Mr. Robert Zakresky reports

CROCOTTA ENERGY INC.: Q3 2013 FINANCIAL AND OPERATING RESULTS

Crocotta Energy Inc. has released its financial and operating results for the three and nine months ended Sept. 30, 2013, including condensed interim consolidated financial statements, notes to the condensed interim consolidated financial statements, and management's discussion and analysis.

Highlights

• Increased production 24 per cent to 8,596 barrels of oil equivalent per day (boe/d) in third quarter 2013 from 6,945 boe/d in third quarter 2012;
• Increased funds from operations 48 per cent to $16.1-million in third quarter 2013 from $10.9-million in third quarter 2012;
• Entered into a $145-million syndicated credit facility.

                        FINANCIAL RESULTS         
       (In thousands of dollars, except per share amounts)     
                                             
                              Three months ended   Nine months ended
                                       Sept. 30,           Sept. 30,
                                  2013      2012      2013      2012

Oil and natural gas sales      $26,950   $17,922   $80,369   $55,580
Funds from operations           16,102    10,888    47,506    36,137
Per share -- basic                0.17      0.12      0.52      0.41
Per share -- diluted              0.16      0.12      0.50      0.40
Net earnings (loss)                975   (3,944)     7,183   (3,172)
Per share -- basic and
diluted (loss)                    0.01    (0.04)      0.08    (0.04)
Capital expenditures            48,911    23,540    94,611    62,228
Net debt                                           105,518    54,436


                            OPERATING RESULTS

                                 Three months ended     Nine months ended 
                                          Sept. 30,             Sept. 30, 
                                    2013       2012       2013       2012
Daily production
Oil and NGL (bbl/d)                2,497      2,103      2,448      2,144
Natural gas (mcf/d)               36,593     29,053     36,624     27,743
Oil equivalent (boe/d)             8,596      6,945      8,552      6,768
Revenue
Oil and NGL ($/bbl)               $79.85     $56.78     $70.61     $63.75
Natural gas ($/mcf)                 2.56       2.60       3.32       2.39
Oil equivalent ($/boe)             34.08      28.05      34.42      29.97
Royalties
Oil and NGL ($/bbl)                 6.89      11.97       8.19       9.96
Natural gas ($/mcf)                 0.04       0.12       0.09       0.13
Oil equivalent ($/boe)              2.18       4.13       2.75       3.69
Production expenses
Oil and NGL ($/bbl)                 6.03       5.00       5.92       5.06
Natural gas ($/mcf)                 1.12       1.00       1.13       0.98
Oil equivalent ($/boe)              6.51       5.72       6.53       5.62
Transportation expenses
Oil and NGL ($/bbl)                 1.93       0.51       1.35       0.84
Natural gas ($/mcf)                 0.18       0.19       0.13       0.18
Oil equivalent ($/boe)              1.31       0.93       0.93       1.01
Operating netback  
Oil and NGL ($/bbl)                65.00      39.30      55.15      47.89
Natural gas ($/mcf)                 1.22       1.29       1.97       1.10
Oil equivalent ($/boe)             24.08      17.27      24.21      19.65
Depletion and depreciation
($/boe) (loss)                   (14.13)    (15.14)    (13.78)    (14.87)
Asset impairment ($/boe)
(loss)                            (0.28)     (3.77)     (0.23)     (3.07)
General and administrative
(expenses) ($/boe)                (1.41)     (1.29)     (1.83)     (1.55)
Share-based compensation
($/boe) (loss)                    (0.56)     (1.17)     (0.60)     (1.52)
Finance (expenses) ($/boe)        (1.76)     (0.72)     (1.38)     (0.72)
Deferred tax reduction
(expense) ($/boe)                 (4.31)       1.40     (2.73)     (0.26)
Realized gain (loss) on risk
management contracts
($/boe)                           (0.74)       1.60     (0.83)       1.92
Unrealized gain (loss) on
risk management contracts
($/boe)                             0.34     (4.36)       0.25     (1.29)
Net earnings (loss) ($/boe)         1.23     (6.18)       3.08     (1.71)

Operations update

In third quarter 2013, Crocotta continued its focus in improving netbacks, expanding its footprint in core areas, and driving production growth toward its year-end target of 10,500 boe/d.

At Edson, it was the first full quarter under its new operated facility and payoff was significant with improved netbacks of approximately $2.50 per boe. After factoring in 98 per cent on time for the facility, the impact was even greater on a relative basis.

Drilling was focused on Cardium horizontal wells in third quarter 2013 but will shift to a blend of Cardium and Bluesky on a go-forward basis. Production has increased from 800 boe/d in mid-2009 to over 8,000 boe/d currently with an inventory of over 100 net locations identified for future development. Free cash flow from the property continues to increase as decline rates have started to moderate on the base production.

Crocotta's Montney project at Dawson also took a significant step forward with the commissioning of a new 100-per-cent-owned gas plant connected to the Alliance pipeline. The plant, which became operational in mid-September, allows Crocotta to receive significant liquid volume not previously received and also materially reduce operating costs. Two successful Crocotta wells drilled in third quarter 2013 also provided increased confidence that this play will become a second major producing property for Crocotta. The measured approach taken at Dawson including construction of facilities to minimize costs and maximize returns mirror steps taken at Edson and are typical of Crocotta's operating philosophy.

Capital is also being invested in land and drilling new concepts in order to hopefully move the plays from concept to development over the next 12 to 24 months. If successful, Crocotta would take the same approach to maximizing returns by focusing on infrastructure and scale.

We seek Safe Harbor.