Renegade Petroleum Ltd. Announces Q1 Operational Update, Initiation of a Strategic Review and Confirmation of April 2013 Dividend

CALGARY, ALBERTA–(Marketwired – Apr 15, 2013) – Renegade Petroleum Ltd. (“Renegade” or the “Company”) (TSX VENTURE:RPL) a light oil focused exploration and production company with assets located in Saskatchewan, Alberta, Manitoba and North Dakota is pleased to provide a first quarter operational update and to announce that the board of directors (the “Board”) has initiated a strategic review of the Company. The Corporation is also confirming the payment of the April 15, 2013 dividend.

FIRST QUARTER OPERATIONAL UPDATE

Renegade continues to focus on allocating the Company’s capital program to areas that provide predictable results and strong capital efficiencies which continue to drive free cash flow of the income plus growth model. As such, the drilling program has been concentrated on Renegade’s core assets in southeast Saskatchewan and its Viking assets in west central Saskatchewan.

Drilling and Exploration

During the quarter, Renegade successfully executed on the following capital program:

• Brought on stream 22 gross (22.0 net) Viking wells in west central Saskatchewan with a 100% success rate. Of the 22 net wells drilled, the average IP 30 rate of 17 gross (17.0 net) wells was 55 boe/d which exceeded the Company type curve by 12%. In addition, the Company has 5 gross (5.0 net) wells which are scheduled to have optimization operations post break-up. Average well costs in the first quarter were approximately $950,000 per well which is in line with the Company’s budget.
• Drilled 4 gross (2.0 net) wells in southeast Saskatchewan in the first quarter with a 75% success rate. Of the wells drilled, 1.0 gross (0.5 net) well had an IP30 rate of 130 boe/d and is currently producing 135 boe/d after 46 days and continues to be optimized; 2.0 gross (1.0 net) wells are awaiting further stimulation post-break-up; and 1.0 gross (0.5 net) well is expected to be abandoned.
• The Company has aggressively evaluated the large inventory of potential drilling locations on the assets it acquired in late 2012 (the “Acquired Assets”). Of the 200 identified locations on the Acquired Assets the Company has completed full technical evaluations on over 90 locations and is well positioned to commence its drilling program coming out of break-up with a stable inventory of low risk locations.
• In aggregate, the successful first quarter capital program added approximately 990 boe/d of production based on a total capital program of approximately $34 million. The implied all in capital efficiencies of the program of $34,300/boe/d for the quarter are 14% less than Renegade’s budgeted all in capital efficiencies of $40,000/boe/d. The drilling results in the first quarter of 2013 demonstrated the Company’s ability to successfully delineate and develop its high quality, light oil focused asset base.

• The Company’s asset base, both in the Viking and all focus areas in southeast Saskatchewan continue to perform at or above expectations from both an existing production and new drill perspective. Based on field receipts, the Company expects average first quarter production of approximately 7,800 to 7,850 boe/d (approximately 95% light oil) and exited the quarter at approximately 7,900 boe/d (net of the disclosed disposition referred to below).
• The Company’s successful first quarter development program resulted in the addition of 990 bbls/d. However, the Company experienced reservoir performance issues in its Redvers area due to earlier than anticipated influx of water cuts. As a result, production from the area is lower by approximately 300 boe/d in the first quarter. The Company is evaluating various work over techniques in an attempt to regain lost production. Initial implementation has produced early positive success. While there can be no assurance that all or a portion of the lost production will be regained, the Company has been encouraged by the initial operations.
• Operating cash flow for the quarter is estimated to be approximately $27 million. The Company was exposed to differentials in the first quarter of up to $11/bbl that impacted corporate cash flow. Differentials have narrowed significantly since the first quarter and the Company believes differentials will continue to improve throughout the balance of 2013.
• The Company confirms that its previously announced non-core asset disposition closed for net proceeds of $12.9 million prior to the end of the first quarter. Management continues to place significant focus on evaluating additional non-core asset dispositions as a continued commitment to prudently manage its balance sheet and reduce debt levels.
• Through the combination of the capital expenditure program, disposition, corporate cash flow, and payment of the dividend, net debt at the end of the quarter is estimated to be approximately $296 million based on management’s internal estimates. The Company’s net debt at the end of the second quarter is expected to be reduced due to limited budgeted field operations as planned.

STRATEGIC REVIEW

The Board has initiated a strategic review of the Company’s business plan to identify appropriate actions for the Company. The strategic review will examine and consider the alternatives available to the Company, both near and long term, with a view to enhancing shareholder value. Management and the Board are committed to acting in the best interests of the Company and its shareholders and believe that the long term strategy of the Company will continue to provide value to shareholders. The Board expects to retain a financial advisor to assist with the review.

DIVIDEND

Renegade is pleased to announce that a cash dividend in the amount of $0.019167 per share ($0.23 annualized) will be paid on May 15, 2013 to shareholders of record as of April 30, 2013. The ex-dividend date is April 26, 2013.

These dividends are designated as “eligible dividends” for Canadian income tax purposes.

CORPORATE INFORMATION

Renegade’s common shares trade on the TSX Venture Exchange under the symbol RPL. Renegade currently has approximately 203.1 million common shares outstanding and 212.1 million fully-diluted common shares.

READER ADVISORIES

Forward-Looking Statements

Statements in this document may contain forward-looking information including management’s assessment of future plans and operations including capital expenditures, matters related to dividends, drilling results, locations and plans, future cash flow and production levels, expectations with respect to decline rates and type curves, matters related to the strategic plans of the Company, differentials and the length of spring break up and its impact on the Company. The reader is cautioned that assumptions used in the preparation of such information may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted, as a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of the Company. These risks include, but are not limited to: the risks associated with the oil and gas industry; commodity prices, and; exchange rate changes. Industry related risks could include, but are not limited to: operational risks in exploration; proposed dispositions not being completed or if completed, not providing the benefits expected; development and production; delays or changes in plans; risks associated to the uncertainty of reserve estimates; health and safety risks, and; the uncertainty of estimates and projections of production, costs and expenses. The recovery and reserve estimates of Renegade’s reserves provided herein are estimates only and there is no guarantee that the estimated reserves will be recovered.
In addition, forward-looking statements or information are based on a number of factors and assumptions which have been used to develop such statements and information but which may prove to be incorrect. Although the Company believes that the expectations reflected in such forward-looking statements or information are reasonable, undue reliance should not be placed on forward-looking statements because the Company can give no assurance that such expectations will prove to be correct. In addition to other factors and assumptions which may be identified herein, assumptions have been made regarding, among other things: the impact of increasing competition; the general stability of the economic and political environment in which the Company operates; the timely receipt of any required regulatory approvals; the ability of the Company to obtain qualified staff, equipment and services in a timely and cost efficient manner; drilling results; the ability of the operator of the projects which the Company has an interest in to operate the field in a safe, efficient and effective manner; the ability of the Company to obtain financing on acceptable terms; field production rates and decline rates; the ability to replace and expand oil and natural gas reserves through acquisition, development and exploration; the timing and costs of pipeline, storage and facility construction and expansion and the ability of the Company to secure adequate product transportation; future commodity prices; currency, exchange and interest rates; the regulatory framework regarding royalties, taxes and environmental matters in the jurisdictions in which the Company operates; and the ability of the Company to successfully market its oil and natural gas products. Readers are cautioned that the foregoing lists of factors and assumptions are not exhaustive. Additional information on these and other factors that could affect the Company’s operations and financial results are included in reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com), at the Company’s website (www.renegadepetroleum.com). Furthermore, the forward-looking statements contained in this news release are made as at the date of this news release and the Company does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.

Certain Oil & Gas Matters

Certain information in this news release may constitute “analogous information” as defined in NI 51-101, including, but not limited to, information relating to areas in geographical proximity to lands the Renegade expects to conduct operations on in 2013. Such information is not an estimate of the reserves or resources attributable to lands held or to be held by Renegade and there is no certainty that the reservoir data and economics information for the lands held or to be held by Renegade will be similar to the information presented herein. The reader is cautioned that the data relied upon by Renegade may be in error and/or may not be analogous to such lands to be held by Renegade.

Any references in this news release to IP rates or 30 day initial production rates are useful in confirming the presence of hydrocarbons, however, such rates are not determinative of the rates at which such wells will continue production and decline thereafter are not necessarily indicative of long term performance or ultimately recovery. While encouraging, readers are cautioned not to place reliance on such rates in calculating the aggregate production for Renegade.

Conversion

The term “boe” may be misleading, particularly if used in isolation. A boe conversion ratio of six thousand cubic feet of natural gas to one boe (6 mcf/bbl.) is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. All boe conversions in this report are derived from converting gas to oil in the ratio of six thousand cubic feet of gas to one barrel of oil. 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 of 6:1, utilizing a conversion on a 6:1 basis may be misleading as an indication of value.