Mr. Dan Toews reports

VIRGINIA HILLS OIL CORP. ANNOUNCES THE PROPOSED ACQUISITION OF A PRIVATE OIL AND GAS PRODUCER AND AMENDMENTS TO THE TERMS OF ITS PREVIOUSLY ANNOUNCED PRIVATE PLACEMENT

Pinecrest Energy Inc. has provided an update. Virginia Hills Oil Corp. and its wholly owned subsidiary 1834163 Alberta Ltd. (AcquisitionCo) have entered into an agreement with a private oil and gas producer (PrivateCo) pursuant to which Virginia Hills, through AcquisitionCo, will purchase all of the issued and outstanding common shares of PrivateCo for total consideration of four million share purchase warrants of Virginia Hills, 10,600 common shares of Virginia Hills and the assumption of approximately $11.8-million in debt. Each Virginia Hills warrant will entitle the holder to purchase one Virginia Hills share at a price of 50 cents for a period of three years.

Terms of the PrivateCo acquisition

Pursuant to the terms of the amalgamation agreement, each shareholder of PrivateCo will receive: (i) 0.09119 of a Virginia Hills warrant; and (ii) 0.0002417 of a Virginia Hills share, for each PrivateCo share held. Certain third party services providers of PrivateCo will also receive 1,171,000 Virginia Hills shares as satisfaction for services rendered to PrivateCo.

The board of directors of PrivateCo has agreed to recommend the approval of the proposed PrivateCo acquisition to PrivateCo shareholders. Certain PrivateCo shareholders, including the management and directors of PrivateCo holding approximately 42.4 per cent of the issued and outstanding PrivateCo shares, have agreed to, among other things, vote their PrivateCo shares in favour of the PrivateCo acquisition at the special meeting of PrivateCo shareholders to be held on or about March 30, 2015. It is anticipated that the PrivateCo acquisition will be completed on or about March 30, 2015. An information circular for the special meeting of PrivateCo shareholders to be held to consider the PrivateCo acquisition will be mailed to PrivateCo shareholders on or about March 9, 2015. Cormark Securities Inc. acted as exclusive financial adviser to PrivateCo respecting the PrivateCo acquisition.

Conditions to completion of the PrivateCo acquisition

Completion of the PrivateCo acquisition is subject a number of conditions including but not limited to the approval of the TSX Venture Exchange, the completion of the arrangement (as defined below) and receipt of PrivateCo shareholder approval. There can be no assurance that the PrivateCo acquisition will be completed as proposed or at all.

The PrivateCo assets

The assets of PrivateCo comprise approximately 110 barrels of oil equivalent per day (85 per cent light oil) of production, 24,000 net undeveloped acres in the Greater Red Earth area and $51-million of high-quality tax pools. All of PrivateCo's light oil production and undeveloped acreage resides within Pinecrest's current core Greater Red Earth operating area and is adjacent to the Pinecrest-owned and operated emulsion processing and water flood infrastructure. Pursuant to the previously announced proposed plan of arrangement under the Business Corporation Act (Alberta) involving Pinecrest, Virginia Hills and junior dividend paying company, Virginia Hills will, among other things, acquire approximately 90 per cent of the assets of Pinecrest, which are located in the Greater Red Earth area of Alberta. The completion of the arrangement and the PrivateCo acquisition by Virginia Hills will provide the potential for significant future operational synergies.

Virginia Hills management estimates that PrivateCo's undeveloped acreage contains approximately 25 risked undeveloped Slave Point light oil horizontal drilling locations with the potential to recover approximately 120,000 barrels of oil equivalent per well at a capital cost of approximately $2.9-million per well. Based on offsetting analogous data, the company believes that the PrivateCo development area has the potential to be successfully water flooded.

On a proved plus probable reserve basis, including developed and undeveloped reserves, the management of Virginia Hills estimates that the PrivateCo assets contain approximately 3.3 million barrels of oil equivalent (95 per cent light oil) of reserves through primary recovery techniques (300,000 barrels of oil equivalent developed and three million barrels of oil equivalent of undeveloped) with associated future development capital of $72.5-million based on the above-noted type curve assumptions of $2.9-million of capital and 120,000 barrels of oil equivalent of recoverable reserves per well. Including the assumption of approximately $11.8-million in debt and the issuance of 1,171,000 Virginia Hills shares at a deemed price of 25 cents per share, the full-cycle finding and development costs of the PrivateCo acquisition are expected to be approximately $25.60 per barrel of oil equivalent and represent a recycle ratio of approximately 1.5 times using the company's forecast full-cycle netbacks of $40 per barrel of oil equivalent (forecast light oil pricing of $75 per barrel Edmonton Par). The company believes that this forecasted recycle ratio has the potential to improve over the long term with the implementation of secondary recovery techniques on the PrivateCo lands and by including certain operational synergies with the offsetting Pinecrest production and assets to be acquired by Virginia Hills pursuant to the arrangement. The forecasted recycle ratio is calculated by dividing the netback per barrel of oil equivalent, by the expected finding and development costs for the period (that is ($40 divided by $25.60 equals 1.56). The recycle ratio compares the netback from existing Pinecrest reserves to the expected cost of finding new reserves and may not accurately indicate investment success unless the replacement reserves are of equivalent quality as the produced reserves.

The PrivateCo acquisition is accretive to Virginia Hills on both proved plus probable reserves and net present value per share. The PrivateCo acquisition will help position the company to establish a premium light oil asset in the Red Earth area focused on sustainable development of the Slave Point formation using concurrent implementation of primary and secondary recovery techniques.

Following the completion of the PrivateCo acquisition and the arrangement, Virginia Hills expects to have a total of 75 gross (70 net) risked undeveloped light oil horizontal drilling locations in the Slave Point formation in the Greater Red Earth area representing approximately a seven-year drilling inventory. Total unrisked undeveloped light oil Slave Point horizontal drilling locations in the Greater Red Earth area would exceed 125 gross (115 net) locations representing over 10 years of potential drilling inventory.

Amendments to Virginia Hills private placement

Virginia Hills has amended the terms of its previously announced private placement of subscription receipts as described in the news release of Pinecrest dated Feb. 17, 2015, and the information circular and proxy circular of Pinecrest dated Feb. 17, 2015, each filed on Pinecrest's SEDAR profile. The size of the private placement has been increased to up to $3-million of subscription receipts at a price of 25 cents per subscription receipt. Each subscription receipt will entitle the holder thereof to one unit of Virginia Hills for no additional consideration upon completion of the PrivateCo acquisition.

Each unit will comprise one Virginia Hills share issued on a flow-through basis under the Income Tax Act (Canada) and two common share purchase warrants issued on a flow-through basis under the tax act. Of the two flow-through warrants, one will be exercisable at a price of 30 cents and the other at a price of 35 cents. Each flow-through warrant will entitle the holder to purchase one Virginia Hills share for a period of five years. The flow-through warrants will vest and become exercisable in tranches of one-third upon the 20-day weighted average trading price of the Virginia Hills shares equalling or exceeding 35 cents, 40 cents and 45 cents, respectively.

Pursuant to the terms of interim order obtained by Pinecrest in connection with the arrangement, this news release shall serve as an amendment to the information circular and particularly the description of the private placement therein. The proposed resolution in respect of the private placement to be approved by a majority of the disinterested Pinecrest shareholders at the special meeting of Pinecrest shareholders to be held on March 19, 2015, shall be read as referencing the terms of the private placement as described in the information circular, as amended by this news release.

Arrangement rights

Under the terms of the proposed arrangement, each Pinecrest shareholder will receive one Virginia Hills share for each 100 common shares of Pinecrest held. Further, each Pinecrest shareholder will receive eight arrangement rights of Virginia Hills for each Virginia Hills share received under the arrangement. Each arrangement right will entitle the holder to purchase one Virginia Hills share for 25 cents for a period of 30 days following completion of the arrangement. To the extent that a holder exercises all arrangement rights granted to it under the arrangement, it will be eligible to purchase additional Virginia Hills shares through the exercise of arrangement rights which remain unexercised by other former Pinecrest shareholders at a price of 25 cents per Virginia Hills share.

Virginia Hills postclosing

Assuming the completion of the PrivateCo acquisition, the arrangement and the exercise of all the outstanding arrangement rights, Virginia Hills will have a total of 32,731,046 Virginia Hills shares and 31,273,104 warrants outstanding.

                        VIRGINIA HILLS SHARES AND WARRANTS

                                                        
Postclosing outstanding equity instruments            Shares        Warrants

Virginia Hills shares (issued pursuant to                                   
the arrangement)                                                           -
Issued pursuant to the arrangement(1)              2,172,125               -
Issued pursuant to the exercise of all                                  
outstanding arrangement rights issued                                  
pursuant to the arrangement(2)(3)                 17,376,989                
Private placement(4)(5)                           12,000,000      24,000,000
Bank warrants(6)                                           -       3,273,104
PrivateCo acquisition(7)                              10,600       4,000,000
PrivateCo third party service providers(8)         1,171,332               -
                                                 ------------    ------------
Total outstanding equity instruments              32,731,046      31,273,104

Notes:
(1) Pursuant to the terms of the plan of arrangement, each holder of 
Pinecrest common shares will receive one Virginia Hills share for each 100
Pinecrest common shares held.                   
(2) Pursuant to the terms of the plan of arrangement, each holder of       
Virginia Hills shares issued thereunder will receive eight arrangement rights 
for each one Virginia Hills share held.         
(3) Assumes that all arrangement rights are exercised.                     
(4) Upon completion of the PrivateCo acquisition, each subscription receipt
will entitle the holder thereof for no additional consideration to one unit 
(as described above).                                             
(5) Assumes that the private placement is fully subscribed.                
(6) Common share purchase warrants of Virginia Hills will be issued to the 
lenders of Virginia Hills, representing 10 per cent of the issued and 
outstanding Virginia Hills shares on the date which is 30 days from the date 
of completion of the arrangement. Each bank warrant will entitle the lenders 
to purchase one Virginia Hills share at a price of 30 cents for a period 
ending on the earlier of five years from the date of issuance or 30 days 
following the date on which the credit facility of Virginia Hills matures.
(7) Pursuant to the terms of the PrivateCo acquisition, a total of four 
million Virginia Hills warrants and 10,600 Virginia Hills shares will be 
issued to holders of PrivateCo shares.                              
(8) Certain third party service providers of PrivateCo will receive Virginia 
Hills shares as payment for services previously rendered to PrivateCo.

Total production following completion of the PrivateCo acquisition will be approximately 1,640 barrels of oil equivalent per day (95 per cent light oil). Net debt is estimated at $96-million, assuming that the private placement is fully subscribed and arrangement rights are fully exercised and prior to the payment of the additional $5-million to which Virginia Hills is entitled to receive from the purchaser under the arrangement if during the period ending on April 26, 2016, a front month hedge is made available to the purchaser by one or more financial institutions, financial intermediaries or credit branches at a price of $65 (U.S.) per barrel WTI for a minimum of 12 months.

Upon closing the above-noted transactions, the entity resulting from the amalgamation of PrivateCo and AcquisitionCo anticipates having its own aggregate credit facilities of $11-million with a maturity date of March 31, 2016. These credit facilities are in addition to the previously announced $94.3-million credit facilities of Virginia Hills anticipated to be available upon closing of the previously announced arrangement.

We seek Safe Harbor.