On 10^th November 2008 Ithaca entered into an agreement to lease the Beatrice oilfield, the pipeline to shore and the Nigg storage facility from Talisman for a minimum period of 3 years. The decommissioning obligations remain with the previous owners, Talisman. The Beatrice Field, in which Ithaca holds a 50% interest, is now operated by Ithaca and is the largest oilfield (approximately 485 MMbbls of stock tank barrels of oil initially in place) in the Inner Moray Firth area, having produced in excess of 163 MMbbls to date. At the time of completion of the lease agreement with Talisman, the Alpha platform wells of Beatrice were producing approximately 1,500 barrels of oil per day. The Beatrice Bravo platform was shut in due to flowline assurance issues between Alpha and Bravo.

The onshore Nigg Oil Terminal processes and stores Beatrice area oil for shipment. The terminal has additional storage which Ithaca is currently renting to BP Oil on an annual basis. In addition the terminal possesses a sheltered deep water jetty which is hired out for Ship to Ship oil transfer operations.

Since taking over the management and running of the Beatrice infrastructure, Ithaca has successfully installed the Jacky platform and the corresponding subsea flow lines back to the Beatrice Alpha platform. Production has been reinstated from the Beatrice Bravo platform via a new flowline which connects into the Jacky-Alpha line.

In the 23^rd Licensing Round, Ithaca was awarded, as one licence, several blocks and part blocks which surround to the Beatrice Field. In addition to the Jacky discovery, Ithaca identified the 11/30-6 undeveloped discovery and a number of other near-field exploration prospects within this acreage. Further to several block specific farmouts, Ithaca now holds interests between 40% and 50% across these licences. In the first quarter of 2008, the Polly prospect in block 12/26c, which is a separate but similar and untested feature to Beatrice, was drilled and discovered 37 degree API oil. The results of the well have been assessed and the opportunity is now being ranked alongside other Beatrice Area opportunities and if commercially justified, the Company proposes to accelerate this development project.

In the second quarter of 2008 a wildcat exploration well was drilled on the Manuel prospect located in block 11/29. The well did not encounter hydrocarbons in commercial quantities however hydrocarbons were observed in tight formations deeper in the section and within the lower Middle Jurassic Beatrice sands.  The result of the well has very positive implications for further exploration in the area.

Over the second half of 2009 Ithaca undertook a programme of well interventions on wells produced from the Bravo platform. The replacement of down hole equipment and recompletion of wells facilitated an incremental increase to production from the Beatrice field. Ithaca plans to continue this success with a further programme of well workovers on the Alpha platform to commence in Q1 2010. The planned incremental increase to production is being targeted at 1,500 bopd.