Shoreline Energy Corporation Announces Significant Reserve Value Increase Associated With 2013 Niobrara/Codell Oil Acquisitions, Wattenberg Field, Colorado

CALGARY, ALBERTA–(Marketwired – April 4, 2013) –

NOT FOR DISTRIBUTION IN THE UNITED STATES

Shoreline Energy Corp. (SEQ.TO) (“Shoreline” or the “Company”) is very pleased to announce the results of an independent reserves evaluation of a previously announced acquisition of two non operated working interest asset packages in the Wattenberg Field of Colorado (“February Acquisitions”) . The transaction closed on February 19, 2013.

The reserves evaluation was conducted by DeGolyer and McNaughton (“D&M”) in accordance with National Instrument 51-101 (“NI 51-101”).

The February Acquisitions increase Shoreline’s corporate reserves by 18% on a Total Proved (TP) basis and 19% on a Proved plus Probable (2P) basis, and increases corporate reserve value to over $97 million TP and $141 million on a 2P basis⁽¹⁾. The February acquisitions immediately increase Shoreline’s oil production weighting via eight gross (0.6 net) new Niobrara horizontal wells which are now on stream. The acquired lands are being drilled by area operators and will further enhance Shoreline’s inventory of Niobrara and Codell light oil drilling locations in accordance with the previously stated strategy of deploying capital into low risk development drilling in the United States.

⁽¹⁾ Calculated using February Acquisitions reserves volumes and values effective February 1, 2013 and Company Aggregate reserves and values effective December 31, 2012 as reported in Shoreline’s 2012 annual information form, based on an annual discount rate of 10%(PV 10) before tax.

2013 Reserve Highlights

• Aggregate Purchase Price of $21.2 million dollars Canadian
• Addition of 385 thousand barrels of oil equivalent (MBOE) of Proved Developed Producing (PDP), 782 MBOE of Total Proved (TP) and 1374 MBOE of Proved plus Probable (2P) reserves to Shorelines portfolio an increase of 14%, 18%, and 19% respectively to the company gross reserves as stated at December 31, 2012
• $21.5 million TP incremental net present value and $34.3 million 2P net present value
• Booked reserve volumes are comprised of 56% light oil on a TP and 54% on a 2P basis
• On a proforma basis Shoreline’s TP reserve volumes increase to 5.2 million BOE and 2P reserve volumes of 8.7 million BOE with net present value of $97 million and $ 141 million respectively, as estimated by adding the reserves associated with the new acquisitions (February 1, 2013) effective date, to the previously announced reserves information as at December 31, 2012 and as published in Shoreline’s 2012 annual information form dated March 29, 2013, available on SEDAR at www.sedar.com
• In addition to the reserve value an independent NI 51-101 compliant Seaton Jordan report dated March 7, 2013 assigned a value of $ 2.1MM to 4086 gross /704 net undeveloped acres

Reserves

The reserves data set forth herein is based upon an independent reserves assessment and evaluation prepared on Shoreline’s assets by D&M (United States), with an effective date February 1, 2013 (the “Reserves Report”). The following presentation summarizes the Company’s crude oil, natural gas liquids, and natural gas reserves and the net present values before income tax, or future net revenue for the Company’s reserves using forecast prices and costs based on the D&M report. The reserves reports have been prepared in accordance with the reserve definitions contained in NI 51-101.

The estimates of reserves and future net revenue for individual properties may not reflect the same confidence level as estimates of reserves and future net revenue for all properties due to the effects of aggregation.

⁽¹⁾ Gross reserves includes working interest (operated and non-operated) share prior to deduction of royalties payable.
⁽²⁾ Net reserves means Shoreline’s gross reserves, subtracting royalties payable and adding royalties payable to Shoreline from royalty interests owned by Shoreline in Canada or the United States.
⁽³⁾ Oil equivalent amounts have been calculated using a conversion rate of six thousand cubic feet of natural gas to one barrel of oil.
⁽⁴⁾ Numbers may not add due to rounding.

⁽¹⁾ Estimated values of future net revenue do not represent fair market value.

Investor Information

Currently, Shoreline has 7,619,696 common shares outstanding. Shoreline is a Calgary, Alberta based corporation engaged in the exploration, development and production of petroleum and natural gas. Shoreline has a proven track record of increasing asset value in Canada, through a combination of drilling and acquisition, and has recently acquired a strategic high impact interest in the Wattenberg Field, where currently a large scale oil development program is targeting oil resources in the Niobrara and Codell formations. In addition to increasing oil and gas asset value, since its initial public offering in May 2011, the Company has paid $0.96 per share via six quarterly dividends. The Company’s common shares and convertible debentures are currently listed on the TSX under the trading symbols “SEQ” and SEQ.DB” respectively. Additional information regarding Shoreline is available under the Company’s profile at www.sedar.com or at the Company’s website, www.shorelineenergy.ca.

Forward-Looking and Cautionary Statements

This news release contains forward-looking statements relating to the Company’s plans and other aspects of the Company’s anticipated future operations, strategies, financial and operating results and business opportunities. These forward-looking statements may include opinions, assumptions, estimates, management’s assessment of value, reserves, future plans and operations. 

Forward-looking statements typically use words such as “will,” “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “project,” “should,” “plan,” and similar expressions suggesting future outcomes, and include statements that actions, events or conditions “may,” “would,” “could,” or “will” be taken or occur in the future. The forward-looking statements are based on various assumptions including expectations regarding the success of current or future drill wells; the outlook for petroleum and natural gas prices; estimated amounts and timing of capital expenditures; estimates of future production; assumptions concerning the timing of regulatory approvals; the state of the economy and the exploration and production business; results of operations; business prospects and opportunities; future exchange and interest rates; the Company’s ability to obtain equipment in a timely manner to carry out development activities; and the ability of the Company to access capital and credit. While the Company considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect.

Statements relating to “reserves” are deemed to be forward-looking statements or information, as they involve the implied assessment, based on certain estimates and assumptions, that the reserves described can be profitable in the future. There are numerous uncertainties inherent in estimating quantities of proved reserves, including many factors beyond the control of the Company. The reserves data included herein represent estimates only. In general, estimates of economically recoverable oil and natural gas reserves and future net cash flows therefrom are based upon a number of variable factors and assumptions, such as historical production from the properties, the assumed effects of regulation by governmental agencies and future operating costs, all of which may vary considerably from actual results. All such estimates are to some degree speculative and classifications of reserves are only attempts to define the degree of speculation involved. For those reasons, estimates of the economically recoverable oil and natural gas reserves attributable to any particular group of properties and classification of such reserves based on risk of recovery and estimates of future net revenues expected therefrom, prepared by different engineers or by the same engineers at different times, may vary substantially. The actual production, revenues, taxes and development and operating expenditures of the Company with respect to these reserves will vary from such estimates, and such variances could be material.

Forward-looking statements are subject to a wide range of assumptions, known and unknown risks and uncertainties and other factors that contribute to the possibility that the predicted outcome will not occur, including, without limitation: risks associated with oil and gas exploration, development, exploitation, production, marketing and transportation; loss of markets; volatility of commodities prices; currency fluctuations; imprecision of reserves estimates; environmental risks; competition from other producers; inability to retain drilling rigs and other services; incorrect assessment of the value of acquisitions; failure to realize the anticipated benefits of acquisitions; general economic conditions; delays resulting from or inability to obtain required regulatory approvals and to satisfy various closing conditions; and ability to access sufficient capital from internal and external sources. Readers are cautioned that the foregoing list of factors is not exhaustive.

Although Shoreline believes that the expectations represented by such forward-looking statements are reasonable, there can be no assurance that such expectations will be realized. As a consequence, actual results may differ materially from those anticipated in the forward-looking statements and you should not rely unduly on forward-looking statements. The forward-looking statements contained in this news release are made as of the date of this news release. Except as required by applicable law, Shoreline does not undertake any obligation to publicly update or revise any forward-looking statements.

Note Regarding BOEs

The term barrel of oil equivalent (“boe”) may be misleading, particularly if used in isolation. A conversion ratio for gas of 6 mcf:1 boe is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency conversion ratio of 6:1, utilizing a conversion on a 6:1 basis is misleading as an indication of value.

Shoreline Energy Corp.
Mr. Trevor Folk
Chief Executive Officer
tfolk@shorelineenergy.ca

Shoreline Energy Corp.
Mr. Kevin Stromquist
President & Chief Operating Officer
kstromquist@shorelineenergy.ca

Shoreline Energy Corp.
Mr. Shaun E. Alspach
Executive Vice-President, Business Development
salspach@shorelineenergy.ca

Shoreline Energy Corp.
Calgary Office
c/o Suite 400, 209-8th Ave SW
Calgary, Alberta, T2P 1B8
(403)767-9066
www.shorelineenergy.ca