PetroShale Announces First Quarter 2014 Results

PetroShale Announces First Quarter 2014 Results 
CALGARY, ALBERTA -- (Marketwired) -- 05/29/14 --   PetroShale Inc.
("PetroShale" or the "Company") (TSX VENTURE: PSH)(OTCQX: PSHIF) is
pleased to announce its financial and operating results for the
quarter ended March 31, 2014. The Company's unaudited consolidated
financial statements and corresponding Management's Discussion and
Analysis (MD&A) for the three month period ended March 31, 2014, will
be available on SEDAR at, on the OTCQX website at, and on PetroShale's website at
Copies of the materials can also be obtained upon request without
charge by contacting the Company directly.  
Operating Highlights: 

--  Reported production for the quarter of 166 boe/d (Company interest,
    gross of royalty - 127 boe/d net of royalty interest), weighted 95% to
    light crude oil and liquids, a 34% increase over the same period in
--  Including incremental production volumes from four (gross) new wells
    that came on-stream in February 2014 in the Company's Stockyard Creek
    asset, confirmed run-rate production through early May of approximately
    300 boe/d (gross of royalty); 
--  In addition to the four (0.2 net) new wells brought onto production
    during the quarter, the Company drilled and is in various stages of
    completing an additional four (0.4 net) wells subsequent to the end of
    the quarter; 
--  Realized strong operating netbacks of $54.22 per boe (Company interest,
    gross of royalty, and excluding the impact of hedging - $71.14 per boe
    net of royalty interest and excluding hedging), which reflects the
    Company's high quality production, combined with a strong pricing
    environment and low operating expenses; and 
--  Continued to successfully execute on its aggressive acquisition strategy
    in North Dakota, closing three separate transactions during the period.
    These include an 18.75% Working Interest ("WI") in a proposed drilling
    unit in McKenzie County, an approximate 19% WI in a drilling unit in
    Williams County, as well as the acquisition of additional undeveloped
    land in Mountrail County through a Federal land sale. Subsequent to the
    end of the quarter, the Company closed on the acquisition of an
    additional 9.5% interest in two of its existing wells in Stockyard
    Creek, and acquired two additional acreage parcels in McKenzie County. 

Financial Highlights: 

--  Generated $1.1 million in revenue net of royalties during the period, an
    increase of 47% over the same period in 2013, reflecting the substantial
    growth in the Company's assets; 
--  Enhanced ongoing financial flexibility to fund further acquisitions and
    capital programs by securing a subordinated loan facility provided by
    the Company's two largest shareholders. The facility was recently
    increased from $20 million to $30 million in capacity; and 
--  Subsequent to the end of the period, announced a private placement of up
    to 5 million common voting shares at a price of $1.30 per share, for
    total gross proceeds of up to $6.5 million. Proceeds will be used
    initially to repay outstanding debt. Completion of the private placement
    is subject to the approval of the TSX Venture Exchange. 

Results of Oil and Gas Activities 

                                                    March 31,     March 31, 
For the three months ended                               2014          2013 
Sales volumes                                                               
  Oil and natural gas liquids (Bbl/d)                     159           117 
  Natural gas (Mcf/d)                                      41            41 
Barrel of oil equivalent (Boe/d)                          166           124 
Barrel of oil equivalent, net of royalty (Boe/d)          127            96 
Operating Netbacks ($/Boe)                                                  
  Revenue                                         $     92.57   $     82.38 
  Royalties                                            (22.02)       (18.50)
  Realized hedge loss                                   (0.54)            - 
  Operating costs                                      (10.84)       (18.50)
  Production taxes                                      (5.49)        (2.23)
Operating netback                                 $     53.68   $     43.15 
Operating netback prior to hedging                $     54.22   $     43.15 
Operating netback prior to hedging, on a net of                             
 royalty basis                                    $     71.14   $     55.65 

Earnings before interest, taxes, depreciation and amortization (EBITDA)
was $204,000 for the three month period ended March 31, 2014 compared
to $141,000 for the quarter ended March 31, 2013. For the first
quarter ended March 31, 2014 the Company reported a net loss of
$554,000 ($0.02 per share), compared to a loss of $17.4 million
($0.60 per share) for the three month period ended March 31, 2013
(primarily due to an impairment charge taken in the prior period).  
Letter to shareholders:  
The first three months of calendar 2014 coincide with PetroShale's
first quarterly reporting period since changing our year end to
December 31.   
Through the first quarter, we continued to execute on our strategy of
acquiring and consolidating working interests ("WI") in the most
prolific and proven areas of the Williston Basin. In January 2014, we
successfully acquired an 18.75% WI in a proposed drilling unit within
the highly productive McKenzie County. This drilling unit has been
spaced for 8 wells and will be operated by EOG Resources, Inc., a
leading and technically skilled operator in the North Dakota Bakken.  
In February 2014, we followed up on that transaction with the
purchase of acreage in Williams County, consisting of an
approximately 19% WI in a drilling unit. Finally, through our
participation in a Federal land sale, we successfully acquired
additional prospective but undeveloped land in Mountrail County for
US$1.8 million. Subsequent to the end of the quarter, we purchased an
additional working interest of approximately 9.5% in two of our
existing wells in Stockyard Creek, and also acquired an interest in
two additional acreage parcels in McKenzie County.   
In May, 2014, we announced a private placement of up to 5 million
common voting shares at a price of $1.30 per share, to generate gross
proceeds of up to $6.5 million. Upon closing, which is anticipated in
early June 2014, net proceeds will be used to repay a portion of
outstanding debt. This, along with the extension of our subordinated
loan facility, will provide PetroShale with enhanced financial
flexibility as we continue to pursue acquisitions that add to our
growing asset base in the North Dakota Bakken.  
With our financial strength coupled with our business alliance with
premier operator, Slawson Exploration Company Inc., we are well
positioned to continue seeking strategic asset acquisitions in the
Williston Basin that offer us the ability to grow organically through
a high quality asset base. As drilling activity continues across our
asset base through the balance of 2014, we expect to benefit from
resulting increases in production, cash flow and booked reserves.  
Thank you again for your interest in PetroShale, and we look forward
to keeping our shareholders updated on our ongoing growth and
M. Bruce Chernoff  
Executive Chairman and CEO  
About PetroShale 
PetroShale is a growing oil company engaged in the acquisition and
consolidation of interests in the most prolific and proven areas of
the Williston Basin in North Dakota and Montana.  
Neither the TSX Venture Exchange nor its Regulation Services Provider
(as that term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this release. 
Note Regarding Forward-Looking Statements and Other Advisories  
Company interest means, in relation to the Company's interest in
production and reserves, the Company's working interest (operating
and non-operating) before the deduction of royalties payable and
including such entity's royalty interest in production and reserves.
Where volumes of reserves and production have been presented, they
have been presented as company working interest, gross of royalties,
except where otherwise noted. All operating netbacks referenced in
this press release are Company working interest, except where
otherwise noted. All dollar figures included herein are presented in
Canadian dollars, unless otherwise noted. 
Within this press release, references are made to terms commonly used
in the oil and natural gas industry. The terms "netback", "operating
netback" or "EBITDA" in this press release are not recognized
measures under generally accepted accounting principles in Canada.
PetroShale uses "netback" as a key performance indicator and it is
used by the Company to evaluate the operating performance of its
petroleum and natural gas assets and is determined by deducting
royalties and production and operating expenses from petroleum and
natural gas revenue. EBITDA means earnings before interest, taxes,
depletion and depreciation, impairments, finance expense, foreign
exchange gain or loss, share-based compensation and other non-cash
charges to income. Management believes that in addition to net income
(loss), operating netback and EBITDA are useful supplemental measures
as they assist in the determination of the Company's operating
performance, leverage and liquidity. Readers are cautioned, however,
that these measures should not be construed as an alternative to net
income (loss) or cash flow from (used in) operating activities
determined in accordance with IFRS as an indication of our
This press release contains forward-looking statements and
forward-looking information (collectively "forward-looking
information") within the meaning of applicable securities laws
relating to aspects of management focus, objectives, strategies and
business opportunities. Forward-looking information typically uses
words such as "anticipate", "believe", "project", "expect", "goal",
"plan", "intend" or similar words suggesting future outcomes,
statements that actions, events or conditions "may", "would", "could"
or "will" be taken or occur in the future. The forward-looking
information is based on certain key expectations and assumptions made
by the Company's management, including expectations and assumptions
concerning prevailing commodity prices, exchange rates, interest
rates, applicable royalty rates and tax laws; future production rates
and estimates of operating costs; performance of existing and future
wells; reserve and resource volumes; anticipated timing and results
of capital expenditures; anticipated timing of the closing and the
size of the private placement, and the use of proceeds therefrom; the
success obtained in drilling new wells; the sufficiency of budgeted
capital expenditures in carrying out planned activities; the timing,
location and extent of future drilling operations; the state of the
economy and the exploration and production business; results of
operations; performance; business prospects and opportunities; the
availability and cost of financing, labor and services; the impact of
increasing competition; ability to market oil and natural gas
successfully; the Company's ability to access capital, and obtaining
the necessary regulatory approvals, including the approval of the TSX
Venture Exchange.  
Although the Company believes that the expectations and assumptions
on which such forward-looking information is based are reasonable,
undue reliance should not be placed on the forward-looking
information because the Company can give no assurance that they will
prove to be correct. Since forward-looking information addresses
future events and conditions, by its very nature they involve
inherent risks and uncertainties. The Company's actual results,
performance or achievement could differ materially from those
expressed in, or implied by, the forward-looking information and,
accordingly, no assurance can be given that any of the events
anticipated by the forward-looking information will transpire or
occur, or if any of them do so, what benefits that the Company will
derive therefrom. Management has included the above summary of
assumptions and risks related to forward-looking information provided
in this press release in order to provide security holders with a
more complete perspective on the Company's future operations and such
information may not be appropriate for other purposes.  
Readers are cautioned that the foregoing lists of factors are not
exhaustive. Additional information on these and other factors that
could affect our operations or financial results are included in
reports on file with applicable securities regulatory authorities and
may be accessed through the SEDAR website ( These
forward-looking statements are made as of the date of this press
release and the Company disclaims any intent or obligation to update
publicly any forward-looking information, whether as a result of new
information, future events or results or otherwise, other than as
required by applicable securities laws.  
Where amounts are expressed on a barrel of oil equivalent ("boe")
basis, natural gas volumes have been converted to boe using a ratio
of 6,000 cubic feet of natural gas to one barrel of oil (6 Mcf: 1
Bbl). This boe conversion ratio 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 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 Mcf: 1 Bbl,
utilizing a conversion ratio at 6 Mcf: 1 Bbl may be misleading as an
indication of value. 
PetroShale Inc.
Attention: Executive Chairman and CEO
Phone: +1.303.297.1407 
Cindy Gray
5 Quarters Investor Relations, Inc.
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