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Press release from Marketwire

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

Thursday, March 14, 2013

Crocotta Energy Announces Strong Reserve Growth and Top Quartile Finding and Development Costs06:00 EDT Thursday, March 14, 2013CALGARY, ALBERTA--(Marketwire - March 14, 2013) - Crocotta Energy Inc. ("Crocotta") (TSX:CTA) is pleased to announce its 2012 year-end reserves as independently evaluated by GLJ Petroleum Consultants Ltd., in accordance with National Instrument 51-101 ("NI 51-101"). 2012 Highlights Achieved all-in finding, development and acquisition costs ("FD&A") including changes in future development costs ("FDC") on a proved plus probable basis of $11.98 per boe Increased Net Asset Value per share by 13% to $3.91 per share Increased proved plus probable reserves by 29% to 38.1 million barrels of oil equivalent ("boe") Increased proved reserves by 27% to 22.2 million boe Increased reserves per share by 27% Reserve Replacement of 439% on a proved plus probable basis and 286% on a proved basis Recycle ratio of 1.8 times with 2012 average pricing (2.2 times using Q4/12 pricing) Reserve life index of 12.3 years on a proved plus probable basis (7.2 years proved) based on 2012 exit production of approximately 8,500 boepd All FDC booked can be funded within projected cash flow Reserves Summary Crocotta's December 31, 2012 reserves as prepared by the independent reserves evaluation firm GLJ Petroleum Consultants Ltd. ("GLJ") and based on the GLJ (2013-01) future price forecast are as follows: Light/Medium Oil Heavy Oil Natural Gas Liquids Natural GasBarrels of Oil EquivalentCompany Interest (Mbbl) Net (Mbbl)Company Interest (Mbbl) Net (Mbbl)Company Interest (Mbbl) Net (Mbbl)Company Interest (Mmcf) Net (Mmcf)Company Interest (Mboe) Net (Mboe)ProvedProducing1,3131,013221,9641,32542,49636,93310,3628,495Developed Non-producing171450452492062,1421,802673566Undeveloped1,17494654442,1831,69346,52740,65611,1659,459Total proved2,5031,973106914,3973,22491,16679,39122,20018,520Probable93467456483,1172,28971,00861,07715,94213,190Total proved & probable3,4372,6471621397,5145,512162,173140,46938,14231,710Notes:(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, 2012 and based on the GLJ (2013-01) future price forecast are summarized in the following table:($000s)0% DCF5% DCF10% DCF15% DCFProvedProducing261,866202,368167,968145,230Developed Non-producing7,6192,686383(880)Undeveloped214,679137,14194,60168,180Total proved484,164342,195262,951212,531Probable407,840216,377135,59293,184Total proved & probable892,004558,572398,543305,714 Price Forecast The GLJ (2013-01) price forecast for the next 5 years is as follows: Year WTI @ Cushing ($US / Bbl) Edmonton Light ($Cdn / Bbl) Natural Gas at AECO ($Cdn / Mmbtu)201390.0085.003.38201492.5091.503.83201595.0094.004.28201697.5096.504.72201797.5096.504.95 Net Asset Value Crocotta's net asset value ("NAV") as at December 31, 2012 and based on the GLJ (2013-01) future price forecast is as follows:($000s, except per share amounts)Discounted @ 10%Pre-tax net present value of proved & probable reserves398,543Undeveloped land (Note 1)30,770Net Debt (2)(80,112)Net asset value349,201Shares outstanding (basic)89,261Net asset value per share$3.91Notes:(1)Undeveloped land was estimated at $150 per acre(2)Net debt includes debt plus working capital deficiency Finding and Development Costs Crocotta's capital program for 2012 was focused on its core properties located at Edson in west-central Alberta and in northeast British Columbia. Capital Expenditures for the year were $104.0 million. 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.201220113 Year Average($000's, except were noted)ProvedProved &Probable ProvedProved & Probable ProvedProved & ProbableFinding & Development Costs (excluding net acquisitions/dispositions)Exploration and Development Expenditures98,54898,54893,08293,082217,659217,659Change in FDC (1)17,02029,18568,405107,172118,532188,800Finding and Development Costs excluding Net Acquisitions/Dispositions- Including FDC115,568127,733161,487200,254336,191406,459All-in Finding and Development Costs(including net acquisitions/dispositions)Exploration and Development Expenditures98,54898,54893,08293,082217,659217,659Net Acquisitions (Dispositions) (including related capital)5,4065,406(12,848)(12,848)(55,387)(55,387)Exploration and Development Expenditures including net acquisitions (dispositions)103,954103,954 80,234 80,234 162,272 162,272Change in FDC17,02029,18568,405107,172118,532188,800All-in Finding and Development Costs - Including FDC120,974133,139148,639187,406280,804351,072Reserve Additions (Mboe)Exploration and Development6,56410,3079,91816,58720,96433,968Net Acquisitions/Dispositions665807(885)(1,804)(2,606)(3,368)Total Reserve Additions7,22911,1149,03314,78318,35930,601Finding and Development Costs excluding net acquisitions/dispositions ($/boe)Excluding FDC15.019.569.395.6110.386.41Including FDC17.6112.3916.2812.0716.0411.97All-in Finding and Development Costs ($/boe)Excluding FDC14.389.358.885.438.845.30Including FDC16.7311.9816.4612.6815.3011.47(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 may 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 2012 exit production of approximately 8,500 boepd.Reserve CategoryReserve Life IndexProved plus Probable Reserves12.3Proved7.2Forward-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: Contact Information: Crocotta Energy Inc.Robert ZakreskyPresident and Chief Executive Officer(403) 538-3736(403) 538-3735 (FAX)Crocotta Energy Inc.Nolan ChicoineVice President, Finance and Chief Financial Officer(403) 538-3738Crocotta Energy Inc.700, 639 -5th Ave SWCalgary, Alberta T2P 0M9(403) 538-3737(403) 538-3735 (FAX)