Mr. Jim McFarland reports

VALEURA ANNOUNCES FIRST QUARTER 2016 FINANCIAL AND OPERATING RESULTS AND YAYLI-1 WELL COMPLETION UPDATE AT BANARLI

Valeura Energy Inc. is releasing highlights of its unaudited financial and operating results for the three-month period ended March 31, 2016, and an update on subsequent developments. The complete quarterly reporting package for the corporation, including the unaudited financial statements, and associated management's discussion and analysis (MD&A), has been filed on SEDAR and posted on the corporation's website.

"Valeura recorded solid results in the first quarter of 2016, realizing continued strong natural gas sales price realizations and operating netbacks in Turkey averaging $10.05 per thousand cubic feet and $45.85 per barrel of oil equivalent, respectively, and delivering $2.0-million in funds flow from operations," said Jim McFarland, president and chief executive officer. "Net sales in the first quarter were down slightly from the fourth quarter of 2015, due to natural declines on the joint venture lands, partially offset by production from the Bati Gurgen-1 well on our 100-per-cent Banarli licences, which achieved first gas on March 12. Sales were up in April to approximately 1,000 barrels of oil equivalent per day, reflecting a full month of production from Banarli. Bati Gurgen-1 is currently producing conventional natural gas from the Osmancik formation at a restricted rate of 2.6 million cubic feet per day.

"We have carried out an extensive fracture stimulation and evaluation program in the Yayli-1 well at Banarli in overpressured, tight gas sands in the Teslimkoy formation to provide important calibration data aimed at facilitating the deep farm-in process. We completed two fracs with encouraging results that have been shared with potential farm-in partners. We plan to move uphole to complete indicated conventional gas pay in the shallower Osmancik formation.

"Efforts are continuing to seek a joint venture partner to farm in on the deeper horizons at Banarli. Active discussions have been under way with a number of parties that have accessed the data room under confidentiality agreements. We are pleased that our Banarli well results have sparked additional interest and accelerated the pace of these discussions."

First quarter 2016 results at a glance:

• Strategic shift to Banarli (Valeura, 100-per-cent working interest) yielding positive results:
  • Bati Gurgen-1 on stream at a restricted IP30 rate of 3.4 million cubic feet per day from the Osmancik;
  • Yayli-1 frac program in the Teslimkoy yielded encouraging results;
• Net sales of 792 barrels of oil equivalent per day (April, 2016, sales averaged approximately 1,000 barrels of oil equivalent per day, of which 45 per cent was from Banarli);
• Funds flow from operations of $2.0-million;
• Working capital surplus of $6.5-million;
• Natural gas price realization of $10.05 per thousand cubic feet;
• Operating costs $6.20 per barrel of oil equivalent;
• Operating netback $45.85 per barrel of oil equivalent;
• Net capital expenditures of $2.7-million.

Operational highlights

Net petroleum and natural gas sales in Turkey in the first quarter of 2016 averaged 792 barrels of oil equivalent per day, which was down 2 per cent from the fourth quarter of 2015, and down 35 per cent from the first quarter of 2015. Net sales in the first quarter of 2016 included 4.7 million cubic feet per day of natural gas and 9.0 barrels of oil per day.

Lower sales in the first quarter of 2016 reflect the impact of reduced drilling and fracing operations on the joint venture lands acquired from Thrace Basin Natural Gas (Turkiye) Corporation (TBNG) and Pinnacle Turkey Inc. (PTI) (the TBNG JV), and resulting natural declines, partially offset from new Banarli volumes, which commenced on March 12, 2016.

Thrace basin -- Banarli exploration licences (Valeura, 100-per-cent working interest)

Bati Gurgen-1 well:

• The company achieved first gas from the Bati Gurgen-1 well on March 12, 2016. The well is producing conventional natural gas from the Osmancik formation and achieved a restricted IP30 rate of 3.4 million cubic feet per day.
• DeGolyer and MacNaughton assigned proved plus probable reserves of 4.9 billion cubic feet (gross) to the Bati Gurgen-1 discovery at Dec. 31, 2015, in the reserves report for the corporation dated March 8, 2016.
• The well is currently producing at a restricted rate of approximately 2.6 million cubic feet per day on an 18/64ths-inch choke. The gas is being produced from an initial completion of 12 metres of net gas pay in the Osmancik formation at a depth of 1,480 metres. It is expected that up to an additional 20 metres of indicated net gas pay in the Osmancik and shallower Danismen formations may be perforated in the next one or two months.
• The gas is being sold to the TBNG JV, net of a transportation and marketing fee, and is being distributed to existing TBNG JV customers located north of Banarli. Valeura receives some benefit from this fee arrangement and the associated proceeds by virtue of its 40-per-cent working interest in the TBNG JV facilities. The average price realization for Banarli gas sales in March was $9.56 per thousand cubic feet, which compares with $9.97 per thousand cubic feet realized by the TBNG JV in the same month.

Yayli-1 well:

• The company completed two fracs in the overpressured tight gas sands in the Teslimkoy formation at a depth of 2,700 to 2,900 metres as a first step prior to completing indicated conventional natural gas pay in the Osmancik formation. This frac program was designed to provide important calibration data on the deep tight gas play to facilitate discussions with potential farm-in partners in the deep horizons. The results of the frac program have been shared with interested parties that have signed confidentiality agreements and are accessing the farm-in process data room.
• The company is encouraged that the evaluation program has confirmed overpressure below 2,500 metres and both frac intervals produced natural gas.
• It is planned to move uphole and complete approximately 13 metres of indicated conventional gas pay in the Osmancik formation at a depth of 1,800 metres. With success, the well can be put on stream quickly, requiring only a short tie-in to a gathering line that connects to the Bati Gurgen-1 well and the TBNG JV facilities. Natural gas would be marketed under the same contract that is in place for the Bati Gurgen-1 well.

Other:

• Active discussions are continuing to secure a joint venture partner to further advance an exploration drilling and fracing evaluation program in the deeper horizons below approximately 2,500 metres at Banarli, targeting to prove up the potential of a basin-centred gas play.

Thrace basin -- TBNG JV (Valeura, 40-per-cent working interest):

• There was no drilling on the TBNG JV lands in the first quarter of 2016.
• The TBNG JV has continued its parallel process to seek a farm-in partner to explore the deeper horizons on certain JV lands.

There is no certainty that a deep farm-in transaction will be completed with respect to Banarli or the TBNG JV lands, or the timing of final terms thereof.

Financial highlights

The average natural gas price realization in Turkey of $10.05 per thousand cubic feet in the first quarter of 2016 was up marginally from the fourth quarter of 2015, and down 8 per cent from the first quarter of 2015, due primarily to fluctuations in the Turkish Lira exchange rate.

The average operating netback of $45.85 per barrel of oil equivalent in the first quarter of 2016 was up 3 per cent from the fourth quarter of 2015, due to higher natural gas price realizations and lower unit operating costs, and down 8 per cent from the first quarter of 2015, due to lower natural gas price realizations, partially offset by lower unit operating costs.

Working capital surplus at March 31, 2016, was $6.5-million, including cash of $3.7-million.

Funds flow from operations of $2.0-million in the first quarter of 2016 was up 23 per cent from the fourth quarter of 2015, due primarily to lower general and administrative expenses, and lower unit operating costs, and down 46 per cent from the first quarter of 2015, due to lower sales volumes and lower natural gas price realizations, partially offset by lower general and administrative expenses, and lower unit operating costs.

Net capital expenditures of $2.7-million in the first quarter of 2016 were down 56 per cent from the fourth quarter of 2015, due to lower drilling expenditures on the Banarli licences, and up 88 per cent from the first quarter of 2015, due to higher fracing and completion expenditures on the Banarli licences, partially offset by lower drilling expenditures on the TBNG JV lands.

                       FINANCIAL AND OPERATING RESULTS SUMMARY
 (in thousands of Canadian dollars, except shares outstanding, per-share data and as indicated)

                                      Three months ended  Three months ended  Three months ended
                                          March 31, 2016      Dec. 31,  2015     March 31,  2015
Financial  
Petroleum and natural gas revenues           $     4,328         $     4,425         $     7,167
Funds flow from operations                         1,969               1,600               3,673
Net income (loss) from operations                   (992)                287                 107
Capital expenditures                               2,704               6,100               1,435
Net working capital surplus                        6,467               7,253              12,288
Cash                                               3,726               6,973               8,082
Share trading                                                       
High                                         $      0.83         $      0.66         $      0.70
Low                                          $      0.60         $      0.36         $      0.36
Close                                        $      0.68         $      0.66         $      0.55
Operations  
Production                 
Crude oil (bbl/d)                                      9                   8                  10
Natural gas (mcf/d)                                4,697               4,805               7,273
Barrel of oil equivalent (at 6:1)                    792                 809               1,223
Average reference price                            46.47               58.16               66.91
Brent ($/bbl)                                      46.47               58.16               66.91
BOTAS reference ($/mcf)                            10.26               10.07               11.06
Average realized price  
Crude oil ($/bbl)                                  39.75               44.51               50.19
Natural gas, Turkey ($/mcf)                        10.05                9.93               10.88
Average operating netback  ($/boe at 6:1)          45.85               44.56               49.58

Boru Hatlari ile Petrol Tasima Anonim Sirketi (BOTAS) owns and operates the national crude oil 
and natural gas pipeline grids in Turkey, and purchases the majority of Turkey's natural gas 
imports. BOTAS regularly posts prices and its industrial interruptible tariff benchmark is shown
here as a reference price.

Outlook

The corporation expects to continue to execute its strategy to shift emphasis from its non-operated 40-per-cent working interest in the TBNG JV to its 100-per-cent-owned and operated Banarli licences in the Thrace basin.

In 2016, the corporation expects to complete a capital expenditure program in the range of $13-million to $15-million (net) in Turkey focused on natural gas development in the Thrace basin, and financed from cash on hand and cash flow. The work program and budget aim to achieve the following key objectives in 2016:

• Grow volumes on Valeura's 100-per-cent-owned and operated Banarli licences by drilling new conventional gas wells targeting the Osmancik and Danismen formations, offsetting the Bati Gurgen-1 and Yayli-1 wells drilled in late 2015;
• Mitigate natural declines on the TBNG JV lands from a work program financed by operating cash flow from the JV;
• Achieve corporate average sales volumes in the range of 1,100 to 1,200 barrels of oil equivalent per day (net);
• Continue to seek a farm-in partner to further advance a drilling and fracing program aimed at proving up a potential basin-centred gas play in overpressured formations below approximately 2,500 metres on the Banarli licences and certain TBNG JV lands.

At Banarli, capital expenditures in 2016 are budgeted in the range of $11-million to $12-million. This includes the completion and tie-in of the Bati Gurgen-1 and Yayli-1 wells, and the drilling, completion and tie-in of up to three new wells targeting conventional natural gas down to a depth of approximately 2,500 metres. With success, it is expected that these new wells could be quickly tied into existing infrastructure under the current gas contract with the TBNG JV.

We seek Safe Harbor.