Prey 2 was re-announced just the other day, as Bethesda revealed that Human Head Studios would be working on the sequel. However, they have now confirmed that the title won't be developed using id' Software's latest piece of kit, which is being used to develop RAGE.
The confusion came, as Bethesda announced that Prey 2 would be using the "cutting edge id Tech engine from id Software". However, Pete Hines has clarified the statement by saying "This game has been in development for quite a while and id Tech 5 is still in progress (until Rage ships, and probably even after). So it really wasn't an option."
Prey 2 is scheduled for a release during 2012 on the PlayStation 3, Xbox 360 and PC. It will presumably use id Tech 4 throughout its development phase.