Iona Energy Announces Company-Wide Brief Including Trent & Tyne Acquisition, Operational Update, and Management Addition

NOT FOR DISTRIBUTION TO UNITED STATES NEWS WIRE SERVICES OR DISSEMINATION IN
UNITED STATES 


Iona Energy Inc. ("Iona" or the "Company") (TSX VENTURE:INA) is pleased to
announce the signing of a sale and purchase agreement ("SPA") with Perenco UK
Limited ("Perenco") for an 80% working interest in the Trent & Tyne Gas Fields
which will bring the Company's aggregate working interest to 100% and result in
Iona becoming Operator. The Company is also pleased to announce a management
addition and the provision of a company-wide operational update. A presentation
detailing the Trent & Tyne acquisition has been added to Iona's website at
www.ionaenergy.com.


ACQUISITION OF REMAINING TRENT & TYNE (80%) WORKING INTEREST

On April 28th, 2014, through its wholly owned UK subsidiary, Iona UK
Developments Co Limited, Iona entered into a binding SPA with Perenco for the
acquisition of Perenco's operated working interests in the producing Trent &
Tyne Gas Field licences (including the Trent East gas discovery), Perenco's
rights and obligations under the sale and purchase agreement dated April 15,
2011 previously entered into between Perenco and Iona Energy Company (UK) plc
(including Perenco's obligation to drill the Tyne North West Well as defined
under that agreement), and Perenco's interest in the Block 44/18e Licence, in
exchange for USD 20 million. Specifically Iona will acquire:




--  An undivided legal interest and 80% beneficial interest in Licence P.
    685 ("Trent Gas Field Blocks 43/24a") 
--  An undivided legal interest and 80% beneficial interest in Licence P.
    609 ("Tyne Gas Field Blocks 44/18a") 
--  A 100% beneficial interest in Licence P.685 to the extent it relates to
    the Trent East Discovery Area Blocks 43/24a 
--  An undivided legal interest and 80% beneficial interest in Block 44/18e
    Licence containing an extension of the Tyne East Discovery 
--  Operatorship of the Tyne to Trent pipeline and the Esmond Transportation
    System ("ETS") pipelines which transport gas to the Bacton terminal



The transaction metrics for the acquisition are as follows: 



--  2P reserves addition: 37.4 Bcf (6.2 MMboe)(1) 
--  Addition of 2P before-tax net present value discounted at 10%: USD 150.9
    million(1) 
--  2P production addition: Immediate addition of 10.1 MMcf/d (1,700
    boe/d)(3) with expected Q1 2015 addition of 21.4 MMcf/d (3,560 boe/d)(3)
--  Acquisition cost: USD 20 million 
--  Acquisition cost per 2P reserve additions: USD 0.53/Mcf or USD
    3.21/boe(3) 
--  Acquisition cost per production additions: USD 936/Mcfpd or USD
    5,615/boe/d(3)



The addition of Perenco's remaining 80% working interest brings Iona's total
Trent & Tyne ownership to 100% and gives the Company operating control of the
fields. The acquisition increases Iona's potential corporate peak production to
over 10,000 boe/d(4) in early 2015, roughly split 55% oil and 45% natural gas,
and creates a strategic hub in the southern gas basin with low entry costs and
high returns. Further, the purchase provides Iona with a strategic focus area
for future acquisitions. Iona has identified significant upside potential within
the Trent & Tyne license area through infill drilling opportunities, development
of undeveloped fault blocks, and the drilling of identified low risk exploration
targets. 


The completion and timing of this transaction remains subject to payment of the
purchase price and to consents from the Department of Energy & Climate Change
("DECC") for the transfer of operatorship, assignment of the interests and other
regulator approval to enable Iona to operate the two fields and the Tyne to
Trent and the Esmond Transportation System ("ETS") pipelines to transport
production to the Bacton terminal. The effective date of the transaction is
January 1, 2014 and between then and completion, Iona will assume 100% of the
financial benefits and obligations associated with the increased working
interest. Completion of the acquisition and transfer of operatorship is
anticipated to occur by October 1, 2014. Costs for transferring operatorship
from Perenco to Iona are shared equally between the companies.


Acquisition of Further Adjacent Exploration Licenses. In addition to the Trent &
Tyne acquisition, Iona has entered into a SPA with Ithaca Energy (UK) Limited
("Ithaca") for a 33.33% non-operated interest in Blocks 42/20a, 42/25b, 43/16,
and 43/21c of License P.2107, potential gas accumulations to the northwest of
Iona's 100% owned Trent field. The total consideration paid to Ithaca by Iona
was GBP 79,094. The partners in the blocks are Parkmead (E&P) Limited (33.33%
operator) and Bridge Energy (SNS) Limited (33.33%). The current work programme
contemplates the near-term acquisition of seismic over the area, and a drill or
drop requirement by 2018.


Neill Carson, CEO, commented "We consider the acquisition of these fields,
platforms and pipeline infrastructure as important and strategic to Iona as it
adds approximately 3,560 boe/d(3) of net gas production in early 2015, currently
selling for over US$10/Mcf. The 100% operatorship enables Iona to carry out an
aggressive work-over program on existing wells, to drill an infill well
portfolio that we have matured to execution readiness, and to target a number of
fresh gas accumulations that sit within reach of this infrastructure. More
importantly, the acquisition gives Iona full control over the timeline for
drilling Tyne NW, the T1Z sidetrack well, and Trent East Discovery. The drilling
program will commence in early 2015."


Trent & Tyne Background. Trent & Tyne are two gas fields located in the UK
Southern North Sea, approximately 130 kilometres and 170 kilometres east of
Scarborough, on the English east coast respectively. The fields lie in the
Southern Gas Basin in 20 to 50 metres water depth. Trent & Tyne were developed
together by Atlantic Richfield Company ("ARCo") and brought on production in
November 1996, approximately five years after discovery in 1991 (Trent) and 1992
(Tyne). As at December 31st, 2013, total gross produced volumes from the two
fields was 270 Bcf, with Iona estimating internally that the fields hold
remaining gross 2P reserves of 46.8 Bcf (7.8 MMboe)(2).


Trent & Tyne Catalysts. Upon assuming operatorship in 2003, Perenco embarked on
a period of operational investment that has, until recently, resulted in greater
than 90% uptime on an annualized basis. The offshore investment focused on
integrity of the platforms, pipelines and topsides equipment and on operational
improvements to increase the uptime of the gas compression trains.


Building upon the refurbished infrastructure, significant upside potential
exists within the Trent & Tyne area to access infield and step-out
opportunities. Until 2012, there had been no new drilling or well sidetracks
since its original development. In 2012, the previously producing Tyne T5 well
was successfully sidetracked updip and recompleted as T6. This well had an
initial peak production rate of 28 MMcf/d. 


Several specific near term drilling opportunities have been identified by Iona:



--  Tyne North West. This undrilled North West fault block underlies in part
    a north-south trending salt wall which obscured reservoir imaging at the
    time of initial development. The fault block is better imaged on
    reprocessed and more recent 3D seismic data and, based on current
    interpretation, Iona is preparing for a new well to be drilled from the
    Tyne platform. The prospect is considered low risk as it lies adjacent
    to two producing compartments in the field and above a known field gas
    water contact. The well and is expected to be drilled in early 2015.
    Based on internal estimates of Iona, Tyne NW contains potentially 20 Bcf
    of prospective resources(3) and may produce at peak rates of up to 25
    MMcf/d(3). 
--  Tyne T1z Sidetrack. The T1z development well is currently unable to flow
    due to a combination of casing collapse and salt plugging. Pressure
    measurements in the well indicate that gross 2P reserves of 25
    Bcf(3)remain at the Tyne field and a development sidetrack well is under
    consideration to tap this substantial reserve in the known reservoir.
    The work programme may be implemented when the rig is on site to drill
    the Tyne North West well. Iona forecasts initial peak production rates
    from this sidetrack of 18 MMcf/d (3). 
--  Trent East Discovery. This is a proven undeveloped gas discovery in the
    Carboniferous Westphalian and Namurian reservoirs, with contingent gas
    resources estimated internally by Iona to be 36.6 Bcf (2C)(3). A Field
    Development Plan ("FDP") is currently being prepared for the Trent East
    Discovery, which will produce across the Trent platform. Iona believes
    Field development could potentially recover higher than the 2C estimate
    if all of the main porous gas-bearing sands flow at commercial rates.
    The existing 43/25-3 discovery well drilled by Arco British Limited flow
    tested from two of the five potential sands at an aggregate rate of 50
    MMcf/d. 
--  Tyne East Discovery. This undeveloped fault block was drilled in the
    original field appraisal programme in 1997 but was not developed at the
    time due the existence of larger volumes elsewhere in the field. Based
    on current gas prices, Iona considers Tyne East to be a commercial
    development which represents further future opportunity at Tyne. Iona
    estimates best case gross contingent resources (2C) for Tyne East of 17
    Bcf(3). 
--  Iona has initiated a 3D seismic reprocessing study of the entire 237 km2
    survey that covers the Trent Field. It is believed that this study will
    mature a number of development drilling opportunities into intra field
    compartments. 
--  Iona is currently preparing the regulatory permits and is in advanced
    planning on location surveys for the drilling of these wells. Further,
    Iona is in discussions with the rig market for the provision of two
    Jackup rig slots in early 2015.



OPERATIONAL UPDATE

Trent & Tyne Update (100% Working Interest, Operator)

The Tyne 44/18-T6 ("T6") well was completed in January 2013 as a production well
and flow tested at an average rate of 25 MMcf/d with a peak rate of 28 MMcf/d.
Until late 2013, T6 production was consistently above 25 MMcf/d and exceeding
expectations. Late in 2013 the T6 well began experiencing technical
difficulties, and production dropped from 28 MMcf/d to 12 MMcf/d. The well was
taken offline to analyze the problem.


In the operating envelope of the Tyne field, and in particular the T6 well, salt
deposition in the wellbore tubulars is a significant risk to production. As
super-saline formation water enters the wellbore tubulars it experiences a drop
in both temperature and pressure. This causes salt to drop out of solution and
deposit in the well. It is a well-known issue in the gas fields of the UK
Southern Gas Basin and elsewhere with highly saline formation waters. 


Standard industry practice is to install a water washing system to the wells.
Fresh water is pumped down the wells and this washes salt deposits to surface. A
water maker takes sea water and, by reverse osmosis, generates fresh water for
the water washing system. Salt build-up is sufficiently quick to preclude
producing wells such as T6 without continual water washing. It is routine
procedure to suspend production while the water maker is out of commission.
Operational improvements to enhance the performance and reliability of the Tyne
water maker are being implemented and should be rectified during the second half
of 2014. 


Huntington Forties Production Update (17.55% Working Interest, Non-Operator)

On April 12, 2014, Huntington production was suspended as work commenced to
replace a number of straub couplings that are part of the inert gas system on
the floating production, storage and offloading ("FPSO") facility. On April 24,
2014, the Operator, E.ON E&P UK Ltd, informed the partners that the replacement
work had been completed ahead of schedule and that production restart had
commenced. However, on April 26, 2014 the Huntington partnership was advised
that due to an unplanned shutdown issue involving the CATS riser system, all
fields producing through the system would be shut in until May 1, 2014. 


Huntington Jurassic Fulmar ("Maxwell") Update (17.55% Working Interest,
Non-operator)


Relating to the deeper Maxwell discovery which lies beneath the producing
Huntington Forties field, a subsequent phase of development is under evaluation
by the Huntington joint venture partners to submit an FDP, to conduct
engineering work in 2015, and to set a first oil target in 2016. Further
appraisal and development of the Fulmar horizon may follow depending on the
geoscience evaluation of the overall extent of this reservoir to include Iona's
100% owned Block 22/14d.


Orlando Update (75% Working Interest, Operator)

The development plan for Orlando comprises the re-entering of the suspended
3/3b-13z well, drilling a 3,000 foot horizontal producer, and completion with
dual electric submersible pumps. Additionally, a subsea pipeline, power supply
and control umbilical are expected to be laid between the well-head and the
Ninian Central Platform ("NCP") approximately 10 km to the south west of the
Orlando field. Engineering modifications are expected to be completed at NCP
allowing tie-in and first production shortly after completing the development
well. 


It was originally contemplated that each of these items would be completed by
2015, enabling first oil from Orlando in the second half of the year. Subsequent
to December 31, 2013, the Company has determined that some of these items will
not be completed during 2014 and 2015, and Iona now aims to achieve first oil
from Orlando as early as possible in 2016. 


The manufacture of line pipe and Xmas trees is substantially complete. The
copper cores for the umbilical are also complete and delivered to the umbilical
assembly plant. Manufacture of the control system is ongoing and contractual
arrangements for the balance of the project supply chain are in the process of
being finalized. Additionally, piping tie-ins to the NCP have now been
completed. 


Kells Update (75% Working Interest, Operator)

Kells is currently slated for development through NCP following tie-in of
Orlando to the same facility. The Kells development plan comprises two subsea
production wells, an oil pipeline, a control umbilical, and some pipework
modifications at NCP. An FDP has been submitted and project activity will be
phased through 2015 and 2016, with first oil expected in the second half of
2016. A subsequent water injection project is planned to unlock additional
reserves. This 2017 project will involve the laying of water injection and gas
lift lines, and the conversion of the second well to water injection service. 


Ronan & Oran Update (100% Working Interest, Operator)

Since acquiring these oil discoveries in the 27th licencing round, Iona has
commenced reprocessing 270 km2 of 3D seismic data over the region, and has
conducted more detailed subsurface mapping of Ronan & Oran that suggests the
area of the discoveries may be greater than previously thought. The three
discovery wells all encountered oil 'down to' the base of the reservoir without
encountering oil-water contacts. Iona believes that subsurface mapping has shown
the potential to add significant resources through appraisal drilling which
exist below known oil levels, and that a potential oil-water contact 150 ft
deeper could be mapped out to the spill point lying to the northeast. A
preliminary appraisal location has been selected to penetrate and test the
extension of this oil column deeper into the basin to determine the extent of
these resources. 


The reprocessed 3D data should be received in July, after which a final
subsurface appraisal location will be confirmed. Iona is currently contemplating
the appraisal drilling in early 2015, and has initiated the permitting, site
survey, and procurement of a semi-submersible rig to pursue this opportunity. 


West Wick Update (58.73% Working Interest, Operator)

Iona completed the acquisition of operatorship and a 58.73% working interest in
West Wick in August 2012 and is the operator of the block. West Wick is
programmed for a three well subsea development. The development will comprise
two producers and one injector. The most likely development is via offset field
infrastructure; however, Iona is also considering stand-alone facilities and is
in consultation with both the joint venture and the supply chain and engineering
studies are ongoing. The Company expects to select a development approach and
submit the associated FDP in 2014.


Notes:

(1) Calculated based on the acquisition of Perenco's remaining 80% working
interest in the Trent & Tyne fields using the proved plus probable reserves (2P)
associated with the Trent & Tyne fields as estimated by Iona's non-independent
qualified reserves evaluator effective as of April 25, 2014 using forecast
prices and costs. See "Notes Regarding Oil and Gas Disclosure" below for
additional information. 


(2) Calculated based on a 100% working interest in the Trent & Tyne fields using
the proved plus probable reserves (2P) associated with the Trent & Tyne fields
as estimated by Iona's non-independent qualified reserves evaluator effective as
of April 25, 2014. See "Notes Regarding Oil and Gas Disclosure" below for
additional information. 


(3) As estimated by Iona's non-independent qualified reserves evaluator
effective as of April 25, 2014. See "Notes Regarding Oil and Gas Disclosure"
below for additional information. 


(4) Assumes 2015 peak production of approx. 6,055 boe/d from Iona's 17.55%
economic interest in the Huntington field plus peak production of 4,452 boe/d
from Iona's (expected) 100% interest in the Trent & Tyne fields (including
successful drilling and completion of the Tyne T1z sidetrack and production from
the T1z sidetrack at a peak production rate of 18 MMcf/d (3,000 boe/d)). 


CORPORATE UPDATE

Appointment of Richard Ames as Executive Vice President

Effective immediately, Mr. Richard Ames has been appointed as Iona's Executive
Vice President. Mr. Ames is currently a Director of Iona. Mr. Alan Curran will
remain as Chief Operating Officer until his departure in June 2014 and Mr.
Graham Heath continues his roles as Interim Chief Financial Officer and VP
Corporate Development until a permanent replacement is found for the role of
CFO.


Mr. Ames has 32 years of broad range experience in the oil and gas industry with
senior executive roles in full cycle oil and gas exploration and production,
information technology and oil and gas services. He has held several Vice
President positions in TNK-BP, Sidanco, and Amoco in Russia and Kazakhstan,
where he was responsible for government liaison, the implementation of business
strategies and the management of exploration and new venture projects. He has
recently held Advisory Board of Director positions in Accenture Russia, Kiawah
Conservancy, and DataSpace.


Additional information relating to the Company is available on SEDAR at
www.sedar.com.


About Iona Energy:

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


Forward-Looking Statements

Some of the statements in this announcement are forward-looking, including
statements regarding Iona's business plans for its properties (including timing
and methods of anticipated drilling and production tie-back), estimates of
proved plus probable reserves, contingent resources and prospective resources
associated with certain properties, anticipated completion of the Trent & Tyne
acquisition and anticipated production levels. 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
production, drilling activity or otherwise. 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, including assumptions which are beyond Iona's control, 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 of unanticipated delays or unanticipated costs impacting
drilling and development plans or future production rates or the risk that the
Trent & Tyne acquisition is delayed or not completed for any reason. 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 Oil and Gas Disclosure

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.


The reserves estimates contained in this press release are estimates only and
the actual results may be greater than or less than the estimates provided
herein. The estimates of reserves and resources for individual properties may
not reflect the same confidence level as estimates of reserves or resources for
all properties, due to the effects of aggregation. Peak production numbers may
not be indicative of long-term performance or of ultimate recovery.


"Contingent resources" is defined in the Canadian Oil and Gas Evaluation
Handbook as those quantities of petroleum estimated, as of a given date, to be
potentially recoverable from known accumulations using established technology or
technology under development, but which are not currently considered to be
commercially recoverable due to one or more contingencies. Contingencies may
include factors such as economic, legal, environmental, political, and
regulatory matters, or a lack of markets. It is also appropriate to classify as
contingent resources the estimated discovered recoverable quantities associated
with a project in the early evaluation stage. Contingent resources are further
classified in accordance with the level of certainty associated with the
estimates and may be subclassified based on project maturity and/or
characterized by their economic status. 1C, 2C and 3C refer to the low estimate,
best estimate, and high estimate, respectively, of contingent resources. The
Trent East and Tyne East discoveries are still at an early stage of evaluation
and until Iona finalizes a development plan for each field, these contingent
resources will not be classified as reserves.


The Contingent resources estimates are estimates only and the actual results may
be greater than or less than the estimates provided herein. There is no
certainty that it will be commercially viable or technically feasible to produce
any portion of the resources.


"Prospective resources" is defined in the Canadian Oil and Gas Evaluation
Handbook as those quantities of petroleum estimated, as of a given date, to be
potentially recoverable from undiscovered accumulations by application of future
development projects. Prospective resources have both an associated chance of
discovery and a chance of development. Prospective Resources are further
subdivided in accordance with the level of certainty associated with recoverable
estimates assuming their discovery and development and may be sub classified
based on project maturity. There is no certainty that any portion of the
Prospective resources will be discovered. If discovered, there is no certainty
that it will be commercially viable to produce any portion of the Prospective
resources nor can there be any certainty regarding the timing of any such
development.


Additionally, this press release uses certain abbreviations as follows:



Oil and Natural Gas Liquids               Natural Gas                      
---------------------------------------------------------------------------
bbls   barrels                            Mcf    thousand cubic feet       
boe    barrels of oil equivalent          MMcf   million cubic feet        
MMboe  million barrels of oil             Bcf    billion cubic feet        
       equivalent                                                          
boe/d  barrels of oil equivalent per day  Mcfpd  thousand cubic feet       
                                                 per day                   
                                          MMcf/d million cubic feet per day



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


FOR FURTHER INFORMATION PLEASE CONTACT: 
Iona Energy Inc.
Neill A. Carson
Chief Executive Officer
[phone]


Iona Energy Inc.
Graham A. Heath
Interim Chief Financial Officer
[phone] (UK)
[phone] (North America)


Iona Energy Inc.
David Ricciardi
Manager, Investor Relations
[phone]