Acquisition Strategy

The Company will grow through producing and development project asset acquisitions, development of assets within the portfolio and through license rounds

The acquisition of producing assets remains a high priority for the Company, with scope for the addition of development project acquisitions to facilitate longer term organic growth.

Producing asset acquisitions will grow the Company and diversify the production base making the Company more resilient to any single field outages

The Company is well financed through ongoing production and a significant 1P reserve base in existing assets. This provides the capability to fund asset acquisition opportunities from cash and debt. Ithaca has also built up over $265 million of tax losses (end Q2 2011)

Marketing of producing and development assets in the North Sea continues at a steady rate as major operators move out to invest in more diverse projects worldwide; Ithaca sees this as an opportunity to continue to invest in the North Sea

The Company seeks to acquire development projects that already have an approved FDP or are near to submission for approval of FDP in 2012

Ithaca prefers to operate development projects and has the capability to operate producing assets

Appraisal of existing undeveloped discoveries and subsequent developments is a core strategy of the Company and has the potential to bring significant profits to shareholders; Ithaca wishes to acquire more appraisal opportunities to be drilled in 2012 and 2013

Growth of the Company through license rounds will continue. The 27^th licensing round is likely to occur in 2012. Ithaca is positioned to bid on blocks that contain undeveloped discoveries with appraisal potential. This is recognised as relatively low cost entry that could deliver high returns to shareholders.

27th Licence Round Potential