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Press release from Marketwire

Crocotta Energy Announces Strong Reserve Growth and Top Quartile Finding and Development Costs

Tuesday, March 22, 2011

Crocotta Energy Announces Strong Reserve Growth and Top Quartile Finding and Development Costs06:00 EDT Tuesday, March 22, 2011CALGARY, ALBERTA--(Marketwire - March 22, 2011) - Crocotta Energy Inc. ("Crocotta") (TSX:CTA) is pleased to announce its 2010 year-end reserves as independently evaluated by GLJ Petroleum Consultants Ltd., in accordance with National Instrument 51-101 ("NI 51-101"). 2010 Highlights Increase in proved plus probable reserves of 22% to 16.2 million barrels of oil equivalent ("boe") despite sale of properties with 3.3 mmboe of proved plus probable reserves booked in opening reserves Increase in proved reserves of 14% to 9.8 million boe Increase in reserves per share by 22% (also 22% after adjusting for debt and future development costs "FDC") All-in finding, development and acquisition costs including FDC on a proved plus probable basis of $8.03 per boe (negative $5.76 per boe excluding FDC as there were net capital dispositions in 2010 due to property dispositions of $50.6 million) Excluding dispositions, finding and development costs including FDC on a proved plus probable basis of $11.09 per boe ($3.68 excluding FDC) Increase in Net Asset Value per share of 7.8% to $2.78 per share Reserve Replacement of 418% on a proved plus probable basis and 230% on a proved basis Recycle ratio of 1.9 times on a proved plus probable basis including FDC but excluding dispositions (1.6 times on a proved basis including FDC but excluding dispositions) Reserve life index of 19.2 years on a proved plus probable basis (11.7 years proved) based on Q410 production of approximately 2,300 boepd Reserves Summary Crocotta's December 31, 2010 reserves as prepared by the independent reserve engineering firm GLJ Petroleum Consultants Ltd. ("GLJ") and based on the GLJ (2011-01) future price forecast are as follows: Light/Medium Oil Heavy Oil Natural Gas Liquids Natural GasBarrels of Oil EquivalentCompanyCompanyCompanyCompanyCompanyInterestNetInterestNetInterestNetInterestNetInterestNet(Mbbl)(Mbbl)(Mbbl)(Mbbl)(Mbbl)(Mbbl)(Mmcf)(Mmcf)(Mboe)(Mboe)ProvedProducing398304441,14872719,57517,2094,8133,903Developed Non-producing1085448152923,6033,086816662Undeveloped211155594896173817,91215,9904,2163,607Total proved6194671171002,2611,55741,09036,2869,8458,172Probable200141574994461930,63927,1816,3085,339Total proved & probable8206081741493,2052,17671,73063,46716,15313,511Notes: (1) "Company Interest" reserves means Crocotta's working interest (operating and non-operating) share before deduction of royalties and including any royalty interest of Crocotta. (2) "Net" reserves means Crocotta's working interest (operated and non-operated) share after deduction of royalties, plus Crocotta's royalty interest in reserves. (3) Oil equivalent amounts have been calculated using a conversion rate of six thousand cubic feet of natural gas to one barrel of oil. (4) Numbers may not add due to rounding. Reserves Values The estimated future net revenues before taxes associated with Crocotta's reserves effective December 31, 2010 and based on the GLJ (2011-01) future price forecast are summarized in the following table:($000s)0% DCF5% DCF10% DCF15% DCFProvedProducing121,29290,70472,63360,822Developed Non-producing21,26512,4458,6256,607Undeveloped94,31967,28450,14638,615Total proved236,876170,432131,404106,044Probable171,64587,60551,28532,509Total proved & probable408,521258,037182,690138,554 Price Forecast The GLJ (2011-01) price forecast for the next 5 years is as follows: Year WTI @ Cushing ($US / Bbl) Edmonton Light ($Cdn / Bbl)Natural Gas at AECO ($Cdn / Mmbtu)201188.0086.224.16201289.0089.294.74201390.0090.925.31201492.0092.965.77201595.1796.196.22 Net Asset Value Crocotta's net asset value ("NAV") as at December 31, 2010 and based on the GLJ (2011-01) future price forecast is as follows:($000s, except per share amounts) Discounted @ 10%Pre-tax net present value of proved & probable reserves 182,690Undeveloped land (Note 1)33,331Net Debt (2) (35,200)Net asset value180,821Shares outstanding (basic)65,142Net asset value per share$2.78Notes: (1) Undeveloped land was estimated at $200 per acre and is considered reasonable by the Company (2) Net debt includes debt plus working capital deficiency Finding and Development Costs Crocotta's capital program for 2010 was focused on its core properties located at Edson in west-central Alberta and in northeast British Columbia. Capital Expenditures for the year were $26.0 million not taking into account $47.9 million of property dispositions. Crocotta has presented Finding and Development Costs below both including and excluding dispositions. While NI 51-101 requires that the effects of acquisitions and dispositions be excluded, Crocotta has included these items because it believes that acquisitions and dispositions can have a significant impact on the Company's ongoing reserve replacement costs and that excluding these amounts could result in an inaccurate portrayal of Crocotta's cost structure.201020093 Year AverageProved &Proved &Proved &($000's, except were noted)ProvedProbableProvedProbableProvedProbableFinding & Development Costs (excluding net acquisitions/dispositions)Exploration and Development Expenditures26,02926,02913,21913,21998,21298,212Change in FDC (1)33,10752,44313,81423,86746,62583,500Finding and Development Costs excluding Net Acquisitions/Dispositions- Including FDC59,13678,47227,03337,086144,837181,712All-in Finding and Development Costs(including net acquisitions/dispositions)Exploration and Development Expenditures26,02926,02913,21913,21998,21298,212Net Acquisitions (Dispositions) (including related capital)(47,945)(47,945)76,41676,41639,46739,467Exploration and Development Expenditures including netacquisitions (dispositions)(21,916)(21,916)89,63589,635137,679137,679Change in FDC33,10752,44313,81423,86746,62583,500All-in Finding and Development Costs - Including FDC11,19130,527103,449113,502184,304221,179Reserve Additions (Mboe)Exploration and Development4,4827,0742362655,8539,158Net Acquisitions/Dispositions(2,386)(3,271)4,7006,7002,6164,051Total Reserve Additions2,0963,8034,9366,9658,47013,208Finding and Development Costs excluding net acquisitions/dispositions ($/boe)Excluding FDC5.813.6856.0149.8816.7810.72Including FDC13.1911.09114.55139.9524.7419.84All-in Finding and Development Costs ($/boe)Excluding FDC(10.46)(5.76)18.1612.8716.2610.42Including FDC5.348.0320.9616.3021.7616.75(1) Future development capital ("FDC") expenditures required to recover reserves estimated by GLJ. The aggregate of the exploration and development costs incurred in the most recent financial period and the change during that period in estimated future development costs generally will not reflect total finding and development costs related to reserve additions for that period. Reserve Life Index The Company's Reserve Life Index presented below is based on Q410 production of approximately 2,300 boepd.Reserve CategoryReserve Life IndexProved plus Probable Reserves19.2Proved11.7Forward-Looking InformationThis press release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "may", "will", "should", "believe", "intends", "forecast", "plans", "guidance" and similar expressions are intended to identify forward-looking statements or information. More particularly and without limitation, this document contains forward looking statements and information relating to the Company's oil, NGLs and natural gas production and reserves and reserves values, capital programs, and oil, NGLs, and natural gas commodity prices. The forward-looking statements and information are based on certain key expectations and assumptions made by the Company, including expectations and assumptions relating to prevailing commodity prices and exchange rates, applicable royalty rates and tax laws, future well production rates, the performance of existing wells, the success of drilling new wells, the availability of capital to undertake planned activities and the availability and cost of labour and services.Although the Company believes that the expectations reflected in such forward-looking statements and information are reasonable, it can give no assurance that such expectations will prove to be correct. Since forward-looking statements and information address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, the risks associated with the oil and gas industry in general such as operational risks in development, exploration and production, delays or changes in plans with respect to exploration or development projects or capital expenditures, the uncertainty of estimates and projections relating to production rates, costs and expenses, commodity price and exchange rate fluctuations, marketing and transportation, environmental risks, competition, the ability to access sufficient capital from internal and external sources and changes in tax, royalty and environmental legislation. The forward-looking statements and information contained in this document are made as of the date hereof for the purpose of providing the readers with the Company's expectations for the coming year. The forward-looking statements and information may not be appropriate for other purposes. The Company undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws. BOE Conversions BOE's 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.FOR FURTHER INFORMATION PLEASE CONTACT: Robert ZakreskyCrocotta Energy Inc.President and Chief Executive Officer(403) 538-3736ORNolan ChicoineCrocotta Energy Inc.Vice President, Finance and Chief Financial Officer(403) 538-3738OR700, 639 - 5th Ave SWCrocotta Energy Inc.Calgary, Alberta T2P