Iona Energy Inc.

Company Update

CALGARY, ALBERTA--(Marketwired - March 5, 2015) -

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

Iona Energy Inc. ("Iona" or the "Company") (TSX VENTURE:INA), a Canadian independent oil & gas company with assets in the UK North Sea wishes to provide the following update.

Financial Update

On September 27, 2013, Iona, via its UK subsidiary, Iona Energy Company (UK) plc, issued US$275 million in senior secured bonds (the "Bonds").

As the Company reported on December 18, 2014, the rapid decline in oil prices and continued production interruptions at Huntington have negatively impacted projected cash flows and the Company reported at that time that it may breach certain of the Bond covenants during the next twelve month operating cycle.

Based on unaudited management accounts, it is highly likely that the Company will be in breach of one or more of its covenants upon publication of its annual financial statements for the year ended December 31, 2014. The Company's annual financial statements are scheduled to be published on April 29, 2015 including fully audited financial statements and final covenant calculations. It should be noted that two consecutive quarterly covenant breaches are required to constitute an event of default under the Bonds.

Constructive discussions are ongoing with certain of the Company's largest bondholders to increase financial flexibility for the Company. Such bondholders and the Company are aligned on the key principle that ensuring Orlando is brought on-stream gives all stakeholders the best opportunity to maximize value. Creating flexibility under the terms of the Bond to deliver the Orlando project also provides greater time for management to deliver its core strategy of refinancing the business in conjunction with an acquisition. It should be noted however that there is no guarantee that an agreement will be reached with the bondholders. Should no agreement be reached then this would have significant negative implications for the Company's ability to operate in its current form.