FOR:  ITHACA ENERGY INC.

TSX VENTURE, AIM SYMBOL:  IAE

July 28, 2010

Ithaca Energy Inc. Announces Closing of Cdn $158 Million Financing

LONDON, UNITED KINGDOM and CALGARY, ALBERTA--(Marketwire - July 28, 2010) -

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

Ithaca Energy Inc. ("Ithaca" or the Company") (TSX VENTURE:IAE)(AIM:IAE), is pleased to announce that it has closed its
previously announced Canadian bought deal and UK private placement for aggregate gross proceeds of Cdn $158 million.

The Canadian bought deal was placed by a syndicate of underwriters led by CIBC World Markets Inc. and including
Wellington West Capital Markets Inc., GMP Securities LP, RBC Dominion Securities Inc., Fraser Mackenzie Limited, Acumen
Capital Finance Partners Limited, FirstEnergy Capital Corp., Mackie Research Capital Corporation, Macquarie Capital
Markets Canada Ltd. and Thomas Weisel Partners Canada Inc., and resulted in 47.6 million common shares ("Common Shares")
of Ithaca being issued at a price of Cdn $1.70 per Common Share for aggregate gross proceeds of Cdn. $80.9 million (the
"Bought Deal Offering").

Pursuant to an engagement with CIBC World Markets Plc and Cenkos Securities plc as placing agents and joint bookrunners
for the UK private placement, Cenkos Securities plc placed 45.1 million Common Shares at a price of GBP 1.07 per Common
Share (approximately equivalent to Cdn $1.70 per Common Share) for aggregate gross proceeds of approximately Cdn $77
million (the "Private Placement").

The combination of the proceeds from the Bought Deal Offering and Private Placement (the "Proceeds") (in total,
approximately US$150 million (gross)), together with debt made available from the recently announced Bank of Scotland
facility and a portion of anticipated cash flows, means that all of the Company's current projects are anticipated to be
fully funded through to first production.

The Proceeds are intended to be used to accelerate the development of the enlarged Greater Stella Area (the "GSA"),
which includes the Stella, Harrier and Hurricane discoveries. The development of the GSA represents a key focus of the
Company over the near term. Management believes the Stella appraisal well has reduced the development risks associated
with the GSA which now accounts for 30.95 million proved plus probable reserves on a barrel of oil equivalent basis
based on the latest reserves report (as at April 30, 2010) prepared by Sproule International Limited.

Central to the project is the joint development of the Stella and Harrier fields which is expected to accelerate the
return on investment and to provide operational and development cost synergies. Detailed planning for the Stella area
has already been launched and a formal dialogue with the authorities (DECC) and host off-take infrastructure owners is
ongoing to accelerate and optimise the development.

The Company plans to develop the larger Stella discovery with a bias towards light oil and liquids recovery. The
expected development plan includes 4 oil producing wells and 1 gas producing well for the Stella discovery and 2 gas
producing wells for the Harrier discovery. The Company currently anticipates total net capital expenditures required to
develop Stella to be approximately US$288.8 million and to develop Harrier to be approximately US$78.95 million. The net
proceeds from the Bought Deal and the Private Placement together with debt and a portion of the Company's anticipated
cash flows are expected to fully fund the development of the GSA.

Pursuant to the Bought Deal Offering, the Common Shares were sold in all provinces of Canada (except Quebec) by way of a
short form prospectus and by way of private placement in the United States pursuant to exemptions from the registration
requirements pursuant to Rule 144A of the United States Securities Act of 1933. The Common Shares have not been
registered under the United States Securities Act of 1933, as amended, or any state securities laws and may not be
offered or sold in the United States unless an exemption from registration is available. This news release does not
constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States.

As a result of the Bought Deal Offering and the Private Placement, the Company currently has 255,459,257 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 255,459,257. This figure of 255,459,257 Common Shares 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.

In accordance with AIM Guidelines, Lawrie Payne, MA Marine Geology (Alberta & Columbia) and Chairman of Ithaca is the
qualified person that has reviewed the technical information contained in this press release.

Reader Advisory

This news release contains certain forward-looking statements, which include assumptions with respect to (i) use of
proceeds; (ii) reserves estimates with respect to the GSA; (iii) availability of equipment, qualified personnel and
other key inputs required to carry out operations in the manner and in accordance with the timelines currently
contemplated; and (iv) availability of adequate funding for current and future operations. The reader is cautioned that
assumptions used in the preparation of such information may prove to be incorrect. All such forward-looking statements
involve substantial known and unknown risks and uncertainties, certain of which are beyond Ithaca's control. Such risks
and uncertainties include, without limitation, risks associated with oil and natural gas exploration, development,
exploitation, production, marketing and transportation, loss of markets, volatility of commodity prices, currency
fluctuations, imprecision of reserve estimates, environmental risks, competition from other producers, inability to
retain drilling rigs and other services, delays resulting from or inability to obtain required regulatory approvals and
ability to access sufficient capital from internal and external sources, the impact of general economic conditions in
the UK, Canada, the United States and globally, industry conditions, changes in laws and regulations (including the
adoption of new environmental laws and regulations) and changes in how they are interpreted and enforced, increased
competition, the lack of availability of qualified personnel or management, fluctuations in foreign exchange or interest
rates, stock market volatility and market valuations of companies with respect to announced transactions and the final
valuations thereof, and obtaining required approvals of regulatory authorities. Ithaca's actual results, performance or
achievements could differ materially from those expressed in, or implied by, these forward-looking statements and,
accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will
transpire or occur, or if any of them do, what benefits, including the amount of proceeds, Ithaca will derive therefrom.
Readers are cautioned that the foregoing list of factors is not exhaustive. All subsequent forward-looking statements,
whether written or oral, attributable to Ithaca or persons acting on its behalf are expressly qualified in their
entirety by these cautionary statements. Furthermore, the forward-looking statements contained in this news release are
made as at the date of this news release and Ithaca does not undertake any obligation to update publicly or to revise
any of the included forward-looking statements, whether as a result of new information, future events or otherwise,
except as may be required by applicable securities laws.

FOR FURTHER INFORMATION PLEASE CONTACT:

Ithaca Energy:
Iain McKendrick
CEO
+44 (0) 1224 650 261
imckendrick@ithacaenergy.com

OR

Ithaca Energy:
Graham Forbes
CFO
+44 (0) 1224 652 151
gforbes@ithacaenergy.com

OR

Ithaca Energy:
Nick Muir
CXO
+44 (0) 1224 650 267
nmuir@ithacaenergy.com

OR

Pelham Bell Pottinger Public Relations:
Philip Dennis
+44 (0) 207 861 3919
pdennis@pelhambellpottinger.co.uk

OR

Pelham Bell Pottinger Public Relations:
Elena Dobson
+44 (0) 207 861 3147
edobson@pelhambellpottinger.co.uk

OR

Cenkos Securities plc:
Jon Fitzpatrick
+44 (0) 207 397 8900
jfitzpatrick@cenkos.com

OR

Cenkos Securities plc:
Ken Fleming
+44 (0) 131 220 6939
kfleming@cenkos.com

Neither TSX Venture Exchange 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.

Ithaca Energy Inc.