Ithaca Farm-outs with Shell UK

Ithaca Energy Inc. has announced the execution of a farm-out transaction with Shell UK Limited in respect of the UK exploration assets acquired pursuant to the acquisition of Valiant Petroleum plc.

Ithaca has entered into an agreement with Shell to farm-out half of the Company's 40% non-operated interest in UK license P1792, covering blocks 21/30f and 22/26c in the Central North Sea.

The farm-out is in exchange for a partial carry of Ithaca's 20% share of the costs of a well on the Beverley prospect, with the license terms requiring the well to be drilled by early 2015.  The license contains the Beverley prospect and the Belinda and Evelyn discoveries. 

The Beverley prospect lies on the flank of an undrilled salt diapir, analogous with other structures in the area, and is located close to the Shell-operated Gannet fields.

Ithaca commented that it has now substantially reduced its exposure to all remaining firm UK exploration well expenditure commitments transferred as part of the Valiant acquisition.

Since the announcement of the Valiant acquisition, the company has reduced its net exploration expenditure commitments by over $45 million, leaving approximately $30 million of remaining committed UK exploration expenditure, mainly consisting of the Handcross well.