Pine Cliff Energy Ltd. Enters into a $33.25 Million Agreement to Acquire Carrot Creek/Edson Area Oil and Natural Gas Assets

CALGARY, ALBERTA--(Marketwired - July 29, 2014) -

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Pine Cliff Energy Ltd. ("Pine Cliff") (TSX VENTURE: PNE) is pleased to announce that it has entered into a binding agreement (the "Agreement") dated July 29, 2014 to acquire (the "Transaction") oil and natural gas assets in one of its core areas of Carrot Creek/Edson in the Province of Alberta (the "Assets") for cash consideration of $33.25 million, prior to any adjustments. The cash consideration is expected to be financed by a combination of working capital and debt.

The Transaction will have an effective date of June 1, 2014 and is scheduled to close on August 7, 2014. The Transaction is conditional upon Pine Cliff's partner in the area, private company Velvet Energy Ltd. ("Velvet"), completing its acquisition of the Assets from a third party, which acquisition is expected to close concurrently with the closing of this Transaction. No assurances can be given that the acquisition of the Assets by Velvet or the Transaction will be completed as proposed or at all.

Transaction Highlights

• The Assets possess a predictable low cost production profile, long reserve life and a geographically focused asset base contiguous with Pine Cliff's current Carrot Creek/Edson core area. The Assets are 67% weighted to natural gas, are approximately 50% operated, high working interest properties (averaging 72%) and include ownership in key strategic infrastructure.
• The Assets have multi-zone potential along with a number of potentially low risk growth opportunities, including infill drilling. The Assets are characterized by liquids rich, high productivity wells and favourable royalties and operating costs.
• Pine Cliff will be partnering with Velvet, an experienced and active driller in the area, on future drilling development on the acquired lands. Subsequent to the closing of the Transaction, Pine Cliff is expected to have a combined asset base of over 7,000 barrels of oil equivalent ("boe") per day, weighted 92% towards natural gas.
• Subsequent to the closing of this Transaction and the closing of the July 24, 2014 announced acquisition of shallow natural gas assets in Alberta and Saskatchewan (the "Shallow Gas Acquisition"), expected to close November 1, 2014, Pine Cliff is expected to have a combined base asset production of over 12,000 boe per day, weighted approximately 95% towards natural gas, with a combined decline rate of 15%.

Key attributes of the Assets are as follows: