Iona Energy Inc.

Company Update - Seite 2

Iona is encouraged that certain bondholders have formed an informal committee and engaged FTI Consulting as their financial advisor and Akin Gump as legal advisors to move the bondholder discussions forward. The Company has engaged ABG Sundal Collier as its financial advisor and Thommessen as its legal advisor.

The financial and operational assumptions currently being utilized by the Company in conducting its financial planning and discussions with bondholders are as follows (all figures on an unaudited basis):

• Cash at December 31, 2014 of US$99.5 million
  • US$25.0 million unrestricted
  • US$61.9 million short-term restricted (for Orlando spend and BP derivative settlement)
  • US$8.6 million long-term restricted (letter of credit ("LoC") against Trent and Tyne decommissioning)
• Current cash of US$71.5 million
  • US$10.9 million unrestricted
  • US$52.1 million short-term restricted ⁽¹⁾
  • US$8.5 million long-term restricted
• Huntington
  • 2015 average production is estimated by Iona at c. 11,500 boepd (gross), taking into account the fact that production has been constrained through January and February and expected maintenance during June and July
  • 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 new or sidetracked water-injection well in 2016. Gross capex is estimated to be a maximum of £25 million
  • 2016 average production with no additional investment is estimated by Iona at c. 10,000 boepd (gross)
  • Further investment could increase the 2016 average rate to 11,000 to 13,000 boepd (assuming new production comes onstream during H2 2016)
  • The operator is required to assess on an annual basis whether the field partners need to make provision by way of posting a LoC for future abandonment costs. This process is undertaken during Q2 and any provision will need to be posted during Q4. Iona estimates that a provision in the range of US$5-10 million (net to Iona) will be required through 2015 and 2016, however the exact provision is uncertain as it is dependent upon a range of factors including the prevailing oil price and future investment decisions relating to the field. The abandonment provision amount also remains subject to further discussion with the operator
• Orlando
  • The project remains on track for first production during Q4 2016
  • Iona's latest capex estimate for the project is US$215 million (gross) for 2015-2016
  • Initial production rates from the field are estimated by Iona at c. 10,500 bopd (gross) with year 1 decline in the range of 50-60% and year 2 decline in the range of 30-40%
• G&A expenses
  • Iona has significantly reduced G&A expenditure with 2015 G&A forecast to be US$5.2 million (after capitalized portion)

(1)

An additional US$13.25m is currently being held in a restricted account in the name of one of Iona's physical crude offtakers in relation to the retirement of certain call options. This party has agreed to consider restructuring this payment subject to the Company reaching a broader restructuring agreement with its bondholders

Huntington