Recovery Energy Reports Third Quarter Financial Results and Provides Operations Update

Recovery Energy Reports Third Quarter Financial Results and Provides
Operations Update

Company-Operated Wattenberg Drilling Program Planned to Commence in 4Q12

DENVER, Nov. 12, 2012 (GLOBE NEWSWIRE) -- Recovery Energy, Inc. (Nasdaq:RECV),
an independent oil and gas exploration and production company with operations
and assets in the Denver-Julesburg (DJ) Basin, reported its financial results
for the quarter ended September 30, 2012, and provided an operations update.

Operations Highlights:

  *50-percent production increase in 3^rd Quarter over 2^nd Quarter 2012, to
    approximately 350 Boep/d

    *Hanson 42-26: J Sand-Pine Bluffs Area, southeast Wyoming

    *Lukassen 44-7: Wykert Sand-Wilke Area, western Nebraska

    *Three non-operated, unconventional horizontal Niobrara wells, with 6.5%
      average working interest, in the Wattenberg, northern Colorado

  *4Q12 conventional drilling program: five vertical wells in Wattenberg,
    targeting the Niobrara and Codell horizons, with drilling expected to
    begin in December. Additional conventional wells planned in several areas
  *Fourth unconventional horizontal Niobrara non-operated well participation
    proposed in Wattenberg: approximately 25% working interest, expected to
    spud in 2013. Multiple horizontal well proposals expected, targeting the
    Niobrara A, B, C, and Codell horizons
  *Seismic permits obtained to run additional 20 square miles in Stateline
    and Pine Bluffs areas, to assess potential of Niobrara, Codell, Greenhorn,
    "J" sandstone and Permo-Penn horizons

Third Quarter Financial Results

For the quarter ended September 30, 2012, the Company reported revenues from
oil and gas operations of $1.94 million, as compared to $1.81 million for the
quarter ended September 30, 2011, an increase of $.13 million, or 7.18%. Net
loss for the same period in 2012 and 2011 was approximately $2.84 million and
$3.03 million, respectively.EBITDAX for the third quarter of 2012 was $.50
million compared to $1.21 million in the third quarter of 2011.

The Company's production volume on a BOE basis was 33,618 for the quarter
ended September 30, 2012, a nominal change as compared to 33,698 for the
quarter ended September 30, 2011.This nominal decrease was affected by
increased production attributed to five new wells, but offset by normal
production declines on more mature properties.Average oil and gas prices
during the quarter increased slightly as compared to the prior year.

The Company's average oil price per equivalent barrel of oil increased to
$83.94 per barrel in the third quarter of 2012, compared to $81.94 per
equivalent barrel of oil in the second quarter of 2011, a 2% increase.

About Recovery Energy, Inc.

Recovery Energy, Inc. (RECV) is a Denver-based independent oil and gas
exploration and production company that operates in the Denver-Julesburg (DJ)
Basin where it holds approximately 140,000 gross, 125,000 net acres.Recovery
Energy's focus is to grow reserves and production through a combination of
acquisitions and conventional and unconventional drilling activity, targeting
the various oil-bearing formations that produce in the DJ Basin.

The Recovery Energy logo is available at

This press release may include "forward-looking statements" as defined by the
Securities and Exchange Commission (the "SEC"), including statements, without
limitation, regarding the Company's expectations, beliefs, intentions or
strategies regarding the future. Such forward-looking statements relate to,
among other things the Company's: (1) proposed exploration and drilling
operations, (2) expected production and revenue, and (3) estimates regarding
the reserve potential of its properties.These statements are qualified by
important factors that could cause the Company's actual results to differ
materially from those reflected by the forward-looking statements. Such
factors include but are not limited to: (1) the Company's ability to finance
its continued exploration and drilling operations, (2) positive confirmation
of the reserves, production and operating expenses associated with the
Company's properties; and (3) the general risks associated with oil and gas
exploration and development, including those risks and factors described from
time to time in the Company's reports and registration statements filed with
the SEC.

                                                   September 30, December 31,
                                                   2012          2011
Current assets                                                   
Cash                                               $698,276     $2,707,722
Restricted cash                                    949,618      932,165
Accounts receivable                                1,217,181    2,227,466
Prepaid assets                                     96,671       75,376
Commodity price derivative receivable              370,000     --
Total current assets                                3,331,746    5,942,729
Oil and gas properties (full cost method), at cost:            
Unevaluated properties                             43,541,930   45,697,481
Evaluated properties                               40,460,933   32,113,143
Wells in progress                                  3,986,919    6,425,509
Total oil and gas properties, at cost               87,989,782   84,236,133
Less accumulated depreciation, depletion            (18,174,968) 
,amortization, and impairment                                     (12,099,098)
Net oil and gas properties, at cost                 69,814,814   72,137,035
Other assets:                                                  
Office equipment, net                              95,980       106,286
Prepaid advisory fees                              304,402      574,160
Deferred financing costs, net                      1,026,192    2,341,595
Restricted cash and deposits                       186,240      186,055
Total other assets                                  1,612,814    3,208,096
Total assets                                        $74,759,374   $81,287,860

                                                  September 30, December 31,
                                                  2012          2011
Liabilities and Shareholders' Equity                            
Current liabilities                                             
Accounts payable                                  $1,183,415   $2,050,768
Commodity price derivative liability              --           75,609
Related party payable                             --           16,475
Accrued expenses                                  2,183,053    1,354,204
Short term loans payable                          873,142      1,150,967
Total current liabilities                          4,239,610    4,648,023
Long term liabilities                                           
Asset retirement obligation                       893,754      612,874
Term loans payable                                19,419,197   20,129,670
Convertible debentures payable, net of discount   9,595,053    4,929,068
Convertible debentures conversion derivative      1,300,000    1,300,000
Total long-term liabilities                        31,208,004   26,971,612
Total liabilities                                  35,447,614    31,619,635
Shareholders' equity                                         
Preferred stock, 10,000,000 authorized, none
issued and outstanding as of September 30 ,2012     --          --
and December 31, 2011.
Common stock, $0.0001 par value: 100,000,000
shares authorized; 18,016,143and
17,436,825shares issued and outstandingas of     1,801       1,744
September 30, 2012 and December 31, 2011,
Additional paid in capital                        120,566,897  118,146,119
Accumulated deficit                               (81,256,938) (68,479,638)
Total shareholders' equity                         39,311,760   49,668,225
Total liabilities and shareholders' equity         $74,759,374  $81,287,860

                    Three months ended September Nine months ended September
                     30,                          30,
                    2012            2011         2012           2011
Oil sales            $1,775,383     $1,650,702   $4,685,713    $5,534,325
Gas sales            168,897        161,029     397,298       446,386
Operating fees       42,853         85,372      132,362       110,282
Realized gain on
commodityprice      37,341         733,830     49,729        402,256
Unrealized gains
(losses)on          (130,000)       --        445,609       222,788
commodity price
Total Revenues       1,894,474      2,630,933    5,710,711     6,716,037
Costs and expenses                                            
Production costs     397,793        344,927     1,033,635     1,114,220
Production taxes     198,781        191,364     561,278       630,718
General and          1,515,868      1,981,026   5,099,932    8,837,802
depletion and        1,069,068      1,052,946   2,897,156     3,194,301
Impairment of        --            --          3,274,718     --
evaluated properties
Total costs and      3,181,510       3,570,263   12,866,719    13,777,041
Loss from operations (1,287,036)    (939,330)   (7,156,008)   (7,061,004)
Other income         333            62,000      (372)         63,115
debenture conversion 600,000        (13,338)    700,000       1,587,699
derivative gain
Interest expense     (2,149,931)    (2,136,950)  (6,320,919)   (6,123,496)
Net Loss             $ (2,836,634)  $(3,027,68)  $ (12,777,299) $(11,533,686)
Net loss per common                                           
Basic and diluted    $ (0.16)       $(0.19)    $ (0.72)      $(0.75)
Weighted average                                              
shares outstanding:
Basic and diluted    17,833,466     15,775,135   17,732,304     15,388,772

                                              Nine months ended September 30,
                                              2012            2011
Cash flowsprovided by (used in) operating                    
Net loss                                      $(12,777,299)   $(11,533,686)
Adjustments to reconcile net loss to net cash               
(used in) provided byoperating activities:
Amortization of stock issued for services     707,504         373,234
Share based compensation                      1,066,154      5,592,638
Impairment of evaluated properties            3,274,718      --
Change in fair value of commodity price       (445,609)      (398,840)
Change in fair value of                       (700,000)      (1,587,699)
convertibledebentures conversion derivative
Amortization of deferred financing costs,
issuance of stock for convertible debentures   3,843,457       3,701,373
interest, and accretion of debt discount
Depreciation, depletion, amortization and     2,897,156       3,194,301
Changes in operating assets and liabilities:                
Accounts receivable                           (433,567)      (891,076)
Other assets                                  (21,294)       (19,674)
Accounts payable and other accruals           (867,353)      2,428,101
Restricted cash                               (17,453)       144,001
Related party payable                         (16,475)       15,067
Accrued expenses                              742,982        297,330
Net cashprovided by (used in)operating       (2,747,079)    1,315,070
Cash flows used ininvesting activities:                    
Acquisition of undeveloped properties         (436,023)      (9,033,007)
Sale of unevaluated properties                1,443,852      --
Investment in operating bonds                 (184)          (160)
Drilling capital expenditures                 (4,278,785)    (6,876,232)
Additions of office equipment                 (2,928)        (40,648)
Net cash used in investing activities          (3,274,068)    (15,950,047)
Cash flows provided by financing activities:                
Proceeds from sale of common stock, units and --             2,129,801
exercise of warrants
Net change in debts                           (988,299)      (377,498)
Proceeds from debts                           5,000,000      8,000,000
Net cash provided by financing activities      4,011,701      9,752,303
Change in cash and cash equivalents            (2,009,446)    (4,882,674)
Cash and cash equivalents at beginning of      2,707,722      5,528,744
Cash and cash equivalents at end of period     $698,276       $646,070


"EBITDAX" means, for any defined period, the sum of net income for the period
plus the following expenses, charges or income, in each case, to the extent
deducted from or added to net income in the period: interest, income taxes,
depreciation, depletion, amortization, accretion, unrealized losses from
financial derivatives, share based compensation, impairment of evaluated
properties and other similar non-cash charges, minus all non-cash income
(without limitation) income from unrealized financial derivatives, added to
net income. EBITDAX is used as a financial measure by Recovery Energy's
management team and by other users of its financial statements to analyze such
things as:

  oRecovery Energy's operating performance and return on capital in
    comparison to those of other companies in its industry, without regard to
    financial or capital structure;
  oThe financial performance of the company's assets and valuation of the
    entity, without regard to financing methods, capital structure or
    historical cost basis;
  oRecovery Energy's ability to generate cash sufficient to pay interest
    costs, support its indebtedness; and
  oThe viability of acquisitions and capital expenditure projects and the
    overall rates or return on alternative investment opportunities.

EBITDAX is not a calculation based on GAAP financial measures and should not
be considered as an alternative to net income (loss) in measuring the
Company's performance, nor used as an exclusive measure of cash flow, because
it does not consider the impact of working capital growth, capital
expenditures, debt principal reductions, and other sources and uses of cash,
which are disclosed in the company's statements of cash flows.

Recovery Energy has reported EBITDAX because this measure is commonly
reported and widely used by investors as an indicator of a company's operating
performance and ability to incur and service debt. You should carefully
consider the specific items included in the Company's computations of EBITDAX.
While Recovery Energy has disclosed its EBITDAX to permit a more complete
comparative analysis of its operating performance and debt servicing ability
relative to other companies, you are cautioned that EBITDAX as reported by the
Company may not be comparable in all instances to EBITDAX as reported by other
companies. EBITDAX amounts may not be fully available for management's
discretionary use, due to requirements to conserve funds for capital
expenditures, debt service and other commitments.

Recovery Energy believes that EBITDAX assists its lenders and investors in
comparing a company's performance on a consistent basis without regard to
certain expenses, which can vary significantly depending upon accounting
methods. Because the Company may borrow money to finance its operations,
interest expense is a necessary element of its costs and ability to generate
cash available for distribution. Because Recovery Energy uses capital assets,
depreciation and amortization are also necessary elements of its costs.
Additionally, the company may, at some point, be required to pay federal and
state taxes, which are necessary elements of its costs. Therefore, any
measures that exclude these elements have material limitations.

To compensate for these limitations, Recovery Energy believes it is important
to consider both net income (loss) determined under GAAP and EBITDAX to
evaluate its performance.

The following table presents a reconciliation of the company's net (loss) to
its EBITDAX for the three month and nine month periods ended September 30,
2012 and 2011:

                        Three Months Ending         Nine Months Ending
                       September 30,               September 30,
                       2012          2011          2012         2011
Net Loss                $(2,836,63) $(3,027,618) $(12,777,29) $(11,533,686)
Interest expense        2,149,931    2,136,950    6,320,919   6,123,496
depletion, amortization 1,069,068    1,052,946    2,897,156   3,194,301
and accretion
Changes in the fair
value of commodity      130,000      --          (445,609)   (222,788)
price derivatives
Change in fair value of
convertible notes       (600,000)    13,338       (700,000)   (1,587,699)
conversion derivative
Impairment of evaluated --          --          3,274,718   --
Amortization of stock
issued for services and 588,004      1,039,128    1,773,658   5,965,872
share based
EBITDAX                 $500,369     $1,214,744   $343,543     $1,939,496

         Investor Relations:
         David Castaneda
         Media Relations:
         Susan Roush

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