Kelt Increases Capital Expenditure Budget, Enters Into Agreement to Acquire Strategic Assets and Increases 2013 Production

Kelt Increases Capital Expenditure Budget, Enters Into Agreement to Acquire 
Strategic Assets and Increases 2013 Production Guidance 
CALGARY, ALBERTA -- (Marketwired) -- 08/01/13 -- Kelt Exploration
Ltd. (TSX:KEL) ("Kelt" or the "Company") has entered into an
agreement with a Canadian oil and gas company to acquire certain
natural gas assets located at Fireweed, adjacent to the Company's
core producing area at Inga, in northeastern British Columbia. The
acquisition has an effective date of April 1, 2013 and is subject to
standard industry closing conditions. Closing is expected to occur on
or around August 9, 2013. Kelt is acquiring a 50% working interest in
the Fireweed assets and its partner at Inga, Artek Exploration Ltd.
("Artek"), is also acquiring a 50% working interest in the assets.
Artek currently operates the Inga property and will become operator
of the Fireweed assets at closing. Financial and operating
information provided herein reflect only Kelt's working interest
relating to the Fireweed assets to be acquired. 
The consideration to be paid by Kelt is $15.5 million, before closing
adjustments, and will be financed by existing cash on hand. In
addition, after conducting a corporate interim review and reviewing
the assets to be acquired, the Company has received a commitment
letter from its bank, the National Bank of Canada, whereby, Kelt's
available bank credit line will be increased by $16.0 million to
$56.0 million, upon satisfactory closing of the Fireweed asset
Key Attributes of Assets to be Acquired 

--  Current net production is estimated to be approximately 600 BOE per day
    - 79% natural gas and 21% natural gas liquids.
--  Net operating income for the first six months of 2013 was approximately
    $1.9 million.
--  Petroleum and natural gas reserves to be acquired were evaluated by an
    independent third party effective December 31, 2012. Proved developed
    producing reserves were 1.23 million BOE, with no associated future
    development costs;
--  An operated compression and dehydration facility with approximately 16
    mmcf per day of gross natural gas capacity and 25 kilometres of pipeline
    that adds to the Company's infrastructure in the area;
--  The Fireweed assets are a complementary fit with a contiguous land
    position adjacent to Kelt's Inga exploration and development core area,
    including 11,227 net acres (15.8 net sections) of land (6,299 net acres
    with Doig mineral rights and 7,097 net acres with Montney mineral

The Fireweed acquisition adds to Kelt's inventory of horizontal
drilling locations targeting the Doig formation and provides the
Company with additional acreage expanding its land base for potential
exploration in the Montney formation. After giving effect to the
acquisition, in its Inga/Fireweed core area, Kelt will own 26,862 net
acres (40 net sections) of land with Doig rights and 32,320 net acres
(48 net sections) of land with Montney rights. 
Kelt expects to benefit from potential operational synergies as a
result of the acquisition, and at the same time expand its land and
infrastructure footprint in the Inga/Fireweed area. 
Inga Operations Update 
At Inga, to date in 2013, Kelt has participated in the drilling of
five (2.0 net) horizontal wells with multi-fracture completions:
three development wells targeting the Doig formation and two
exploratory wells targeting the Montney formation. The 30-day initial
production rate from the three Doig wells was approximately 3,000 BOE
(1,200 BOE net) per day or an average of 1,000 BOE (400 BOE net) per
day per well. Production was approximately 62% natural gas and 38%
liquids. These three wells extend the Doig pool on the north end of
Kelt's Inga play. During the second half of the year the Company
plans to participate in drilling horizontal wells in the southern
part of the Inga play trend, including potential pool extensions. 
In addition to the Doig drilling, Kelt participated in the drilling
of two (0.8 net) exploratory Montney horizontal wells during the
first half of 2013. These wells are part of a three well program
planned for 2013 that will utilize different completion techniques in
order to provide information that helps the Company assess what works
best for potential future Montney development. The first well was
completed using nitrogen foam energized water and during the first 30
days, gross production averaged 820 mcf per day of raw gas and 102
barrels per day of liquids, of which approximately 85% was
condensate. This equates to average total gross sales volumes of
approximately 220 BOE per day (46% liquids) with a liquids yield of
124 bbls/mmcf of raw gas. During the completion, the Company sanded
off certain fracture stages and encountered an obstruction near the
heel on drill out. After remedial work, it was only able to drill out
to approximately half of the horizontal length initially planned. An
analysis conducted by the Company suggests that considerable
formation damage occurred during the completion. 
The second Montney well was drilled approximately 1.5 miles to the
south and was logged and cored with a pilot well, and subsequently
drilled out horizontally. This well was completed using propane and
during the first 30 days, gross production averaged 2.5 mmcf per day
of raw gas and 286 barrels per day of liquids, of which approximately
77% was condensate. This equates to total average gross sales volumes
of approximately 637 BOE per day (45% liquids) with a liquids yield
of 114 bbls/mmcf of raw gas. 
The Company is encouraged by the initial results from its Montney
exploration program and the high liquids yields enhance the well
economics in the current commodity price environment. The third
Montney test at Inga is scheduled for early fall.  
2013 Capital Budget 
The Company's Board of Directors have increased Kelt's 2013 capital
expenditure budget by $70.0 million as outlined in the following

                              Previous   New Budget   Increase     Percent  
                           Budget ($ MM)   ($ MM)      ($ MM)     Increase  
Drilling & Completions          54.7        96.0        41.3         76%    
Facilities, Equipment &                                                     
 Pipelines                      11.0        18.0         7.0         64%    
Land & Seismic                  11.3        18.0         6.7         59%    
Property Acquisitions            -          15.0        15.0          -     
Total Capital Expenditures      77.0        147.0       70.0         91%    

To date in 2013, Kelt has been pleased with drilling results in its
core areas. Under the new capital budget, Kelt expects to drill
and/or complete 24 gross (15.0 net) wells during the year: 8 gross
(6.8 net) wells at Karr, Alberta; 12 gross (4.8 net) wells at Inga,
British Columbia; and 3 gross (2.5 net) wells at Grande Cache,
In summary, new drilling plans added to the 2013 capital expenditure
budget include 2.5 net wells at Grande Cache, 1.0 well at Karr, 1.6
net wells at Inga and 1.0 exploratory well in a new area. At Karr,
the Company is targeting light oil in the Triassic Montney formation.
At Inga, in 2013, Kelt will participate in the drilling of nine gross
wells in its Doig development play and in three gross exploratory
wells targeting the Triassic Montney formation. At Grande Cache, the
Company will drill two gross exploratory wells targeting natural gas
in the Falher formation and one well targeting oil in the Chinook
Revised 2013 Guidance 
After giving effect to the increased capital expenditure budget and
the acquisition of assets, Kelt has revised its 2013 guidance as

                                        Previous     Revised      Percent   
                                        Guidance     Guidance      Change   
Average 2013 Production (BOE/d)          3,200        3,500          9%     
Exit 2013 Production (BOE/d)             4,000        4,900         22%     
WTI oil price (US$/bbl)                  90.00        90.00          -      
NYMEX natural gas price (US$/MMBTU)       4.10         4.10          -      
AECO natural gas price ($/GJ)             3.55         3.55          -      
Exchange rate (US$/CA$)                  0.9804       0.9804         -      
Funds from operations ($MM)               23.4         25.1          7%     
  Per share, diluted                      0.32         0.35          9%     

The impact on production relating to the increased exploration and
development spending is partially reflected in the 2013 exit
production rate; however, the majority of the impact will occur in
early to mid-2014. The impact of the Fireweed acquisition is
reflected in the exit 2013 production rate shown in the above table. 
Financial Position 
After giving effect to the acquisition and the increased capital
expenditure program, Kelt estimates that it will have bank debt, net
of working capital, of approximately $17.0 million at the end of
2013. Given its new bank line of $56.0 million, the Company expects
to have sufficient financial flexibility to carry out its operations
during the year and pursue new opportunities as they arise. 
About Kelt 
Kelt is a Calgary, Alberta, Canada-based oil and gas company focused
on exploration, development and production of crude oil and natural
gas resources, primarily in west central Alberta and northeastern
British Columbia. Kelt's land holdings are located in three core
areas: (a) a natural gas property at Grande Cache, Alberta; (b) a
liquids-rich natural gas property at Inga, British Columbia; and (c)
an oil prospect at Karr, Alberta. 
Cautionary Statement and Advisory Regarding Forward-Looking
Statements and Information  
Certain information with respect to the Company contained herein,
including expectations, beliefs, plans, goals, objectives,
assumptions, information and statements about future events,
conditions, results of operations, performance, Kelt's planned
capital expenditure program, or management's assessment of future
potential, contain forward-looking statements. In particular,
forward-looking statements contained in this press release include,
but are not limited to: the expected closing of the Fireweed
acquisition, the resultant operational synergies and the increase to
Kelt's bank credit line, the results of Kelt's ongoing drilling
operations at Inga, B.C. and the impact on production relating to the
increased 2013 capital expenditure budget. These forward-looking
statements are based on assumptions and are subject to numerous risks
and uncertainties, certain of which are beyond the Company's control,
including the impact of general economic conditions, industry
conditions, volatility of commodity prices, currency exchange rate
fluctuations, imprecision of reserve estimates, environmental risks,
competition from other explorers, stock market volatility, and
ability to access sufficient capital. We caution that the foregoing
list of risks and uncertainties is not exhaustive. 
Statements relating to "reserves" are deemed to be forward looking
statements as they involve the implied assessment, based on current
estimates and assumptions that the reserves can be profitably
produced in the future. Readers are cautioned that disclosure of any
well test results or initial well production rates are not
necessarily indicative of long-term performance. 
Kelt's actual results, performance or achievement could differ
materially from those expressed or implied by these forward-looking
statements and, accordingly, no assurance can be given that any
events anticipated by the forward-looking statements will transpire
or occur. As a result, undue reliance should not be placed on
forward-looking statements. 
In addition, the reader is cautioned that historical results are not
necessarily indicative of future performance. The forward-looking
statements contained herein are made as of the date hereof and the
Company does not intend, and does not assume any obligation, to
update or revise any forward-looking statements, whether as a result
of new information, future events or otherwise unless expressly
required by applicable securities laws. 
Certain information set out herein may be considered as "financial
outlook" within the meaning of applicable securities laws. The
purpose of this financial outlook is to provide readers with
disclosure regarding Kelt's reasonable expectations as to the
anticipated results of its proposed business activities for the
periods indicated. Readers are cautioned that the financial outlook
may not be appropriate for other purposes. 
Non-GAAP Measures  
This press release contains certain financial measures, as described
below, which do not have standardized meanings prescribed by GAAP. As
these measures are commonly used in the oil and gas industry, the
Company believes that their inclusion is useful to readers. The
reader is cautioned that these amounts may not be directly comparable
to measures for other companies where similar terminology is used.
"Operating netback" is calculated by deducting royalties, production
expenses and transportation expenses from oil and gas revenue. "Funds
from operations" is calculated by adding back settlement of
decommissioning obligations and change in non-cash operating working
capital to cash provided by operating activities. Funds from
operations per common share is calculated on a consistent basis with
profit (loss) per common share, using basic and diluted weighted
average common shares as determined in accordance with GAAP. Funds
from operations and operating netbacks are used by Kelt as key
measures of performance and are not intended to represent operating
profits nor should they be viewed as an alternative to cash provided
by operating activities, profit or other measures of financial
performance calculated in accordance with GAAP. 
Measurements and Abbreviations 
All dollar amounts are referenced in thousands of Canadian dollars,
except when noted otherwise. Where amounts are expressed on a barrel
of oil equivalent ("BOE") basis, natural gas volumes have been
converted to oil equivalence at six thousand cubic feet per barrel
and sulphur volumes have been converted to oil equivalence at 0.6
long tons per barrel. The term BOE may be misleading, particularly if
used in isolation. A BOE conversion ratio of six thousand cubic feet
per barrel is based on an energy equivalency conversion method
primarily applicable at the burner tip and does not represent a value
equivalency at the wellhead. References to oil in this press release
include crude oil and field condensate. References to natural gas
liquids ("NGLs") include pentane, butane, propane, and ethane.
References to gas in this press release include natural gas and

bbls    Barrels                                                             
mcf     thousand cubic feet                                                 
MMBTU   million British Thermal Units                                       
AECO-C  Alberta Energy Company "C" Meter Station of the Nova Pipeline System
WTI     West Texas Intermediate                                             
NYMEX   New York Mercantile Exchange                                        

Kelt Exploration Ltd.
David J. Wilson
President and Chief Executive Officer
(403) 201-5340 
Kelt Exploration Ltd.
Sadiq H. Lalani
Vice President, Finance and Chief Financial Officer
(403) 215-5310 
Kelt Exploration Ltd.
Suite 600, 321 - 6th Avenue SW
Calgary, Alberta, Canada T2P 3H3
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