzpatrick@cenkos.com +44 (0) 207 397 8900 Ken Fleming kfleming@cenkos.com +44 (0) 131 220 6939 RBC Capital Markets: Tim Chapman tim.chapman@rbccm.com +44 (0) 207 653 4641 Matthew Coakes matthew.coakes@rbccm.com +44 (0) 207 653 4871 About Ithaca Energy: Ithaca Energy Inc. (TSX: IAE, LSE AIM: IAE) and its wholly owned subsidiary Ithaca Energy (UK) Limited ("Ithaca" or "the Company"),is an oil and gas operator focused on production, appraisal and development activities on the United Kingdom Continental Shelf. 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 -ENDS- This information is provided by RNS The company news service from the London Stock Exchange END