Mr. Walter Vrataric reports

CHINOOK ENERGY ANNOUNCES YEAR-END 2013 RESULTS

Chinook Energy Inc. has released its audited year-end financial results, as well as certain year-end operational results. The audited financial results presented herein are consistent with the unaudited financial results announced in the news release issued on Feb. 26, 2014.

The company will file later this evening its audited consolidated financial statements for the years ended Dec. 31, 2013, and 2012, and related management's discussion and analysis on the SEDAR website and the company's website. Operational and financial highlights for the three months and year ended Dec. 31, 2013, are noted herein and should be read in conjunction with the audited consolidated financial statements and related MD&A.

              FOURTH QUARTER AND YEAR-END OPERATING HIGHLIGHTS

                                   Three months ended         Year ended
                                          Dec. 31,              Dec. 31,
                                      2013       2012       2013       2012
Operations                                                                 
Production                                                                 
Oil (bbl/d)                          3,356      4,035      3,418      3,642
Natural gas liquids (bbl/d)            722      1,003        838      1,117
Natural gas (Mcf/d)                 33,612     39,585     35,396     44,548
Average daily production                                                   
(boe/d)                              9,680     11,636     10,155     12,184
Sales                                                                      
Oil (bbl/d)                          3,725      4,264      3,398      3,609
Natural gas liquids (bbl/d)            722      1,003        838      1,117
Natural gas (Mcf/d)                 33,612     39,584     35,396     44,548
Average daily sales (boe/d)         10,049     11,864     10,136     12,151
Sales prices                                                               
Average oil price ($/bbl)          $ 98.57    $ 97.72    $ 99.29    $ 96.61
Average natural gas liquids                                                
price ($/bbl)                      $ 63.74    $ 57.71    $ 59.72    $ 60.26
Average natural gas price                                                  
($/Mcf)                             $ 3.99     $ 3.39     $ 3.70     $ 2.55
Netback                                                                 
Average commodity pricing                                                  
($/boe)                            $ 54.46    $ 51.30    $ 51.16    $ 43.58
Royalties ($/boe)                  $ (4.61)   $ (0.64)   $ (4.14)   $ (2.70)
Net production expenses ($/boe)    $(19.32)   $(18.98)   $(18.13)   $(17.46)
Cash G&A ($/boe)                   $ (3.10)   $ (4.48)   $ (2.85)   $ (3.42)
Netback ($/boe)                    $ 27.43    $ 27.20    $ 26.04    $ 20.00
Wells drilled (net)                                                        
Oil                                   1.65       2.96      10.89       8.09
Gas                                     --         --         --       1.00
Dry                                     --         --       0.86       0.96
Total wells drilled (net)             1.65       2.96      11.75      10.05

             FOURTH QUARTER AND YEAR-END FINANCIAL HIGHLIGHTS
                  ($ thousands, except per-share amounts)

                                    Three months ended         Year ended
                                           Dec. 31,              Dec. 31,
                                       2013       2012       2013       2012
Petroleum and natural gas
revenues, net of royalties        $  46,088   $ 55,303  $ 173,918  $ 181,802
Per share -- basic and
diluted ($/share)                 $    0.09   $   0.13  $    0.41  $    0.37
Net (loss)                        $ (39,002)  $(36,708) $ (26,700) $ (91,028)
Per share -- basic and
diluted ($/share)                 $   (0.18)  $  (0.17) $   (0.13) $   (0.42)

Fourth quarter and fiscal 2013 highlights:

• Improved fourth quarter 2013 netback by 5 per cent over the third quarter of 2013 to $27.43 per barrel of oil equivalent and fiscal 2013 netback by 30 per cent to $26.04 per barrel of oil equivalent compared with fiscal 2012;
• Achieved record annual cash flow of $87.0-million (41 cents per share) up from $78.7-million (37 cents per share) in 2012, an increase of 11 per cent, while reducing capital expenditures by 24 per cent from $109.7-million in 2012 to $83.2-million in 2013 and net debt by 15 per cent from $72.4-million to $61.8-million year over year;
• Continued a 100-per-cent oil-focused capital program in both the fourth quarter and fiscal 2013; fourth quarter capital expenditures of $14.2-million were invested $9.9-million in Canada and $4.3-million in Tunisia;
• In the fourth quarter of 2013, participated in five (1.65 net) wells in Canada: four (1.15 net) on the non-operated Karr property and one (0.50 net) on the Albright property; and in Tunisia, spudded the TT-15 well on Dec. 21, 2013, and subsequently completed it in the first quarter of 2014; the annual capital program of $83.2-million resulted in $42.6-million being invested in Canada and $40.6-million being invested in Tunisia, with 20 (11.75 net) wells being drilled;
• Renewed its Canadian reserve-based revolving credit facility at $115-million.

Financial and operating results in 2013

Two thousand thirteen highlighted Chinook's transition from a natural-gas-weighted producer to a more oil-focused producer with the development of its Canadian oil properties and continued development on the BBT concession in Tunisia.

Production in 2013 averaged 10,155 barrels of oil equivalent per day, down 17 per cent from 2012's annual average production of 12,183 barrels of oil equivalent per day. A significant component of the decrease was related to the disposition of Canadian non-core properties, which dispositions, made in 2012 and 2013, accounted for approximately 2,200 barrels of oil equivalent per day of the annual decline. Offsetting the decreased production was an increase in the overall realized price, which was 17 per cent higher on a barrel of oil equivalent basis, due to naturally declining natural gas volumes being replaced by higher priced oil production. Lower production costs and general and administrative costs also contributed to higher cash flow for the year. The increased cash flow and proceeds from the non-core dispositions were used to finance the capital expenditure program and provide for the $11-million debt repayment during the year.

Canada

Canadian production averaged 8,238 barrels of oil equivalent per day for the year ended Dec. 31, 2013, and averaged 7,943 barrels of oil equivalent per day for the fourth quarter of 2013. The focus on shifting capital development to more liquids-based plays has resulted in a measurable shift in the commodity mix with liquids comprising 31 per cent of production for the year ended Dec. 31, 2013, and 32 per cent of production for the fourth quarter of 2013, as compared with just over 28 per cent for the same periods in 2012. This shift to increased crude oil production has placed upward pressure on operating costs within the Canadian business due to higher transportation costs associated with oil production, which were offset by the higher netbacks received on oil compared with natural gas in 2013. The company plans to participate in the construction of an oil battery on its Karr property in 2014, which is expected to reduce operating costs on its Dunvegan development program.

Subsequent to its last operations update on Feb. 26, 2014, the company completed one (0.37 net) well at Karr, which has produced at an average gross rate of 315 barrels of oil equivalent per day (90 per cent oil) during the first 30 days of production, and drilled one (0.26 net) well, which is currently being completed. At Albright, the company completed two (2.0 net) wells with current gross production rates of 260 barrels of oil equivalent per day (80 per cent oil) in one well and 65 barrels of oil equivalent per day (79 per cent oil) in the second well, which may require remedial work after spring breakup. The company also drilled one (1.0 net) well at Albright, which encountered mechanical problems, prior to completion, and is scheduled to be re-entered immediately after breakup. Results from the Dunvegan development in the greater Grande Prairie area continue to exceed its budgeted type-curve production estimates. In addition, gross costs to drill, complete and equip wells at Karr have been reduced from $6.5-million per well in January, 2013, to approximately $4.0-million per well in the latest four-well program. At Albright, gross costs have been reduced from $3.6-million in February, 2013, to a current estimate of $2.9-million per well. The company has identified over 80 additional gross Dunvegan locations on its lands in the Grande Prairie area.

The company drilled two (1.12 net) separate Montney prospects in the first quarter of 2014 and anticipates that it will have both wells completed prior to the end of the quarter. At Birley/Umbach, the company drilled a (0.75 net) 2,700-metre well (1,220-metre horizontal leg) and performed an 18-stage (65 tonnes per stage) slick-water multistage fracture operation on the well. Results of the completion are currently being evaluated. At Gold Creek, the company drilled a (0.37 net) 4,543-metre well (1,950-metre horizontal leg) and performed a 28-stage (50 tonnes per stage) slick-water multistage fracture operation on the well. The company has just commenced the initial cleanup of the Gold Creek well to recover the associated frack fluid and production test the well.

Tunisia

Tunisian production averaged 1,917 barrels of oil equivalent per day for the year ended Dec. 31, 2013, and averaged 1,737 barrels of oil equivalent per day for the fourth quarter of 2013. The company continued its development of the BBT concession during 2013, bringing its total number of producing wells on this concession to 13 (11.18 net). The planned capital program was slightly hindered in the latter part of the year, with the introduction of a new application and approval process, which resulted in part of the budgeted capital program being deferred to early 2014. The company had minimal capital expenditure and growth on both of its non-operated Adam and BEK properties with one well (0.05 net) drilled on the Adam property. The strengthening of the U.S. dollar relative to the Canadian dollar has had a positive impact on reported revenues from the Tunisian segment. The company continues to receive a premium to the Brent benchmark price on its sales volumes, which has financed the capital program for the Tunisian business.

The company has drilled four (3.44 net) of its six-(5.16 net)-well program on the BBT concession, which is on schedule to be completed by June, 2014. All six wells are vertical wells, with estimated drill and complete costs of $4-million per well. In addition to the drilling program, the company has finalized plans for the construction of a central gathering facility and oil battery on the concession, which is projected to commence late in the first half of 2014 and is expected to reduce operating and transportation costs at BBT.

Outlook

The company is maintaining the guidance for 2014 that was initially announced in the news release of Dec. 19, 2013, with only an improvement to the year-end net debt.

                              OUTLOOK
       ($ millions, except barrels of oil equivalent per day)  
   
                                Consolidated   International          Canada

Production (boe/d)              9,500-10,250     1,850-2,130     7,650-8,120
Cash flow                            $82-$90         $42-$46         $40-$44
Capital expenditures                     $85             $36             $49
Net debt                                 $60                             $60
Maximum avilable credit               $138.8      $23.8 (U.S.)          $115

For 2014, the company is focused on the continued development of its properties at Karr, Albright and the BBT concession while pursuing new resource opportunities over a large undeveloped Western Canadian land base that would provide meaningful and economic scale to shareholders that would be supported by a fully financed cash-flow-based budget and further supported by a healthy balance sheet.

Also in 2014, the company is continuing with its 2013 initiative, reviewing potential alternative strategies for its international business in an attempt to better understand the respective valuation of its domestic and international assets and to identify potential alternatives that may improve the market valuation of Chinook as a hybrid company relative to its domestic peers. The company cautions that there are no assurances or guarantees that such process will result in a transaction or, if a transaction is undertaken, the terms or timing of such a transaction.

Two thousand fourteen will be an exciting and pivotal year at Chinook, and the company would like to thank its employees and board of directors for their continuing commitment and its shareholders for their continued support. The company looks forward to providing readers with updates of its success throughout 2014.

We seek Safe Harbor.