Exall Energy Corporation announces results for the three months and year ended December 31, 2013

Exall Energy Corporation announces results for the three months and year ended 
December 31, 2013 
CALGARY, March 19, 2014 /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, 
2013, 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 fiscal 2013 production averaged 1,138 boe per day, representing a 5 
percent increase from the fiscal 2012 production average of 1,082 boe per day. 
Exall's fourth quarter 2013 well optimization operations resulted in downtime 
which contributed to the 12 percent decrease in the fourth quarter 2013 
production average to 978 boe per day from the third quarter 2013 production 
average of 1,116 boe per day. Post optimization was restored to 1,056 boe per 
day in December with ongoing well optimization efforts scheduled for 2014. 
Highlights of Fiscal 2013 include: 


        --  A 5 percent increase in the fiscal 2013 production average to
            1,138 boe per day from the fiscal 2012 production average of
            1,082 boe per day.
        --  A December 2013 production average of 1,056 boe per day.
        --  A December 31, 2013 proved plus probable net present value per
            share of $0.48 (Before Tax, discounted at 10%) based on 66.6
            million fully diluted shares
        --  A December 31, 2013 company working interest reserves are
            2,146.6 Mboe total proved, a 16% decrease from December 31,
            2012, and 3,574.0 Mboe proved plus probable, a 23% decrease
            from December 31, 2012, a direct result of Exall's curtailed
            drilling activities during fiscal 2013.
        --  The December 31, 2013 net present value of the proved plus
            probable reserves decreased 19% from December 31, 2012 to $91.3
            million, discounted at 10 percent, forecast prices, before tax.
        --  Reserve life index of 5.2 years total proved and 8.6 years
            proved plus probable based on the 2013 annual average
            production rate and year-end reserves, this represents an
            decrease of 20% in the total proved reserve life index and a
            26% decrease in the proved plus probable reserve life index
            from December 31, 2012
        --  During fiscal 2013 the Company spud 3.0 gross oil wells (2.39
            net) in the Marten Mountain / Mitsue area.
        --  Completed upgrades at the Marten Mountain pipeline and battery
            facility alleviating certain constraints and eliminating
            certain operational expenses, as a result operating expenses
            were reduced by 8 percent or $1.06 per boe to $11.81 per boe in
            2013 from $12.88 in 2012.
        --  The average price received per boe in the calendar year ended
            December 31, 2013 increased 10 percent over the same period in
            2012 to $87.27.
    HIGHLIGHTS            3 months ended December 31 Year ended December 31
    In thousands of                            %                       %
    dollars                  2013  2012     change      2013   2012  change
    Financial ($)                                                          
    Gross revenue            7,307 8,027         (9)   36,262 30,699     15
    Funds from operations    1,521 3,918        (61)   12,896 15,625   (17)
            Basic per
            share             0.02  0.06        (67)     0.19   0.25   (24)
            Diluted per
            share             0.01  0.04        (75)     0.12   0.15   (20)
    Net income (loss)     (17,301)   751     (2,404) (16,428)  3,633  (552)
            Basic per
            share           (0.26)  0.01     (2,700)   (0.25)   0.06  (517)
            Diluted per
            share           (0.26)  0.01     (2,700)   (0.25)   0.05  (600)
    Capital expenditures,
    net                      4,055 8,180        (50)   12,154 44,697   (73)
                                                                           
    Operations                                                             
    Daily production                                                       
            Crude oil
            (bbl)              908 1,042        (13)    1,059    988      7
            Natural gas
            liquids (bbl)       17    14          21       18     18      -
            Natural gas
            (mmcf)             319   297           7      368    457   (19)
    Total daily
    production (boe @
    6:1)                       978 1,106        (12)    1,138  1,082      5
    Netback per boe (6:1)
    ($)                      38.07 51.22        (26)    47.21  52.65   (10)

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 2013 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), with production growth that currently translates to 31.4 percent 
compounded annually from 2007. Exall will continue to focus on organic growth 
through exploitation and expansion of its existing oil producing properties.

http://files.newswire.ca/357/Outlook.pdf

While Exall continues to seek debt restructure alternatives, and will maintain 
this focus until completed, the Capital Expenditure Program for 2014 is slated 
to continue to explore and develop the North Waterflood Gilwood channel 
extension of the Central Waterflood channel. Successful drilling on the 
Central Waterflood / North Waterflood channel extension in 2014 is expected to 
add 500 boepd net (based on an average working interest of 71.5%) during the 
latter half of 2014. It is a tribute to the quality of the Gilwood reservoir 
that Exall has been able to maintain the level of production we have today 
utilizing a modest amount of maintenance capital.

Capital expenditures through Q1 2014 will continue to focus on the 
"low-hanging fruit" (LHF) opportunities. Short term focus of capital will be 
firstly waterflood implementation and secondly the lowest-risk, lowest-cost 
infill wells in the North Waterflood area. Two water injector conversions are 
to be implemented through the first and second quarters of 2014. Exall plans 
to drill up to 4 gross development wells in 2014 with a further 4 gross 
development wells and 1 gross exploration well in 2015, subject to cash flow 
from operations. These wells are all high-impact, low risk locations 
identified through previous drilling and could have a significant impact on 
the Company's production if successful. Continued drilling success on the 
North Waterflood channel extension will drive production growth on an annual 
basis through 2014 and 2015.

While reservoir conformance issues presented challenges in the South 
Waterflood during 2012 and 2013, optimization efforts aimed at improving well 
performance and oil recovery appear to have had a positive effect. With the 
stabilization of the South Waterflood production, Exall turned its focus to 
debt restructuring and spent a significant amount of time in discussions with 
various parties regarding debt restructuring. As a result, Exall's Capital 
Expenditure Program for 2013, was adjusted to concentrate on well optimization 
efforts with minimal capital being put towards higher risk drilling activities.

The Company's Marten Mountain oil production attracts 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 
$1.63 less than the posted Edmonton Par price at the wellhead. Based on the 
$1.63 differential Exall expects its January 2014 price received was $88.21 
per barrel, and its February 2014 price received was $104.60 per barrel. This 
pricing estimate is approximately $13.50 higher than the posted Western 
Canadian Select price being received by other entities during these periods.

Marten Mountain production is estimated to receive an average price of 
approximately $85.65, Exall is currently generating an operating netback of 
approximately $43.50 and a corporate netback of approximately $27.70 after 
general and administrative expenses and interest expenses. At an average of 
1,200 boepd (based on an average working interest of 71.5%) over the entire 
year, the Company would generate a cash flow from operations of approximately 
$12.0 million for 2014.

Exall's current debt level is approximately $59.0 million which includes $26.0 
million of revolving demand credit held under a facility with an alternate 
Canadian lender that bears interest at the lender's base prime rate plus 1.25 
percent, $10.0 million of revolving demand credit held under a facility with 
an alternate Canadian lender that bears interest at the lender's base prime 
rate plus 3.00 percent, which are reviewed periodically by the lender. To 
date, these facilities have not been renewed for 2014. 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%.

Overview

Exall's average daily production for the fourth quarter of 2013 decreased 12 
percent to 978 barrels of oil per day ("boe/d") from 1,106 boe/d in the fourth 
quarter of 2012.

http://files.newswire.ca/357/Overview.pdf

During the fourth quarter of 2013 Exall experienced significant downtime with 
two wells due to cleanout operations which were performed on the wells. 
Additionally, Exall had a casing gas compressor engine fail at the north 
waterflood which significantly reduced volumes for a period of time. The 
cleanout operations were completed by year end, and the casing gas compressor 
engine was replaced successfully during the quarter.

Results of Operations

Oil and gas exploration and development expenditures were $4,055 for the 
fourth quarter of 2013 and $12,154 for the fiscal year ended December 31, 
2013.  During the fourth quarter of 2013 the Company participated in the 
drilling of 1.0 gross oil well (0.80 net) in the Marten Mountain / Mitsue 
area.  During fiscal 2013 the Company spud 3.0 gross oil wells (2.39 net) in 
the Marten Mountain / Mitsue area.

The Company has acquired 480 gross (353 net) acres of undeveloped land in the 
Mitsue area, during the fiscal year ended December 31, 2013. As at December 
31, 2013, the Company had 188,960 acres (140,728 acres net) of undeveloped 
land in Alberta, Canada.

Production for 2013 of 1,138 boe per day represents a 5% increase over 2012. 
Funds from operations for the year of $12.9 million or $0.19 per share were 
primarily the result of the relatively flat production, increased commodity 
prices received during the year (Exall's prices received were up 10% during 
2013 averaging $87.27 per boe compared to $79.52 per boe in 2012), 
significantly increased royalty prices paid during the year (Exall's royalties 
paid were up 102% during 2013 averaging $28.24 per boe compared to $13.99 per 
boe in 2012), and decreased operating costs paid during the year (Exall's 
operating costs were down 8% during 2013 averaging $11.82 per boe compared to 
$12.88 per boe in 2012).
                                                   
                               Three months ended         Year ended
                                      December 31        December 31
                                                %                  %
    Netback per boe (6:1) $     2013  2012 Change  2013  2012 Change
                                                                    
    Production revenue         81.21 78.43      4 87.27 79.52     10
    Royalties                  29.30 15.26     92 28.24 13.99    102
    Operating expenses         13.84 11.95     16 11.82 12.88    (8)
    Operating netbacks ($/boe) 38.07 51.22   (26) 47.21 52.65   (10)

Reserves Evaluation

The MD&A presents plans and expectations of the Company shaped by Management's 
view of how future events may unfold.  See Risk Factors - Reserve Estimates 
located at the end of the MD&A.

Exall retained AJM / Deloitte Petroleum Consultants ("Deloitte") to conduct an 
independent evaluation of Exall's oil and gas reserves effective December 31, 
2013, which was provided to Exall in an Evaluation Report dated February 15, 
2014 (herein referred to as the "Deloitte Evaluation"). The oil and gas 
reserves and income projections were estimated by Deloitte in accordance with 
the Canadian Oil and Gas Handbook ("COGEH") and National Instrument 51-101 
("NI 51-101").

Summary of Reserve Value - Forecast Pricing

The following tables, extracted from the Deloitte Evaluation, summarize the 
Corporation's total reserves and net present values of future net reserves 
based on forecast pricing and costs as at December 31, 2013.  It should not be 
assumed that the estimated future net cash flow shown below is representative 
of the fair market value of the Company's properties. There is no assurance 
that such price and cost assumptions will be attained and variances, both 
positive and negative, could be material.
                                                              
                                    Light &   Natural            
    Company Gross Reserves(1)      medium oil   gas    NGL    Total
    as at December 31, 2013          (Mbbl)   (MMcf)  (Mbbl) (Mboe)
                                                                    
    Proved developed producing        1,198.8   827.0   40.0 1,376.7
    Proved developed non-producing      179.7    50.8    2.5   190.7
    Proved undeveloped                  512.4   310.8   15.0   579.2
    Total proved                      1,890.9 1,188.6   57.5 2,146.6
    Probable                          1,232.3   907.3   43.9 1,427.4
    Total proved plus probable        3,123.2 2,095.9  101.4 3,574.0

(1) Columns and rows may not add due to rounding
                                    
                                                  Before Income Tax
    Forecast Net Revenue(1)                    $000s, discounted at
    as at December 31, 2013             0%        5%      10%      15%
                                                                        
    Proved developed producing      54,829.7  48,211.4 43,159.7 39,200.4
    Proved developed non-producing   6,972.3   5,982.6  5,221.9  4,621.9
    Proved undeveloped              18,025.6  15,338.7 13,199.9 11,465.6
    Total proved                    79,827.5  69,532.6 61,581.5 55,287.9
    Probable                        50,030.8  37,794.0 29,719.4 24,034.9
    Total proved plus probable     129,858.4 107,326.6 91,300.9 79,322.8

(1) Columns and rows may not add due to rounding
                                    
                                                  After Income Tax
    Forecast Net Revenue(1)                    $000s, discounted at
    as at December 31, 2013             0%        5%      10%      15%
                                                                        
    Proved developed producing      54,829.7  48,211.4 43,159.7 39,200.4
    Proved developed non-producing   6,972.3   5,982.6  5,221.9  4,621.9
    Proved undeveloped              18,025.6  15,338.7 13,199.9 11,465.6
    Total proved                    79,827.5  69,532.6 61,581.5 55,287.9
    Probable                        41,139.8  31,062.3 24,442.3 19,786.4
    Total proved plus probable     120,967.4 100,594.9 86,023.8 75,074.3

(1) Columns and rows may not add due to rounding

Summary of Forecast Pricing

Future prices used in the forecast of net revenue are based on those estimated 
by Deloitte as at December 31, 2013. The following table sets forth the 
relevant portions of Deloitte's forecast of commodity prices and costs used in 
the Deloitte Evaluation:
                                                  Natural Gas Liquids
            WTI     Edmonton   Natural                                    Currency    Price     Cost
    Year Crude Oil City Gate     Gas        Edm.                          Exchange  Inflation Inflation
         ($US/BBL) ($CDN/BBL)  at AECO    Propane      Edm.     Edm. C5+    Rate      Rate      Rate
                              ($CDN/MCF) ($CDN/BBL)   Butane   ($CDN/BBL) ($US/CDN)    (%)       (%)
                                                    ($CDN/BBL)
    2014    $95.00     $95.75      $3.70     $33.50     $76.60    $105.35      0.94       0.0       0.0
    2015    $91.80     $92.30      $3.95     $32.30     $73.85    $101.55      0.94       2.0       2.0
    2016    $91.55     $95.20      $4.10     $52.35     $76.15    $104.70      0.94       2.0       2.0
    2017    $91.25     $94.80      $4.30     $52.15     $75.85    $104.30      0.94       2.0       2.0
    2018    $92.00     $95.60      $4.55     $52.60     $76.50    $105.15      0.94       2.0       2.0
    2019    $93.85     $97.50      $4.85     $53.65     $78.00    $107.25      0.94       2.0       2.0
    2020    $95.70     $99.45      $5.25     $54.70     $79.55    $109.40      0.94       2.0       2.0
    2021    $97.65    $101.45      $5.70     $55.80     $81.15    $111.60      0.94       2.0       2.0
    2022    $99.60    $103.45      $6.10     $56.90     $82.75    $113.80      0.94       2.0       2.0
    2023   $101.60    $105.55      $6.45     $58.05     $84.45    $116.10      0.94       2.0       2.0
    2024   $103.60    $107.65      $6.95     $59.20     $86.10    $118.40      0.94       2.0       2.0
    2025   $105.70    $109.80      $7.10     $60.40     $87.85    $120.80      0.94       2.0       2.0
    2026   $107.80    $112.00      $7.25     $61.60     $89.60    $123.20      0.94       2.0       2.0
    2027   $109.95    $114.25      $7.35     $62.85     $91.40    $125.70      0.94       2.0       2.0
    2028   $112.15    $116.50      $7.50     $64.10     $93.20    $128.15      0.94       2.0       2.0
    2029   $114.40    $118.85      $7.65     $65.35     $95.10    $130.75      0.94       2.0       2.0
    2030   $116.70    $121.20      $7.80     $66.65     $96.95    $133.30      0.94       2.0       2.0
    2031   $119.00    $123.65      $8.00     $68.00     $98.90    $136.00      0.94       2.0       2.0
    2032   $121.40    $126.10      $8.15     $69.35    $100.90    $138.70      0.94       2.0       2.0
    2033   $123.85    $128.65      $8.30     $70.75    $102.90    $141.50      0.94       2.0       2.0
    2034     2.0 %      2.0 %      2.0 %      2.0 %      2.0 %       2.0%      0.94       2.0       2.0
    +    Escalated  Escalated  Escalated  Escalated  Escalated  Escalated
       Reserve Reconciliation                                               
                                         Light &   Natural            
    Reserve Reconciliation(1)           medium oil   gas    NGL    Total
    (Company Working Interest)            (Mstb)   (MMcf)  (Mstb) (Mboe)
                                                                         
    Proved                                                               
         December 31, 2012                 2,465.4   492.1   21.9 2,569.4
         Extensions & improved recovery      152.1    58.2    2.8   164.6
         Technical revisions               (350.5)   780.8   39.7 (180.7)
         Economic Factors                      6.5     1.7    0.1     6.8
         Acquisitions                          0.0     0.0    0.0     0.0
         Dispositions                          0.0     0.0    0.0     0.0
         Production                        (382.5) (144.2)  (7.0) (413.5)
         December 31, 2013                 1,890.9 1,188.6   57.5 2,146.6
                                                                         
    Probable                                                             
         December 31, 2012                 1,999.1   286.7   12.8 2,059.7
         Extensions & improved recovery       66.2    25.3    1.2    71.7
         Technical revisions               (831.4)   596.3   29.9 (702.1)
         Economic Factors                    (1.7)   (1.1)  (0.1)   (1.9)
         Acquisitions                          0.0     0.0    0.0     0.0
         Dispositions                          0.0     0.0    0.0     0.0
         Production                            0.0     0.0    0.0     0.0
         December 31, 2013                 1,232.3   907.3   43.9 1,427.4
                                                                         
    Proved plus Probable                                                 
         December 31, 2012                 4,464.5   778.8   34.7 4,629.1
         Extensions & improved recovery      218.3    83.5    4.0   236.2
         Technical revisions             (1,181.9) 1,377.1   69.6 (882.7)
         Economic Factors                      4.8     0.6    0.0     4.9
         Acquisitions                          0.0     0.0    0.0     0.0
         Dispositions                          0.0     0.0    0.0     0.0
         Production                        (382.5) (144.2)  (7.0) (413.5)
         December 31, 2013                 3,123.2 2,095.9  101.3 3,574.0

(1) Columns and rows may not add due to rounding

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 fluctuating 
commodity prices, capital spending and costs of production, 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 the Company 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.



SOURCE  Exall Energy Corporation 
please contact: 
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. Bettina 
Filippone:bfilippone@renmarkfinancial.com Preeti 
Athwal:nmarks@renmarkfinancial.com Tel.: (416) 644-2020 or (514) 939-3989 
www.renmarkfinancial.com 
PDF available at:  
http://stream1.newswire.ca/media/2014/03/19/20140319_C6013_DOC_EN_38137.pdf 
PDF available at:  
http://stream1.newswire.ca/media/2014/03/19/20140319_C6013_DOC_EN_38138.pdf 
To view this news release in HTML formatting, please use the following URL: 
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CO: Exall Energy Corporation
ST: Alberta
NI: OIL ERN  
-0- Mar/19/2014 14:48 GMT
 
 
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