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Iona Energy Announces Huntington and Corporate Production Update

CALGARY, ALBERTA--(Marketwired - July 17, 2013) -

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR DISSEMINATION IN UNITED STATES

Iona Energy Inc. (TSX VENTURE:INA) ("Iona" or the "Company") is pleased to provide an update related to its Huntington Oil Field located in the UK North Sea, as well as a total production update for the Company.

Huntington and Corporate Production

Current production from the Huntington Oil Field is approximately 24,500 boepd gross (21,700 bopd of oil and 16.9 MMscf/d of natural gas). Net to Iona, production is approximately 4,300 boepd, which includes the Company's royalty interests. Iona owns a 15% working interest and a 2.55% royalty interest at the Huntington Oil Field. As a result of the increased production at Huntington, Iona has reached a new production record of approximately 5,600 boepd, a 62% increase over its last publicized production rate of 3,464 boepd announced on June 10th, 2013. Iona's net production is expected to increase to over 7,500 boepd as Huntington reaches production capacity.

With the majority of the gas compression issues having been resolved, production is expected to continue to increase towards the Floating Production Storage and Offloading ("FPSO") unit capacity of 30,000 bopd and 27 MMscf/d within the next few weeks. Iona has been advised by the operator of the FPSO that the B-train gas compression system has been stabilized, allowing for Huntington production to surpass the 20,000 bopd milestone. Upon stabilization of the A-train, production is expected to steadily increase towards full capacity.

There have been three successful liftings of crude oil from Huntington totalling more than 500,000 barrels with a fourth lifting of over 200,000 bbls due on July 21st, 2013. Huntington produces 43º API light oil, and to date the oil has sold between par and a slight discount to Brent (USD 2/bbl). The realized price is expected to increase once the refineries see continued and regular shipments, and in the future Iona believes that Huntington production will yield a premium to Brent. Huntington gas production has realized USD 8.52/mcf.

The working interests in the Huntington field are E.ON Ruhrgas UK E&P (25% Operator), Premier Oil plc (40%), Norwegian Energy Company ASA (20%), and Iona (15%). In addition to the working interest, Iona holds a gross overriding royalty of 2.55% of total Huntington production, payable from the Huntington Joint Venture Partners.

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 estimates of the quantities of reserves, associated net present values of future revenue therefrom, and contingent resources in the Huntington field. 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 the assumption with respect to the timing and effects of commissioning gas compression systems for Huntington 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 impacting production rates at Huntington. 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.

Additionally, this press release uses certain abbreviations as follows:
Oil and Natural Gas Liquids Natural Gas

bbls barrels mcf thousand cubic feet

MMbbls millions of barrels MMscf million standard cubic feet

MMboe million barrels of oil equivalent Bcf billion cubic feet

boepd barrels of oil equivalent per day

bopd barrels of oil 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.

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

Iona Energy Inc.
Graham A. Heath
Interim Chief Financial Officer
+44 7508 936982

Iona Energy Inc.
David Ricciardi
Investor Relations
403 978 4894

Source: Marketwired (July 17, 2013 - 3:40 PM EDT)

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Iona Energy Inc
Symbol C : INA
Shares Issued 366,830,868
Close 2013-09-16 C$ 0.60
Recent Sedar Documents

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Iona Energy issues $275-million (U.S.) bond

2013-09-17 18:15 ET - News Release


Mr. Neill Carson reports

IONA ENERGY ANNOUNCES SUCCESSFUL COMPLETION OF USD 275 MILLION SENIOR SECURED CALLABLE BOND

Iona Energy Inc. has placed a $275-million (U.S.) senior secured bond issued by its U.K. subsidiary Iona Energy Company (UK) Ltd.

The net proceeds from the bond issue will be used to refinance the senior secured borrowing base facility, of which approximately $143-million (U.S.) is outstanding, and to retire all or parts of its existing structured energy derivative transaction. Additional proceeds of the bond issue are expected to enable the company to finance the delivery of its key development projects, Orlando and Kells, to first oil. The bond will provide the company with enhanced financial flexibility through improved access to cash flow from its producing assets, Huntington and Trent & Tyne, and increased debt financing for its coming development expenditures, while offering general terms and conditions which are less restrictive than those of the BBF.

The bond, which has a tenor of five years, carries an interest coupon of 9.5 per cent, payable semi-annually, and will be issued at 97.5 per cent of par. The amortization profile is tailor-made to match the cash flow profile of Iona's existing asset base and is structured to enable Iona to bring Orlando, its next significant development project, on stream before commencing amortization payments. Commencing 30 months after the settlement date, the bond will amortize 15 per cent of the issue amount every six months with a 25-per-cent final payment at maturity. The amortizations will be performed at the prevailing call option prices of 105 per cent, 104 per cent, 104 per cent, 103 per cent and 103 per cent of par value, with the residual amount payable at 102 per cent of par value. The bond is callable at the option of the issuer at any time.

The bond has the usual comprehensive security package, including a charge over all main assets of the issuer, including its interest in the Huntington, Trent & Tyne, Orlando and Kells fields, and the shares of the issuer and its wholly owned subsidiary, Iona UK Huntington Ltd., as well as a parent company guarantee. The settlement date for the bond is expected to be Sept. 27, 2013, and is subject to final completion and execution of standard documentation. The bond is governed under Norwegian law, and the trustee for the bond is Norsk Tillitsmann ASA.

Neill Carson, Iona's chief executive officer, commented: "Following a ramp-up period the Huntington field reached full production capacity of 30,000 barrels per day and 27 million cubic feet per day in early September. With this important milestone in place the next vital step in the further development of Iona was to secure improved flexibility in its financing for the operated field development projects, Orlando and Kells, which are expected to commence production in 2015 and 2016, respectively. With the successful closing of the $275-million (U.S.) bond issue, the company believes it is fully financed for the development of these key projects, which are expected to lead to a ramp-up in production to 17,000 barrels of oil equivalent per day by year-end 2016, representing more than a doubling of Iona's existing production. We are very pleased with the reception of Iona in the international bond market. Through the bond, Iona will be able to access cash flow from our producing assets and redeploy this cash flow into new projects in line with our strategy, creating a self-financed and repeatable business model."

Pareto Securities acted as sole manager and book runner of the bond issue.

We seek Safe Harbor.