PetroShale Announces First Quarter 2014 Results

FOR: PetroShale Inc. 
MAY 29, 2014 
PetroShale Announces First Quarter 2014 Results 
CALGARY, ALBERTA--(Marketwired - May 29, 2014) - 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
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
Thank you again for your interest in PetroShale, and we look forward to keeping
our shareholders updated on our ongoing growth and expansion.  
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.
INDUSTRY:  Energy and Utilities - Oil and Gas  
-0- May/30/2014 00:00 GMT
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