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Mr. Brad Gabel reports

CANAMAX ANNOUNCES FIRST QUARTER MAY 31, 2014 FINANCIAL AND OPERATING RESULTS

Canamax Energy Ltd. has released its financial and operational results for the first quarter ended May 31, 2014.

Highlights

Canamax exited the first quarter ended May 31, 2014, with a net production rate of approximately 820 barrels of oil equivalent per day (boe/d) and has increased net production to approximately 1,200 boe/d as at late July. As a result of the activities below, the company was able to almost double its exit production rate from the previous quarter end of Feb. 28, 2014 (430 boe/d net), to the current quarter-end. In addition, Canamax strengthened its financial position at May 31, 2014, with $6.7-million of working capital and no debt.

• During March, Canamax completed a successful horizontal, Cardium farm-in well at Wapiti in which Canamax earned a 70-per-cent working interest. The initial 30-day production rate (IP30) for this well was approximately 405 boe/d gross (86 per cent oil and NGL (natural gas liquids)) and 286 boe/d net. The well flowed during April and May and at May 31 the net production rate was approximately 100 boe/d.
• On April 30, Canamax acquired 100 per cent of the shares of Ki Exploration Inc. in exchange for three million Canamax units valued at $4.4-million for accounting purposes. At the acquisition date, Ki's net production was approximately 330 boe/d (34 per cent oil and NGL; 66 per cent natural gas). During May, significant maintenance work was performed on the Ki wells as little maintenance capital had been spent on these wells by Ki over the past year due to financial constraints.
• On April 30 and May 15, respectively, Canamax closed two tranches of a brokered, private placement financing that raised aggregate gross proceeds of $13.0-million (net cash proceeds of $12.1-million). The financing significantly exceeded management's initial target of $5.0-million to $8.0-million.
• During May, Canamax acquired five sections (net four) of land at Flood from a peer company for $800,000. The acquisition also included 40 bbl/d of net Montney oil production from five producing wells, compression facilities and a gas sales line for produced solution gas. This acquisition increased the Flood property to 42 (net 41) sections at May 31.
• During March, the following senior management team members were appointed by the company: Brad Gabel, president and chief executive officer; Chris Martin, vice-president, finance, and chief financial officer; and Jeremy Krukowski, vice-president, operations, and chief operating officer. Mr. Gabel and Mr. Martin bring significant acquisition and divestiture and public markets experience to Canamax, while Mr. Krukowski brings significant operational experience to the company.

Subsequent to quarter-end May 31, 2014, and through late July, Canamax completed the following:

• The company drilled two successful vertical Montney wells at Flood and placed these wells on production on July 18.
• The company acquired the remaining working interest on the five newly acquired sections at Flood. After this acquisition, the company's working interest at Flood increased to 100 per cent on all 42 sections.
• The company activated the water handling/disposal facilities on the southwest portion of the Flood property and placed four shut-in wells on production that were waiting for these facilities to start-up. As a result of the new drills, the working interest acquisition and start-up of the shut-in wells, the aggregate Montney oil production at Flood increased from 40 boe/d at May 31 to approximately 350 boe/d in late July.
• The company increased the production from the acquired Ki properties by approximately 130 boe/d through four well recompletions and the optimization of a number of wells.
• The company established a $6-million revolving credit facility with a Canadian chartered bank.
• The company continued to build the Canamax team to match the increased activity levels in the company including the hiring of the following new employees: land manager, field superintendent, controller and operations manager.

During May, Canamax announced a capital expenditure budget of $14-million for the months of June through December, 2014. The majority of the budget (approximately 75 per cent) has been allocated to the continued development of Flood and includes the drilling of eight wells (two of which were completed in June/July), and expanded infrastructure to tie in all of the wells to Canamax's central water handling/disposal facilities.

During late June, all Brazeau River production (approximately 340 net boe/d) was shut in for a three-week period as the Keyera gas plant in the area was down for a plant turnaround. Full production resumed in the area on July 12.

                  FINANCIAL AND OPERATIONAL SUMMARY
            (In thousands of dollars, except where indicated)

                                                    Three months      Three months
                                                           ended             ended
                                                    May 31, 2014      May 31, 2013

Revenue                                                   $3,250               $24
Operating netback (loss)                                  $1,560              ($6)
Funds from continuing operations (loss)                     $528             ($97)
Per share (loss)                                           $0.02           ($0.01)
Net (loss) -- continuing operations                     ($1,221)            ($120)
Per share (loss)                                         ($0.04)           ($0.01)
Net (loss) -- discontinued operations                          -            ($146)
Per share (loss)                                               -           ($0.02)
Net capital expenditures                                  $3,052                 -
Net proceeds from financings                             $12,080                 -
Proceeds from share purchase warrant and stock
option exercises                                            $518                 -
Cash and working capital -- end of
period (loss)                                             $6,698            ($505)
Operating
Average daily production
Oil and NGL (bbl/d)                                          293                 4
Natural gas (mcf/d)                                        2,197                 5
Oil equivalent (boe/d)                                       659                 5
Average price
Oil and NGL ($/bbl)                                       $80.87            $57.02
Natural gas ($/mcf)                                        $5.28             $4.22
Oil equivalent ($/boe)                                    $53.56            $56.47
Royalties and operating expenses ($/boe)                  $27.85            $62.04
Operating netback ($/boe) (loss)                          $25.71           ($5.57)

Outlook

Management of Canamax continues to assess corporate acquisition opportunities in Western Canada given the number of junior oil and gas companies in financial distress -- the residual effects of low natural gas prices during 2010 through 2013 and the limited access to capital during those periods. In addition, the company continues to negotiate property acquisitions with peer companies in an effort to enhance its core operating areas.

The net proceeds of $12.1-million from the recently closed financing, plus the newly established credit facilities of $6-million, will give Canamax the financial strength to execute its capital expenditure plan for the remainder of the year and also allow the company to continue seeking accretive acquisitions.

We seek Safe Harbor.