Corcel Regulatory News (CRCL)

Caracal Energy Inc.

issues third quarter results and provides

operational and reserves update

Calgary, Alberta, November 7, 2013 - Caracal Energy Inc. ("Caracal" or the "Company") (LSE: CRCL) today reported its operating and financial results for the three and nine months ended September 30, 2013 and provide an operational and reserve update.

Gary Guidry, Chief Executive Officer, said:

"The commencement of production, at the end of the third quarter, marked a significant milestone in Caracal's development into a cash flow generating entity. Future cash flow from production will be utilized to fund the development of the Company's properties and a high impact exploration program in 2014 and beyond. We are off to a great start with our first two exploration targets - the Mangara E sands and Krim well - resulting in two new discoveries. I would personally like to thank the staff for their hard work and commitment, and the Government of Chad and our joint venture partners, Glencore and SHT, for their continued support as the Company established operating momentum."

Operational Highlights

· Commenced first production from the Badila Field on September 30, 2013. As at November 6, 2013, Caracal was flowing oil from the Badila Field into the Export Pipeline at a rate of approximately 5,100 bbl/d (gross)

· Drilled and tested the Mangara-5 development well to a total depth of 3,339 meters. The initial flow test on the E sand achieved a maximum natural flow rate of 1,917 bbl/d at a flowing wellhead pressure of 160 psi with the C sand test achieving a natural flow rate of 3,200 bbl/d

· Spudded the Krim exploration target on August 6, 2013 and in September, drilled to a total depth of 3,332 meters. Initial testing of the E sands achieved a maximum natural flow rate of 2,580 bbl/d at a flowing wellhead pressure of 120 psi. Testing of the C & D sands is expected prior to year end

· Received delivery of a second drilling rig (Rig-96) in Chad and spudded Badila-4 on August 8, 2013

· Badila-4 well drilled to a depth of 2,272 metres and is currently being assessed.

· Increased net entitlement proven reserves ("1P") to 16.8 million barrels of light oil, proven plus probable reserves ("2P") to 57.3 of million barrels of light oil and proven plus probable plus possible reserves ("3P") to 105.7 million barrels of light oil;

· Increased the Net Present Value discounted at 10 percent of 2P reserves to $1.5 billion

Corporate Highlights

· Common shares admitted to the premium listing segment of the Official List of the Financial Conduct Authority and began trading on the London Stock Exchange's main market for listed securities on July 9, 2013

· Achieved a UK Classification by the FTSE Nationality Committee for purposes of Caracal's application to be included on the FTSE index series. Subsequently, Caracal became part of the FTSE All-Share UK Index Series

· Officially listed as a Supporting Company of the Extractive Industries Transparency Initiative (EITI)

· Signed the Transportation Agreements to gain access to the Export Pipeline

· Filed a final short form base shelf prospectus with the securities regulatory authorities in each of the provinces of Canada other than Quebec

· Convertible bonds admitted to the official list of the Luxembourg Stock Exchange and admitted to trading on the Euro MTF market

Financial Highlights

· Exited the third quarter with working capital of $191.8 million, including cash and cash equivalents of $45.3 million

· Capital spending of $81.6 million in the third quarter

· Received $75 million of the $100 million second tranche of the Glencore farm-in

· Reduced net loss by 39 percent from the second quarter (16 percent excluding the non-recurring listing fees)

Outlook targets

· Bitanda exploration well to spud in the fourth quarter of 2013

· Complete the testing of the Cretaceous C and D sands in Krim well

· Complete and commission the Southern Processing Terminal ("SPT"), adjacent to the Badila field which will initially process oil production from the Badila-4 and Badila-5 wells

· Complete the Mangara to Badila Pipeline

· Complete and commission the Central Processing Facility ("CPF")

· Complete and commission the blending and shipping facilities

Operational Review

Badila Field

Production

Caracal commenced first production from the Badila Field on September 30, 2013. As at November 6, 2013, Caracal was flowing oil from the Badila Field into the Export Pipeline at a rate of approximately 5,100 bbl/d (gross) (2,550 bbl/d working interest). As at November 6, 2013, approximately 45,900 bbls (gross) had been flowed into the Export Pipeline, and the Company expects to complete the line fill in December 2013. Between October 11 - 24, 2013, the Company's production was stopped to make modifications to computer software necessary for the precise measurement of the crude oil flowed into the Export Pipeline. The redesigned software is now operating as required. In addition, each of the three pumps designed to ship Caracal's crude oil through to the Export Pipeline have been affected by mechanical malfunction, with the consequence that they are not currently operating at full capacity. The Company expects to undertake the repairs necessary to restore these pumps to full working order during November 2013. The Company has also arranged delivery of three additional pumps to provide spare flow capacity, which it expects to commission in November 2013.

Drilling

The Company drilled the Badila-4 well during the third quarter, which it expects to develop prior to year-end. Additionally, Caracal spudded the Badila-5 well on October 12, 2013 which is expected to take 25-30 days to drill.

Mangara Field

Drilling

· The Mangara-5 well was drilled to a depth of 3,339 metres in July 2013 and completed as lower Cretaceous C and D sands production well. The initial flow test on the E sands achieved a maximum natural flow rate of 1,917 bbl/d at a flowing wellhead pressure of 160 psi. The initial flow test, conducted over a 53 hour period, yielded a total oil volume greater than 1,450 bbl at varying rates. Field sampling estimates indicate oil gravity of 35°-39° API and a producing gas-oil ratio of approximately 100 scf/stb. The Group estimates that, using an ESP for artificial lift, a stable production rate of 1,500 to 2,500 bbl/d is achievable from the E interval. More recently, testing of the C interval achieved a maximum natural flow rate of 3,200 bbl/d.

· Caracal intends to spud the Mangara-6 well during November. The Mangara-6 well will test the aerial extent of the E sands on the western side of the Mangara field.

Facilities

Construction continued on the central processing facilities, southern processing terminal, blending facilities and Mangara sales pipeline. All of these facilities, except for the southern processing terminal, are expected to be mechanically complete and operational in the second quarter of 2014. The southern processing terminal is expected to be commissioned in the fourth quarter of 2013.

Exploration

DOB/DOI PSC

Krim-1 Exploration Well

· The Krim-1 well, the Group's first exploration well, was spudded on August 5, 2013 and drilled to a depth of 3,332 metres. Initial testing of the E sands has achieved a maximum natural flow rate of 2,580 bbl/d at a flowing wellhead pressure of 120 psi. Field sampling suggests oil gravity of 34°-37° API and a producing gas-oil ratio of approximately 100 scf/stb. The Group estimates that, using an ESP for artificial lift, a stable production rate of 3,000 to 4,500 bbl/d is achievable.

Bitanda Exploration Well

· During the third quarter, Caracal completed the lease construction for the Bitanda prospect. The Bitanda prospect is scheduled to spud in Q4 2013 targeting unrisked mean prospective resources of 277 million bbls as per the Company's resources evaluation dated effective June 30, 2013 from McDaniel & Associates Consultants Ltd. ("McDaniel")

Seismic

· As part of the planned 2D seismic shoot there will be 250 lineal kms. of seismic acquired to mature leads and prospects on the DOB /DOI blocks

Doseo/Borogop PSC

The Company has scheduled the following key work streams relating to the development of the Doseo/Borogop PSC to be undertaken during the fourth quarter of 2013 and the 2014 calendar year:

Drilling

· one appraisal well and seven exploration well are planned to be drilled

· Seismic:

a 455 km2 3-D seismic programme covering the Kibea Field and adjacent exploration prospects

a 253 km2 3-D seismic programme covering the Maku Field

1,250 lineal km2 of 2D seismic be acquired impacting maturation of leads and drill ready prospects

Facilities and Civil

· the Doseo/Borogop Pipeline Engineering Study

· land acquisition in relation to the Doseo/Borogop Pipeline route

· a facility feasibility study; and

· road and infrastructure upgrades.

During the third quarter Caracal evaluated the commercial and technical aspects of the bids for the seismic, pipeline study and additional drilling rigs. The Company expects to award the requisite contracts in the fourth quarter of 2013.

DOH PSC

During the third quarter, Caracal continued to reprocess existing 2-D seismic with the intent of drilling two exploration wells in 2014.

Corporate Review

London Stock Exchange and FTSE Inclusion

The Company's common shares were admitted to listing on the premium listing segment of the Official List and to trading on the London Stock Exchange's main market for listed securities on July 9, 2013 (the "Introduction"). The Introduction has increased Caracal's global profile and better positioned it in the London market, which has numerous listed oil and gas companies that are focused on Africa.

Caracal's common shares were admitted to the FTSE UK Index Series on September 23, 2013. FTSE's indices are used by market participants for investment analysis, performance measurement, asset allocation and portfolio hedging. Many pension funds, asset managers and other institutional investors use FTSE's indices to create index tracking funds, structured products and index derivatives. 

EITI

During the third quarter, the Company was officially listed as a Supporting Company of the Extractive Industries Transparency Initiative ("EITI"). The EITI is a global standard that promotes revenue transparency and provides a robust methodology for monitoring and reconciling company payments and government revenues at the country level. Each implementing country creates its own EITI process, which is overseen by participants from the government, companies and national civil society. The international EITI Board and the International Secretariat are the guardians of the EITI methodology internationally. More information can be found on the website: http://eiti.org.

Transportation Agreements

Subsequent to the end of the third quarter, Caracal entered into Transportation Agreements with the operator of the Export Pipeline. The Transportation Agreements govern the terms of use of the Export Pipeline for the transport of oil produced in the Badila and Mangara Fields, including the order of priority for access and the applicable fees payable for use of the Export Pipeline. The Transportation Agreements incorporate a set of general terms (the "General Transportation Terms") applicable to all new shippers and a set of other terms specific to the Company. The General Transportation Terms include general terms of use of the Export Pipeline, including the order of priority for access. The fees reflected in the Transportation Agreements include payments in respect of a fixed and variable throughput charge, operating expenditure, capital expenditure and a utility rate of return for use of the Export Pipeline. Transit fees are also payable to the Government of Cameroon in respect of oil transported through the Cameroonian portion of the Export Pipeline. Based on the Transportation Agreements, the Company expects the aggregate transportation fees to range between $6.00 and $8.00 per barrel shipped.

Base Shelf Prospectus

Subsequent to the end of the third quarter the Company filed a final short form base shelf prospectus (the "Final Base Shelf Prospectus") with the securities regulatory authorities in each of the Provinces of Canada, other than the Province of Quebec.

The Final Base Shelf Prospectus allows the Company to offer common shares, subscription receipts, warrants and debt securities (collectively, the "Securities") or any combination thereof up to an aggregate offering price of US$1,000,000,000 during a 25-month period that a base shelf prospectus remains effective. Securities may be offered separately or together, in amounts, at prices and on terms to be determined based on market conditions at the time of sale and set forth in an accompanying supplement that would also be provided with the Final Base Shelf Prospectus to investors.

Caracal filed a Final Base Shelf Prospectus to maintain financial flexibility and to have the ability to offer the Securities on an accelerated basis, once a supplement is filed over the 25-month time frame. There is no certainty that any offering of Securities will occur within the 25-month period.

A copy of the Final Base Shelf Prospectus will be available on SEDAR (www.sedar.com).

Reserves Update

The Company commissioned McDaniel to prepare an independent competent person's report on its Crude oil assets as at September 30, 2013 (the "Report"). The tables below summarize certain information contained in the Report. The Report was prepared in accordance with the definitions, standards and procedures contained in the Canadian Oil and Gas Evaluation Handbook ("COGE") and National Instrument 51-101, Standards of Disclosure for Oil and Gas Activities ("NI 51-101"). A statement of the Reserves consistent with an NI 51-101F1 can be found at www.caracalenergy.com or www.sedar.com, under Caracal's profile.

SUMMARY OF CRUDE OIL RESERVESAS AT SEPTEMBER 30, 2013FORECAST PRICES AND COSTS

Notes:

(1) All of the Company's proved, probable and possible reserves have been classified as light and medium crude oil. The Company has no heavy crude oil. Based on current market conditions in Chad, neither reserves or values have been attributed to gas or natural gas liquid volumes. However, the Company has rights to monetize gas volumes and is currently discussing and assessing this market potential for the future.

(2) Gross lease are the total marketable reserves assigned to the Company's concessions.

(3) The Government of Chad has elected to acquire a 25 percent participating interest in the Badila and Mangara EXAs and McDaniel has assumed, for the purposes of estimating the Company's participating interest in any future EXAs which may be granted under each PSC, that the Government of Chad will continue to elect to acquire a 25 percent participating interest in each EXA. Accordingly, the Company's participating interests have been assumed to be 50 percent of the gross lease interests.

(4) Net reserves are the Company's share of Cost Oil recovery and Profit Oil. Under the COGE Handbook, using the economic interest method, "Net" as depicted above is equivalent to "company net" and, in the particular case of the Company's PSCs, "company gross".

(5) Columns may not add due to rounding.

SUMMARY OF NET PRESENT VALUE OF FUTURE NET REVENUE (US$)AS AT SEPTEMBER 30, 2013FORECAST PRICES AND COSTS

Notes:

(1) The Government of Chad has elected to acquire a 25 percent participating interest in the Badila and Mangara EXAs and McDaniel has assumed, for the purposes of estimating the Company's participating interest in any future EXAs which may be granted under each PSC, that the Government of Chad will continue to elect to acquire a 25 percent participating interest in each EXA. Accordingly, the Company's participating interests have been assumed to be 50 percent of the gross lease interests.

(2) Pursuant to the terms of the DOB/DOI PSC and the Doseo/Borogop PSC, the Government of Chad's Profit Oil allocation is inclusive of income tax.

(3) Columns may not add due to rounding.

Finance Review

A copy of Caracal's third quarter financial statements and Management Discussion and Analysis ("MD&A") can be found at www.caracalenergy.com or www.sedar.com, under Caracal's profile

Revenues

The Company did not generate any operating revenues during the period ended September 30, 2013. Production commenced from the Badila field on September 30, 2013, however, this production was directed to Caracal's portion of the required line fill.

Net Loss

The Company incurred a net loss of $19.5 million during the third quarter, a 39 percent decrease from the net loss incurred in prior quarter. The decrease in the net loss is predominately due to non-recurring listing costs expensed in the second quarter of 2013.

Liquidity

Caracal's available cash resources as at September 30, 2013 and 2012 were $45.3 million and $212.0 million respectively. The Company exited the third quarter with working capital of $191.8 million. Caracal entered into the Glencore Farm-in agreement in 2012 which closed in June 2013. This transaction provided approximately $330.8 million in liquidity and reduces future capital requirements by reducing Caracal's working interest in the PSCs.

Historically, the Company financed its capital resource needs through the sale of its common shares, convertible bonds and farm-outs with the objective of the acquiring prospective oil and gas assets and maximizing long-term financial returns to its shareholders. Caracal anticipates developing its assets in the Republic of Chad utilizing a combination of existing capital resources, the financial commitments of Glencore pursuant to the farm-in agreement, anticipated future revenues and, if necessary, funds raised the issuance of debt and/or equity securities, if available and on reasonable terms. First production commenced on September 30, 2013, and accordingly the Company expects to generate internal funds to further expand and develop its asset base. In order to maintain or adjust its capital structure in future periods, Caracal may pay dividends, return capital to shareholders, enter into joint venture agreements with third parties, incur short- or long-term debt, issue new securities, sell assets, or execute a combination of the aforementioned items.

Commitments

Under the terms of its PSCs, the Company has committed to various work programmes. The agreed-upon minimum work requirement amounts to $76.7 million, net to the Company, for the three PSCs over five years. As at September 30, 2013, $45.1 million is yet to be spent with three more years remaining in the term of the agreements.

Other commitments consist of training of Chadian Nationals and employees of the Energy Ministry as well as office lease commitments in N'Djamena, Chad and Calgary, Alberta.

Strategy

Having commenced first production from the Badila Field in September 2013, Caracal's business strategy is to increase shareholder value through sustained growth in production, cash flow and reserves. The Company intends to lead the development and control of infrastructure in the regions in which it operates. Caracal believes that the PSCs offer significant near-term production and long-term exploration opportunities with substantial resource potential and that the combination of its existing asset base and experienced technical management team will contribute significantly to the Company's objectives of being a leading independent international oil company while delivering growth in net asset value per common share.

Outlook

Caracal continued its momentum from the first half of the year into the third quarter. The Company has progressed on a number of fronts specifically production, development drilling and exploration. Caracal is in a position to develop its existing world class asset base while pursing accretive opportunities.

For further information:

About Caracal Energy Inc.

Caracal Energy Inc. is an international exploration and development company focused on oil and gas exploration, development and production activities in the Republic of Chad, Africa. In 2011, the Company entered into three PSCs with the government of the Republic of Chad. These PSCs provide exclusive rights to explore and develop reserves and resources over a combined area of 26,103 km2 in southern Chad. The PSCs cover two world-class oil basins with development opportunity, oil discoveries, and numerous exploration prospects.

Cautionary Statement

Certain information contained in this press release constitutes forward-looking information or statements including, without limitation, information and statements respecting: drilling operations, infrastructure development, future production, anticipated cash flow and revenues and future investment and potential financing objectives. Statements relating to "reserves" and "resources" are forward-looking information as they involve the implied assessment, based on certain estimates and assumptions that, among others, the reserves and resources described exist in the quantities predicted or estimated. Forward-looking information and statements are often, but not always, identified by the use of words such as "anticipate", "seek", "believe", "expect", "hope", "plan", "intend", "forecast", "target", "project", "guidance", "may", " might", "will", "should", "could", "estimate", "predict" or similar words or expressions suggesting future outcomes or language suggesting an outlook. By their very nature, forward-looking information and statements involve inherent risks and uncertainties, both general and specific, and risks that predictions, forecasts, projections and other forward-looking information and statements will not be achieved. We caution readers not to place undue reliance on these statements as a number of important factors could cause the actual results to vary materially from the forward-looking information or statements. These factors include, but are not limited to: the volatility of oil and gas prices; production and development costs; capital expenditures; the imprecision of reserve and resource estimates and estimates of recoverable quantities of oil, natural gas and liquids; the Company's ability to replace and expand oil and gas reserves; environmental claims and liabilities; incorrect assessments of value when making acquisitions or dispositions; increases in debt service charges; the loss of key personnel; the marketability of production; defaults by third party operators; unforeseen title defects; fluctuations in foreign currency and exchange rates; inadequate insurance coverage; compliance with environmental laws and regulations; changes in tax and royalty laws; the Company's ability to access external sources of debt and equity capital; and the Company's ability to obtain equipment in a timely manner to carry out development activities. Readers are cautioned that the foregoing list of factors that may affect future results is not exhaustive. When relying on these forward-looking statements to make decisions with respect to the Company, investors and others should also carefully consider information set forth in the section "Forward-Looking Statements" of the Company's prospectuses respecting the assumptions upon which the Company bases certain forward-looking information and the uncertainties inherent in such assumptions. Financial outlook information contained in this report about the Company's prospective cash flows and financial position is based on assumptions about future events, including economic conditions and proposed courses of action, based on management's assessment of the relevant information currently available. Readers are cautioned that any such financial outlook information contained herein should not be used for purposes other than for which it is disclosed herein. The Company does not assume responsibility for the accuracy and completeness of the forward-looking information or statements and such information and statements should not be taken as guarantees of future outcomes. Subject to applicable securities laws, the Company does not undertake any obligation to revise this forward-looking information or these forward-looking statements to reflect subsequent events or circumstances. This cautionary statement expressly qualifies the forward-looking information and statements contained in this press release.

Well-flow test results are not necessarily indicative of long-term performance or ultimate recovery.