Crew Energy Inc. Announces First Quarter 2014 Financial and Operating Results and Updates Its Montney Resource Evaluation

Crew Energy Inc. Announces First Quarter 2014 Financial and Operating Results 
and Updates Its Montney Resource Evaluation 
NEWS RELEASE TRANSMITTED BY Marketwired 
FOR: Crew Energy Inc. 
TSX SYMBOL:  CR 
MAY 7, 2014 
Crew Energy Inc. Announces First Quarter 2014 Financial and Operating Results
and Updates Its Montney Resource Evaluation 
CALGARY, ALBERTA--(Marketwired - May 7, 2014) - Crew Energy Inc.
("Crew" or the "Company") (TSX:CR) of Calgary, Alberta is
pleased to present its operating and financial results for the three month
period ended March 31, 2014. 
Highlights  
/T/ 
--  Funds from operations in the first quarter increased 52% over the first 
quarter of 2013 and 8% over the prior quarter to $51.8 million while the 
funds from operations netback increased by 40%; 
--  Funds from operations per diluted share increased 50% over the first 
quarter of 2013 and increased 5% over the previous quarter to $0.42 per 
share; 
--  First quarter production was previously announced on April 9, 2014 and 
averaged 28,021 boe per day, an 8% increase over the same period in 2013 
and a 2% decrease from the previous quarter; 
--  Operating netbacks improved 55% over the first quarter of 2013 to $28.49 
per boe, before risk management losses, as a result of improved 
commodity prices and lower costs; 
--  Operating costs per boe decreased 6% over the same period in 2013 to 
$11.35 per boe; 
--  Crew completed and tied-in two wells at Septimus that are producing into 
the Company's gathering system averaging 1,200 boe per day and 1,180 boe 
per day (16% ngl); 
--  The Company updated its Montney Resource Evaluation which increased 20% 
to 109 TCFE of Total Petroleum Initially in Place ("TPIIP") and the 
Contingent Resource increased 44% to 5.0 TCFE; 
--  Crew added strategic production, reserves, land and infrastructure in 
northeast British Columbia acquiring 1,400 boe per day of production, 
8.5 million boe of proved plus probable reserves, 75 net sections of 
Montney rights and over 130 kilometers of pipelines and 6,000 hp of 
field compression for $105 million; 
--  Subsequent to the quarter end, Crew announced the disposition of 
approximately 7,000 boe per day of production concentrated in the Deep 
Basin area of Alberta, 254,000 net acres of land and 60.4 million boe of 
proved plus probable reserves for $222 million in cash plus 
approximately 400 boe per day of heavy oil production.  
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Three months   Three months  
ended          ended 
Financial                                          March 31,      March 31, 
($ thousands, except per share amounts)                 2014           2013 
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Petroleum and natural gas sales                      130,368         91,267 
Funds from operations (note 1)                        51,810         34,188 
  Per share                                                                  
- basic                                             0.43           0.28  
- diluted                                           0.42           0.28 
Net loss                                            (129,693)       (22,047)
  Per share                                                                  
- basic                                            (1.07)         (0.18) 
- diluted                                          (1.07)         (0.18) 
Exploration and Development expenditures              66,140         65,252 
Property acquisitions (net of dispositions)          102,532         14,663  
------------------------------
Net capital expenditures                             168,672         79,915 
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As at          As at  
March 31,   December 31, 
Capital Structure ($ thousands)                         2014           2013 
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Working capital deficiency (note 2)                   53,121         40,098 
Net assets held for sale (note 3)                   (231,677)             - 
Bank loan                                            301,212        197,688  
------------------------------ 
122,656        237,786 
Senior unsecured notes                               145,785        145,623  
------------------------------
Total net debt                                       268,441        383,409  
Bank facility after closing of the Alberta Gas                              
 Disposition                                         350,000        420,000 
Common Shares Outstanding (thousands)                121,679        121,635 
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/T/ 
Notes:  
/T/ 
(1)  Funds from operations is calculated as cash provided by operating       
activities, adding the change in non-cash working capital,              
decommissioning obligation expenditures and accretion of deferred       
financing charges. Funds from operations is used to analyze the         
Company's operating performance and leverage. Funds from operations     
does not have a standardized measure prescribed by International        
Financial Reporting Standards and therefore may not be comparable with  
the calculations of similar measures for other companies.              
(2)  Working capital deficiency shown above includes accounts receivable     
less accounts payable and accrued liabilities.                         
(3)  Net assets held for sale reflects the amounts reclassified from         
property, plant and equipment and decommissioning obligations for the   
assets less liabilities associated with the Alberta Gas Disposition as  
described below.                                                        
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Three months   Three months  
ended          ended  
March 31,      March 31, 
Operations                                              2014           2013 
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Daily production (note 1)                                                   
  Princess and other oil (bbl/d)                       3,298          4,936 
  Lloydminster oil (bbl/d)                             6,128          5,441 
  Natural gas liquids (bbl/d)                          3,435          2,984 
  Natural gas (mcf/d)                                 90,959         75,597 
  Oil equivalent (boe/d @ 6:1)                        28,021         25,961 
Average prices (notes 1 & 2)                                                
  Princess and other oil ($/bbl)                       81.81          64.36 
  Lloydminster oil ($/bbl)                             69.50          50.61 
  Natural gas liquids ($/bbl)                          64.59          54.43 
  Natural gas ($/mcf)                                   5.84           3.42 
  Oil equivalent ($/boe)                               51.69          39.06 
Netback ($/boe)                                                             
  Revenue                                              51.69          39.06 
  Realized commodity hedging loss                      (3.47)         (0.55)
  Royalties                                           (10.63)         (7.41)
  Operating costs                                     (11.35)        (12.03)
  Transportation costs                                 (1.22)         (1.25) 
------------------------------
  Operating netback (note 3)                           25.02          17.82 
  G&A                                                  (2.13)         (1.99)
  Interest on long-term debt                           (2.36)         (1.19) 
------------------------------
  Funds from operations                                20.53          14.64  
Drilling Activity                                                           
  Gross wells                                             21             39 
  Working interest wells                                19.0           36.8 
  Success rate, net wells                                100%           100%
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/T/ 
Notes: 
/T/ 
(1)  Princess, Alberta oil (20 degree to 26 degree API oil) has historically 
been classified as medium or conventional oil. Effective December 31,   
2012 Crew's reserves attributable to its Princess property have been    
classified as heavy oil to accord with definitions in the royalty       
regulations in Alberta. Princess and other oil production and pricing   
are shown separately from Lloydminster heavy oil volumes for clarity    
and comparison with historical classification.                         
(2)  Average prices are before deduction of transportation costs and do not  
include gains and losses on financial instruments.                     
(3)  Operating netback equals petroleum and natural gas sales including      
realized hedging gains and losses on commodity based financial          
instruments less royalties, operating costs and transportation costs    
calculated on a boe basis. Operating netback and funds from operations  
netback do not have a standardized measure prescribed by International  
Financial Reporting Standards and therefore may not be comparable with  
the calculations of similar measures for other companies.               
/T/ 
OVERVIEW 
Crew continued to execute on its corporate strategy in the first quarter
culminating in the closing of two separate transactions that resulted in the
Company acquiring certain strategic Montney liquids rich natural gas properties
in northeast British Columbia for approximately $105 million (the "Montney
Acquisition"). The acquired assets include 75 net sections of land that
are either contiguous with existing Crew land or increase Crew's working
interest in joint interest lands. The acquired lands include production of
1,400 boe per day of predominantly natural gas production and 8.5 million boe
of proved plus probable reserves. Subsequent to the end of the first quarter,
Crew entered into an agreement to sell certain petroleum and natural gas assets
including approximately 7,000 boe per day of 75% natural gas production and
60.4 mmboe of proved plus probable reserves focused primarily in the Deep Basin
of Alberta (the "Alberta Gas Disposition"). Consideration for the
Alberta Gas Disposition will include approximately $222 million in cash, before
closing adjustments, plus approximately 400 bbls per day of heavy oil
production. This disposition is scheduled to close on or about May 30, 2014,
subject to satisfaction of customary industry closing conditions. In
conjunction with the announcement of these transactions, the Company increased
its 2014 capital budget to $285 million with the incremental $39 million
directed exclusively to the Company's Montney resource development and an
acceleration of Crew's Montney five year growth plan. 
As previously announced, Crew's first quarter production averaged 28,021
boe per day as the severe winter weather along with an unusual number of wells
temporarily shut-in due to third party drilling operations in the Lloydminster
area impacted volumes by approximately 1,000 boe per day. Toward the end of
March, the majority of the Company's 21 (19.0 net) wells drilled in the
quarter came on production resulting in the Company achieving field estimated
production rates of 30,400 boe per day in the month of April (inclusive of the
1,400 boe per day acquired at the end of March) consistent with budget
expectations. During the first quarter, exploration and development capital
expenditures were $66.1 million allocated $35.0 million to the northeast
British Columbia Montney, $15.4 million to Princess Mannville development,
$13.8 million to Lloydminster and $1.9 million to the Deep Basin and Other
Alberta areas. 
FINANCIAL 
Crew's first quarter funds from operations increased 8% over the prior
quarter and 52% over the same period in 2013 to $51.8 million or $0.42 per
diluted share. The Company's funds from operations benefited from stronger
oil and natural gas pricing experienced during the quarter that were partially
offset by a $8.7 million realized loss on the Company's risk management
program. The Company's $130 million first quarter net loss was impacted by
realized and unrealized losses of $27.8 million incurred on the Company's
risk management program and a non-cash impairment charge of $153.5 million on
assets related to the Alberta Gas Disposition that have been reclassified as
held for sale. 
An extended cold winter across North America has reduced natural gas storage
levels to 52% below last year's level and 55% below the five year gas
storage average level. Natural gas prices continue to reflect the reduced
storage levels as the Company's realized natural gas price increased 53%
over the previous quarter to average $5.84 per mcf for the first quarter of
2014. Oil prices strengthened during the quarter as the discount for Canadian
heavy oil, measured as the Western Canadian Select ("WCS") price
differential to West Texas Intermediate ("WTI"), narrowed to average
CDN$25.55 per bbl as compared to CDN$33.89 for the previous quarter. A number
of positive catalysts provided support for the increase in WCS oil prices
including increased crude-by-rail exports and increased rail loading facilities
and expansions scheduled for 2014.  
The Company's hedging strategy is focused on protecting against
significant declines in commodity prices that would negatively impact the funds
from operations needed to fund the Company's on-going capital program.
Strengthening commodity prices have significantly affected Crew's realized
and unrealized losses from its risk management program in the first quarter of
2014. In the first quarter, the Company incurred a realized hedging loss of
$8.7 million or $3.47 per boe as compared to $1.3 million or $0.55 per boe in
the same period in 2013. During the first quarter of 2014, the Company also
incurred unrealized losses on financial instruments of $19.0 million.  
The Company had a successful first quarter exploration and development program
which saw Crew spend $66.1 million focusing on development of liquids rich
natural gas from the Montney formation at Septimus. Quarter-end net debt
totaled $268 million which included a reclassification of the Alberta Gas
Disposition assets from property, plant and equipment to current assets held
for sale. Following the closing of the Alberta Gas Disposition, the
Company's bank facility will be renewed at $350 million.  
OPERATIONS UPDATE 
Septimus/Tower, British Columbia 
Crew achieved the fourth consecutive quarter of production growth at Septimus
with average production of 10,140 boe per day and a March average of 10,650 boe
per day as new wells in the quarter were brought on during the month and with
the Septimus gas plant running at 95% to 102% of projected capacity. With
sub-$5 per boe operating costs, an attractive and improving royalty structure
and improved pricing, the operating netback at Septimus has increased 62% to
$29.42 per boe compared to the first quarter of 2013 levels. The Company
projects that an annual capital program of $40 to $50 million is required to
maintain the Septimus gas plant at capacity and combined with the current
pricing environment this would result in $40 to $50 million of annual free cash
flow being generated from this first phase of Crew's Montney development.
Future economics have been further enhanced with the announcement of a second
tier to the British Columbia Deep Well Credit Program effective April 1, 2014.
Based on this addition to the program the majority of Crew's Montney
liquids rich natural gas drilling program will now qualify resulting in an
increased NPV10 of approximately $0.8 million per well. 
During the quarter, Crew conducted a second production test on the Montney oil
exploration well drilled in the fourth quarter of 2013 located 11 kilometers
northwest of the Company's existing Montney oil production. Following an
80 day shut in period, the well was brought back on production for an 11 day
test during which it produced an average of 540 barrels of oil per day and 1.1
mmcf per day of natural gas for a total average rate of 723 boe per day. The
well is expected to be tied into Crew's gathering system in the third
quarter. The Company is planning to begin drilling its first well of a six well
pad at Tower in June. 
At Septimus, Crew drilled five (5.0 net) horizontal wells in the quarter with
two of the wells on production at 6 to 8 mmcf per day as of the end of the
quarter. With the evolution of the Company's development strategy to pad
drilling to capture additional cost efficiencies, Crew is currently drilling
the third well on a six well pad which is expected to be completed in the third
quarter and will be brought on production following the planned turnaround at
the Septimus gas plant in August. A second rig is operating in the Groundbirch
area where the Company is drilling the second well on a two well pad. These
wells are expected to be completed and tested in the third quarter along with
one of the Attachie wells drilled in 2013. Crew also began ordering major
equipment for the second Septimus facility anticipated to be on stream mid-2015
with a designed capacity of 60 mmcf per day of raw gas. 
Lloydminster, Alberta/Saskatchewan 
At Lloydminster, Crew drilled nine (7.6 net) oil wells and recompleted 16 (15.1
net) wells for $10.8 million. Production for the quarter averaged 6,150 boe per
day and the Company is expecting to maintain production in the 6,000 boe per
day range throughout the year with total capital expenditures of $35 million.  
Princess, Alberta 
During the first quarter, production at Princess averaged 3,950 boe per day as
the majority of the wells in the Company's first quarter drilling program
came on production early in the second quarter. Current production is
approximately 4,500 boe per day based on field estimates with new wells still
being optimized. Crew drilled six (6.0 net) wells with total capital
expenditures of $14 million including well optimizations. The first quarter
drilling program targeted new Mannville opportunities on the Company's
Crown acreage and represents the first phase of delineation of a number of
these lands. Crew is projecting to maintain production in the 4,000 to 4,500
boe per day range throughout the year as the Company continues to delineate its
Mannville acreage. 
Deep Basin, Alberta 
Crew's Deep Basin and other minor Alberta properties produced an average
of 7,220 boe per day during the quarter. Crew has announced an agreement to
sell these assets pursuant to the Alberta Gas Disposition with an anticipated
closing date of May 30, 2014. 
OUTLOOK 
With the announced Alberta Gas Disposition, the Company revised forecasted 2014
average production to 25,500 to 26,500 boe per day and forecasts to exit the
year at 26,000 to 27,000 boe per day, subject to closing the disposition on May
30, 2014. Exploration and development capital expenditures are now budgeted at
$285 million, a $39 million increase over the previous budget. Net debt after
closing of the transaction is forecasted to be approximately $280 million. 
For the remainder of 2014, Crew plans to: 
/T/ 
--  Continue to develop and delineate our Montney resource which is now over 
109 TCFE of TPIIP and 5.0 TCFE of Contingent Resource; 
--  Apply new and evolving drilling and completion technologies to improve 
Expected Ultimate Recoveries and initial production rates; 
--  Invest in Montney production infrastructure which is estimated at $35 
million in 2014 in addition to pre-drilling the majority of the 18 wells 
planned to initially fill the new 60 mmcf per day facility; 
--  Evaluate the Montney potential at Crew's Attachie, Groundbirch and 
Tower, British Columbia properties; 
--  Continue to high-grade our asset base and consolidate acreage in the 
Montney in northeast British Columbia; 
--  Maintain aggregate production levels at Lloydminster and Princess with 
free funds from operations to be distributed to our Montney growth 
initiatives.  
/T/ 
Our 2014 capital program has positioned the Company with an expanded resource
and drilling inventory, important infrastructure as well as land that is
strategic to our future growth plans. Crew's five year growth plan
anticipates the construction of facilities to process 240 mmcf per day of
natural gas and 10,000 bbls per day of light oil with targeted exit 2018
Montney production of approximately 45,000 boe per day. 
We would like to thank our employees and Board of Directors for their steadfast
commitment to Crew's success and our shareholders for their continued
support. We are excited about our prospects and future and look forward to
reporting our second quarter operating and financial results in August.  
NORTHEAST BRITISH COLUMBIA MONTNEY RESOURCE EVALUATION 
The following discussion in "Northeast British Columbia Montney Resource
Evaluation" is subject to a number of cautionary statements, assumptions
and risks as set forth therein. See "Information Regarding Disclosure on
Oil and Gas Reserves, Resources and Operational Information" for
additional cautionary language, explanations and discussion and "Forward
Looking Information and Statements" for a statement of principal
assumptions and risks that may apply. See also "Definitions of Oil and Gas
Resources and Reserves". The discussion includes reference to TPIIP,
DPIIP, UPIIP and Contingent Resources per the Sproule Associates Ltd.
("Sproule") Resources Evaluation effective as at April 30, 2014,
prepared in accordance with the Canadian Oil and Gas Evaluation Handbook
("COGE Handbook"). Unless indicated otherwise in this news release,
all references to Contingent and Prospective Resource volumes are Best Estimate
Contingent and Prospective Resource volumes. 
Sproule was engaged to conduct an updated independent Montney resource
evaluation of Crew's 452 net Montney sections located in Northeast British
Columbia ("NEBC") (the "Evaluated Areas") effective as of
April 30, 2014 (the "Resource Evaluation"). The Resource Evaluation
confirms the development and resource potential on the Company's land base
providing us with significant opportunities to add reserves above the current
booked reserves and to increase the current Contingent Resource. The commodity
diversity of Crew's NEBC Montney assets allow us to navigate through
commodity price cycles given the range of Crew's Montney landholdings with
exposure to liquids rich gas, crude oil and dry natural gas (gas containing
greater than 95% methane). The Resource Evaluation reaffirms Crew's belief
in the considerable potential that exists to further increase our current
reserve base, highlighting the world class potential of the NEBC Montney. 
TPIIP in the Montney "gas window" increased to 60.6 TCF from 44.6 TCF
due to the Montney Acquisition completed in the first quarter. The Resource
Evaluation also included recognition of Crew's lands in the Montney
"oil window" where Crew has 138 net sections. On the oil bearing
lands, TPIIP increased from 7.8 billion barrels of oil to 8.1 billion barrels
of oil. The tight Montney oil potential is in the early stages of development
and requires additional data to realize the recoverable potential of these
lands. The continued improvement of technology and the early results are very
encouraging to the recovery of this vast resource. 
The Resource Evaluation that is presented below and the results we have had at
Septimus to date highlight the quality of the lands that Crew has successfully
acquired over the past six years. With the improved economics of this play and
the visibility of continued development of infrastructure in the Septimus
corridor we are committed to continue to pursue opportunities in this region
and it is our intent to aggressively exploit the 60.6 TCF and 8.1 billion
barrels of TPIIP on our acreage in order to grow production, reserves and
cashflow into the future.  
The following tables summarize the results of the Resource Evaluation. 
/T/ 
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Natural Gas Resource Categories (1)(2)(3)                                Tcf
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Total Petroleum Initially In Place (TPIIP)                              60.6
Discovered Petroleum Initially In Place (DPIIP)                         26.1
Undiscovered Petroleum Initially In Place (UPIIP)                       34.5
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(1)  All volumes in table are company gross and raw gas volumes.            
(2)  Sproule's analysis identified four intervals in the Montney consisting  
of one interval in the Upper Montney and three intervals in the Lower   
Montney.                                                               
(3)  Crew's acreage was divided into six (6) areas in the "gas window". Crew 
owns 276 net sections in the gas window at April 30, 2014.              
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Oil Resource Categories (1)(2)(3)(4)                                  Mmbbls
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Total Petroleum Initially In Place (TPIIP)                             8,052
Discovered Petroleum Initially In Place (DPIIP)                        1,363
Undiscovered Petroleum Initially In Place (UPIIP)                      6,689
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(1)  All volumes in table are company gross.                                
(2)  The oil volumes are quoted as Stock Tank Barrels ("STB").              
(3)  Sproule's analysis identified four intervals in the Montney consisting  
of one interval in the Upper Montney and three intervals in the Lower   
Montney.                                                               
(4)  Crew's acreage was divided into five (5) areas in the "oil window".     
Crew owns 138 net sections in the oil window at April 30, 2014.         
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Best
Reserves and Contingent Resources (1)(2)(3)(6)(7)                   Estimate
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Natural gas (Tcf)                                                           
  Reserves (3)                                                           0.5
  Contingent Resources                                                   4.0 
Natural gas liquids (Mmbbls) (4)(5)                                         
  Reserves (3)                                                          14.7
  Contingent Resources                                                 160.7 
Oil (Mmbbls)                                                                
  Reserves (3)                                                           0.4
  Contingent Resources                                                  10.9
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(1)  All DPIIP other than cumulative production, reserves, and Contingent    
Resources has been categorized as unrecoverable at this time.          
(2)  All volumes in table are company gross and sales volumes.              
(3)  For reserves, the volume under the heading Best Estimate are proved     
plus probable reserves as at December 31, 2013.                        
(4)  The liquid yields are based on average yield over the producing life of 
the property.                                                          
(5)  Liquid yields are unique to each area. They are estimated based on gas  
composition of gas samples in the area and expected plant recoveries.  
(6)  There is no certainty that it will be commercially viable to produce    
any of the resources.                                                  
(7)  Contingent Resources includes an 85% development factor.                
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Best
Prospective Resources (1)(2)(5)(6)                                  Estimate
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Natural gas (Tcf)                                                        6.3
Natural gas liquids (Mmbbls) (3)(4)                                    254.4
Oil (Mmbbls)                                                            14.4
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(1)  All UPIIP other than Prospective Resources has been categorized as      
unrecoverable at this time.                                            
(2)  All volumes in table are company gross and sales volumes.              
(3)  The liquid yields are based on average yield over the producing life of 
the property.                                                          
(4)  Liquid yields are unique to each area. They are estimated based on gas  
composition of gas samples in the area and expected plant recoveries.  
(5)  There is no certainty that it will be commercially viable to produce    
any of the resources.                                                  
(6)  Prospective Resources includes an 85% development factor.               
/T/ 
Based upon the foregoing analysis and Crew's expertise in the Montney
formation in NEBC, it is expected that significant additional reserves will be
developed in the future with continued drilling success on currently
undeveloped Montney acreage together with further development, completion
refinements and improved economic conditions. Additional drilling, completion,
and test results are required before Crew can commit to development and these
contingent resources can be converted to reserves and a larger component of
Prospective Resources is converted to Contingent Resource. 
The Prospective Resources have not been risked for chance of discovery. There
is no certainty that any portion of the Prospective Resources will be
discovered. There is no certainty that it will be commercially viable to
produce any portion of the Prospective (if discovered) or Contingent Resources.
The Contingent Resource contingencies are identified as economic or
non-technical, there are no technical contingencies. Crew anticipates that a
large portion of the Contingent Resources will be economically viable to
develop. Significant positive factors are historic drilling success and
production history on the more fully developed Montney acreage, abundant well
log and production test data. Potential negative factors include lack of long
term production history over the majority of Crew lands, lack of
infrastructure, potential for variations in the quality of the Montney
formation where minimal well data currently exists, access to the substantial
amount of capital which would be required to develop the resources, low
commodity prices that would curtail the economics of development and the future
performance of wells, regulatory approvals, access to the required services at
the appropriate cost and topographic or surface restrictions. 
Definitions of Oil and Gas Resources and Reserves 
Reserves are estimated remaining quantities of oil and natural gas and related
substances anticipated to be recoverable from known accumulations, as of a
given date, based on the analysis of drilling, geological, geophysical and
engineering data; the use of established technology; and specified economic
conditions, which are generally accepted as being reasonable. Reserves are
classified according to the degree of certainty associated with the estimates
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.  
Possible Reserves are those additional reserves that are less certain to be
recovered than probable reserves. It is unlikely that the actual remaining
quantities recovered will exceed the sum of the estimated proved plus probable
plus possible reserves. 
Cumulative Production is the cumulative quantity of petroleum that has been
recovered at a given date.  
Resources encompasses all petroleum quantities that originally existed on or
within the earth's crust in naturally occurring accumulations, including
Discovered and Undiscovered (recoverable and unrecoverable) plus quantities
already produced. "Total resources" is equivalent to "Total
Petroleum Initially-In-Place". Resources are classified in the following
categories:  
Total Petroleum Initially-In-Place ("TPIIP") is that quantity of
petroleum that is estimated to exist originally in naturally occurring
accumulations. It includes that quantity of petroleum that is estimated, as of
a given date, to be contained in known accumulations, prior to production, plus
those estimated quantities in accumulations yet to be discovered. 
Discovered Petroleum Initially-In-Place ("DPIIP") is that quantity of
petroleum that is estimated, as of a given date, to be contained in known
accumulations prior to production. The recoverable portion of discovered
petroleum initially in place includes production, reserves, and contingent
resources; the remainder is unrecoverable. 
Contingent Resources are those quantities of petroleum estimated, as of a given
date, to be potentially recoverable from known accumulations using established
technology or technology under development but which are not currently
considered to be commercially recoverable due to one or more contingencies.
Contingencies may include such factors as economic, legal, environmental,
political and regulatory matters or a lack of markets. It is also appropriate
to classify as Contingent Resources the estimated discovered recoverable
quantities associated with a project in the early evaluation stage. 
Undiscovered Petroleum Initially-In-Place ("UPIIP") is that quantity
of petroleum that is estimated, on a given date, to be contained in
accumulations yet to be discovered. The recoverable portion of undiscovered
petroleum initially in place is referred to as "prospective
resources" and the remainder as "unrecoverable." 
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 and a chance of development. 
Unrecoverable is that portion of DPIIP and UPIIP quantities which is estimated,
as of a given date, not to be recoverable by future development projects. A
portion of these quantities may become recoverable in the future as commercial
circumstances change or technological developments occur; the remaining portion
may never be recovered due to the physical/chemical constraints represented by
subsurface interaction of fluids and reservoir rocks. 
Uncertainty Ranges are described by the Canadian Oil and Gas Evaluation
Handbook as low, best, and high estimates for reserves and resources. The Best
Estimate is considered to be the best estimate of the quantity that will
actually be recovered. It is equally likely that the actual remaining
quantities recovered will be greater or less than the best estimate. If
probabilistic methods are used, there should be at least a 50 percent
probability (P50) that the quantities actually recovered will equal or exceed
the best estimate. 
Information Regarding Disclosure on Oil and Gas Reserves, Resources and
Operational Information 
All amounts in this news release are stated in Canadian dollars unless
otherwise specified. Throughout this press release, the terms Boe (barrels of
oil equivalent), Mmboe (millions of barrels of oil equivalent), and Tcfe
(trillion cubic feet of gas equivalent) are used. Such terms when used in
isolation, may be misleading. Where applicable, natural gas has been converted
to barrels of oil equivalent ("BOE") based on 6 Mcf:1 BOE and oil and
liquids have been converted to natural gas equivalent on the basis of 1 bbl:6
mcfe. The BOE rate is based on an energy equivalent conversion method primarily
applicable at the burner tip, and given that the value ratio based on the
current price of crude oil as compared to natural gas is significantly
different than the energy equivalency of the 6:1 conversion ratio, utilizing
the 6:1 conversion ratio may be misleading as an indication of value. The BOE
rate is based on an energy equivalent conversion method primarily applicable at
the burner tip and does not represent a value equivalent at the wellhead. In
accordance with Canadian practice, production volumes and revenues are reported
on a company gross basis, before deduction of Crown and other royalties, unless
otherwise stated. Unless otherwise specified, all reserves volumes in this news
release (and all information derived therefrom) are based on "company
gross reserves" using forecast prices and costs. Our oil and gas reserves
statement for the year-ended December 31, 2013 includes complete disclosure of
our oil and gas reserves and other oil and gas information in accordance with
NI 51-101, and is contained within our Annual Information Form which is
available on our SEDAR profile at www.sedar.com.  
This news release contains references to estimates of proved plus probable
reserves attributed to the assets acquired by the Company pursuant to the
Montney Acquisition. Such reserves reflect Company internally estimated
"gross" reserves prepared by a qualified reserves evaluator effective
December 31, 2013 in accordance with the definitions and provisions contained
in the COGE Handbook. Estimates of proved plus probable reserves contained
herein attributed to the assets being disposed of pursuant to the Alberta Gas
Disposition reflect "gross" reserves assigned by the Company's
independent reserves evaluator, Sproule Associates Limited, effective December
31, 2013.  
This news release contains references to estimates of oil and gas classified as
TPIIP, DPIIP, UPIIP and Contingent Resources in the Montney region in
northeastern British Columbia which are not, and should not be confused with,
oil and gas reserves. See "Definitions of Oil and Gas Resources and
Reserves". TPIIP, DPIIP and UPIIP have been estimated using a zero percent
porosity cutoff. 
Projects have not been defined to develop the resources in the Evaluated Areas
as at the evaluation date. Such projects, in the case of the Montney resource
development, have historically been developed sequentially over a number of
drilling seasons and are subject to annual budget constraints, Crew's
policy of orderly development on a staged basis, the timing of the growth of
third party infrastructure, the short and long-term view of Crew on gas prices,
the results of exploration and development activities of Crew and others in the
area and possible infrastructure capacity constraints. As with any resource
estimates, the evaluation will change over time as new information becomes
available. 
Crew's belief that it will establish significant additional reserves over
time with the conversion of Prospective Resource into Contingent Resource,
Contingent Resource into probable reserves and probable reserves into proved
reserves is a forward looking statement and is based on certain assumptions and
is subject to certain risks, as discussed below under the heading
"Forward-Looking Information and Statements". 
Cautionary Statements 
Forward-Looking Information and Statements 
This news release contains certain forward-looking information and statements
within the meaning of applicable securities laws. The use of any of the words
"expect", "anticipate", "continue",
"estimate", "may", "will", "project",
"should", "believe", "plans", "intends"
"forecast" and similar expressions are intended to identify
forward-looking information or statements. In particular, but without limiting
the foregoing, this news release contains forward-looking information and
statements pertaining to the following: completion of the Alberta Gas
Disposition and the timing thereof and anticipated benefits to be derived
therefrom; the effect of the Alberta Gas Disposition on continuing operations
and plans to expand the 2014 capital program on a post-transaction basis;
forecasted net debt after closing of the Alberta Gas Disposition; the volume
and product mix of Crew's oil and gas production; production estimates
including 2014 forecast average and exit productions; the recognition of
significant resources under the heading "Northeast British Columbia
Montney Resource Evaluation"; future oil and natural gas prices and
Crew's commodity risk management programs; future liquidity and financial
capacity; future results from operations and operating metrics; anticipated
reductions in operating costs and potential to improve ultimate recoveries and
initial production rates; future costs, expenses and royalty rates; future
interest costs; the exchange rate between the $US and $Cdn; future development,
exploration, acquisition and development activities and related capital
expenditures and the timing thereof; the number of wells to be drilled,
completed and tied-in and the timing thereof; the amount and timing of capital
projects including anticipated timing of the new Septimus facility; the total
future capital associated with development of reserves and resources; and
methods of funding our capital program, including possible non-core asset
divestitures and asset swaps. In this news release reference is made to the
Company's five year growth plan including future processing capacity in
Northeast British Columbia and a 2018 Montney production target of 45,000 boe
per day which are not estimates or forecasts of rates that may actually be
achieved. Such information reflects internal projections used by management for
the purposes of making capital investment decisions and for internal long range
planning and budget preparation. Accordingly, undue reliance should not be
placed on same. 
Forward-looking statements or information are based on a number of material
factors, expectations or assumptions of Crew which have been used to develop
such statements and information but which may prove to be incorrect. Although
Crew believes that the expectations reflected in such forward-looking
statements or information are reasonable, undue reliance should not be placed
on forward-looking statements because Crew can give no assurance that such
expectations will prove to be correct. In addition to other factors and
assumptions which may be identified herein, assumptions have been made
regarding, among other things: that all conditions to closing of the Alberta
Gas Disposition are satisfied or waived; the impact of increasing competition;
the general stability of the economic and political environment in which Crew
operates; the timely receipt of any required regulatory approvals; the ability
of Crew to obtain qualified staff, equipment and services in a timely and cost
efficient manner; drilling results; the ability of the operator of the projects
in which Crew has an interest in to operate the field in a safe, efficient and
effective manner; the ability of Crew to obtain financing on acceptable terms;
field production rates and decline rates; the ability to replace and expand oil
and natural gas reserves through acquisition, development and exploration; the
timing and cost of pipeline, storage and facility construction and expansion
and the ability of Crew to secure adequate product transportation; future
commodity prices; currency, exchange and interest rates; regulatory framework
regarding royalties, taxes and environmental matters in the jurisdictions in
which Crew operates; the ability of Crew to successfully market its oil and
natural gas products. There are a number of assumptions associated with the
potential of resource volumes assigned to the Evaluated areas including the
quality of the Montney reservoir, future drilling programs and the funding
thereof, continued performance from existing wells and performance of new
wells, the growth of infrastructure, well density per section, and recovery
factors and discovery and development necessarily involves known and unknown
risks and uncertainties, including those identified in this press release.  
The forward-looking information and statements included in this news release
are not guarantees of future performance and should not be unduly relied upon.
Such information and statements, including the assumptions made in respect
thereof, involve known and unknown risks, uncertainties and other factors that
may cause actual results or events to defer materially from those anticipated
in such forward-looking information or statements including, without
limitation: changes in commodity prices; the potential for variation in the
quality of the Montney formation; changes in the demand for or supply of
Crew's products; unanticipated operating results or production declines;
changes in tax or environmental laws, royalty rates or other regulatory
matters; changes in development plans of Crew or by third party operators of
Crew's properties, increased debt levels or debt service requirements;
inaccurate estimation of Crew's oil and gas reserve and resource volumes;
limited, unfavourable or a lack of access to capital markets; increased costs;
a lack of adequate insurance coverage; the impact of competitors; and certain
other risks detailed from time-to-time in Crew's public disclosure
documents (including, without limitation, those risks identified in this news
release and Crew's Annual Information Form). 
The forward-looking information and statements contained in this news release
speak only as of the date of this news release, and Crew does not assume any
obligation to publicly update or revise any of the included forward-looking
statements or information, whether as a result of new information, future
events or otherwise, except as may be required by applicable securities laws. 
Test Results and Initial Production Rates 
A pressure transient analysis or well-test interpretation has not been carried
out and thus certain of the test results provided herein should be considered
to be preliminary until such analysis or interpretation has been completed.
Test results and initial production rates disclosed herein may not necessarily
be indicative of long term performance or of ultimate recovery. 
BOE equivalent 
Barrel of oil equivalents or BOEs may be misleading, particularly if used in
isolation. A BOE 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 than the energy equivalency of 6:1, utilizing a 6:1
conversion basis may be misleading as an indication of value. 
Crew is an oil and gas exploration and production company whose shares are
traded on the Toronto Stock Exchange under the trading symbol "CR". 
Financial statements and Management's Discussion and Analysis for the
three month period ended March 31, 2014 and 2013 will be filed on SEDAR at
www.sedar.com and are available on the Company's website at
www.crewenergy.com. 
-30-
FOR FURTHER INFORMATION PLEASE CONTACT: 
Crew Energy Inc.
Dale Shwed
President and C.E.O.
(403) 231-8850
dale.shwed@crewenergy.com
or
Crew Energy Inc.
John Leach
Senior Vice President and C.F.O.
(403) 231-8859
john.leach@crewenergy.com
or
Crew Energy Inc.
Rob Morgan
Senior Vice President and C.O.O.
(403) 513-9628
rob.morgan@crewenergy.com 
INDUSTRY:  Energy and Utilities - Oil and Gas  
SUBJECT:  ERN 
-0-
-0- May/07/2014 21:57 GMT
 
 
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