Iona Energy Closes Senior Debt Facility and Huntington Oil Field Acquisition

Fri Feb 22, 2013 2:20pm EST

* Reuters is not responsible for the content in this press release.


Iona Energy Inc.

February 22, 2013 - 02:20:22 PM

Iona Energy Closes Senior Debt Facility and Huntington Oil Field Acquisition

CALGARY, ALBERTA--(Marketwire - Feb. 22, 2013) - 


Iona Energy Inc. ("Iona" or the "Company") (TSX VENTURE:INA), is pleased to
announce the closing of its previously announced Senior Secured Borrowing Base
Facility for up to USD$250 million (the "BBF") with Bank of America Merrill
Lynch, Lloyds TSB Bank plc, and BNP Paribas.

Iona has also closed its acquisition of Carrizo UK Huntington Limited
("Carrizo UK"). The acquisition of Carrizo UK consists of:

--  A 15% non-operated working interest in License P1114 of UK North Sea
    Block 22/14b covering the near-producing Huntington oil field
    development ("Huntington"); 
--  Royalties equivalent to 2.55% of total gross oil and gas production
    payable to Carrizo UK from the other Huntington Joint Venture Partners
    (the "Royalties"); 
--  A 100% interest in that part of Block 22/14d that contains the 3D
    seismically mapped extension of the Jurassic discovery which underlies
    Huntington; and 
--  Carrizo UK's ring-fenced tax losses totaling approximately USD$125
    million as at the transaction effective date of July 1st, 2012. 

The working interests on License P1114 consist of E.ON Ruhrgas UK E&P (25%
Operator), Premier Oil plc (40%), Norwegian Energy Company ASA (20%), and Iona
(15%) (collectively the "Huntington Joint Venture Partners").

Under the terms of the Sale and Purchase Agreement, total consideration paid
on closing by Iona to Carrizo Oil & Gas Limited ("Carrizo"), including
financial and working capital adjustments was USD$172.6 million. Additional
deferred payment of USD$18 million is due and payable to Carrizo upon receipt
of first oil revenues.

Huntington consists of Paleocene reservoir oil, located in Block 22/14b in the
Central North Sea. Huntington has been developed with four production and two
water-injection wells and will be tied back to Teekay's Floating Production
Storage and Offloading ("FPSO") vessel, the Voyageur Spirit. The FPSO arrived
at its final location on October 2nd, 2012. Final hook-up of risers has been
completed and commissioning is now taking place, with first oil expected in
the first half of 2013.

Initial stabilized gross production rates are estimated to be approximately
30,000 bbls of oil per day ("bopd") and 27 MMscf of gas per day ("MMscf/d"),
or 4,500 bopd and 4.0 MMscf/d, totaling 5,175 boepd net to Iona (not including
approximately net 765 bopd and 0.68 MMscf/d attributed to the Royalties).
Management believes peak production rates will be considerably governed by the
processing capacity of the FPSO, and as a result production decline rates in
the first 24 months are expected to be slight. Given the API of 43 degrees and
other qualities of the Huntington crude oil, Iona anticipates a slight premium
to Brent quality priced crude.

As developed and under current market conditions, Iona estimates reserves for
its interest in Huntington to be 3.5 MMbbls Proved Reserves, 6.0 MMbbls Proved
plus Probable Reserves, and 7.3 MMbbls Proved plus Probable plus Possible
Reserves respectively (excluding volumes attributed to the Royalties from the
Huntington Joint Venture Partners). Iona expects to include the working and
royalty interests in Huntington in its 2012 year-end independent reserves
valuation due to be completed no later than April 30th, 2013.

Iona also announces that it has made full payments to MPX North Sea Limited
("MPX") and Sorgenia (E & P) UK Limited ("Sorgenia") in respect to the
combined total adjusted deferred consideration, interest and fees of USD$46.8
million related to the Orlando Sale and Purchase agreement dated June 7, 2012.

About Iona Energy

Iona Energy is an oil and gas exploration, development and production company
focused on oil and gas development in the United Kingdom's North Sea.


(1) Prepared by a non-independent qualified reserves evaluator in accordance
with the COGE Handbook, effective February 22, 2013.

The securities of Iona being offered have not been, nor will be, registered
under the United States Securities Act of 1933, as amended, and may not be
offered or sold within the United States or to, or for the account or benefit
of, U.S. persons absent U.S. registration or an applicable exemption from U.S.
registration requirements. This release does not constitute an offer for sale
of securities in the United States.

Forward-looking Statements

Some of the statements in this announcement are forward-looking, including
statements regarding the proposed terms of the Offering and anticipated
closing dates of various transactions of Iona. Forward-looking statements
include statements regarding the intent, belief and current expectations of
Iona Energy Inc. or its officers with respect to various matters, including
expected production and reserves of the Huntington field. When used in this
announcement, the words "expects," "believes," "anticipate," "plans," "may,"
"will," "should", "scheduled", "targeted", "estimated" and similar
expressions, and the negatives thereof, are intended to identify
forward-looking statements. Such statements are not promises or guarantees,
are based on various assumptions by Iona's management and are subject to risks
and uncertainties that could cause actual outcome to differ materially from
those suggested by any such statements, including without limitation, the risk
that operational delays occur. These forward-looking statements speak only as
of the date of this announcement. Iona Energy Inc. expressly disclaims any
obligation or undertaking to release publicly any updates or revisions to any
forward-looking statement contained herein to reflect any change in its
expectations with regard thereto or any change in events, conditions or
circumstances on which any forward-looking statement is based except as
required by applicable securities laws.

Notes Regarding Reserves Estimates

As used in this press release, "boe" means barrel of oil equivalent on the
basis of 6 mcf of natural gas to 1 bbl of oil. Boes may be misleading,
particularly if used in isolation. A boe conversion ratio of 6 mcf: 1 bbl is
based on an energy equivalency conversion method primarily applicable at the
burner tip and does not represent a value equivalency at the wellhead.

As used in this press release, "possible reserves" are those additional
reserves that are less certain to be recovered than probable reserves. There
is a 10% probability that the quantities actually recovered will equal or
exceed the sum of proved plus probable plus possible reserves.

Additionally, this press release uses certain abbreviations as follows:

Oil and Natural Gas Liquids                    Natural Gas                  
bbls     barrels                               Bcf      billion cubic foot  
MMbbls   millions of barrels                   MMcf     million cubic feet  
MMboe    million barrels of oil equivalent                                  

Iona Energy Inc.
Neill A. Carson
Chief Executive Officer
+011 (44) 1224 228400

Iona Energy Inc.
Brad G. Gunn
Chief Financial Officer
(403) 775-7442


Neither TSX Venture Exchange nor its Regulation Service Provider (as that term
is defined in the policies of the TSX Venture Exchange) accepts responsibility
for the adequacy or accuracy of this release.

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