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Press release from Marketwire

Shoreline Energy Corporation Announces First Quarter 2012 Financial & Operational Results, Progress Area Oil Success, and Record Production

Tuesday, May 15, 2012

Shoreline Energy Corporation Announces First Quarter 2012 Financial & Operational Results, Progress Area Oil Success, and Record Production19:48 EDT Tuesday, May 15, 2012CALGARY, ALBERTA--(Marketwire - May 15, 2012) - Shoreline Energy Corporation ("Shoreline" or the "Company") (TSX:SEQ) announced today its first quarter 2012 financial and operating results, as well as record production levels. A complete copy of the Company's financial statements along with management's discussion and analysis may be obtained at www.sedar.com or via the Corporation's website at www.shorelineenergy.ca.Highlights During the quarter Shoreline continued to execute on its business plan of developing highly profitable light oil production and reserves in the Peace River Arch area of northwest Alberta, through drilling of relatively low cost conventional horizontal wells, and through drilling of vertical delineation wells in newly discovered pools. Over the period, Shoreline;Drilled three light oil wells (2.3 net) with 100% success rate. Production averaged 1,631 BOED for the quarter, an increase of 41% over Q4 2011 Production exceeded 1,800 BOED at the end of the quarter (13% above year end 2011 levels) 180 BOED of production (77% oil and natural gas liquids) awaiting tie-in at the end of the quarter Strategic hedging program expanded, approximately 40% of current oil production hedged for remainder of 2012 at equivalent of $104.64 per barrel Realized price for oil increased by 1.6% to $86.25 per barrel, despite a decline of 4.2% in Edmonton par pricing from Q4 2011 levels, and widening Canadian to US differentials in Q1 2012 Acquired additional acreage on an existing high impact Montney oil project Operating revenue of $4.6 million in the first quarter an increase of 23% over Q4 2011 On April 17th the Company paid its third consecutive quarterly dividend of $0.20 per common share Combined operating and transportation expenses reduced by 2.5% to $15.04 per BOE Operating netback of $10.97 per BOE due to weak natural gas pricesQ1 Financial SummaryThree Months EndedMarch 31, 2012December 31, 2011ChangeFINANCIALPetroleum and natural gas sales$4,605,726$3,745,62623%Funds flowFrom operations(1)$1,059,384$370,060186%Per share - basic and diluted$0.19$0.08138%EarningsEarnings (loss) before tax$(1,354,372)$(12,691,569)89%Per share - diluted$(0.24)$(2.77)91%Earnings (loss) after tax$(1,020,072)$(12,270,396)92%Per share - diluted$(0.18)$(2.68)93%Dividends declared$1,128,333$1,128,1770%Per share$0.20$0.200%Capital expendituresExploration, development, land, and facilities$5,844,754$4,239,71538%Acquisitions (dispositions) and$-$24,692,304-100%other - net$53,759$127,671-58%Net capital expenditures$5,898,513$29,059,690-80%Total assets$75,678,552$70,658,4027%Net debt(1)$27,395,696$21,270,23029%Shareholders' equity$32,602,409$34,758,455-6%Total shares outstanding- As at end of period5,641,6735,640,8820%OPERATINGProductionNatural gas (MMcf/d)7,5085,03449%Oil and Natural Gas liquids (BBL/d)37932018%Total production (Boe/d @ 6:1)1,6311,15941%Average pricesNatural gas ($/Mcf)$2.11$3.71-43%Crude Oil ($/Bbl)$86.25$84.862%Drilling activity (gross)Gas01-100%Oil31200%Total wells3250%(1)The terms are not IFRS measures and do not have standardized meanings prescribed by IFRS.Operational and Progress Area UpdateShoreline is pleased to announce that production commenced from the first horizontal Charlie Lake oil well (44.8% WI) drilled into the Company's Progress core area on May 12, 2012. The well produced 195 barrels of light crude oil during a 14 hour in-line flow test (334 barrels per day) plus 70 mcf of natural gas (120 mcf per day). At these production levels, the 150 barrels per day of oil net to Shoreline's working interest represents a 40% increase over the Company's average Q1 2012 liquids production rate. Following the tremendous results from Shoreline's first horizontal oil well in the area the Company plans on accelerating the capital program in the Progress area in order to increase the company's cash flow, and to decrease the dividend payout ratio. To accomplish this goal Shoreline will commence the drilling of the next two wells in June 2012, following spring breakup. The Company is anticipating drilling a total of four additional horizontal oil wells (1.8 net) in the Progress area during the remainder of 2012. The additional drilling locations are located in close proximity to the first well and will target the same Charlie Lake reservoir unit. All production from Progress will be produced through existing oil and gas pipelines to facilities where the Company owns a working interest.Net Asset ValueThe following table summarizes the Corporation's estimated net asset value as of March 31, 2012:Net Asset Value (March 31, 2012)Q1 2012(000's)Proved plus Probable Reserve Value(1)$62,620Added PP&E5,544Undeveloped Land, Seismic and Other Assets (internal estimate)8,967Bank Indebtedness(11,922)Long Term Royalty Obligation(10,260)Net Asset Value - Basic54,949Basic Common Shares Outstanding (at Mar. 31, 2012)5,642,916Net Asset Value - Basic (per share)(2)$9.74Net Asset Value - Basic54,949Funds Received from Exercise of Dilutives73,066Net Asset Value - Fully Diluted128,015Diluted Shares Outstanding (at Mar. 31, 2012)11,933,531Net Asset Value - Fully Diluted (per share)(2)$10.73Notes:(1) Value as per NI 51-101 Compliant Independent Reserve Report, prepared by GLJ Petroleum Consultants dated December 31, 2011.(2) The estimated values may not represent fair market value.Investor InformationCurrently, Shoreline has 5,642,916 common shares outstanding. Shoreline is a Calgary, Alberta based corporation engaged in the exploration, development and production of petroleum and natural gas. Shoreline offers investors a combination of value growth via lower risk development of additional oil and gas reserves and production on its current lands, as well as through a quarterly dividend. The Corporation's common shares are currently listed on the TSX under the trading symbol "SEQ." Additional information regarding Shoreline is available under the Corporation's profile at www.sedar.com or at the Corporation's website, www.shorelineenergy.ca.Forward Looking and Cautionary StatementsThis news release contains forward-looking statements relating to the Corporation's plans and other aspects of the Corporation's anticipated future operations, strategies, financial and operating results and business opportunities. These forward-looking statements may include opinions, assumptions, estimates, management's assessment of value, reserves, future plans and operations. Forward-looking statements typically use words such as "will," "anticipate," "believe," "estimate," "expect," "intend," "may," "project," "should," "plan," and similar expressions suggesting future outcomes, and include statements that actions, events or conditions "may," "would," "could," or "will" be taken or occur in the future. The forward-looking statements are based on various assumptions including expectations regarding the success of current or future drill wells; the outlook for petroleum and natural gas prices; estimated amounts and timing of capital expenditures; estimates of future production; assumptions concerning the timing of regulatory approvals; the state of the economy and the exploration and production business; results of operations; business prospects and opportunities; future exchange and interest rates; the Corporation's ability to obtain equipment in a timely manner to carry out development activities; and the ability of the Corporation to access capital and credit. While the Corporation considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect.Forward-looking statements are subject to a wide range of assumptions, known and unknown risks and uncertainties and other factors that contribute to the possibility that the predicted outcome will not occur, including, without limitation: risks associated with oil and gas exploration, development, exploitation, production, marketing and transportation; loss of markets; volatility of commodities prices; currency fluctuations; imprecision of reserves estimates; environmental risks; competition from other producers; inability to retain drilling rigs and other services; incorrect assessment of the value of acquisitions; failure to realize the anticipated benefits of acquisitions; general economic conditions; delays resulting from or inability to obtain required regulatory approvals and to satisfy various closing conditions; and ability to access sufficient capital from internal and external sources. Readers are cautioned that the foregoing list of factors is not exhaustive. Although Shoreline believes that the expectations represented by such forward-looking statements are reasonable, there can be no assurance that such expectations will be realized. As a consequence, actual results may differ materially from those anticipated in the forward-looking statements and you should not rely unduly on forward-looking statements. The forward-looking statements contained in this news release are made as of the date of this news release. Except as required by applicable law, Shoreline does not undertake any obligation to publicly update or revise any forward-looking statements.Note Regarding BOEsThe term barrel of oil equivalent ("boe") may be misleading, particularly if used in isolation. A conversion ratio for gas of 6 mcf:1 boe is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly equivalency conversion ratio of 6:1, utilizing a conversion on a 6:1 basis is misleading as an indication of value.FOR FURTHER INFORMATION PLEASE CONTACT: Mr. Trevor FolkShoreline Energy CorporationChief Executive Officertfolk@shorelineenergy.caORMr. Kevin StromquistShoreline Energy CorporationPresident & Chief Operating Officerkstromquist@shorelineenergy.caORCalgary OfficeShoreline Energy Corporationc/o Suite 400, 209-8th Ave SWCalgary, Alberta, T2P 1B8(403) 767-9066ORToronto OfficeShoreline Energy CorporationSuite 103, 145 King Street WestToronto, Ontario, M5H 1J8www.shorelineenergy.ca