Exall Energy Corporation announces results for the three months and year ended December 31, 2012

Exall Energy Corporation announces results for the three months and year ended 
December 31, 2012 
CALGARY, March 21, 2013 /CNW Telbec/ - Exall Energy Corporation ("Exall" or 
the "Company") (TSX:EE and TSX:EE.DB) is pleased to announce its financial and 
operating results for the three months and fiscal year ended December 31, 
2012; and that it has filed its Annual Information Form which contains 
reserves data and other oil and gas information required by Section 2.1 of NI 
51-101. Exall's annual filings can all be found at www.exall.com or 
www.sedar.com. 
Exall's fourth quarter 2012 well optimization operational successes have 
resulted in a 18 percent increase in the first quarter 2013 production average 
to 1,310 boe per day from the fourth quarter 2012 production average of 1,106 
boe per day with additional well optimization efforts scheduled for 2013. 
Highlights of Fiscal 2012 include: 


    --  A 12 percent increase in the fourth quarter 2012 production
        average to 1,106 boe per day from the third quarter 2012
        production average of 991 boe per day,
    --  Spud 11 gross (7.61 net) wells with 6 gross (4.30 net) wells
        being placed on production, 4 gross (2.53 net) service wells
        being brought online and 2 gross (1.44 net) wells in various
        stages of completion,
    --  Completed and interpreted a 51 section 3D Seismic program
        identifying approximately 20 Tier I, 12 Tier II and 46 Tier III
        locations on nine Gilwood channel trends,
    --  Achieved additional 3D Seismic drilling success culminating in
        a fourth quarter 2012 production average of 609 boe per day
        from the north Gilwood seismic channel,
    --  Completed upgrades at the Marten Mountain pipeline and battery
        facility alleviating certain constraints and eliminating
        certain operational expenses, and
    --  Acquired 25,600 gross (20,851 net) acres of undeveloped land in
        Mitsue, Alberta.

HIGHLIGHTS                     Three months ended           Year ended
                                      December 31          December 31


                                         %                    %
In thousands of dollars       2012   2011  change  2012   2011  change 
Financial ($)                                                          
Gross revenue                 8,027 11,272   (29) 30,699 32,534    (6) 
Funds from operations         3,918  6,175   (37) 15,625 18,553   (16) 
Basic per share              0.06   0.10   (40)   0.25   0.30   (17) 
Diluted per share            0.04   0.10   (60)   0.15   0.29   (48) 
Net income (loss)               751  2,271   (67)  3,633  6,960   (48) 
Basic per share              0.01   0.04   (75)   0.06   0.11   (45) 
Diluted per share            0.01   0.04   (75)   0.05   0.11   (55) 
Capital expenditures, net     8,180 14,913   (45) 44,697 50,057   (11) 


                                                                      

HIGHLIGHTS                     Three months ended           Year ended
                                      December 31          December 31
                                             %                    %
                              2012   2011  change  2012   2011  change

Operations                                                            

Daily production                                                      

  Crude oil (bbl)             1,042  1,218   (14)    988    949      4

  Natural gas liquids (bbl)      14     19   (26)     18     21   (14)

  Natural gas (mmcf)            297    873   (66)    457    749   (39)

Total daily production (boe @
6:1)                          1,106  1,383   (20)  1,082  1,094    (1)

Netback per boe (6:1) ($)     51.22  53.85    (5)  52.65  52.14      1

Outlook

Exall is a light oil-weighted company with high operating margins. Starting 
from a modest production base of light oil and gas, the Company has 
historically, excluding the 2012 Reservoir conformance challenges in the south 
waterflood, shown itself capable of setting and achieving ambitious production 
and cash flow targets (as can be seen in the chart below reflecting 
production), production growth that currently translates to 42.1 percent 
compounded annually from 2007. Exall will continue to focus on organic growth 
through exploitation and expansion of its existing oil producing properties.

Outlook

While reservoir conformance issues presented challenges in the South 
Waterflood during 2012; optimization efforts aimed at improving well 
performance and oil recovery appear to be having a positive effect. Polymer 
treatments were performed on two injection wells resulting in reduced water 
cuts in one adjacent well, along with an increase in oil production. Current 
production from the South Waterflood area is 428 boepd (310 boepd net), an 
increase of 87% from the 2012 fourth quarter average of 229 boepd (164 boepd 
net). With the stabilization of the south waterflood's production in the 
latter two months of 2012, Exall is once again poised to see production growth 
on an annual basis through 2013 and into 2014.

Exall's Capital Expenditure Program for 2013 is planned to continue to explore 
and develop the North Waterflood Gilwood channel extension of the Central 
Waterflood channel. Successful drilling on the Central Waterflood and North 
Waterflood channel extension in 2012 added 676 boepd net from the first 
quarter to the fourth quarter of 2012. Exall plans to drill up to 3 gross 
exploration wells (2.21 net) and up to 10 gross development wells (7.19 net) 
in 2013, subject to cash flow from operations. Continued drilling success on 
the North Waterflood channel extension will drive production growth on an 
annual basis through 2013 and into 2014.

With the Company's Marten Mountain oil production attracting a price based on 
the average of the daily settlement price of the NYMEX near month Light Sweet 
Crude Oil contract as it trades, excluding weekends / holidays, for the 
calendar month of production, plus the weighted average of the Net Energy 
Index and the NGX index for Light Sweet Crude Oil, plus the one month prior 
Enbridge Sweet WADF, the Company's oil price received averages approximately 
$1.22 less than the posted Edmonton Par price. Based on the $1.22 differential 
Exall expects its January 2013 price received was $86.52 per barrel, and its 
February 2013 price received was $87.40 per barrel. This pricing estimate is 
approximately $26.00 higher than the posted Western Canadian Select price 
being received by other entities during these periods.

With the Company's Marten Mountain oil production currently receiving an 
average price of approximately $87.00, Exall is currently generating an 
Operating Netback of approximately $58.00 and a Corporate Netback of 
approximately $45.00 after General and Administrative Expenses and Interest 
Expenses. At an average of 1,400 boepd over the entire year, the Company would 
generate a Cash Flow from Operations of approximately $23.0 million for 2013.

While the Exall debt level appears relatively significant, once broken down it 
becomes less of a concern. Exall's current debt level is approximately $59.0 
million which includes $36.0 of revolving demand credit held under a facility 
with a Canadian chartered bank that bears interest at the lender's base prime 
rate plus 1.25 percent, and is reviewed periodically by the bank. The balance 
of the debt is a $23.0 million Convertible Debenture with a maturity date of 
March 2017 that pays an annual interest rate of 7.75%.

Exall's debt to cash flow at December 31, 2012, excluding the Convertible 
Debentures was 2.5 times. It is Exall's plan to exit 2013 with a fourth 
quarter annualized cash flow that would see the debt to cash flow at December 
31, 2013, excluding the Convertible Debentures, being in the order of 1.0 
times. Including the 2017 Convertible Debentures in the calculation would give 
Exall a debt to cash flow of approximately 1.6 times. Exall's target for 2014 
is to exit the year with a fourth quarter annualized cash flow that would see 
the debt to cash flow at December 31, 2014, including the Convertible 
Debentures, being in the order of 1.0 times. This would then give Exall 27 
months to establish a $23.0 million fund to pay out the Convertible Debentures 
in March of 2017, subject to the Debentures not being converted or repurchased.

Overview

Exall's average daily production for the fourth quarter of 2012 decreased 20 
percent to 1,106 barrels of oil per day ("boe/d") from 1,383 boe/d in the 
fourth quarter of 2011. As at March 19, 2013 Exall's net production rate was 
as outlined below:

Production by Region

Exall's first quarter 2013 average daily production to March 15, 2013 is 
approximately 1,310 boepd, an increase of 32% over the Q3 2012 production 
average of 991 boepd and an increase of 18% over the 2012 fourth quarter 
production average of 1,106 boepd. This does not include production from the 
most recently drilled wells which will be brought on stream in the second half 
of 2013.

The Company groups the Waterflood Approvals in the Marten Mountain area into 
three project areas; the South WF, Central WF and North WF. The production 
issues faced in these three project areas are being successfully addressed, as 
described below.

Reservoir conformance issues presented challenges in the south waterflood 
during 2012. Optimization efforts aimed at improving well performance and 
oil recovery appear to be having a positive effect. Polymer treatments were 
performed on two injection wells resulting in reduced water cuts in one 
adjacent well, along with an increase in oil production. Current production 
from the South WF area is 428 boepd (310 boepd net), an increase of 26% from 
340 boepd (243 boepd net) through November, 2012.

The Central WF continues to improve as the result of well optimization and the 
installation of an Electric Submersible Pump (ESP) into the newest producing 
well. The new oil well, which was producing 165 boepd, is now producing at 406 
boepd (292 boepd net). The Central WF project is currently producing 783 boepd 
(546 boepd net), an increase of 144% over the Q3 2012 average.

A water source well was drilled, completed and equipped during Q4 2012 and 
injection of water has begun in the North WF Approval area. Optimization 
efforts in the North WF and the addition of two producing wells has increased 
production from 375 boepd (253 boepd net) in August 2012 to an average of 794 
boepd (541 boepd net) over the last week, an increase of 112%.

Results of Operations

Oil and gas exploration and development expenditures were $8,180 for the 
fourth quarter of 2012 and $44,697 for the fiscal year ended December 31, 
2012. During the fourth quarter of 2012 the Company participated in the 
drilling of 2.0 gross oil wells (1.44 net) in the Marten Mountain / Mitsue 
area, and 1.0 gross water source wells (0.72 net). During fiscal 2012 the 
Company spud 7.0 gross oil wells (5.02 net) in the Marten Mountain / Mitsue 
area and 4.0 gross service wells (2.53 net).

The Company has acquired 25,600 gross (20,851 net) acres of undeveloped land 
in the Mitsue area, during the fiscal year ended December 31, 2012. As at 
December 31, 2012, the Company had 194,400 acres (144,327 acres net) of 
undeveloped land in Alberta, Canada.

Production for 2012 of 1,082 boe per day represents a 1% decrease over 2011. 
Funds from operations for the year of $15.6 million or $0.25 per share were 
primarily the result of the flat production, decreased commodity prices 
received during the year (Exall's prices received were down 7% during 2012 
averaging $79.52 per boe compared to $85.53 per boe in 2011), decreased 
royalty prices paid during the year (Exall's royalties paid were down 39% 
during 2012 averaging $13.99 per boe compared to $22.84 per boe in 2011), and 
increased operating costs paid during the year (Exall's operating costs were 
up 22% during 2012 averaging $12.88 per boe compared to $10.55 per boe in 
2011).
                                                
                           Three months ended          Year ended
                                   December 31        December 31


                                      %                  %
Netback per boe (6:1) $    2012  2011  Change  2012  2011  Change 
                                                              
Production revenue         78.43 88.58    (11) 79.52 85.53    (7) 
Royalties                  15.26 22.00    (31) 13.99 22.84   (39) 
Operating expenses         11.95 12.73     (6) 12.88 10.55     22 
Operating netbacks ($/boe) 51.22 53.85     (5) 52.65 52.14      1 
Net income, as a result, for 2012 was $3,633 or $0.06 per share compared to a 
net income for 2011 of $6,960 or $0.11 per share. 
About Exall 
Exall is a junior oil and gas company active in its business of oil and gas 
exploration, development and production from its properties in Alberta. Exall 
Energy is currently developing the new Mitsue area "Marten Mountain" discovery 
in north-central Alberta. 
Exall Energy currently has 66,634,854 common shares outstanding. The Company's 
common shares are listed on the Toronto Stock Exchange under the trading 
symbol EE. The Company's convertible debentures are listed on the Toronto 
Stock Exchange under the trading symbol EE.DB. 
Reader Advisory 
This news release contains forward-looking statements, which are subject to 
certain risks, uncertainties and assumptions, including those relating to 
results of operations and financial condition, capital spending, financing 
sources, commodity prices and costs of production. By their nature, 
forward-looking statements are subject to numerous risks and uncertainties 
that could significantly affect anticipated results in the future and, 
accordingly, actual results may differ materially from those predicted. A 
number of factors could cause actual results to differ materially from the 
results discussed in such statements, and there is no assurance that actual 
results will be consistent with them. Such factors include 
fluctuatingcommodity prices,capital spending and costs ofproduction, and 
other factors described in the Company's most recent Annual Information Form 
under the heading "Risk Factors" which has been filed electronically by means 
of the System for Electronic Document Analysis and Retrieval ("SEDAR") located 
at www.sedar.com. Such forward-looking statements are made as at the date of 
this news release, and theCompany assumes no obligation to update or revise 
them, either publicly or otherwise, to reflect new events, information or 
circumstances, except as may be required under applicable securities law. 
For the purposes of calculating unit costs, natural gas has been converted to 
a barrel of oil equivalent (boe) using 6,000 cubic feet equal to one barrel 
(6:1), unless otherwise stated. The boe conversion ratio of 6 mcf: 1 bbl is 
based on an energy equivalency conversion method and does not represent a 
value equivalency; therefore boe may be misleading if used in isolation. This 
conversion conforms to the Canadian Securities Regulators' National Instrument 
51-101 - Standards of Disclosure for Oil and Gas Activities. 
Exall Energy Corporation Frank S. Rebeyka Vice Chairman Tel: 403-815-6637  
Roger N. Dueck President & CEO Tel: 403-237-7820 x 223 info@exall.com  
Please visit Exall Energy's website at:www.exall.com 
Renmark Financial Communications Inc. Maurice 
Dagenais:mdagenais@renmarkfinancial.com Nadia 
Marks:nmarks@renmarkfinancial.com Tel.: (514) 939-3989 or (416) 644-2020 
www.renmarkfinancial.com 
PDF available at:  
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PDF available at:  
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SOURCE: EXALL ENERGY CORPORATION 
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CO: EXALL ENERGY CORPORATION
ST: Alberta
NI: OIL FIN ERN  
-0- Mar/21/2013 11:30 GMT