CALGARY, ALBERTA--(Marketwired - Feb. 10, 2015) - Kicking Horse Energy Inc. ("Kicking Horse" or the "Company") (TSX VENTURE:KCK) reports an update on its operational activity and provides updated guidance for 2015.


During Q4 2014, Kicking Horse drilled 4 (3 net) wells and completed 3 (2.25 net) previously drilled wells, with 1 (0.75 net) of these completed wells being placed on production. At the end of Q4 2014, the Company had 4 (3 net) wells drilled and awaiting completion and 2 (1.5 net) additional wells completed and awaiting tie-in.

Recent operational highlights included the drilling by Kicking Horse in Q4 2014 of its longest well to date, being the horizontal well located at 14-25-63-6 W6M ("14-25 Well"). The 14-25 Well was drilled in the Montney Formation to a total measured depth of 6,161 meters. Completion operations on this well were finalized in late January 2015. The Company utilized sliding sleeve frac technology run on coiled tubing in the completion, allowing 84 individual slickwater fracs to be successfully placed. The 14-25 Well was production tested for 200 hours, through February 2, 2015, during which the 14-25 Well flowed back frac water, and experienced hydrocarbon rates of 1,431 bbl/d condensate and 5,880 mcf/d against flowing pressure of 8,400kPa at the end of the test. During the final 24 hours of the production test, the well produced 1,105 bbl condensate and 5,000 mcf of natural gas flowing against pressures between 8,400 and 10,000 kPa. Kicking Horse holds a 75% working interest in the 14-25 Well. The Company advises that although the initial rates from the 14-25 Well are encouraging, production test results are not necessarily indicative of long-term performance or of ultimate recovery from this well.

Additionally, the Company recently carried out successful completion operations in the Halfway Formation in a well located at 1-14-63-6 W6M ("1-14 Well"). The 1-14 Well was drilled in Q4 2014 and had previously been completed in the Montney Formation. After isolating the Montney Formation, the Company carried out a 10 ton water-based frac in the Halfway zone and production tested the 1-14 Well from the Halfway for a 2 day period. During the final 24 hours of the production test, the 1-14 Well flowed 229 bbls of light oil and 418 mcf of natural gas from the Halfway Formation, flowing at pressures between 2kPa and 265kPa. The Company expects to carry out additional production testing on the 1-14 Well to determine the feasibility of producing from both the Halfway and Montney zones. Kicking Horse holds a 75% working interest in the 1-14 Well.

In early January 2015 the Company spud a well at 13-23-63-6 W6M ("13-23 Well"), which well is currently drilling horizontally in the Montney Formation. The Company has a 75% working interest in this well. The Company expects drilling of the 13-23 Well to be finished by mid-February 2015 after which the Company plans to release the drilling rig. As a result of the 25% working interest partner's election to not participate in the drilling of the 13-23 Well, Kicking Horse will hold a 100% revenue interest in this well pending payout to the Company of 400% of the associated drilling and completion costs.

Kicking Horse continues to enhance its pipeline and facilities infrastructure, including through the expansion of its 75% working interest, operated compressor and condensate stabilization facility ("16-7 Facility"). The capacity of the 16-7 Facility is being increased to approximately 30 mmcf/d and 5,000 bbl/d, with the project expected to be completed in April 2015. The expansion includes the installation of a new condensate stabilization unit designed to enhance product quality and thereby improve realized condensate pricing.

Kicking Horse has secured firm processing and transportation for its condensate and gas production which will become effective once third party (mid-stream) infrastructure expansion has been completed, with the majority of the third party infrastructure expected to be operational by April 2015. The Company, in conjunction with its working interest partner at East Kakwa, has secured transportation agreements to cover gross volumes of approximately 15 mmcf/d natural gas and 3,500 bbl/d of condensate. Upon these firm service contracts becoming effective, the Company expects its transportation expenses to decrease. The Company expects that the processing and transportation of any volumes produced by it in excess of these firm service commitments will be able to be accommodated through existing and expanded infrastructure.

2015 Outlook

With the sharp decrease in commodity prices and the Company's focus towards maintaining a strong balance sheet and financial flexibility, Kicking Horse has reduced its planned capital activities for 2015 and has deferred certain capital activities to later in 2015. The Company released one of its two drilling rigs under contract at the end of Q4 2014.

Along with lower commodity prices, the Company has been subject to temporary infrastructure restrictions and increased transportation costs experienced in Q4 2014 and to date in 2015. As such, Kicking Horse has elected to delay the start-up of the 14-25 Well and the two other wells completed in Q4 2014, originally anticipated to be on production in Q1 2015, until approximately April 2015. At that point, the Company's firm service agreements are expected be in effect and the 16-7 Facility expansion is scheduled to be completed. It is anticipated that this delay in bringing additional production on stream will result in higher netbacks through enhanced condensate quality and commensurate increased pricing, and lower transportation and processing costs.

The Company's Q4 pro forma production averaged approximately 2,300 boe/d, impacted by approximately 20 days of scheduled and unexpected plant and pipeline outages.

Near term planned capital activity by the Company includes finalizing the drilling of the 13-23 Well, completing 1 (0.75 net) well prior to spring break-up and finalizing construction of the 16-7 Facility expansion. The Company expects to complete 3 (2.5 net) wells, including the 13-23 Well, in Q2 and Q3 2015.

In order to enhance development and accelerate value creation in some of the Company's undeveloped properties outside of East Kakwa, Kicking Horse recently entered into a farmout agreement with a third party operator respecting certain shallow rights in the Wapiti/West Kakwa areas of Alberta. The Company will retain all of its interests in the Montney, and other deep rights, in the farmout lands. Under the farmout arrangement, the third party is to drill and complete one well and one option well to earn a working interest in the shallow rights in eleven sections, with the initial well to be drilled on the farmout lands by the end of Q4 2015. Kicking Horse will retain a minority working interest in the shallow rights once the third party has earned. The Company also retains the ability to deepen a farmout well, at its discretion.

Given deferred capital activities and production delays experienced in Q1 2015, the Company expects its 2015 production to average between 3,200 to 3,700 boe/d and 2015 exit production to be approximately 3,600 to 3,900 boe/d. The Company's capital program for the first half of 2015 will be $20 - $25 million, with the Company currently planning for a capital budget of $12 - $17 million for the second half of 2015. Capital spending by the Company in 2015, and in particular the second half of the year, will remain subject to the ongoing monitoring of oil and natural gas prices, along with a continued focus on maintaining financial flexibility. The Company exited 2014 with net debt of approximately $23 million on its $70 million credit facility.

Director Resignation

In connection with the transaction pursuant to which Contact Exploration Inc. and Donnycreek Energy Inc. ("Donnycreek") merged to form the Company, Bruce Allford had agreed to resign as a director of the Company provided that the transaction was completed and a request to resign was made, subsequent to January 31, 2015, by the three directors of the Company who were nominees of Donnycreek. Such a request was recently delivered to Mr. Allford and consequently Mr. Allford has resigned as a director of the Company. Mr. Allford will remain as the Corporate Secretary of Kicking Horse.

About Kicking Horse Energy Inc.

Kicking Horse Energy Inc. is a public oil and gas company which is focused on the development of Alberta's liquids-rich Montney Formation tight gas play. For more information, please see the Company's website:

ADVISORY ON USE OF "BOEs": "BOEs" may be misleading, particularly if used in isolation. A BOE conversion ratio of six thousand cubic feet of natural gas to one barrel of oil equivalent (6 mcf: 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 equivalency of 6:1, utilizing a conversion on a 6:1 basis may be misleading as an indication of value.

ADVISORY ON FORWARD-LOOKING STATEMENTS: This press release contains certain forward-looking information and statements within the meaning of applicable securities laws. The use of any of the words "expect", "continue", "estimate", "may", "will", "should", "believe", "plans", "cautions" and similar expressions are intended to identify forward-looking information or statements. More particularly and without limitation, this press release contains forward-looking information concerning: the expected additional production testing on the 1-14 Well; the timing for finishing the drilling of the 13-23 Well and releasing the drilling rig; the expected timing for completion of the expansion of the 16-7 Facility; the timing for third party (mid-stream) infrastructure expansion to be completed; the timing for transportation agreements negotiated by the Company to become effective; the ability of the Company to arrange for processing and transportation of volumes produced by it in the future that are in excess of negotiated transportation agreement volumes; the timing to start up the 14-25 Well and two other wells completed in Q4 2014; anticipated higher netbacks for the Company through enhanced condensate quality and commensurate increased pricing and lower transportation and processing costs; the nature and timing of near term capital spending by the Company through Q3 2015; the third party's drilling commitments under the farmout agreement entered into with the Company; the Company's expected average and exit production volumes for 2015 and the amount and timing of the Company's planned capital spending for 2015. Such forward-looking information is provided for the purpose of providing information about management's current expectations and plans relating to the future. Investors are cautioned that reliance on such information may not be appropriate for other purposes, such as making investment decisions.

Forward-looking statements or information are based on a number of material factors, expectations or assumptions of Kicking Horse which have been used to develop such statements and information but which may prove to be incorrect. Although Kicking Horse believes that the expectations reflected in these forward-looking statements are reasonable, undue reliance should not be placed on them because Kicking Horse can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. In particular, in addition to other factors and assumptions which may be identified herein, no assurances can be given respecting: whether the Company's exploration and development activities respecting the Deep Basin Montney project will be successful or that material volumes of petroleum and natural gas reserves will be encountered, or if encountered can be produced on a commercial basis; the ultimate size and scope of any hydrocarbon bearing formations at the Deep Basin Montney project; that the results of the production test from the 14-25 well will be indicative of the long-term performance or of ultimate recovery from the well; that additional drilling operations in the Deep Basin Montney project will be successful such that further development activities in this area is warranted; that Kicking Horse's efforts to raise additional capital will be successful; that Kicking Horse will continue to conduct its operations in a manner consistent with past operations; results from drilling and development activities will be consistent with past operations; the accuracy of the estimates of Kicking Horse's reserve volumes; the general stability of the economic and political environment in which Kicking Horse operates; drilling results; field production rates and decline rates; the general continuance of current industry conditions; the timing and cost of pipeline, storage and facility construction and expansion and the ability of Kicking Horse to secure adequate product transportation; future commodity prices; currency, exchange and interest rates; regulatory framework regarding royalties, taxes and environmental matters in the jurisdictions in which Kicking Horse operates; and the ability of Kicking Horse to successfully market its oil and natural gas products.

Further, 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, including, without limitation: changes in commodity prices; changes in the demand for or supply of the Company's products; unanticipated operating results or production declines; changes in tax or environmental laws, royalty rates or other regulatory matters; changes in development plans of Kicking Horse or by third party operators of Kicking Horse's properties, increased debt levels or debt service requirements; inaccurate estimation of Kicking Horse's oil and gas reserve and resource volumes; limited, unfavourable or a lack of access to capital markets; increased costs; a lack of adequate insurance coverage; the impact of competitors; and certain other risks detailed from time-to-time in Kicking Horse's public disclosure documents. Additional information regarding some of these risk factors may be found under "Risk Factors" in the Company's Management Discussion and Analysis prepared for the year ended March 31, 2014. The reader is cautioned not to place undue reliance on this forward-looking information. The forward-looking statements contained in this press release are made as of the date hereof and Kicking Horse undertakes no obligations to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information:

Kicking Horse Energy Inc.
Steve Harding
President and Chief Executive Officer
(403) 771-1091
(403) 695-3915 (FAX)

Kicking Horse Energy Inc.
Chad Kalmakoff
Vice President Finance and Chief Financial Officer
(403) 234-8663
(403) 695-3915 (FAX)