Caracal Announces 2013 Full Year Results

A year of world-class success in Chad 
CALGARY, March 31, 2014 /CNW/ - Caracal Energy Inc. ("Caracal" or the 
"Company") (LSE:CRCL) is pleased to announce its 2013 year end results, its 
first full year results as a listed company. A summary of the results follows, 
which should be read in conjunction with the full audited financial 
statements, related Management's Discussion & Analysis ("MD&A") and annual 
information form ("AIF") which are available at www.caracalenergy.com and on 
the Caracal's SEDAR profile at www.sedar.com. 
Operational Highlights: 


        --  Commenced production in September and exited the year with
            gross production of 10,000 barrels of oil per day ("bopd");
        --  Commenced exploration drilling with first two successful wells:
      o Mangara-5 a discovery in the lower Cretaceous E sands tested at up
        to 1,917 bopd1 and
      o Krim, a discovery in Cretaceous C, D and E sands tested at up to
        1,470 bopd, 702 bopd and 2,580 bopd maximum oil rate respectively2
        --  Closed the Farm-In Agreement with GlencoreXstrata plc
            ("Glencore" or "Joint Venture Partner") on June 17, 2013
            whereby Glencore paid US$300 million for a 25% working interest
            in the Badila and Mangara EXAs;
        --  Commenced trading  on the premium list of the London Stock
            Exchange on July 9, 2013;
        --  Closed a US$203 million firm placing and open offer in December
            2013;

Continued Success In 2014
        --  Oil production grew to 14,200 gross barrels of oil per day
            ("bopd"), as at March 5, 2014, from 12,000 bopd in January,
            2014;
      o targeting gross average production in 2014 of 22,000 to 26,000 bopd
        --  Revenue generation commenced on March 23, with Caracal's first
            lifting of approximately 560,000 barrels of oil, net to the
            Company. Pricing for the crude was in line with the Company's
            competent person's report assumptions of Brent minus a
            differential of five per cent;
        --  Badila-7 drilled and tested in March, and flowed naturally at a
            rate of 4,500 barrels of oil per day3. The well is expected to
            be tied-in during April;
        --  Badila-9 spudded on March 20, 2014;
        --  Mangara-4 has been successfully side-tracked and cased as a
            Cretaceous E sands producer;
        --  Mangara-6 has been completed and testing of the Cretaceous E
            sands is underway. The comprehensive completion program will
            also include tests of the Cretaceous D and C sands;
        --  The first of the four new drilling rigs contracted in 2014 has
            arrived at the port in Cameroon, on schedule, and should be on
            site in Q2;
        --  The Company remains on track to mobilize six drilling and three
            completion rigs by the end of 2014 to support the active
            exploration, appraisal and development drilling program;
        --  2014 exploration programs in the Doba and Doseo basins have
            commenced to  test one billion barrels of unrisked mean
            Prospective Resources with the first 8 to 10 wells in the
            program;
        --  Finally, furthering its long term strategy, on March 15, 2014
            Caracal entered into an arrangement agreement to merge with
            TransGlobe Energy Corporation (TSX:TGL)(NASDAQ:TGA)
            ("TransGlobe") by way of an exchange of shares pursuant to a
            plan of arrangement under the Business Corporations Act
            (Alberta) (the "Arrangement").  The Arrangement would create
            one of the largest independent Africa focused oil producers,
            which together will be poised for strong growth in oil
            production and reserves from development and exploration in
            Chad and Egypt.

Gary Guidry, Chief Executive of Caracal, said:

"2013 was a very significant year for Caracal.  We commenced production, 
closed a major farm-in agreement with Glencore and listed on the London Stock 
Exchange.  All of which enabled us to maintain our operational development 
with the drilling of development and exploration wells.

"Since the year end, we have become revenue generating with the first lifting 
earlier this month.  Production is increasing inline with our expectations and 
we are on track to hit our target of gross 2014 production of 22-26,000 bopd.  
The exploration programme has commenced and the first 8 to 10 exploration 
wells will test one billion barrels of unrisked mean Prospective Resources.

"Earlier this month we announced the agreement to merge with TransGlobe to 
create one of the largest independent Africa focused oil producers with 
focused operations in Chad and Egypt.  Post-merger, we will continue to be 
entirely focused on onshore, conventional oil production, development and 
exploration. The combination will provide shareholders with significant 
organic production and reserves growth."

Selected Financial results for the three and twelve months ended December 31, 
2012 and 2013
                           Three months ended                  Year ended
                                  December 31                 December 31
                             2013        2012          2013          2012
    Tariff Revenue             80           -            80             -
    Oil Revenue                 -           -             -             -
    Change in Oil          27,159           -        27,159             -
    Inventory
                           27,239           -        27,239             -
    Expenses                                                             
    Operating               4,249           -         4,249             -
    expenses
    Transportation          2,527           -         2,527             -
    expenses
    Depreciation and        4,508         328         5,823         1,082
    depletion
    Salaries and            8,175       4,072        21,108        13,122
    benefits
    Share-based             3,589       2,076        11,044         8,564
    compensation
    General and             3,949       5,523        27,996        30,493
    administrative
    Travel                  2,590       3,167         8,586         7,821
    Finance expense         7,290       7,246        28,872         8,083
    Foreign exchange        (140)         474         1,573           228
    loss (gain)
                           36,737      22,886       111,778        69,393
    Net loss before         9,498           -        84,539        69,393
    tax
    Deferred tax            (329)     (5,381)         (329)       (5,381)
    reduction
    Net and                 9,169      17,505        84,210        64,012
    comprehensive
    loss

Oil Production and Inventory

The Company commenced production from the Badila field on September 30, 2013, 
and net entitlement share of production for the period to December 31, 2013 
was 264,575 barrels. All production for the period to December 31, 2013 was 
directed towards the Company's portion of the required line fill. As such, 
there was no sale of crude oil in 2013. The Company completed its share of 
line fill inventory, on February 6, 2014 following which production 
accumulated as "lifting entitlement" for cargo sales for the lifting on March 
25, 2014. Pursuant to industry standard, the Company can draw on its share of 
line fill inventory if required to meet the standard cargo size and replace 
the draw during the next production inventory build period. Hence, the 
Company's net entitlement share of production for the period ended December 
31, 2013 has been recognised as crude oil inventory and valued at the 
estimated net realisable value. As per the Joint Marketing Agreement with its 
joint venture partner, Glencore Energy UK Ltd. (the "JMA") in place for the 
sale of the Company's crude oil, the price formula uses a dated Brent average 
and certain adjustments, including a discount or premium to Brent for the 
difference in crude oil quality. In computing the estimated net realisable 
value the forward March 2014 Brent price as at December 31, 2013 has been used 
and reduced for estimated adjustments under the JMA price formula. The 
estimated net realizable value as at December 31, 2013 has been adjusted for 
the transit fees that will be due and paid once the volumes are loaded on a 
tanker.

The estimated net realisable value of crude oil for the period has been 
recorded in the statement of operations as an increase in the value of crude 
oil inventory and the value of the inventory is shown in the current assets 
within the Company's statement of financial position. The following table 
depicts the Company's crude oil inventory position as at December 31, 2013:
                                         Volumes       Net Realizable Value
                                          (BBLS)                   US$ '000
    Opening crude oil inventory as             -                          -
    at January 1, 2013
    Entitlement production               264,575                     27,159
    Cargo lifting                              -                          -
    Re-valuation                               -                          -
    Ending crude oil Inventory as        264,575                     27,159
    at December 31, 2013
                                                                           
    Inland Transportation Pipeline          2013                       2012
    Tariff revenue                            80                          -
                                                                           

During the year ended December 31, 2013, the Company also earned revenue 
related to the tariff charged for the use of the Company's inland 
transportation pipeline operated by, its subsidiary PetroChad Transportation 
Company.

Oil inventory comprises production volumes accumulated in pipeline and storage 
facilities that have not yet been offloaded and transported to market. The 
first off load of oil production occurred on March 21, 2014 which resulted in 
the sale of approximately 560,000 barrels of oil net to the Company.

Operating and Transportation Costs, and Depreciation and Depletion

Operating and transportation costs for the Company's inaugural quarter of 
production were $4.2 million and $2.5 million, respectively. The unit costs of 
$17.43 and $9.55 per barrel for operating and transportation relate to the 
264,575 barrels of oil produced in 2013 and held as oil inventory. The unit 
costs are expected to decrease as production increases. Production commenced 
in late 2013 and as such there was no operating or transportation expense 
recorded in the comparative periods.

Depreciation and depletion expense increased by $4.2 million and $4.7 million, 
respectively, for the three and twelve months ended December 31, 2013. The 
increase is the result of the recognition of depletion in the net book value 
of the Badila EXA which commenced production in September 2013. Prior there 
to, depreciation related primarily to corporate assets.

General and Administrative Costs

Salaries and benefits - Increased $8.0 million for the year ended December 31, 
2013. The increase is a result of the Company progressing from planning, 
development, engineering, and procurement to staffing for operating two 
drilling rigs, one service rig, constructing a variety of facilities and 
infrastructure, and operating production facilities. With the a high level of 
activity throughout 2013 and beyond, the Company undertook the required 
recruiting campaign to attract and retain needed professionals, scaling its 
headcount from approximately 113 employees at the end of December 31, 2012 to 
approximately 287 employees at the end of December 31, 2013.

Share-based compensation - Increased for the three and twelve months ended 
December 31, 2013 by $1.5 million and $2.5 million respectively. The increase 
relates to stock options granted to employees as well as the establishment of 
the Long Term Incentive Plan for officers and other key executives of the 
Company aimed at retaining, attracting and motivating key executives 
responsible for executing the Company's long term business strategy.

General and administrative costs - General and administrative costs decreased 
by $1.6 million for the three months ended December 31, 2013 and $2.5 million 
for the year ended December 31, 2013. During the year ended December 31, 2012, 
the Company accrued $10.5 million to provide for potential penalties and fines 
for an issue that was resolved in the first quarter of 2013. During the third 
quarter of 2013, Caracal paid $9.8 million in listing fees relating to legal, 
financial and accounting advisory services in conjunction with listing the 
common shares of Caracal on the London Stock Exchange. As Caracal did not 
raise any capital, at that time all fees were expensed.

Travel - The increase in travel during year ended December 31, 2013 is 
primarily due to increased personnel traveling to Chad supervising and 
executing capital and operating programs. The Company's share of travel for 
the three months ended December 31, 2013 compared to the three months ended 
December 31, 2012 has decreased due to the change in the carrying interest of 
the Company.

Finance expense

On September 13, 2012, Caracal completed a financing through the issuance of 
$173.6 million unsecured convertible bonds with a maturity date of September 
30, 2017, and can be called in September 2015 at par. The interest rate was 
subject to increases unless a qualifying public offering occurred. The 
qualifying public offering occurred in 2013 and the interest rate is fixed at 
12.5% until maturity. In December 30, 2013, upon completion of the qualifying 
public offering, $28.7 million of accrued and unpaid interest was paid out in 
cash and shares.

Outlook

With production from Badila coming on-stream during the fourth quarter of 2013 
and Mangara production targeted for the third quarter of 2014, Caracal's 
financial strategy for 2014 will focus its cash flow from operating activities 
to fund the Company's 8-10 high-impact exploration drilling prospects.

About Caracal Energy Inc.

Caracal Energy Inc. is an international exploration and development company 
focused on oil and gas exploration, development and production activities in 
the Republic of Chad, Africa. In 2011, the Company entered into three 
production sharing contracts ("PSCs") with the government of the Republic of 
Chad. These PSCs provide exclusive rights, along with its partners, to explore 
and develop reserves and resources over a combined area of 26,103 km2 in 
southern Chad. The PSCs cover two world-class oil basins with oil discoveries, 
and numerous exploration prospects.

The Company's shares trade on the London Stock Exchange under the symbol CRCL.

(1)
     ______________________________________________________________________
    |Interval|Maximum|Flowing|Choke| Total  | Gas-Oil |Gravity|Productivity|
    | (mKB)  |  Oil  |  WHP  |Size |  Flow  |  Ratio  | (Deg  |   Index    |
    |        | Rate  |(psig) |(in.)|Duration|(scf/stb)| API)  | (bopd/psi) |
    |        |(bopd) |       |     |  (hr)  |         |       |            |
    |________|_______|_______|_____|________|_________|_______|____________|
    |E (2,474| 1,917 |   160 |64/64|    53  |    100  |35 - 39|      1.7   |
    |- 2,669)|       |       |     |        |         |       |            |
    |________|_______|_______|_____|________|_________|_______|____________|
    |C (1,896| 3,200 |   200 |80/64|   45.3 |    540  |35 - 37|      2.2   |
    |   -    |       |       |     |        |         |       |            |
    |2,103.5)|       |       |     |        |         |       |            |
    |________|_______|_______|_____|________|_________|_______|____________|

(2 )
     ___________________________________________________________________
    |   Interval  |Maximum |Flowing|Choke|Total Flow| Gas-Oil | Gravity |
    |     (mKB)   |  Oil   |  WHP  |Size |Duration  |  Ratio  |(Deg API)|
    |             |  Rate  |(psig) |(in.)|   (hr)   |(scf/stb)|         |
    |             | (bopd) |       |     |          |         |         |
    |_____________|________|_______|_____|__________|_________|_________|
    |     C       | 1,470* |   140 |96/64|      38  |    519  |     36  |
    |(2,012-2,166)|        |       |     |          |         |         |
    |_____________|________|_______|_____|__________|_________|_________|
    |     D       |  702** |   120 | 1/2 |      38  |      -  |     35  |
    |(2,219-2,520)|        |       |     |          |         |         |
    |_____________|________|_______|_____|__________|_________|_________|
    |   E (2,582  |2,580***|   120 |64/64|      29  |    100  | 34 - 37 |
    |    -2,630)  |        |       |     |          |         |         |
    |_____________|________|_______|_____|__________|_________|_________|
    *   - A total of 1,600 bbls of oil and < 1 bbl of water/completion
    fluid recovered
    **  - A total of 557 bbls of oil and 1 bbl of water/completion fluid
    were recovered.
    *** - A total of 921 bbls of oil and 8 bbls of water/completion fluid
    recovered

(3)
     _________________________________________________________________________
    |     |        | Max  |Flowing|Choke| Total  |         |       |          |
    |     |        | Oil  |  WHP  |Size |  Flow  |         |       |          |
    |Zones|Interval| Rate |       |     |Duration|    GOR  |Gravity|      PI  |
    |_____|________|______|_______|_____|________|_________|_______|__________|
    |     |  (mKB) |(bopd)|(psig) |(in.)|  (hrs) |         |  (Deg |          |
    |     |        |      |       |     |        |(scf/bbl)|  API) |(bopd/psi)|
    |_____|________|______|_______|_____|________|_________|_______|__________|
    | D2, |1758.0 -| 4986 |   580 |56/64|   20.0 |         |       |          |
    | D3, | 1932.0 |      |       |     |        |         |       |          |
    | D4, |        |      |       |     |        |         |       |          |
    | D5, |        |      |       |     |        |         |       |          |
    | D6, |        |      |       |     |        |         |       |          |
    | D8, |        |      |       |     |        |         |       |          |
    | D9  |        |      |       |     |        |  273.00 |  33.6 |    9.90  |
    |_____|________|______|_______|_____|________|_________|_______|__________|
    A total of 1,774 bbls of oil and 68 barrels of completion fluid
    recovered

CAUTIONARY STATEMENTS:

This announcement contains certain forward-looking information and statements. 
Forward-looking information typically contains statements with words such as 
"intend", "target", "anticipate", "plan", "estimate", "expect", "potential", 
"could", "will", or similar words suggesting future outcomes. Information 
relating to reserves and resources is deemed to be forward-looking 
information, as it involves the implied assessment, based on certain estimates 
and assumptions, that the reserves and resources described exist in the 
quantities predicted or estimated, and can be profitably produced in the 
future. The Company cautions readers not to place undue reliance on 
forward-looking information which by its nature is based on current 
expectations regarding future events that involve a number of assumptions, 
inherent risks and uncertainties, which could cause actual results to differ 
materially from those anticipated by the Company. In addition, any 
forward-looking information is made as of the date hereof, and each of the 
Company and its affiliates expressly disclaim any obligation or undertaking to 
update, review or revise such forward-looking information contained in this 
announcement to reflect any change in its expectations or any change in 
events, conditions or circumstances on which such information is based unless 
required to do so by applicable law.

Forward-looking information is not based on historical facts but rather on 
current expectations and assumptions regarding, among other things, the timing 
and scope of certain of the Company's operations and the timing and level of 
production from the Company's properties, plans for and results of drilling 
activity and testing programs, future capital and other expenditures 
(including the amount, nature and sources of funding thereof), continued 
political stability, and timely receipt of any necessary government or 
regulatory approvals. Although the Company believes the expectations and 
assumptions reflected in such forward-looking information are reasonable, they 
may prove to be incorrect. Forward-looking information involves significant 
known and unknown risks and uncertainties. A number of factors could cause 
actual results to differ materially from those anticipated by the Company 
including, but not limited to, risks associated with the oil and gas industry 
(e.g. operational risks in exploration and production; inherent uncertainties 
in interpreting geological data; changes in plans with respect to exploration 
or capital expenditures; interruptions in operations together with any 
associated insurance proceedings; reductions in production capacity, the 
uncertainty of estimates and projections in relation to costs and expenses and 
health, safety and environmental risks), the risk of commodity price and 
foreign exchange rate fluctuations, the uncertainty associated with 
negotiating with foreign governments, risk associated with international 
activity, including the risk of political instability, the risk of adverse 
economic market conditions, the actual results of marketing activities and the 
risk of regulatory changes. Forward-looking information cannot be relied upon 
as a guide to future performance. Well-test results are not necessarily 
indicative of long-term performance or ultimate recovery. Financial outlook 
information contained in this report about the Company's prospective cash 
flows and financial position is based on assumptions about future events, 
including economic conditions and proposed courses of action, based on 
management's assessment of the relevant information currently available. 
Readers are cautioned that any such financial outlook information contained 
herein should not be used for purposes other than for which it is disclosed 
herein. The Company does not assume responsibility for the accuracy and 
completeness of the forward-looking information or statements and such 
information and statements should not be taken as guarantees of future 
outcomes. Subject to applicable securities laws, the Company does not 
undertake any obligation to revise this forward-looking information or these 
forward-looking statements to reflect subsequent events or circumstances. This 
cautionary statement expressly qualifies the forward-looking information and 
statements contained in this press release.

Terms related to reserves and resources classifications referred to in this 
announcement are based on definitions and guidelines in the Canadian Oil and 
Gas Evaluation Handbook which are as follows.

"Proved reserves" are those reserves that can be estimated with a high degree 
of certainty to be recoverable. It is likely that the actual remaining 
quantities recovered will exceed the estimated proved reserves.

"Probable reserves" are those additional reserves that are less certain to be 
recovered than proved reserves. It is equally likely that the actual remaining 
quantities recovered will be greater or less than the sum of the estimated 
proved plus probable reserves.

The qualitative certainty levels referred to in the definitions above are 
applicable to individual reserves entities (which refers to the lowest level 
at which reserves calculations are performed) and to reported reserves (which 
refers to the highest-level sum of individual entity estimates for which 
reserves estimates are presented). Reported reserves should target the 
following levels of certainty under a specific set of economic conditions:
        --  at least a 90 percent probability that the quantities actually
            recovered will equal or exceed the estimated proved reserves.
            This category of reserves can also be denoted as 1P;
        --  at least a 50 percent probability that the quantities actually
            recovered will equal or exceed the sum of the estimated proved
            plus probable reserves. This category of reserves can also be
            denoted as 2P; and
        --  at least a 10 percent probability that the quantities actually
            recovered will equal or exceed the sum of the estimated proved
            plus probable plus possible reserves. This category of reserves
            can also be denoted as 3P.

Additional clarification of certainty levels associated with reserves 
estimates and the effect of aggregation is provided in the COGE Handbook. The 
estimates of reserves and future net revenue for individual properties may not 
reflect the same confidence level as estimates of reserves and future net 
revenue for all properties, due to the effects of aggregation.

"Prospective resources" are those quantities of petroleum estimated, as of a 
given date, to be potentially recoverable from undiscovered accumulations by 
application of future development projects. Prospective resources have both an 
associated chance of discovery (geological chance of success or "COS") and a 
chance of development (economic, regulatory, market, facility, corporate 
commitment or political risks). The chance of commerciality is the product of 
these two risk components. The prospective resource estimates referred to 
herein have not been risked for either the chance of discovery or the chance 
of development.

There is no certainty that any portion of the prospective resources will be 
discovered. If a discovery is made, there is no certainty that it will be 
developed or, if it is developed, there is no certainty as to the timing of 
such development or that it will be commercially viable to produce any portion 
of the prospective resources.

Figures related to the Company's reserves and resources are derived from the 
December 31, 2013 McDaniel Report and the June 30, 2013 McDaniel Report.

A description of the uncertainties and significant positive and negative 
factors associated with the estimates of reserves and resources in respect of 
the December 31, 2013 McDaniel Report is contained in the Company's Annual 
Information Form dated March 31, 2014 and a description of the uncertainties 
and significant positive and negative factors associated with the estimates of 
resources in respect of the June 30, 2013 McDaniel Report is contained in the 
Company's July 25, 2013 material change report.  Copies of these documents are 
available on the internet under the Company's profile at www.sedar.com.

Information relating to reserves and resources is deemed to be forward-looking 
information, as it involves the implied assessment, based on certain estimates 
and assumptions, that the reserves and resources described exist in the 
quantities predicted or estimated, and can be profitably produced in the 
future. Well-test results are not necessarily indicative of long-term 
performance or ultimate recovery.



SOURCE  Caracal Energy Inc. 
Caracal Energy Inc. Gary Guidry, President and Chief Executive Officer Trevor 
Peters, Chief Financial Officer +1 403-724-7200 
Longview Communications - Canadian Media Enquiries Alan Bayless +1 
604-694-6035 Joel Shaffer +1 416-649-8006  FTI Consulting - UK Media Enquiries 
Ben Brewerton / Ed Westropp + 44 (0) 207 8313 3113 
caracalenergy.sc@fticonsulting.com  
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CO: Caracal Energy Inc.
ST: Alberta
NI: OIL ERN  
-0- Mar/31/2014 06:00 GMT
 
 
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