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Waldron Energy Corporation Announces 2011 Year End Results and Ferrybank Belly River Operations Update

CALGARY, ALBERTA -- (Marketwire) -- 03/30/12 -- Waldron Energy Corporation (TSX:WDN) ("Waldron" or the "Corporation") is pleased to announce its financial and operational results for the year and three months ended December 31, 2011. The Corporation's audited year-end financial statements and Annual Information Form ("AIF") including a statement on reserves data and other information specified in NI 51-101 are available for review at and on the Corporation's website at

Subsequent to year end, Waldron drilled two Belly River horizontal oil wells at Ferrybank, Alberta. The first well was drilled to a horizontal length of approximately 1,000 meters and the second well was drilled to a horizontal length of approximately 1,400 meters. The wells are currently being completed and Waldron expects both wells will be on production mid-April 2012. The Corporation intends to continue to shift its capital to the Belly River oil and Ellerslie oil projects at Ferrybank. Waldron is strategically positioned to allocate capital between oil projects and liquids rich projects as economic conditions dictate. Depending on the results of the two Belly River horizontal wells, the Corporation has over twenty horizontal oil wells identified in the Ferrybank Belly River oil pool which have not been recognized in the Corporation's 2011 reserves report. Additionally, Waldron has a large inventory of high impact liquids rich opportunities at Crystal, Strachan and Ricinus. Waldron's current production is approximately 2,900 boepd (26% oil and liquids).

2011 Financial Highlights

                   Three months ended December 31,  Year ended December 31, 
                                 2011         2010        2011         2010 
Financial (000's except                                                     
 for per share amounts)                                                     
Petroleum and natural gas                                                   
 sales                    $     8,536  $     7,653 $    33,218  $    24,615 
Funds from operations(1)        4,200        3,361      14,559        8,834 
  Per share basic &                                                         
   diluted(1)(2)                 0.12         0.12        0.44         0.34 
Net income (loss)             (14,319)       2,196     (14,482)        (407)
  Per share basic &                                                         
   diluted(2)                   (0.42)        0.08       (0.44)       (0.02)
Capital expenditures(3)         6,284       10,845      46,795       24,447 
Dispositions                      456        6,300         456        6,300 
Acquisitions                        -           53           -       44,629 
Working capital                                                             
 deficiency (excluding                                                      
 bank debt)                                              5,846        7,666 
Current bank debt (credit                                                   
 facilities $41 million)                                29,200        9,600 
Property and equipment                                  99,903       81,110 
Exploration and                                                             
 evaluation assets                                      10,677       14,046 
Shareholders' equity                                    62,871       64,426 
Number of shares                                                            
 outstanding at period                                                      
 end                                                    34,333       30,345 
(1)   Funds from operations is a non-GAAP term and the Corporation          
      calculates this measure as cash provided from operations before       
      changes in non-cash working capital and decommissioning expenses.     
(2)   At December 31, 2011 there were 3,281,500 (2010 - 2,395,000) options  
      and 7,182,560 (2010 - 7,182,560) warrants outstanding that were not   
      included in the calculation of weighted average shares outstanding as 
      the effect would be anti-dilutive.                                    
(3)   Capital expenditures exclude acquisitions, dispositions,              
      decommissioning expenditures and capitalized share based compensation.

2011 Operational Highlights

                  Three months ended December 31,   Year ended December 31, 
                                2011         2010         2011         2010 
  Natural Gas (mcf/d)         12,506       12,429       12,342        9,848 
  NGL (bbls/d)                   559          400          444          274 
  Light crude oil                                                           
   (bbls/d)                      167          209          186          192 
  BOE/day                      2,810        2,681        2,687        2,108 
Netback per boe                                                             
  Sales price            $     33.01  $     31.03  $     33.87  $     32.00 
  Royalties                    (4.13)       (1.59)       (4.22)       (3.69)
  Operating expenses           (6.50)       (9.85)       (8.81)      (10.11)
   expenses                    (1.94)       (2.00)       (1.76)       (1.73)
  Operating netback      $     20.44  $     17.59  $     19.08  $     16.47 

2011 Reserves Summary

Waldron is pleased to provide the following summary results from its annual independent reserve evaluation completed by GLJ Petroleum Consultants ("GLJ") for all of the Corporation's properties effective December 31, 2011 (the "GLJ Report"). These estimates were prepared in accordance with National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities ("NI 51-101") and the full reserves information is included in the Corporation's AIF.

The following tables summarizes the Corporation's gross and net interests in proved and probable reserves at December 31, 2011 as assessed in the GLJ Report prepared in accordance with NI 51-101 using the GLJ January 1, 2012 forecast prices and cost assumptions.

                                       RESERVES SUMMARY (1)                 
                                                                   TOTAL OIL
                              OIL & NGLS    NATURAL GAS(2)     EQUIVALENT(3)
RESERVES CATEGORY         Gross      Net    Gross      Net    Gross      Net
                         (Mbbl)   (Mbbl)   (Mmcf)   (Mmcf)   (Mboe)   (Mboe)
Producing                   985      738   17,339   15,337    3,876    3,293
  Developed Non-                                                            
   Producing                 89       65    2,270    2,042      468      404
  Undeveloped               510      394    6,675    5,682    1,623    1,341
TOTAL PROVED              1,585    1,195   26,283   23,061    5,966    5,039
PROBABLE                  1,243      898   24,796   21,389    5,377    4,463
TOTAL PROVED PLUS                                                           
 PROBABLE                 2,830    2,093   51,079   44,450   11,343    9,502
(1)   Numbers in this table are subject to rounding.                        
(2)   Natural gas volumes include solution gas volumes associated with the  
      Corporation's light and medium crude oil reserves.                    
(3)   Natural gas is converted to barrels of oil equivalent ("boe") at a    
      ratio of six thousand standard cubic feet to one barrel of oil.       

Net Present Values of Future Net Revenue

The following table summarizes Waldron's share of the net present value of future net revenue attributable to its reserves before taxes but prior to the provision for interest and general and administrative expenses:

                                    NET PRESENT VALUES OF FUTURE NET        
                               BEFORE INCOME TAXES DISCOUNTED AT (%/year)   
RESERVES CATEGORY                     0%          5%         10%         15%
                                    (M$)        (M$)        (M$)        (M$)
  Producing                       77,899      61,897      52,260      45,661
  Developed Non-Producing          9,433       6,342       4,623       3,545
  Undeveloped                     19,135      12,576       8,410       5,613
TOTAL PROVED                     106,467      80,814      65,293      54,819
PROBABLE                          94,009      54,988      35,339      23,935
TOTAL PROVED PLUS PROBABLE       200,476     135,803     100,632      78,754
(1)   Gross reserves are the Corporation's total interest share before the  
      deduction of royalties and without including any royalty interest of  
      the Corporation.                                                      
(2)   Utilizes GLJ Petroleum Consultants escalated price forecasts as of    
      January 1, 2012.                                                      
(3)   Natural gas volumes include solution gas volumes associated with the  
      Corporation's light and medium crude oil reserves.                    
(4)   Natural gas is converted to barrels of oil equivalent ("boe") at a    
      ratio of six thousand standard cubic feet to one barrel of oil.       
(5)   Numbers in this table are subject to rounding.                        

Waldron's December 31, 2011 Proved Producing reserves increased by 30% on a reserves basis and increased 20% on net present value basis discounted at 10%, respectively, over the December 31, 2010 Proved Producing reserves. Typically, proved producing reserves form the basis of determining lending values. Waldron's credit facility is anticipated to be renewed by the April 30, 2012 semi-annual review date. The Corporation's gross and net interests in proved and probable reserves and net present value of future net revenue attributable to its reserves before taxes at December 31, 2011 were lower than at December 31, 2010, respectively, due to lower natural gas pricing and reduction in undeveloped and probable reserves at Ricinus. The Corporation is directing its efforts to increase the oil production and add oil reserves in Waldron's Ferrybank Belly River oil prospect by infill drilling of horizontal wells and re-evaluating the waterflood management program.

Net Asset Value

The following table summarizes the Corporation's net asset value at December 31, 2011:

Net Asset Value (December 31, 2011)                                    2011 
Proved plus Probable NI 51-101 discounted at 10%           $        100,632 
Undeveloped Land, Seismic and Other Assets (internal                        
 estimate)                                                           18,000 
Net Debt                                                            (35,046)
Net Asset Value - Basic                                    $         83,594 
Basic Common Shares Outstanding (at Dec. 31, 2011)                   34,333 
Net Asset Value - Basic (per share)(1)                     $           2.43 
Net Asset Value - Basic                                    $         83,594 
Funds Received from Exercise of Dilutives                            19,889 
Net Asset Value - Fully Diluted                            $        103,483 
Diluted Shares Outstanding (at Dec. 31, 2011)                        44,797 
Net Asset Value - Fully Diluted (per share)(1)             $           2.31 
(1)   Net Asset Value numbers are at December 31, 2011 and do not           
      incorporate drilling results during the first quarter of 2012 and do  
      not incorporate changes in dilutives post December 31, 2011.          
(2)   The estimated values do not represent fair market value.              

Update and Outlook

During the fourth quarter of 2011, Waldron produced on average 2,810 boepd (26% oil and liquids), resulting in $4.2 million in funds from operations. The Corporation exited 2011 with $29.2 million drawn on its credit facilities of $41 million with $5.8 million working capital deficiency (excluding debt) and a net debt to annualized fourth quarter funds from operations ratio of 2.1 to 1.

The Corporation originally budgeted for drilling a second Glauconite gas well at Crystal given the success of the first liquids rich well. However, due to strong oil prices and recent successful industry results of Belly River oil, Waldron revised its plans and has drilled two Belly River horizontal light oil wells at Ferrybank. As a result of a shift towards light oil opportunities and low natural gas pricing, the Corporation will continue to execute a cash flow budget and will update guidance when the Belly River horizontal well results have been determined.

The Corporation has established a core area with a top tier asset base of multi-zone high value prospects. Waldron's core areas are characterized by light oil and high deliverability liquids rich opportunities, with high working interests, operatorship, infrastructure, access to production facilities and year round access.

Currently, a non-core asset disposition process is ongoing and the Corporation is continually seeking opportunities to optimize its portfolio of assets through asset sales, swaps, farm-ins, farm-outs and other value creating activities. Waldron has 75 net sections of land in the greater Pembina Area which is prospective for liquids rich gas reserves in the Duvernay shale resource play. With current industry activity and recent land sales in the area, Waldron's land position has the potential to increase in value significantly. Additionally, Waldron has identified over 125 horizontal drilling locations on its lands targeting a mix of deep basin light oil and liquids rich opportunities in the Belly River, Ellerslie, Glauconite, and Falher zones.

Additionally, Waldron's current production is approximately 2,900 boepd (26% oil and liquids).

Investor Information

Waldron is a Calgary, Alberta based corporation engaged in the exploration, development and production of petroleum and natural gas. The Corporation's common shares are currently listed on the Toronto Stock Exchange under the trading symbol "WDN." Additional information regarding Waldron is available under the Corporation'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. Specifically, this press release contains forward-looking statements relating to the results and timing of operations; number of follow-up locations; whether or not recent industry results are favorable; whether or not additional light oil reserves are recognized; whether or not the Corporation achieves guidance; the character and nature of the Corporation's asset base; whether or not the asset base is prospective; value of Duvernay rights; and number of horizontal drilling locations and opportunities. 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; whether or not proved producing reserves form the borrowing base; 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 Waldron 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, Waldron does not undertake any obligation to publicly update or revise any forward-looking statements.

Note Regarding Non-GAAP Financial Measures

Funds from operations and operating netback are not recognized measures under IFRS as issued by the International Accounting Standards Board. Management believes that in addition to net earnings, funds from operations and operating netback are useful supplemental measures as they demonstrate the Corporation's ability to generate the cash necessary to fund future growth through capital investment or repay debt if incurred in future periods. Investors are cautioned, however, that these measures should not be construed as an alternative to cash flow from operating activities or net earnings determined in accordance with IFRS as an indication of the Corporation's performance. The Corporation's method of calculating these measures may differ from other entities and, accordingly, they may not be comparable to measures used by other entities. For these purposes, the Corporation defines funds from operations as cash flow from operations before changes in non-cash operating working capital, financing expenditures related to the costs of acquisitions and decommissioning expenditures and defines operating netback as revenue less royalties, operating and transportation expenses. Net debt is defined as current assets less current liabilities.

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.

Waldron Energy Corporation
Ernie Sapieha
President & CEO
[email protected]

Waldron Energy Corporation
Dean Schultz
VP Finance & CFO
[email protected]

Waldron Energy Corporation
Murray Stodalka
EVP Engineering & Operations
[email protected]

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