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Additional	Information
Market:	AIM, TSX
Sector:	Oil & Gas Exploration & Production
Epic:	IAE
News:	Latest news
Web Site:	Ithaca Energy
Other Articles:	08-02-201005-02-201006-04-2009

Ithaca Energy’s Athena JV starts development, first oil production targeted in 2011

North Sea oil & gas company Ithaca Energy Inc (AIM, TSX-V: IAE) said that the joint venture partners of the Athena project have initiated the oilfield's development. The partners have committed to the purchase of in long-lead equipment worth US$14.85m and a full project team has been commissioned to develop and finalise Athena’s Environmental Statement and Field Development Plan (FDP).

Athena’s first production is being targeted for Q2 2011 with estimated initial gross production rates of 22,000 barrels of oil per day (bopd), of which 4,950 bopd are attributable net to Ithaca.

"The Athena Joint Venture Partners have seized (the) opportunity to develop Athena, which has been enabled by the recovery in oil price since Q3 2008”, Ithaca chief developments officer John Woods commented, “Ithaca as operator of the Athena Development has been working closely with the engineering services sector to negotiate competitive rates that now secure a robust project which is expected to come into production within the next two years".

Ithaca is the operator of the project with 22.5% interest, Dyas UK, a unit of privately owned Dutch conglomerate SVH Holdings, is the largest stakeholder with 47.5% of the project, German utilities group EWE Aktiengesellschaft owns 20% and Rheochem’s (AIM: RHEP) 50%-held subsidiary Zeus Petroleum has 10%.

The orders initiate the project's development phase, and the items being procured include electrical submersible pumps, subsea trees and engineering support.

The newly established project team will initially focus on the finalisation of the Environmental Statement and FDP for submission in March 2010. Ithaca expects to receive FDP approval by the authorities in July 2010. The team will also undertake the final stage negotiation of contracts for a Floating Production Storage and Offtake (FPSO) vessel, construction and provision of sub-sea facilities and drilling services.

The initial development plan consists of four production wells supported by one water injection well. To date the JV has successfully drilled three wells on Athena, which are currently suspended. The existing three wells will be re-entered and completed for production and one further well will be drilled during Q4 2010/Q1 2011. Additional wells will also be drilled from seabed locations close to existing wells to allow for ease of tie-back to a new subsea manifold.

The production will be routed to a stand-alone FPSO. Produced gas will be used to generate power on the FPSO. Other services will include additional electrical power generation, chemical injection, water treatment and injection, and system monitoring and controls. It is anticipated that all offshore installation works, including FPSO on location, will be completed by the end of Q2 2011.

The oil production will be exported via shuttle tankers.

The latest reserves report issued by Sproule International Limited for year ended December 31 2009, ascribed Proved and Probable reserves in Athena of 24.40 million barrels (mmbbls) of oil gross, of which 5.49mmbbls are attributable net to Ithaca.

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