Advantage Announces High Liquid Yield Wells, Increases Montney Acreage & Provides Update on Operations & Strategic Alternatives

   Advantage Announces High Liquid Yield Wells, Increases Montney Acreage &
        Provides Update on Operations & Strategic Alternatives Process

PR Newswire

CALGARY, Sept. 30, 2013

CALGARY, Sept. 30, 2013 /PRNewswire/ - Advantage Oil & Gas Ltd. ("Advantage"
or the "Corporation") (TSX/NYSE: AAV) is pleased to announce the following
updates. An updated investor presentation is also available on our website.

Two Middle Montney Wells Demonstrate Free Condensate ("C5+")Yield of up to  50 
bbls/mmcf and Propane Plus ("C3+") Yield of up to 76 bbls/mmcf at Glacier

  *Two Middle Montney wells located on the Eastern portion of our land block
    at Glacier at 103/1-9-76-12W6 and 102/13-29-76-12W6 were completed during
    the first quarter of 2013. Both wells demonstrated significant liquid

  *The 103/1-9-76-12W6 well was production tested for 124 hours and flowed
    free condensate which averaged 50 bbls/mmcf over the production test
    period. The final gas flow rate at the end of the production test period
    was 3.9 mmcf/d at a flowing pressure of 3,534 kpa. The estimated propane
    plus (C3+) yield based on a shallow cut liquids extraction process is 76
    bbls/mmcf utilizing data obtained from the production test. The well has
    been on-stream for 169 days and has been re-tested with the latest results
    indicating similar yields.

  *The 102/13-29-76-12w6 was production tested for 192 hours and flowed free
    condensate which averaged 24 bbls/mmcf over the production test period.
    The final gas flow rate at the end of the production test period was 5.3
    mmcf/d at a flowing pressure of 3,358 kpa. The estimated propane plus
    (C3+) yield based on a shallow cut liquids extraction process is 57
    bbls/mmcf utilizing data obtained from the test. The well has been
    on-stream for 214 days and has demonstrated strong production performance.

  *These wells demonstrated liquid yields that are much higher than the
    Middle Montney wells located on the western portion of our land block and
    higher than the estimated Glacier average shallow cut C3+ yield of 39
    bbls/mmcf raw. We believe the changes in liquid content are related to
    geological trends which can be utilized to identify high graded areas
    within the Montney at Glacier and within the regional fairway.

Additional Undeveloped Lands Acquired for Middle Montney Liquids Potential

  *We have gained considerable geological and engineering experience in the
    liquids rich Middle Montney formation. Our knowledge and achievements have
    resulted in significant contingent resource growth and improved Middle
    Montney well results at Glacier. Internal evaluations are underway to
    assess liquid extraction options.

  *Our Middle Montney experience also led to identification of opportunities
    beyond Glacier and as a result, we acquired an additional 43.25 sections
    (27,680 acres) of 100% working interest Montney lands. These lands are
    located southeast of Glacier in a fairway that we believe is prospective
    for Middle Montney natural gas liquids. The lands were acquired from the
    Province of Alberta at a cost of $6.7 million.

  *The acquired lands consist of three contiguous parcels. One parcel,
    containing 20.5 sections (13,120 acres), is located within one kilometer
    (0.6 miles) of our 100% owned southeast Glacier gas gathering pipeline.
    This pipeline is connected to our 100% owned Glacier gas plant. The other
    two parcels are located further southeast and offset an industry Middle
    Montney well which reports free condensate production in excess of 100

  *These land parcels are held under licenses which will not expire until
    September 2017 and can be extended for an additional five years with the
    drilling of two horizontal wells. These lands can also be continued
    indefinitely under production.

  *Our total acreage position in the Montney has increased to 125.65 gross
    (120.35 net) sections.

Glacier Wells  with  Revised  Completion Techniques  Continue  to  Demonstrate 
Sustained Improvement

  *During the first half of 2013, 11 Montney wells completed with revised
    completion techniques were brought on-production. These wells consisted of
    six Upper Montney, three Middle Montney and two Lower Montney wells
    located across the Glacier land block and have produced an average of 200

  *Production from these wells continues to demonstrate stronger production
    rates when compared to wells that were completed using our previous
    completion technique after a similar production period. Additionally, the
    new wells are significantly outperforming the older wells in terms of
    cumulative production. For example, the 100/7-7-76-13w6 Lower Montney well
    which was completed with a high rate slick water frac utilizing an open
    hole packer system has produced 1.5 bcf compared to the older offset wells
    which produced 0.5 bcf after six months of production. This well is
    currently flowing at 8 mmcf/d.

  *We have identified additional opportunities to further optimize our
    completion techniques in each of the Montney formations including the
    liquids rich Middle Montney. We expect these future changes could generate
    additional improvements in overall well results as we continue to evaluate
    multi-frac design technologies.

Glacier Production  Exceeding  Budget,  Operating  Costs  Lower  than  Budget, 
Capital Program on-track

  *Glacier working interest production based on field estimates for the third
    quarter of 2013 is approximately 110 mcfe/d (18,333 boe/d) which exceeds
    our internal budget.

  *Operating costs at Glacier are estimated to average less than $0.30/mcfe
    ($1.80/boe) during the third quarter of 2013. Operating cost optimization
    initiatives are continuing with the recent completion of a water disposal
    well which will reduce trucking and third party water disposal costs
    commencing in the fourth quarter of 2013. Additional third party gas was
    redirected to our Glacier plant in September and expected to continue
    through October 2013 which will provide processing income.

  *Our Phase VI Glacier Capital program which is designed to ramp Advantage
    production to 135 mmcfe/d by Q2 2014 is progressing on-track with three
    drilling rigs. Five of the 22 total wells in the program have been rig
    released to date. We expect completion information from some of the new
    wells to be available by early November 2013.

Commodity Hedging Program

  *Advantage has entered into a number of natural gas hedges in support of
    our two year Glacier development plan. Our natural gas hedges will reduce
    the volatility of future cash flows through to March 2016 and are
    particularly important during this current period of wider Canadian
    natural gas price differentials. Our hedging positions are summarized in
    the following table:

Period                  Average         Net Forecast   Average Price
                   Production Hedged Production Hedged  $Cdn. AECO
Q3 2013 & Q4 2013     38.1 mmcf/d          39%          $3.45/mcf
Q1 2014 to Q4 2014    50.2 mmcf/d          39%          $3.81/mcf
Q1 2015 to Q4 2015    45.0 mmcf/d          27%          $3.91/mcf
Q1 2016               42.7 mmcf/d          23%          $3.90/mcf

  *Additional details on our hedging program are available at our website at

Strategic Alternatives Process Update

  *As previously announced, the Company's financial advisors, FirstEnergy
    Capital Corp. and RBC Capital Markets, commenced a broad global marketing
    effort to solicit interest in a sale of the Corporation or another
    transaction to maximize value for all shareholders. The process is ongoing
    and the Corporation and its financial advisors are actively engaged and
    continue to coordinate with parties wishing to participate in the
    process. Technical presentations are ongoing and interested parties have
    been scheduled.

  *There can be no assurance that a transaction will be undertaken. Advantage
    does not intend to make any announcements regarding the process unless and
    until the Board of Directors has approved a specific transaction or course
    of action or otherwise determines that disclosure is necessary.

The information in this press release contains certain forward-looking
statements, including within the meaning of the United States Private
Securities Litigation Reform Act of 1995. These statements relate to future
events or our future intentions or performance. All statements other than
statements of historical fact may be forward-looking statements.
Forward-looking statements are often, but not always, identified by the use of
words such as "seek", "anticipate", "plan", "continue", "estimate",
"demonstrate", "expect", "may", "will", "project", "predict", "potential",
"targeting", "intend", "could", "might", "should", "believe", "would" and
similar expressions and include statements relating to, but not limited to,
the Corporation's objectives for its recently acquired Montney lands;
anticipated effect of increased Montney acreage on resources, reserves and
production; the Corporation's beliefs regarding effect of optimization of
completion and frac designs on well completion; anticipated effect of
additional opportunities on overall well results; operating cost optimization
initiatives and anticipated timing of reduced trucking and third party water
disposal costs; the Corporation's anticipated drilling and completion plans;
anticipated timing of new completion information from the Phase VI Glacier
Capital Program; the Corporation's development plan to increase production at
Glacier and the anticipated production levels and timing thereof; expected
effect of natural gas hedges on volatility of future cash flows; and status of
the Corporation's strategic alternatives process. In addition, statements
relating to "reserves" or "resources" are deemed to be forward-looking
statements, as they involve the implied assessment, based on certain estimates
and assumptions, that the resources and reserves described can be profitably
produced in the future.

Advantage's actual decisions, activities, results, performance or  achievement 
could  differ  materially  from  those  expressed  in,  or  implied  by,  such 
forward-looking statements and, accordingly, no  assurances can be given  that 
any of the events anticipated by the forward-looking statements will transpire
or occur or, if any of them do, what benefits that Advantage will derive  from 

These  statements   involve   substantial   known  and   unknown   risks   and 
uncertainties, certain of which are beyond Advantage's control, including, but
not limited to: changes in  general economic, market and business  conditions; 
industry  conditions;  actions  by  governmental  or  regulatory   authorities 
including increasing taxes  and changes  in investment  or other  regulations; 
changes in tax laws,  royalty regimes and incentive  programs relating to  the 
oil and  gas industry;  the  effect of  acquisitions; Advantage's  success  at 
acquisition, exploitation  and development  of reserves;  unexpected  drilling 
results,  changes  in  commodity  prices,  currency  exchange  rates,  capital 
expenditures, reserves or  reserves estimates and  debt service  requirements; 
the occurrence of unexpected events involved  in the exploration for, and  the 
operation and development of,  oil and gas properties;  hazards such as  fire, 
explosion, blowouts,  cratering, and  spills, each  of which  could result  in 
substantial damage to  wells, production  facilities, other  property and  the 
environment or  in  personal injury;  changes  or fluctuations  in  production 
levels; delays  in anticipated  timing of  drilling and  completion of  wells; 
individual well productivity;  competition from other  producers; the lack  of 
availability of  qualified personnel  or management;  credit risk;  individual 
well productivity; changes in laws  and regulations including the adoption  of 
new environmental laws and regulations and changes in how they are interpreted
and enforced; our ability to comply  with current and future environmental  or 
other  laws;  stock  market  volatility  and  market  valuations;  liabilities 
inherent in  oil and  natural gas  operations; uncertainties  associated  with 
estimating oil and natural gas reserves; competition for, among other  things, 
capital, acquisitions of  reserves, undeveloped lands  and skilled  personnel; 
incorrect assessments  of the  value of  acquisitions; geological,  technical, 
drilling and processing problems and other difficulties in producing petroleum
reserves; ability  to obtain  required  approvals of  regulatory  authorities; 
failure to complete  an acceptable transaction  pursuant to the  Corporation's 
strategic alternatives process; and ability to access sufficient capital  from 
internal and external sources.

Many of  these  risks  and  uncertainties  and  additional  risk  factors  are 
described in the Corporation's Annual  Information Form which is available  at and  Readers  are also  referred  to  risk 
factors described in other documents Advantage files with Canadian  securities 

With respect to  forward-looking statements contained  in this press  release, 
Advantage has made assumptions regarding:  conditions in general economic  and 
financial markets;  effects of  regulation by  governmental agencies;  current 
commodity prices and  royalty regimes; future  exchange rates; royalty  rates; 
future  operating  costs;  availability  of  skilled  labor;  availability  of 
drilling and related equipment; timing and amount of capital expenditures; the
impact of increasing competition; the price of crude oil and natural gas; that
the Corporation will  have sufficient  cash flow,  debt or  equity sources  or 
other  financial  resources  required  to  fund  its  capital  and   operating 
expenditures and requirements  as needed; that  the Corporation's conduct  and 
results of  operations will  be  consistent with  its expectations;  that  the 
Corporation will have the ability to  develop the Corporation's crude oil  and 
natural gas properties in the manner currently contemplated; current or, where
applicable, proposed assumed  industry conditions, laws  and regulations  will 
continue in effect or as anticipated;  and the estimates of the  Corporation's 
production and reserves volumes and the assumptions related thereto (including
commodity prices and development costs) are accurate in all material respects.

These forward-looking statements are made as of the date of this press release
and Advantage  disclaims  any intent  or  obligation to  update  publicly  any 
forward-looking statements, whether  as a  result of  new information,  future 
events  or  results  or  otherwise,  other  than  as  required  by  applicable 
securities laws.

References in this  press release  to initial production  test rates,  initial 
"productivity", initial  "flow" rates,  "flush" production  rates and  "behind 
pipe production"  are  useful  in confirming  the  presence  of  hydrocarbons, 
however such rates are not determinative of the rates at which such wells will
commence production and decline thereafter and are not indicative of long term
performance or of ultimate recovery. While encouraging, readers are  cautioned 
not to place reliance  on such rates in  calculating the aggregate  production 
for Advantage.

Barrels of  oil  equivalent (boe)  and  thousand  cubic feet  of  natural  gas 
equivalent (mcfe) may be  misleading, particularly if  used in isolation.  Boe 
and mcfe conversion ratios have been calculated using a conversion rate of six
thousand cubic feet of natural gas equivalent to one barrel of oil. A boe  and 
mcfe conversion  ratio of  6 mcf:1  bbls  is based  on an  energy  equivalency 
conversion method  primarily  applicable  at  the  burner  tip  and  does  not 
represent a value  equivalency at  the wellhead.  Given that  the value  ratio 
based on  the  current price  of  crude oil  as  compared to  natural  gas  is 
significantly different  from  the  energy equivalency  of  6:1,  utilizing  a 
conversion on a 6:1 basis may be misleading as an indication of value.

The following abbreviations used in this  press release have the meanings  set 
forth below:

mcf    thousand cubic feet
mcfe    thousand cubic feet of natural gas equivalent, using the ratio of
            6 mcf of natural gas to 1 bbl of oil
mmcfe   million cubic feet of natural gas equivalent, using the ratio of 6
            mcf of natural gas to 1 bbl of oil
mmcf    million cubic feet
mmcf/d  million cubic feet per day
bbl    barrel
NGLs    natural gas liquids
Boe/d   barrels of oil equivalent per day

SOURCE Advantage Oil & Gas Ltd.


Investor Relations
Toll free: 1-866-393-0393

Advantage Oil & Gas Ltd.
700, 400 - 3^rd Avenue SW
Calgary, Alberta
T2P 4H2
Phone: (403) 718-8000
Fax: (403) 718-8300
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