Advantage Announces 2013 Year End Financial & Operating Results and Glacier Operational Update

 Advantage Announces 2013 Year End Financial & Operating Results and Glacier
                              Operational Update

PR Newswire

CALGARY, March 27, 2014


CALGARY, March 27, 2014 /PRNewswire/ -  Advantage Oil & Gas Ltd.  ("Advantage" 
or the "Corporation") is  pleased to report  the unconsolidated financial  and 
operating results (excludes Longview Oil Corp.) for the three months and  year 
ended December 31,  2013. Advantage's  remaining non-core assets  which had  a 
production rate of approximately 5,600 boe/d were divested on April 30,  2013. 
As a result, financial  and operating results during  the second half of  2013 
are more representative  of our industry  leading low cost  pure play  Montney 
development at Glacier.

Advantage's 2013 results, achievement of our 135 mmcfe/d Phase VI production
target ahead of schedule, and acceleration of our Phase VII drilling program
provides a solid foundation for multi-year growth. Advantage's growth strategy
is targeted to deliver 100% production per share growth and 190% cash flow per
share growth through its three year development plan at its world class
Montney resource play at Glacier, Alberta.

                              Three months ended         Year ended
Advantage Unconsolidated         December 31              December 31
                             2013      2012        2013       2012
Financial ($000, except                                        
as otherwise indicated)                                               
Sales including realized                                       
hedging                     $  34,304    $  36,556    $  142,943   $ 126,749
     per boe              $    20.57  $   19.15   $    20.08  $    15.97
Funds from operations      $   23,822   $ 16,890   $   85,310  $   47,046
     per share ^ (2)      $     0.14   $    0.10   $     0.51  $     0.28
     per boe              $    14.30   $    8.85   $    11.98  $     5.94
Dividends received from                                        
Longview                    $    2,961   $   3,172   $   12,479   $  14,350
     per share ^ (2)      $     0.02   $    0.02  $     0.07  $     0.09
Total capital                                                  
expenditures                $   69,512    $ 35,849    $ 155,370   $  130,570
Working capital deficit ^                                      
(3)                         $   49,034    $  35,467    $   49,034   $   35,467
Bank indebtedness          $  153,697   $ 161,630   $  153,697  $  161,630
Convertible debentures                                         
(face value)                $   86,250    $  86,250   $   86,250   $   86,250
Shares outstanding at end                                      
of period (000)               168,383     168,383      168,383     168,383
Basic weighted average                                         
shares (000)                  168,383     168,383      168,383     167,509
Daily Production                                                  
     Natural gas (mcf/d)    108,260    116,929     113,947    122,069
     Crude oil and NGLs                                       
      (bbls/d)                     79       1,261          507       1,337
     Total mcfe/d ^ (4)     108,734    124,495     116,989    130,091
     Total boe/d ^ (4)       18,122     20,749      19,498     21,682
Average prices (including                                      
     Natural gas ($/mcf)  $     3.39   $    2.70   $    3.10  $     2.09
     Crude oil and NGLs                                       
      ($/bbl)               $    77.01    $   65.21   $    76.01   $    68.35

(1) Non-consolidated financial and operating highlights for Advantage
     excluding Longview.
(2) Based on weighted average shares outstanding.
(3) Working capital deficit includes trade and other receivables, prepaid
     expenses and deposits, and trade and other accrued liabilities.
(4) A boe and mcfe conversion ratio has been calculated using a conversion
     rate of six thousand cubic feet of natural gas equivalent to one barrel
     of oil.

Increased Funds from Operations driven by Glacier Production, Low Cost
Structure and Improved Gas Prices

  *Funds from operations for the fourth quarter of 2013, excluding dividends
    from Longview Oil Corp. ("Longview"), increased 41% to $23.8 million or
    $0.14 per share as compared to the fourth quarter of 2012. Funds from
    operations during 2013 increased 81% to $85.3 million or $0.51 per share
    as compared to 2012. The increase in funds from operations was supported
    by a continued reduction in Advantage's cost structure due to development
    at Glacier and an increase in realized natural gas prices for the quarter
    and year.

  *The tax free dividend income received from Longview amounted to $3.0
    million ($0.02/share) during the fourth quarter of 2013 and $12.5 million
    ($0.07/share) for 2013 due to Advantage's 45.1% ownership in the common
    shares of Longview in 2013.

  *Glacier production increased to 135 mmcfe/d (22,500 boe/d) in early March,
    approximately one month ahead of our Phase VI budget schedule. Production
    averaged 117.0 mmcfe/d (19,498 boe/d) for 2013 and averaged 108.7 mmcfe/d
    (18,122 boe/d) during the fourth quarter of 2013. The 2013 average
    production rate included the non-core assets from January 1 to April 30,
    2013. Production during the fourth quarter of 2013 was impacted by minor
    facility outages at Glacier to accommodate field gathering system work in
    preparation for the eventual tie-in of new Phase VI Montney wells.

  *The royalty rate in 2013 was 5.4% as compared to 5.7% during 2012. The
    reduction in royalty rate reflects the disposition of the non-core assets
    and increased production from Glacier where royalty rates of approximately
    5% are realized on our Montney wells.

  *Operating costs decreased 68% to $0.28/mcfe ($1.66/boe) in the fourth
    quarter of 2013 compared to the same period in 2012. The decrease in
    operating costs was due to the divestment of the higher cost non-core
    assets and the continued improvement in operating efficiencies achieved
    through our Glacier Montney development. Advantage's operating costs for
    2013 which included the non-core assets to April 30, 2013 decreased 47% to
    $0.48/mcfe ($2.88/boe) compared to 2012.

  *Advantage's operating netback during the fourth quarter of 2013 was
    $3.00/mcfe which is 93% of our realized natural gas price of $3.21/mcfe.
    This strong cash margin is due to the industry leading low cost structure
    at Glacier and is a key success factor in our go forward three year
    development plan which is targeted to deliver 190% cash flow per share
    growth at an average natural gas price of $3.75/GJ.

  *Total capital expenditures in the fourth quarter of 2013 were $69.5
    million and $155.4 million for the 2013 year which resulted from ongoing
    activities in our Glacier Phase VI development program.

  *On a pro forma basis after giving consideration to net proceeds of $90
    million received from the sale of the Longview common shares, Advantage's
    bank debt was $63.7 million and total debt was $199.0 million as of
    December 31, 2013.

  *Advantage's estimated tax pools as of December 31, 2013 are approximately
    $1.1 billion of which $0.8 billion are categorized as immediately
    deductible at a rate of 100%.

Glacier Operations On-Track with Three Year Development Plan

Advantage's Glacier three year  development plan is  targeted to deliver  100% 
production per share growth and 190% cash flow per share growth. Production is
expected to grow to 183 mmcfe/d in  2015, 205 mmcfe/d in 2016 and 245  mmcfe/d 
in 2017. The  three year development  plan is supported  by continuing  strong 
operational results and a solid financial strategy which includes an  improved 
balance sheet and hedging program. The three year development plan is designed
to maintain an average total debt to forward cash flow ratio of 1.5x based  on 
an average natural  gas price of  AECO Cdn $3.75/GJ.  Advantage has hedged  an 
average of 47% of  its forecast production  through to Q1  2016 at an  average 
price of $3.86/mcf.

Strong Initial Production from New Phase VI Glacier Wells

  *Only nine of the 22 new Phase VI Montney wells were required to ramp
    production to our 135 mmcfe/d Phase VI target which was achieved
    approximately one month ahead of schedule. The remaining Phase VI wells
    will be brought on stream as required to maintain the 135 mmcfe/d
    production rate through the balance of 2014.

  *Advantage's record Upper Montney well at 05-20-76-12W6 which demonstrated
    a final production test rate of 21 mmcf/d was initially brought on
    production at rates of up to 21 mmcf/d and then restricted to
    approximately 10 mmcf/d for the last 80 days. The production rate has
    been restricted to manage the flow back of frac sand through well site
    equipment which is typical in most higher rate Montney wells. The
    05-20-76-12W6 well is still producing at a strong flowing wellhead
    pressure of 7,620 kpa compared to our average gas gathering system
    pressure of 3,000 kpa. During the first 80 days of production, the
    05-20-76-12W6 well has produced 0.7 bcf.

  *Two Lower Montney wells located at 15-31-75-13W6 and 10-31-75-13W6 were
    initially brought on production at rates of up to 15 mmcf/d and 11 mmcf/d
    and then restricted to a rate of 8.0 mmcf/d for each well. The wells have
    produced for an average of 125 days and each well has produced
    approximately 1 bcf during this period. These wells, which were completed
    with slickwater and modified completion techniques, are demonstrating
    significantly improved performance compared to older Lower Montney wells.

  *Since the winter of 2012, a total of 15 Upper and Lower Montney wells that
    were completed with slickwater and brought on production are demonstrating
    performance which is trending at or above our Phase VII budget type curve
    (based on an average initial 30 day production rate of 6.9 mmcf/d).

  *Advantage's record Middle Montney well located at 12-02-76-12W6 which
    demonstrated a final production test rate of 13 mmcf/d, including 20
    bbl/mmcf of free condensate, was initially brought on production at
    restricted rates of up to 9.5 mmcf/d. This well has been further rate
    restricted to approximately 6.0 mmcf/d for the last 20 days to manage the
    flow back of frac sand and to control the amount of free condensate that
    our facilities can handle at this time since our Glacier gas plant does
    not currently have liquid extraction or condensate stabilization processes
    installed. The 12-02-76-12W6 well is still producing at a strong wellhead
    pressure of 10,100 kPa compared to our average gas gathering system
    pressure of 3,000 kpa.

Glacier Phase VII Glacier Development Program Underway

  *The Glacier Phase VII drilling program was accelerated during the first
    quarter of 2014 due to lower than anticipated capital expenditures in our
    Phase VI program. The lower capital spending resulted from improved
    drilling and well completion efficiencies which reduced well costs below
    our original budget estimates.

  *To date, four new Phase VII wells have been rig released. One drilling rig
    is currently situated on a six well pad that will continue drilling
    through spring breakup. Two additional rigs will be deployed once weather
    conditions permit access to new drilling sites. A total of 33 wells are
    included in our Phase VII drilling program.

  *Engineering design is nearing completion for the expansion of our 100%
    owned Glacier gas plant. The expansion work is targeted for completion
    during the second quarter of 2015 and includes the installation of a
    shallow cut liquids extraction process and increased natural gas
    processing capacity to accommodate our Phase VII production target of 183
    mmcfe/d. The engineering design will allow our Glacier gas plant to
    ultimately provide 245 mmcfe/d of processing capacity to accommodate our
    three year development plan through to 2017.

  *Design plans are also underway for increasing the transportation capacity
    of the sales gas lateral which connects the Glacier gas plant to
    TransCanada Pipeline's main sales pipeline to accommodate our three year
    development plan and beyond.

Advantage's strong operating and financial achievements during 2013 combined
with simplification of the Corporate structure have positioned the company as
an industry leading low cost Montney producer with strong growth. We look
forward to reporting results on our progress as we execute Advantage's Glacier
three year development plan.

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, among other  things, 
Advantage's anticipated production per  share growth and  cash flow per  share 
growth, including  the  targeted amount  and  timing of  achievement  thereof; 
expectations as to future natural gas prices; estimated tax pools;  expected 
increases in  production in  2015, 2016  and 2017  resulting from  Advantage's 
Glacier three year development plan; expectations of future debt to cash  flow 
ratios; expectations as to the number of wells in Advantage's Phase VI Program
required to provide sufficient production inventory to maintain production  at 
anticipated levels through to the end of 2014; expectations regarding  tie-ins 
of Phase VI wells; expected  number of future drilling locations;  anticipated 
drilling plans, including drilling rigs to be deployed and number of wells  to 
be included in Advantage's Phase VIII drilling program; anticipated timing  of 
completion of expansion of Glacier gas plant and effect of engineering  design 
on processing capacity, including the amount of such processing capacity;  and 
the status of design  plans to increase transportation  capacity of the  sales 
gas lateral which  connects the  Glacier gas plant  to TransCanada  Pipeline's 
main  sales  pipeline.  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 them.

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, including 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; 
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; 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 authorities.

With respect to  forward-looking statements contained  in this press  release, 
Advantage has made assumptions  regarding, but not  limited to: 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.

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 bbl  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.

References in this press release to final production test rates, initial  test 
production rates,  production  type  curves,  restricted  rates  and  30  day 
production  rates  and  other  short-term  production  rates  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. 
A pressure transient analysis or well-test interpretation has not been carried
out in respect of  all wells. Accordingly, the  Corporation cautions that  the 
test results should be considered to be preliminary.

The Corporation  discloses several  financial measures  that do  not have  any 
standardized  meaning  prescribed  under  International  Financial   Reporting 
Standards ("IFRS"). These  financial measures include  operating netbacks  and 
debt to cash flow ratio. Management believes that these financial measures are
useful supplemental information to  analyze operating performance and  provide 
an indication of the results generated by the Corporation's principal business
activities. Investors should be  cautioned that these  measures should not  be 
construed as  an alternative  to net  income or  other measures  of  financial 
performance as  determined  in accordance  with  IFRS. Advantage's  method  of 
calculating these measures may differ  from other companies, and  accordingly, 
they may not be comparable to similar measures used by other companies. Please
see the Corporation's most recent Management's Discussion and Analysis,  which 
is  available  at  and  for   additional 
information about  these financial  measures,  including a  reconciliation  of 
funds from operations to cash provided by operating activities.

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

bbls       barrels
mbbls      thousand barrels
mmbbls     million barrels
boe        barrels of oil equivalent of natural gas, on the basis of one
              barrel of oil or NGLs for six thousand cubic feet of natural gas
mboe       thousand barrels of oil equivalent
mmboe      million barrels of oil equivalent
mcf        thousand cubic feet
mmcf       million cubic feet
bcf        Billion cubic feet
tcf        trillion cubic feet
mcfe       thousand cubic feet equivalent on the basis of six thousand
              cubic feet of natural gas for one barrel of oil or NGLs
mmcfe/d    million cubic feet equivalent per day
tcfe       trillion cubic feet equivalent

SOURCE Advantage Oil & Gas Ltd.


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

Advantage Oil & Gas Ltd.
300, 440 - 2^nd Avenue SW
Calgary, Alberta
T2P 5E9
Phone: (403) 718-8000
Fax: (403) 718-8332
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