Mr. Scott Ratushny reports

CARDINAL ENERGY LTD. ANNOUNCES FIRST QUARTER RESULTS

Cardinal Energy Ltd. has released its operating and financial results for the three months ended March 31, 2016. The company also announces that its unaudited financial statements and management's discussion and analysis for the quarter ended March 31, 2016, will be available on SEDAR and Cardinal's website.

In Q1 Cardinal focused its operations in three areas:

• Reducing operating costs;
• Increasing its hedging exposure;
• Preserving capital.

Cardinal decreased its unit operating costs for the first quarter by 9 per cent to $21.50/barrel of oil equivalent from $23.66/boe in the fourth quarter of 2015. The company is on track to continue to see further cost reductions.

In the first quarter commodity prices fell to levels that both Cardinal and industry were not expecting. This dramatic fall in pricing further reinforced the need to protect revenue through hedging. The company added sufficient hedges to protect its capital program and dividend in 2016, and has begun to systematically layer in additional hedges for 2017 and 2018. The downturn and pricing levels in the first quarter have further emphasized the need to control as many of the company's inputs as possible to try and reduce the volatility of its business.

The company undertook a very modest capital program in the first quarter. The low-decline nature of the company's asset base allowed it to spend only $2.4-million in the quarter while maintaining production at the budgeted level of 14,245 barrels of oil equivalent per day for the quarter. This was an increase of 29 per cent over the first quarter of 2015.

               FINANCIAL AND OPERATING HIGHLIGHTS
          (In thousands, except per share and per boe)

                                      Three months ended March 31,
                                                2016         2015

Petroleum and natural gas revenue            $33,424      $38,409
Cash flow from operations                      7,758       21,944
Basic per share                                 0.12         0.38
Fully diluted per share                         0.12         0.38
Net (loss)                                   (15,644)     (12,847)
Basic per share                                (0.24)       (0.22)
Fully diluted per share                        (0.24)       (0.22)
Dividends declared                             6,917       12,021
per share                                      0.105         0.21
Net debt(1)                                  147,022       45,935
Development capital expenditures               2,077        2,711
Operating
Average daily production
Crude oil and NGL (bbl/d)                     12,597       10,225
Natural gas (mcf/d)                            9,886        4,785
Total (boe/d)                                 14,245       11,023
Netback
Petroleum and natural gas revenue              25.78        38.72
Royalties                                       3.57         4.87
Operating expenses                             21.50        23.20
                                             -------      -------
Netback                                         0.71        10.65
Realized gain on derivatives                    8.36        15.10
                                             -------      -------
Netback after risk management                   9.07        25.75
                                             =======      =======

(1) Includes $50-million face value convertible debentures.

Guidance confirmation

There has been no change to Cardinal's base capital expenditure budget for 2016. The budget is anticipated to result in average and exit production for 2016 of approximately 14,600 boe/d and deploys total development capital of $25-million. The company continues to expect $60-million in cash flow from operations based on an average West Texas Intermediate price of $40 (U.S.)/barrel, an exchange rate of 0.71 U.S. dollar/Canadian dollar, a differential to Western Canadian Select of $19 and the effect of existing 2016 hedges. Given the recent improvement in crude oil prices, the company has not adjusted these budget inputs. The budget achieves a total payout ratio of less than 100 per cent in this lower-commodity-price environment and net bank debt of $90-million at year-end.

The company is well positioned in the current low-price environment to execute its base capital budget and maintain production while maintaining a total payout ratio of less than 100 per cent. If oil prices continue to improve the company will continue to add to its existing 2016 and 2017 hedge portfolio, and will consider increasing its base capital budget and guidance for 2016.

Cardinal was able to successfully maintain its base production levels during the lowest quarter for oil pricing since its inception. The low-decline nature of the company's production enabled Cardinal to hold production levels with only $2.4-million of capital expenditures in the first quarter. The company was also able to successfully reduce operating costs by $2.16 per boe compared with the fourth quarter 2015. The operating cost reductions were realized throughout all of the company's properties.

Hedging has been an important part of Cardinal's business strategy. During the quarter the company increased its 2016 and 2017 hedge portfolio for oil to WTI, natural gas and the WCS/WTI oil differential. Approximately 70 per cent of the company's oil production is priced off of WCS and the differential for WCS has had significant volatility. The widening of the differential substantially reduced the company's fourth quarter and Q1 netback. The company has systematically hedged its WCS exposure for 2016 and 2017 to mitigate this exposure.

Cardinal continues to opportunistically hedge its oil and natural gas production for 2016, 2017 and 2018.

                                      HEDGES

                          WTI                            AECO               
                      average           Volume        average         Volume
Year                    price           hedged          price         hedged

2016 (April to 
December)              $63.90      6,667 bbl/d(1)       $2.12     2,560 gj/d(2)
2017                   $62.33      4,949 bbl/d          $2.14     2,496 gj/d
2018                   $57.50        500 bbl/d          $2.25(3)  1,000 gj/d
                                                                            
(1) Five hundred barrels per day collared from April to June, 2016, at $70 
to $78. 
(2) Three thousand gigajoules per day collared from April to December, 2016, 
at $2.00 to $2.93. 
(3) Two thousand eighteen AECO hedges only run January through April. 
(4) Does not include WCS hedges, refer to the management's discussion and 
analysis.

With increased oil prices in April and some near-term price stability, the company is cautiously optimistic in its approach to the remainder of 2016. No new wells were drilled by Cardinal in the first quarter. The company has recently begun a four-well drilling program in Bantry and expects to drill an additional four wells in the third quarter as part of its base budget. The company is starting to see some additional unbudgeted cost savings in its drilling program and expects to increase the number of wells drilled as a result of these cost savings.

The company's staff has done an excellent job of integrating the Mitsue property into the portfolio. The company has been able to begin moving forward with growth-focused operations on the property and has begun the planning and implementation of operating cost-reduction initiatives. The company's geological team has started to put together a drilling inventory on the property and it expects to drill the first horizontal well in Mitsue in late Q4 or early Q1 2017.

With the positive move forward in oil prices the company has initiated several workovers of under optimized and suspended wells.

The company continues to evaluate acquisition opportunities and sees this opportunity list slowly starting to grow and be more accessible.

We seek Safe Harbor.