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June 20, 2013 at 09:39 AM EDT
Iona Energy Announces Proposed Issue of Senior Secured Callable Bond

CALGARY, ALBERTA--(Marketwired - June 20, 2013) -

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 that the Company proposes the issuance of a Senior Secured Callable Bond Issue of USD 250-300 million (the "Bond Issue") in order to refinance its current Senior Secured Borrowing Base Facility (the "BBF") of which approximately USD 139 million of debt is drawn, and to partially retire its existing structured energy derivative transaction ("Structured Derivative Transaction"). Additional proceeds of the Bond Issue will enable the Company to fund the delivery of its Orlando and Kells projects to first oil, as well as mature and accelerate its other pipeline of development opportunities.

The Company has initiated a process for a potential refinancing of its existing BBF and the Structured Derivative Transaction through a bond issue. As such, Pareto Securities has been appointed by Iona as Sole Manager and Bookrunner of the Bond Issue.

The bond will be issued by Iona Energy Company (UK) Limited (the "Issuer"), a subsidiary owned 100% by Iona, with proceeds expected to be available by early July 2013. The security package attached to the Bond will include a parent company guarantee from Iona, a charge over the shares of the Issuer and its subsidiary Iona UK Huntington Limited, as well as a charge over the Issuer's interests in the Huntington, Trent & Tyne, Orlando, Kells and West Wick assets.

The Bond Issue 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 upcoming development expenditures, while offering general terms and conditions which are less restrictive than those of the BBF.

Neill Carson, Iona's CEO commented: "We commenced a rapid ramp-up in production from early Q2 2013 through the start-up of the Huntington field. Whilst first cargos have been sold, ramp-up operations continue at Huntington with the recent onset of gas compression, export, and water injection. Strong well and reservoir performance has indicated that ramp up from approximately gross 10,000 bbls/d to full production capacity of gross 30,000 bbls/d and 27 MMcf/d is expected to be reached within weeks once the facility gas export systems are fully commissioned. This production represents significant cash flow and it is important that we optimize our ability to access this income in order to maintain our production growth and accelerate the development of our portfolio of operated discoveries. The proposed Bond Issue provides Iona with the opportunity to achieve its objectives in this respect."

About Iona Energy

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

The securities of Iona being offered have not been, nor will be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons absent U.S. registration or an applicable exemption from U.S. registration requirements. This release does not constitute an offer for sale of securities in the United States.

Forward-looking Statements

Some of the statements in this announcement are forward-looking, including statements regarding the proposed terms, timing and use of proceeds of the Bond Issue and anticipated closing dates of various transactions of Iona. 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 expected production rates of the Huntington field. 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 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 the Bond Issue is delayed or does not close, or the risk that operational delays at Huntington occur. 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.

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

Contact Information:

Iona Energy Inc.

Neill A. Carson

Chief Executive Officer

+44 1224 228400

Iona Energy Inc.

Graham Heath

Interim Chief Financial Officer

+44 7508 932986

Iona Energy Inc.

Dave Ricciardi

Investor Relations

403 978 4894

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