Energy SpA — Earnings Release 2014

Apr 29, 2015

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

IONA ENERGY INC. ANNOUNCES 2014 FINANCIAL RESULTS AND YEAR END RESERVES

FOR IMMEDIATE RELEASE

CALGARY, ALBERTA, April 29, 2015 – Iona Energy Inc. ("Iona" or the "Company") (TSX-V: INA) a Canadian independent oil & gas company with assets in the UK North Sea announces its financial and operating results for the year ended December 31, 2014 and details of its end of 2014 reserves assessment.

2014 Highlights

Operating

• 2014 average net production of 2,229 barrels of oil equivalent per day ("boepd") driven by low availability of the Central Area Transmission System ("CATS") gas export system for Huntington.
• o Huntington 2014 average production of 13,472 boepd (gross), 2,021 boepd (net to the Company's 15% working interest(1)).
• o Trent & Tyne 2014 average production of 1,043 boepd (gross), 209 boepd (net to the Company's 20% working interest).
• New executive team completed during Q4 2014.
• Orlando development remains on track for first production in Q4 2016.
• o Full suite of offtake agreements executed with CNR International (UK) Limited ("CNR") during Q4 2014.
• o Management seeking to deliver capex savings of 10-15% on the current 2015-2016 budget of US\$215 million (gross).
• 29.2 million barrels of oil equivalent ("mmboe") proved and probable ("2P") reserves at December 31, 2014, a 14% reduction versus year-end 2013.
• o Orlando net 2P reserves reduced by 2.1 mmboe following commitment to single well development solution (versus two well proposal at year-end 2013).
• o Huntington net 2P reserves reduced by 1.1 mmboe following 2014 production (0.8 mmboe) and observation of well performance (0.3 mmboe).
• New management team has implemented a strict focus on cost control and G&A reduction.
• o Q4 2014 employee costs reduced by 36% versus Q4 2013.
  • o Q4 2014 total G&A reduced by 47% versus Q4 2013.

Financial

• 2014 revenues of \$90.5 million (2013: \$65.5 million) and Adjusted EBITDA of \$43.7 million (2013: \$47.9 million).
• Loss after tax of \$119.5 million for 2014 (2013: \$29.5 million loss) following full impairment of Trent & Tyne (\$31.2 million) and impairment of Huntington asset (\$88.9 million) and associated goodwill (\$14.1 million) during 2014.
• o Huntington impairment largely driven by oil price drop in Q4 2014.
• Approximately 400,000 barrels (effective December 2014 December 2015) hedged during Q4 2014 with a floor price of US\$80.00 / bbl.
• End of year cash and restricted cash \$95.7 million (2013: \$104.9 million) (\$55.5 million (2013: \$85.1 million) restricted for purposes of Orlando development and BP hedging settlement).

Post Year End Operational Highlights

• Huntington production resumed in April 2015 with all four production wells returning to full production delivery. Since our last update of April 16, 2015 Huntington production has averaged 25,018 bbls of oil per day and 3,084 boe of associated gas per day exported into CATS (28,102 boe/day gross, 4,215 boe/day net to the Company's 15% working interest(1)).
• (1) Iona also benefits from a 0.75% differential lifting entitlement and a 1.8% royalty interest in the Huntington field.

Funding Update

• The Company was in breach of the financial covenants of its US\$275 million senior secured bonds (the "Bond") at December 31, 2014.
• Since year end, financial flexibility has been significantly increased for 2015 and 2016 following bondholder approval of a range of amendments to the terms of the Bond including:
• o Full waiver of financial covenants through to first oil from Orlando.
• o Conversion of interest payments to payment-in-kind for 2015 and 2016.
• o Scheduled 2016 amortization payments deferred until Bond maturity in September 2018.
• o Iona also to commence a review process to consider a range of alternatives to enable the Company to (i) fully fund Orlando and/or (ii) refinance the Bonds. A proposal needs to be presented to the bondholders by the end of June 2015 and, subject to bondholders' approval, implemented by the end of September 2015. If Iona does not provide a proposal or the proposal is not supported by the bondholders then the Company shall use its reasonable endeavors to arrange for the issue of a new super senior debt funding.
• o Both a proposal or a super senior debt funding require support from bondholders.

Tom Reynolds, Chief Executive Officer, commented:

"Under the Company's new leadership team significant progress has been made to strengthen the business in a period where macro conditions are adversely affecting the entire sector. The Bond restructuring is underway, G&A costs have been materially reduced, appropriate hedging is in place for 2015 and key agreements were signed to progress the Orlando development. With resumption of normal service at CATS the Huntington field is now producing at unrestricted rates representing a more stable and predictable cashflow."

Q4 2014 Operations Update

Huntington

• Q4 2014 net production of 395 boepd.
• Production was significantly impacted by issues with CATS, with production shut-in or constrained for all of Q4 2014.
• The field operator continues to work on gas disposal by way of an injection solution.
• The Huntington field partners continue to review how to maximize recovery from the field. Subsurface studies are ongoing which may support further capital investment in the field in the form of either a new production well or a sidetracked water-injection well in 2016.

Trent & Tyne

• Q4 2014 net production of 227 boepd.
• Company announced that its proposed acquisition of the remaining 80% interest in the Trent & Tyne fields would not complete.

Orlando

• Full suite of offtake agreements finalized with CNR, the operator of the Ninian Central Platform ("NCP") infrastructure.
• Significant milestone to keep the project on track for first oil production at the end of 2016 and add significant production and value.
• NCP modifications on track and installation of Orlando equipment planned during summer shutdown in 2015.
• Orlando 2015-2016 project costs budget reduced from US\$228 million to US\$215 million (gross). Further cost savings in the order of 10-15% on the revised budget are being targeted by management.

Reserves Update

Iona's estimated net reserves as of December 31, 2014 as audited by Gaffney Cline & Associates ("GCA") are summarised below:

• Net 1P Reserves of 17.6 million barrels of oil equivalent ("mmboe") (2013: 18.9 mmboe(2) )
• Net 2P Reserves(1) of 29.2 mmboe (2013: 34.0 mmboe(2) )
• Net 3P Reserves of 37.4 mmboe (2013: 43.8 mmboe(2) )
• Net 2P Reserves Pre-Tax Net Present Value (assuming a discount rate of 10%) of \$871 million (2013: \$1,280 million(2) )
• (1) 2P Reserves comprises 87% oil and 13% natural gas.
• (2) Information is from the December 31, 2013 GCA reserves report produced for the Company in April 2014.

A call for analysts and investors will be held at 8.30am EST to discuss the results. Dial-in details are below:

Dial-in (Canada):	+1 866 404 5783
Dial-in (UK):	+44 (0) 203 139 4830
Dial-in (UK toll free):	+44 (0) 808 237 0030
Passcode:	85361941#

Following the call, a playback facility will be made available on the Iona website www.ionaenergy.com.

For further information please contact:

Iona Energy Inc.
Tom Reynolds, CEO	+44 (0) 1224 228400
Robert Gair, CFO	+44 (0) 1224 228400
Email: info@ionaenergy.com
Camarco
Billy Clegg / Georgia Mann	+44 (0) 20 3757 4980

Notes:

Further details on the above are provided in the Consolidated Financial Statements and Management's Discussion and Analysis for the year ended December 31, 2014 and the year ended December 31, 2013, which have been filed with securities regulatory authorities in Canada. These documents are available on the System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com and on the Company's website: www.ionaenergy.com.

About Iona Energy:

Iona is an oil and gas company with assets 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 plans for the development of its properties, statements regarding acquisitions, estimated production levels, anticipated effects of the UK small field allowance, and estimates of the net present value of future net revenue of proved and probable reserves from Iona's properties. 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 assumptions regarding Huntington production rates. When used in this announcement, the words "expects," "believes," "anticipate," "plans," "may," "will," "should", "scheduled", "targeted", "estimated" and similar expressions, and the negatives thereof, whether used in connection with estimated production levels and future activity or otherwise, are intended to identify forward-looking statements. Such statements are not promises or guarantees, 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 Iona's development plans change as a result of new information or events or the risk that proposed transactions are not completed. 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:

Note: "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.

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.