Shoreline Energy Corp.

Shoreline Energy Corp.

February 19, 2013 08:00 ET

Shoreline Energy Corp. Announces Expansion of Niobrara and Codell Holdings in Wattenburg Field, Weld County

CALGARY, ALBERTA--(Marketwire - Feb. 19, 2013) - Shoreline Energy Corp. (TSX:SEQ) ("Shoreline" or the "Company") is pleased to announce the acquisition of two non-operated working interest asset packages located in Weld County Colorado in the Wattenberg field. The asset packages are in the heart of the world class Niobrara and Codell oil projects, being developed with the use of proven horizontal wells and multiple stage hydraulic fracturing technology. These latest acquisitions are situated in close proximity and are a perfect complement to the royalty and working interest acquisitions the Company announced in the fourth quarter of 2012. Total aggregate purchase price for these acquisitions is US$22.5 million, subject to final closing adjustments, with effective dates of November 1, 2012 and February 1, 2013 respectively.

These new acquisitions bring to Shoreline an average pre-pooled working interest of 14% in approximately 4,500 acres of land. Drilling operations are underway on the acreage and to date 8 new horizontal oil wells are on production. Based on current development plans published by the key operators in the area, there are between 100 and 200 possible horizontal drilling locations on the acquired acreage. Current operating income from the existing vertical oil and gas wells on the lands is approximately $250,000 per month, plus a forecast initial $200,000 to $250,000 per month attributable to the initial 8 recently drilled horizontal producers on Company lands. The Company has engaged the services of a well-respected reserve evaluator to provide an NI 51-101 compliant independent evaluation of the assets to be completed in the second quarter of 2013.

"The closing of these latest acquisitions is a very significant event for Shoreline, further expanding our holdings in what we believe is a world class and highly profitable project. These assets are an excellent fit with our existing assets. Drilling activity has already commenced and the Company has an extensive inventory of drilling locations which could substantially increase cash flow in both the short and longer term," stated Trevor Folk, Shoreline's Chief Executive Officer. "Our total acreage in the Wattenberg Field now spans 31,500 gross acres and includes a combination of passive royalty income generating properties and high impact growth oriented working interest properties. We believe these assets will provide a very attractive return on investment to our shareholders."

The acquisition price comprises $19.2 million of cash plus 600,000 common shares of Shoreline at a price of $3.65 per common share. Shoreline will finance the acquisition with a combination of cash-on-hand, short-term debt and bank debt.

Shoreline is also pleased to announce that based on data available as of November 2012, 21 new horizontal wells were on production on its Weld County royalty lands, with an additional 4 wells drilling and 20 wells awaiting permit approval. Shoreline anticipates receiving its first revenue from the already producing horizontal wells this month. This new royalty revenue, when coupled to new revenue from the previously announced light oil discoveries in its Canadian core operating area, will serve to significantly increase cash flow.

Shoreline is currently completing its December 31, 2012 NI 51-101 Reserve Report, when complete, Shoreline will publish its 2013 capital expenditure program and 2013 production guidance.

About Shoreline Energy

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. Shoreline has 6,207,960 Common Shares outstanding and 170,000 convertible debentures outstanding. The Common Shares are currently listed on the TSX under the trading symbol "SEQ" and the debentures under the trading symbol "SEQ.DB". Additional information regarding Shoreline is available under the Company's profile at or at the Corporation's website,

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.

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 equivalency conversion ratio of 6:1, utilizing a conversion on a 6:1 basis is misleading as an indication of value.

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