INA

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


Iona Energy Inc. ("Iona" or the "Company") (TSX VENTURE:INA) announces its
financial results for the three months and six months ended June 30, 2012. 


HIGHLIGHTS 



Financial                                                                   
                                                                            

--  Received credit approval from lenders on a corporate senior secured
    reserve based lending facility of USD$130 million. The facility is
    subject to final documentation and conditions precedent which are
    currently being negotiated. 
    
--  Closing of a CAD$92 million equity financing of common shares. 
    
--  No short or long term debt as at June 30, 2012. 
    
--  Exploration and evaluation assets of CAD$65.9 million (December 31,
    2011- CAD$28.2 million). 
    
--  Total assets of CAD$167.2 million (December 31, 2011 - CAD$72.1
    million). 
    
--  Q2 Net loss of CAD$2.9 million (or CAD$0.01 per share) resulting in a
    loss for the six months ended June 30, 2012 of CAD$3.9 million. 
    
--  Issue of a cash-backed letter of credit for GBP 4.26 million pounds
    (CAD$6.8 million) for the Company's share of future decommissioning
    costs for the Trent & Tyne properties. 
    
--  GBP 20 million (CAD$32.0 million) paid into a trust account as an
    upfront payment for the side-track of the Tyne T5-z well, which
    commenced in August 2012. 
    

Operational                                                                 
                                                                            

--  Trent & Tyne net production to Iona during each of the three and six
    months ended June 30, 2012 was 2.3 MMscf/d and the average realized gas
    price was $8.67/mcf and $8.86/mcf respectively. 
    
--  Completion of the Orlando well and side-track with better than expected
    results. 
    
--  Contracts awarded for the Kells & Orlando field developments covering
    project management, engineering, Xmas trees and procurement of other
    equipment. 
    
--  Gaffney Cline & Associates Ltd. ("GCA") completed an independent
    reserves report, effective March 31, 2012 using GCA's forecast prices
    and costs, evaluating the Kells project. Based on management's revised
    development plan, GCA determined the Pre-Tax Net Present Value,
    discounted at 10%, of Kells Proved plus Probable ("2P") reserves have
    increased to USD$358.4 million, up from USD$164.9 million as of December
    31, 2011, an increase of more than 117%. 
    
--  Performed an engineering and portfolio review and decided to put Orlando
    development ahead of the Kells Development. 
    
--  The Orlando Environmental Statement and consultation with DECC is now
    complete. A re-engineered Orlando Field Development Plan ("FDP") is
    being finalized for submission to DECC. Optimized engineering for
    Orlando is expected to provide peak production at a rate of over 14,000
    bopd.  
    
--  The Company has bid on 5 blocks in DECC's 27th UK licence round. 
    

Acquisitions                                                                
                                                                            

--  Completion of the acquisition of the 100% operated interest in the Kells
    field and fast track development progressing with exploration
    operatorship application approved by the Department of Energy and
    Climate Change ("DECC") and submission of an FDP and Environmental
    Statement to DECC. 
    
--  Signed a definitive sale and purchase agreement to acquire a 58.73%
    working interest, including operatorship, in the West Wick oil discovery
    on UK Block 13/21a. 
    
--  Signed a sale and purchase agreement for the purchase of its partners'
    interests, MPX (30%) and Sorgenia (35%), in the Orlando Oil field. 
    

Corporate                                                                   
                                                                            

--  Mr. Alan Curran joined the Company as Chief Operating Officer. 
    
--  In March 2012, the UK Government doubled the Small Field Allowance
    ("SFA") tax shelter from GBP 75 million to GBP 150 million, which is
    expected to benefit Iona but has not yet been applied to any of Iona's
    qualifying properties. Iona's Orlando and Kells fields will each qualify
    for SFA, representing a total of GBP 300 million of supplementary charge
    tax shelter. 
    
--  17,280,000 stock options granted during the second quarter of 2012. 
    

Post Quarter End                                                            
                                                                            

--  Completed the purchase of its partners' interests, MPX North Sea Limited
    ("MPX") (30%) and Sorgenia E&P (UK) Ltd ("Sorgenia") (35%), in the
    Orlando Oil field in exchange for the payment of historical costs and
    future payments out of production. 
    
--  The Company received a completion date extension to its previously
    announced West Wick sale and purchase agreement and expects to complete
    the acquisition at the end of August 2012. 
    
--  During August, the Ensco 80 jack-up rig commenced operations to side-
    track the T5-z production gas well. 



Further details on the above are provided in the Condensed Consolidated
Financial Statements and Management's Discussion and Analysis for the three and
six months ended June 30, 2012, 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 at www.ionaenergy.com. 


Iona is an oil and natural gas acquisition, appraisal, and development
corporation active through its 100% wholly owned United Kingdom subsidiary, Iona
Energy Company (UK) Ltd. in the United Kingdom's Continental Shelf ("UKCS").


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,
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
Kells property. Forward-looking statements include statements regarding the
intent, belief and current expectations of Iona Energy Inc. or its officers with
respect to various matters. 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, and
the risk that drilling results differ materially from management's current
estimates. 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. 


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. 


It should not be assumed that the present worth of estimated future net revenue
represents the fair market value of the reserves disclosed in this press
release. The reserve and related revenue estimates set forth in this press
release are estimates only and the actual reserves and realized revenue may be
greater or less than those calculated. The estimates of reserves and future net
revenue for individual properties may not reflect the same confidence level as
estimates of reserves and future net revenue for all properties, due to the
effects of aggregation. 


Additionally, this press release uses certain abbreviations as follows



Oil and Natural Gas Liquids      Natural Gas                                
------------------------------   -------------------------------------------
bbls    barrels                  mcf      thousand cubic feet               
Mbbls   thousand barrels         mcf/d    thousand cubic feet per day       
MMbbls  million barrels          scf      standard cubic foot               
bbls/d  barrels per day          MMscf    millions of standard cubic feet   
bopd    barrels of oil per day   MMscf/d  millions of standard cubic feet   
                                          per day                           
NGLs    natural gas liquids      Bscf     billion standard cubic feet

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