Mr. Richard Thompson reports

MARQUEE ENERGY LTD. ANNOUNCES SECOND QUARTER 2014 FINANCIAL RESULTS WITH RECORD FUNDS FLOW AND PRODUCTION

Marquee Energy Ltd. had record funds flow from operations and production for the second quarter of 2014. The company's financial statements and management's discussion and analysis (MD&A) for the three and six months ended June 30, 2014, are available on SEDAR and on Marquee's website.

Financial and operational highlights include:

• Marquee achieved significant growth in both revenue and funds flow from operations in the second quarter of 2014. Revenue increased 19 per cent to $25.6-million, compared with $21.6-million in the first quarter of 2014 and $12.3-million in the second quarter of 2013. Funds flow from operations increased 36 per cent to $9.3-million, compared with $6.8-million in the first quarter of 2014 and $4.4-million in the second quarter of 2013.
• The company increased production to an average of 5,035 barrels of oil equivalent per day (43 per cent oil and natural gas liquids (NGLs)) in the quarter, a 25-per-cent improvement over the first quarter of 2014 and 138 per cent higher than the fourth quarter of 2013.
• Marquee closed a $20.1-million bought deal equity financing on May 2, 2014.
• The company incurred $5.2-million in capital expenditures in the quarter, mainly in its core Michichi area, and realized proceeds of $500,000 from the sale of non-core assets.
• Marquee drilled one horizontal oil well and spudded a second well in June at Michichi. Both wells are now on production.
• Subsequent to the end of the quarter, the company entered into a syndicated credit facility agreement with two Canadian chartered banks, providing total credit availability of $95-million, comprising a revolving and operating facility of up to $80-million and an acquisition facility of up to $15-million. The company's net debt at the end of the second quarter was $56.9-million.

Financial and operational summary

Financial and operational details for the three- and six-month periods ended June 30, 2014, with comparative data for 2013, are set out in the accompanying table and should be read in conjunction with the condensed interim financial statements and related MD&A.

                                           Three months ended June 30,          Six months ended June 30,            
                                               2014              2013              2014             2013
Financial (in thousands of
dollars, except per-share 
and per-boe amounts)
Oil and natural gas sales(1)         $       25,625    $       12,317    $       47,201   $       22,712
Funds flow from operations           $        9,273    $        4,420    $       16,093   $        7,448
Per share -- basic and diluted       $         0.08    $         0.08    $         0.16   $         0.14
Per boe                              $        20.24    $        21.41    $        19.62   $        18.15
Net income (loss)                    $          900    $          484    $      (1,850)   $      (2,100)
Per share -- basic and diluted       $         0.01    $         0.01    $       (0.02)   $       (0.04)
Capital expenditures                 $        4,173    $        1,543    $       17,170   $       10,133
Asset acquisitions including
non-cash consideration               $        1,015    $            -    $       12,842   $            -
Dispositions                         $         (501)   $         (688)   $         (529)  $         (786)
Net debt(2)                                                              $       56,911   $       45,735
Total assets                                                             $      282,939   $      163,017
Operational
Net wells drilled                               1.0                 -               6.0              2.1
Daily sales volumes
Oil (bbl per day)                             1,434               830             1,329              832
Heavy oil (bbl per day)                         525               534               518              533
NGLs (bbl per day)                              195                80               188               69
Gas (mcf per day)                            17,285             4,942            14,983            4,998
Total (boe per day)                           5,035             2,268             4,532            2,267
% oil and NGLs                                   43%               64%               45%              63%
Average realized prices
Oil ($/bbl)                          $       100.12    $        88.10     $       97.49    $       84.12
Heavy pil ($/bbl)                    $        82.23    $        69.53     $       77.46    $       59.48
NGLs ($/bbl)                         $        58.92    $        56.28     $       65.21    $       61.30
Gas ($/mcf)                          $         4.82    $         3.80     $        5.26    $        3.63
Netbacks
Revenue ($/boe)                      $        55.93    $        59.68     $       57.54    $       55.35
Royalties ($/boe)                    $         7.31    $         5.41     $        6.45    $        4.67
Opex and transportation ($/boe)      $        19.66    $        20.78     $       21.18    $       21.67
Field operating netbacks             $        28.96    $        33.49     $       29.91    $       29.01      

(1) Before royalties.
(2) Net debt is calculated as currents assets less current liabilities, excluding commodity contracts and 
    flow-through share premiums.

Second quarter 2014 financial and operating results

For the second consecutive quarter, Marquee achieved significant increases in a number of financial and operating categories as a result of the company's recent drilling programs, together with the acquisitions of the Sonde assets on Dec. 31, 2013, and the Paramount assets on March 6, 2014:

• Production in the second quarter of 2014 was 5,035 barrels of oil equivalent per day (43 per cent oil and NGLs), a 122-per-cent increase from 2,268 barrels of oil equivalent per day in the second quarter of 2013.
• Revenue from oil and natural gas sales was $25.6-million, more than double the $12.3-million in the second quarter of 2013.
• Funds flow from operations was $9.3-million in the quarter, more than double the $4.4-million in the second quarter of 2013.
• Net general and administrative expense (G&A) was $3.65 per barrel of oil equivalent in the quarter, 48 per cent less than the second quarter of 2013.

Field operating netbacks decreased slightly in the quarter to $28.96 per barrel of oil equivalent compared with the second quarter of 2013 and the first quarter of 2014, primarily due to the increase in the proportion of the company's production from natural gas resulting from the gas-weighted strategic acquisitions mentioned previously.

The company incurred $5.2-million in capital expenditures in the quarter, mainly in its core Michichi area, and realized proceeds of $500,000 from the sale of non-core assets. The capital expenditures included:

• Drilled one Michichi horizontal oil well and spudded a second well;
• Recompletion and workover program in the greater Michichi/Drumheller;
• Targeted land acquisition in the Michichi area.

The company closed a common share bought-deal financing, including a 15-per-cent overallotment option, for net proceeds of $20.1-million. The significant increase in production and contribution from the financing reduced the company's debt-to-cash-flow ratio from 3.1 at the end of the second quarter of 2013 to 1.8 times, based on the funds flow from operations for the first six months of the year and net debt at the end of June, 2014.

Operations update

Michichi

Marquee has drilled eight horizontal wells at Michichi in 2014. The first three wells have been on production for five months and are now producing at stabilized levels. For the first 90 days (IP90), the average production from each of these wells was 143 barrels of oil equivalent per day, 76 per cent oil and liquids. The next three wells have been on production for less than a month. Initial results indicate that production from these wells should meet or exceed Marquee's published type curve expectations for Michichi. The seventh well has been hydraulically fractured, or fracked, and is scheduled to be on production before the end of August. Drilling operations recently concluded on the eighth well, which is being prepared for completion operations. An additional four wells are planned for the remainder of 2014 as part of the company's 2014 drilling program of 12 new Banff horizontal wells at Michichi.

Construction of a multiwell battery has been completed to support recent drilling activity, which will lead to reduced equipping and operating costs. Equipping costs for wells connected by flow line to the battery are expected to decrease by approximately $250,000 per well. The battery will include separation and gas-sweetening facilities and has been designed to accommodate expansion and future drilling in the vicinity.

The company completed the tie-in of all Sonde wells acquired at Michichi into owned gas-gathering infrastructure in the second quarter.

Production in the Michichi area averaged 3,665 barrels of oil equivalent per day in the second quarter of 2014, or 73 per cent of corporate production.

Lloydminster

The company has drilled one gross (one net) vertical heavy oil well and one gross (one net) horizontal heavy oil well at Lloydminster so far in the third quarter; both wells are now on production. Marquee expects to drill one additional vertical and one additional horizontal well here in the fourth quarter of 2014.

Production in the Lloydminster area averaged 525 barrels per day in the second quarter of 2014, or 10 per cent of corporate production.

Outlook

Marquee has built an extensive contiguous, operated, high-working-interest land position in its core area of Michichi. The company further expanded its landholdings, infrastructure and drilling inventory through strategic acquisitions completed earlier in 2014. The evolution of the company's technical and operating knowledge at Michichi continues and is reflected in improved well performance and cost efficiencies. Further consolidation of lands will occur on a targeted basis, and the growth of company-owned and -operated infrastructure is under way to further reduce operating costs and improve netbacks.

Marquee expects to reach its forecast guidance of 5,600 barrels of oil equivalent per day by the end of the year through the completion of its planned program of 12 Banff light oil wells at Michichi and six heavy oil wells at Lloydminster. Average production for the year is expected to be approximately 5,000 barrels of oil equivalent per day. Production growth late in the second quarter and early in the third quarter was affected by spring breakup and access issues at Lloydminster. All wells drilled in the first quarter were placed on production by early April. New production from drilling that occurred since the capital program resumed in June was not realized until early August. In the month of August, five new wells have been tied in and placed on production, three at Michichi and two at Lloydminster.

The company expects to finance its capital program for the remainder of 2014 out of cash flows from operations and its existing credit facilities.

Subsequent to the quarter, the company closed the disposition of a non-core asset for proceeds of $1.2-million, and continues to evaluate non-core asset disposition opportunities.

The company will be participating in the upcoming Peters & Co. 2014 Energy Conference on Sept. 10, 2014, in Toronto at the Ritz Carlton Hotel. Marquee's chief executive officer, Richard Thompson, will be presenting at 8 a.m. ET in room B. To register for the live webcast, please go on-line.

We seek Safe Harbor.