•The Boards of Ithaca Energy Inc. and of Valiant Petroleum plc announce that they have reached agreement on the terms of a recommended acquisition under which Ithaca Energy Holdings (UK) Limited (“Ithaca Bidco”) will acquire the entire issued and to be issued share capital of Valiant (the “Acquisition”). The Acquisition is to be effected by means of a Court-sanctioned scheme of arrangement under Part 26 of the Companies Act.

• Under the terms of the Acquisition, Valiant Shareholders will be entitled to receive 307 pence in cash and 1.33 Ithaca Consideration Shares for each Valiant Share held at the Scheme Record Time.

• Based on the Closing Price of an Ithaca Share of C$1.97 (126 pence) on 28 February 2013, the Acquisition values the entire issued and to be issued share capital of Valiant at approximately £203 million (equivalent to approximately US$309 million and C$318 million) and each Valiant Share at approximately 475 pence.

• The consideration payable under the Acquisition represents a premium of approximately:

◦ 37% to the Closing Price of 346.5 pence per Valiant Share on 28 February 2013, the last Business Day prior to the date of this announcement;

◦ 31% to the average Closing Price of 361.1 pence per Valiant Share for the 20 Business Days ended on 28 February 2013, the last Business Day prior to the date of this announcement; and

◦ 3% to the Closing Price of 460.0 pence per Valiant Share on 5 September 2012, the last Business Day prior to the announcement by Valiant of the commencement of a ‘formal sale process’ as defined in the Code.

• The Valiant Board, which has been so advised by Morgan Stanley & Co. Limited (“Morgan Stanley”, as the independent financial adviser for the purposes of Rule 3 of the Code), considers the terms of the Acquisition to be fair and reasonable. In providing its advice to the Valiant Board, Morgan Stanley has taken into account the commercial assessments of the Valiant Board.

• Accordingly, the Valiant Board intends to recommend that Valiant Shareholders vote in favour of the resolutions to be proposed at the Court Meeting and the General Meeting which are to be convened to approve the Acquisition. The Valiant Directors have irrevocably undertaken to approve the Acquisition in respect of their own beneficial holdings in Valiant, which amount in aggregate to 433,695 Valiant Shares, representing approximately 1.06% of the entire issued share capital of Valiant (as described in Appendix III). These irrevocable undertakings do not lapse in the event of a higher competing offer being made for Valiant. As previously announced by Valiant on 15 November 2012, Peter Buchanan has ceased to participate in meetings of the Valiant Board relating to the Strategic Review and formal sale process initiated on 6 September 2012, including relating to the Acquisition and has not given an irrevocable undertaking.

• In aggregate, Ithaca Bidco has received irrevocable undertakings and non-binding letters of intent to vote in favour of the Scheme and the resolutions at the Court Meeting and the General Meeting in respect of 16,930,479 Valiant Shares, representing approximately 41.35% of Valiant’s issued share capital. Further details of these irrevocable undertakings and letters of intent are set out at paragraph 7 and Appendix III to this announcement.

• In addition, although no shareholder approval of Ithaca or Ithaca Bidco is required in connection with the Acquisition, Ithaca Bidco has received non-binding letters from the following Ithaca shareholders (or investment managers), confirming their support for Ithaca and Ithaca Bidco making the Acquisition in line with Ithaca’s stated strategy: Artemis Investment Management LLP; Four Capital Partners Limited; HSBC Global Asset Management; JP Morgan Asset Management (UK) Limited; Salida Capital; and SLZ Capital Management, LLC.

• Ithaca, through its wholly-owned subsidiary, Ithaca Energy (UK) Limited, is an oil and gas operator focused on production, appraisal and development activities in the North Sea. Ithaca’s strategy is to grow shareholder value by building a highly cash-generative North Sea oil and gas Business. Execution of the strategy is centred on: maximising cash flow and production from existing assets; delivering material growth by appraising and developing existing hydrocarbon discoveries; and continuing to increase and diversify Ithaca’s portfolio and cash flows via acquisitions. The Ithaca Shares are listed on the Toronto Stock Exchange and admitted to trading on AIM, a market operated by the London Stock Exchange. Ithaca Bidco is a wholly-owned subsidiary of Ithaca incorporated under the laws of Scotland for the purpose of making the Acquisition. Ithaca Bidco has not traded since incorporation, nor has it entered into any obligations, other than in connection with the Acquisition and the financing of the Acquisition.

• Valiant has a balanced portfolio of production, development and exploration assets with a primary focus on the UK and Norway. Formed in 2004, Valiant has developed a stable production foundation providing it with sustained cash flows which fund on-going investment. Valiant has built a broad and attractive portfolio in stable geographies where it has deep knowledge of the geology and regulatory environment.

• The announcement of this recommended Acquisition follows the announcement by Valiant on 6 September 2012 that it had decided to launch a ‘Strategic Review’ in the context of a ‘formal sale process’ as defined in the Code, which process has now been successfully concluded with the announcement of this recommended Acquisition. The end of the formal sale process means that the data room which has been open to participants will be closed with effect from 7.00 a.m. on 1 March 2013. Other potential offerors can still nonetheless announce competing offers for Valiant.

• The Acquisition is anticipated to result in:

◦ the establishment of Ithaca as a leading mid cap North Sea oil and gas operator, with 2P reserves of approximately 74MMboe(1), of which approximately 50% relates to currently producing assets;

◦ a more than doubling of Ithaca’s current forecast 2013 production to 14-16kboe/d (90% oil), rising to approximately 27kboe/d in 2015; and

◦ approximately a four fold increase in Ithaca’s anticipated 2013 cash flow from operations to US$400 million, rising to over US$700 million in 2015.

• Ithaca is pleased to confirm that, on completion of the Acquisition, two existing Valiant Directors, Mr Jannik Lindbæk and Mr Michael Bonte-Friedheim, will be appointed to the Board of Ithaca as Non-Executive Directors. Both Mr Lindbæk and Mr Bonte-Friedheim have considerable oil and gas industry experience, both in the North Sea and internationally, and will be central to ensuring a seamless and efficient integration of Valiant’s assets into Ithaca’s existing operations. Mr Lindbæk was previously Chairman of the Norwegian international oil and gas company Statoil ASA, prior to its merger with Norsk Hydro in 2007. Mr Bonte-Friedheim, an investment banker by background, was previously Non-Executive Chairman and subsequently CEO of Mediterranean Oil and Gas plc, a UK AIM-traded company, and is currently co-CEO of NextEnergy Capital, a merchant bank focused on the renewable energy sector, as well as acting CEO of Valiant.

• The Ithaca Consideration Shares to be issued pursuant to the Acquisition are expected to represent approximately 18% of the issued share capital of Ithaca as enlarged by the Acquisition.

• The Ithaca Consideration Shares will rank equally in all respects with the existing Ithaca Shares and will be entitled to all dividends and/or other distributions declared or paid by Ithaca in respect of common shares of Ithaca by reference to a record date falling after the Effective Date.

• The cash consideration payable under the terms of the Acquisition will be funded from a bridge credit facility provided to Ithaca Bidco by Banc of America Securities Limited, BNP Paribas and The Bank of Nova Scotia, together with Ithaca’s existing cash resources.

• The Panel has consented to Valiant entering into a break fee arrangement with Ithaca Bidco as a participant in Valiant’s announced formal sale process under Note 2 of Rule 21.2 of the Code. As such, Valiant has agreed to pay Ithaca Bidco a break fee of £2,034,944 (subject to adjustment for VAT) if a Competing Offer is announced prior to the Acquisition lapsing or being withdrawn and such Competing Offer becomes or is declared unconditional in all respects or otherwise becomes effective.

• The Acquisition is conditional on, among other things, certain regulatory approvals and the sanction of the Scheme by the Court. The Acquisition is also conditional upon a Brent Failure Event not having occurred. In addition, in order to become Effective, the Scheme must be approved by a majority in number of Scheme Shareholders voting at the Court Meeting representing not less than 75% in value of the Scheme Shares held by the Scheme Shareholders present and voting in person or by proxy. It is currently expected that the Scheme Document, containing further information about the Acquisition and notices of the Court Meeting and the General Meeting, together with the Forms of Proxy, will be posted on or around 12 March 2013 and that, subject to the satisfaction, or where relevant, waiver of all relevant Conditions (including regulatory clearances), the Scheme is expected to become Effective on or around 19 April 2013.

Commenting on the Acquisition, Jack Lee, Non-Executive Chairman of Ithaca said:

“This proposed acquisition represents a significant step forward in the execution of Ithaca’s strategy to build a highly profitable 25kboe/d North Sea oil and gas company. The combined assets of the two groups have a strong strategic fit, with the acquisition materially increasing and broadening Ithaca’s producing asset base and reserves portfolio.

The highly cash generative nature of the enlarged portfolio and further enhancement of Ithaca’s existing financial strength provides an exciting springboard from which to continue driving forward the Business and accelerating value from Ithaca’s production and development-led growth strategy.

I am also delighted to announce that as part of the acquisition, Ithaca will be further strengthening its Board of Directors with the addition of two of Valiant’s existing Non-Executive Directors, Mr Jannik Lindbæk and Mr Michael Bonte-Friedheim. Jannik and Michael are two extremely experienced oil and gas industry executives, who bring both a wealth of North Sea knowledge and will be central to ensuring a seamless and efficient integration.”

Commenting on the Acquisition, Kevin Lyon, Non-Executive Chairman of Valiant said:

“We are pleased to announce Ithaca’s recommended offer to our shareholders. The Board feels the offer recognises the value in Valiant’s portfolio and provides our shareholders with the opportunity to both realise a proportion of this value in cash today whilst retaining exposure to the enlarged portfolio. The combination with Ithaca will create a leading North Sea oil and gas operator with a diverse production and reserves asset base from which to pursue new and exciting growth opportunities.

On behalf of the Board, I would like to take this opportunity to thank our employees, staff and partners whose hard work and dedication have helped build Valiant over the past nine years into a full-cycle E&P company with a portfolio of licences across four countries.”

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