Shoreline Provides Corporate Update and 2013 Guidance

CALGARY, ALBERTA–(Marketwired – Aug. 6, 2013) – Shoreline Energy Corp. (TSX:SEQ) (“Shoreline” or the “Company“) is pleased to announce the following corporate update and guidance for the remainder of 2013.

Production

Corporate average monthly production for July 2013 was approximately 2,385 Boe/d (32% oil, 4% NGL’s, 64% natural gas), comprised of approximately 1,925 Boe/d from the Company’s Canadian Peace River Arch assets including its new Montney oil wells and approximately 460 Boe/d from the Company’s Niobrara/Codell assets in the Wattenberg field of Colorado.

Capital Update

Shoreline recently closed the final round of its private placements, raising a total of $10,568,788 in equity offerings year to date. Shoreline plans to spend approximately $7,000,000 in the third and fourth quarter of 2013 and expects to drill 2 new wells (2 net) in Canada, to further develop Shoreline’s previously announced Montney light oil discovery. In addition the Company forecasts spending in the Wattenberg Niobrara/Codell oil project to range from $3,000,000 to $3,500,000.

Hedging

For 2013, the Company has entered into fixed price gas contracts for approximately 45% of its current natural gas production with prices as high as AECO $3.64 CAD per GJ and about 10% of its current production at AECO $3.64 CAD per GJ for 2014. The Company has entered into fixed price contracts for approximately 9% of its current oil production with prices as high as $103.05 US per barrel.

Dividend

The Company delayed its 1^st quarter dividend while accommodating the closing of its common equity private placement and delayed the 2^nd quarter dividend to accommodate the closing of its flow through share private placement. The Company intends to return to its regular quarterly dividend schedule and declare a total $0.48 per share in dividends for 2013, representing approximately 39% of 2013 average annual net free cash flow.

2013 Outlook

As production rates on the Company’s U.S. assets increases, management expects that funds from operations will begin to decrease the Company’s net debt and the Company will target a debt to cash flow ratio of between 1.8 and 2.5 times for 2014.

Banking Update

As previously disclosed, the capital expenditure necessary to acquire certain of the Company’s U.S. assets caused the Company to breach its working capital covenant under the credit facility agreement with ATB Financial. After spending $21,000,000 to acquire the US assets, the Company has since raised $15,658,788 through private placement equity offerings and a $5,000,000 bridge loan. The Company is now close to resolving its working capital covenant breach and expects to fully resolve the breach with the closing of a $15,000,000 term loan secured by its U.S. assets. The $15,000,000 term loan will be used to cancel and repay the existing $5,000,000 bridge loan and for working capital purposes including up to $7,500,000 of anticipated capital expenditures in the Company’s Wattenburg field assets.

Wattenburg Title Issue

As previously announced, the Company has decided to complete the February 2013 purchase of the “Dios” Wattenburg producing property in the following amounts at this time:

Total cash consideration of $3,500,001 plus closing adjustments and 109,200 Common Shares for certain oil and gas assets previously reported as being:

As reported on April 5, 2013, 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 and 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 National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities.

As described in notes to Shoreline’s first quarter financial results, the $15,700,000 principal payment due June 19, 2013 is no longer required, thereby reducing Shorelines current debt by $15,700,000.

BOE Conversions

The term barrels of oil equivalent (“Boe“) may be misleading, particularly if used in isolation. Per boe amounts have been calculated using a conversion ratio of six thousand cubic feet of natural gas (6 mcf) to one barrel of oil (1 bbl). The Boe conversion ratio of 6 mcf to 1 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. Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalent of 6:1, utilizing a conversion on a 6:1 basis may be misleading as an indication of value.

Investor Information

Shoreline is a Calgary, Alberta based corporation engaged in the exploration, development and production of petroleum and natural gas. Shoreline offers investors a combination of value growth via lower risk development of additional oil reserves and production on its current lands and pays a quarterly dividend. The Company’s common shares are currently listed on the TSX under the trading symbol “SEQ” and its debentures under the trading symbol “SEQ.DB”. 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 Corporation’s plans and other aspects of the Corporation’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 Corporation’s ability to obtain equipment in a timely manner to carry out development activities; and the ability of the Corporation to access capital and credit. While the Corporation considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect.

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.