PetroQuest Energy Announces Its 2012 Estimated Proved Oil And Gas Reserves And Production; Provides 2013 Production And Capital

PetroQuest Energy Announces Its 2012 Estimated Proved Oil And Gas Reserves And
   Production; Provides 2013 Production And Capital Expenditures Guidance;
                   Updates Operating Activities And Hedging

PR Newswire

LAFAYETTE, La., Feb. 5, 2013

LAFAYETTE, La., Feb.5, 2013 /PRNewswire/ --PetroQuest Energy, Inc. (NYSE:
PQ) announced today that the Company ended 2012 with approximately 228 Bcfe
(265 Bcfe using December 31, 2012 pricing) of estimated proved oil and gas
reserves having a pre-tax discounted value ("PV-10") including hedges of
approximately $241.4 million ($286.1 million using December 31, 2012 pricing).
The Company's estimated proved reserves at December 31, 2012 were comprised of
85% natural gas, 4% oil and 11% natural gas liquids. In addition,
approximately 87% of the reserves were located in long-lived basins and
approximately 74% were proved developed. 

The Company estimates that its 2012 production was approximately 34.0 Bcfe, or
92.8 MMcfe per day, including fourth quarter 2012 production of 8.9 Bcfe, or
96.3 MMcfe per day. The Company's 2012 production was 13% higher than 2011
and was comprised of 81% natural gas, 9% oil, and 10% natural gas liquids.
Fourth quarter 2012 production was 11% higher than the comparable 2011 period
and was comprised of 78% natural gas, 9% oil, and 13% natural gas liquids. The
Company's Fayetteville assets, which were sold on December 31, 2012, accounted
for natural gas production of approximately 5.4 MMcf per day and 5.6 MMcf per
day for 2012 and the fourth quarter of 2012, respectively. During the fourth
quarter of 2012, the Company produced 3,550 barrels of liquids per day, a 41%
increase from liquids production in the fourth quarter of 2011.

Production Guidance

The Company projects its 2013 production to average between 90 and 95 MMcfe
per day with approximately 80%, 8% and 12% to be derived from natural gas, oil
and natural gas liquids, respectively. In addition, the Company projects its
first quarter 2013 production to average between 87 and 92 MMcfe per day with
approximately 80%, 9% and 11% to be derived from natural gas, oil and natural
gas liquids, respectively.

Capital Expenditures Guidance

The Company's capital budget for 2013 is expected to range between $80 million
and $100 million, the mid-point of which is approximately 35% lower than the
Company's estimated capital expenditures in 2012. Approximately 96% of the
2013 capital budget is expected to be allocated to projects that the Company
operates. Accordingly, the Company expects to be able to adjust its capital
expenditures in response to changes in market conditions, including commodity
prices.

The 2013 budget is expected to be allocated as follows:

2013 Capital Allocation         %
Gulf Coast/GOM                  32%
Woodford                       29%
Mississippian Lime              9%
Texas                          8%
Capitalized interest & overhead 22%

Infrastructure Divestiture

During January 2013, the Company sold a 50% interest in its saltwater disposal
system and related facilities in the Woodford Shale for net proceeds of
approximately $10.4 million, subject to customary post-closing adjustments.
The sale did not include any oil and gas producing assets and proceeds were
used for general corporate purposes. 

Operations Update

In the Woodford, the Company is in the process of completing eight wells in
its liquids rich acreage. The Company expects to have these eight wells
online in late February and expects to drill 12-15 additional Woodford wells
during 2013. Since November 2012, the Company has acquired approximately
5,000 additional acres in the liquids rich window of the Woodford. The
Company estimates this acreage provides 50-75 additional gross drilling
locations. The Company's net production from its liquids rich Woodford area
increased approximately 150% during 2012. During December 2012, the Company's
daily production from this area included more than 900 barrels of natural gas
liquids. The Company currently has one rig working in the trend.

In the Mississippian Lime, the Company currently has one rig operating in
Grant County. The Company expects to release the rig at the end of the first
quarter as it moves into the next phase of field development. The Company is
in the process of scheduling 3D seismic surveys within each of its project
areas and plans to receive the data over its Pawnee county acreage in the
third quarter of 2013 and its Kay county acreage in the second quarter of
2013.Once the seismic data has been interpreted and integrated with well
results drilled to date, the Company expects to resume drilling activities
utilizing a significantly enhanced geologic model in this oil focused area.

The Company established production on two additional operated Mississippian
Lime wells. The Company's PQML #11 (Pawnee County - NRI - 31%) and PQML #6
(Kay County - NRI - 37%) wells achieved maximum 24 hour gross daily rates of
289 Boe (85% oil) and 85 Boe (72% oil), respectively. Without the benefit of
seismic data, the Company has initiated production on eight operated wells in
the Mississippian Lime with an average 24 hour initial production rate of 425
Boe and an average 30 day production rate of 255 Boe (six well average). 

In the Gulf Coast, the Company recently spud its third well at La Cantera, the
Broussard Estates #3 (WI-24%). The well is currently drilling at
approximately 15,000 feet and is expected to reach total depth next month. In
addition, the Company recently received a 70 square mile 3D seismic survey,
which includes coverage over its Thunder Bayou prospect, located approximately
two miles north of the La Cantera discovery. The Company expects to spud
Thunder Bayou during the second half of 2013.

The Company's onshore South Louisiana oil prospect, Overlake (WI-22%), is
currently drilling at approximately 13,000 feet and is expected to reach total
depth this month.

In East Texas, the Company is currently drilling the lateral section on its PQ
#9 (WI-100%) horizontal Cotton Valley well. The well is scheduled to reach
total depth this month and is expected to be completed in March. The
Company's net production from this liquids rich area increased approximately
56% during 2012. During December 2012, the Company's daily production from
this area included more than 650 barrels of natural gas liquids. Once drilling
is completed on PQ #9, the Company expects to release the rig and plans to
resume activity later in the year.

Hedging Update

The Company recently initiated the following commodity hedging transactions:

                        Instrument
Production Period       Type        Daily Volumes  Price
Oil:
Feb13 - Dec13           Swap        250 Bbls       $104.75 ^(1)
Gas:
Feb13 - Dec13           Swap        10,000 MMbtu   $3.71
^(1)^ LLS Index

After executing the above transactions, the Company has approximately 84,000
barrels of oil and 8.8 Bcf of gas hedged for 2013.

Management's Comment

"Pro forma for the sale of our Fayetteville assets, we are forecasting 2013
production growth of approximately 5% ^ with a capital budget that is
approximately 35% lower than our projected 2012 capital spend," said Charles
T. Goodson, Chairman, Chief Executive Officer and President. "While we are
allocating a higher percentage of capital to the Gulf Coast basin than in
previous years, we remain committed to our balanced strategy of utilizing Gulf
Coast cash flow to fund resource development. As always, we expect to select
projects that generate the highest projected risked adjusted rates of return
and we believe that this year's inventory of high quality Gulf Coast projects
justifies a slight shift in our typical capital allocation."

Non-GAAP Financial Measure

PV-10 is the estimated future net cash flows from estimated proved reserves
discounted at an annual rate of 10% before giving effect to income taxes.
Standardized measure is the after-tax estimated future net cash flows from
estimated proved reserves discounted at an annual rate of 10%, determined in
accordance with GAAP. Management believes PV-10 is useful to investors as it
is based on prices, costs and discount factors which are consistent from
company to company, while the standardized measure is dependent on the unique
tax situation of each individual company. As a result, the Company believes
that investors can use PV-10 as a basis for comparison of the relative size
and value of the Company's reserves to other companies. The Company also
understands that securities analysts and rating agencies use PV-10 in similar
ways. PV-10 cannot be currently reconciled to the standardized measure of
discounted future net cash flows becausefinal income tax information for 2012
is notyet available. The Company will provide the reconciliation of PV-10 to
standardized measure in its Form 10-K for the year ended December 31, 2012.

About the Company

PetroQuest Energy, Inc. is an independent energy company engaged in the
exploration, development, acquisition and production of oil and natural gas
reserves in the Arkoma Basin, Wyoming, Texas, South Louisiana and the shallow
waters of the Gulf of Mexico. PetroQuest's common stock trades on the New
York Stock Exchange under the ticker PQ.

Forward-Looking Statements

This news release contains "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. These forward-looking statements
are subject to certain risks, trends and uncertainties that could cause actual
results to differ materially from those projected. Among those risks, trends
and uncertainties are our ability to find oil and natural gas reserves that
are economically recoverable, the volatility of oil and natural gas prices and
significantly depressed natural gas prices since the middle of 2008, the
uncertain economic conditions in the United States and globally, the declines
in the values of our properties that have resulted in and may in the future
result in additional ceiling test write-downs, our ability to replace reserves
and sustain production, our estimate of the sufficiency of our existing
capital sources, our ability to raise additional capital to fund cash
requirements for future operations, the uncertainties involved in prospect
development and property acquisitions or dispositions and in projecting future
rates of production or future reserves, the timing of development expenditures
and drilling of wells, hurricanes and other natural disasters, changes in laws
and regulations as they relate to our operations, including our fracing
operations in shale plays or our operations in the Gulf of Mexico, and the
operating hazards attendant to the oil and gas business. In particular,
careful consideration should be given to cautionary statements made in the
various reports PetroQuest has filed with the Securities and Exchange
Commission. PetroQuest undertakes no duty to update or revise these
forward-looking statements.

Click here for more information:
http://www.petroquest.com/news.html?=BizID=1690&1=1

SOURCE PetroQuest Energy, Inc.

Website: http://www.petroquest.com
Contact: Matt Quantz, Manager - Corporate Communications, +1-337-232-7028,
www.petroquest.com