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Press release from Marketwire

Crocotta Energy Provides 2012 Guidance and Operational Update

Thursday, February 09, 2012

Crocotta Energy Provides 2012 Guidance and Operational Update06:00 EST Thursday, February 09, 2012CALGARY, ALBERTA--(Marketwire - Feb. 9, 2012) - Crocotta Energy Inc. ("Crocotta" or the "Company") (TSX:CTA) is pleased to announce 2012 Guidance and Operations Update.CAPITAL PROGRAM AND GUIDANCECrocotta has approved a budget that entails spending approximately $87 million in 2012 with over 90% focused on oil and liquids-rich natural gas. Crocotta estimates average 2012 production to be 2,205 bopd of light oil and natural gas liquids plus 31.0 mmcf/d of natural gas for a total of 7,350 boepd. 2012 exit production is estimated to reach 2,550 bopd of light oil and natural gas liquids plus 35.7 mmcf/d of natural gas for a total of 8,500 boepd. By area, Edson will receive over 80% of the capital budget split between Cardium oil wells and liquids-rich Bluesky gas wells. Approximately 10% will be spent on drilling exploration oil projects acquired in 2011. The remaining capital will be spent on tying and equipping the previously drilled Montney well at Sunrise that tested over 10 mmcf/d of gas and potentially drilling a second well in Q412 pending gas prices.If the ongoing Cardium oil results at Edson or the exploration oil projects warrant further capital, Crocotta will be in a position to quickly shift capital from more gas-prone projects to accommodate such success. Such shift in capital may materially increase Crocotta's oil to gas production mix.Crocotta has estimated 2012 cash flow to be approximately $70 million (net of G&A and interest) based on the current price forecast of GLJ Petroleum Consultants or approximately $60 million on current strip pricing. Assuming the mid-point of $65 million, Crocotta's net debt would increase to $49 million at the end of 2012 as compared to a current bank credit facility of $80 million. Based on exit production of 8,500 boepd, the ratio of debt to cash flow will be 0.6:1 and Crocotta will have only 61% drawn on the current bank credit facility.The strong financial position will allow Crocotta to be flexible in looking at acquisitions and/or modifying its capital program.OPERATIONS UPDATECrocotta is currently producing over 6,800 boepd and is actively drilling at Edson. Crocotta expects to have 3 (2.6 net) liquids-rich Bluesky gas wells and 1 (0.4 net) Cardium oil wells drilled and completed prior to break-up in early April in addition to having the previously announced Montney well on-stream by late March.SUMMARYCrocotta is well positioned to show accelerated and material growth through the exploitation of its large proven resource base at Edson and in the Montney and also have significant financial flexibility to react to opportunities as they arise.Forward-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 capital programs. 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 Barrels of oil equivalent ("boe") 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 0M9(403) 538-3737(403) 538-3735 (FAX)