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Wilmington Announces 2014 First Quarter Results

TORONTO, ONTARIO -- (Marketwired) -- 05/13/14 -- Wilmington Capital Management Inc. ("Wilmington" or the "Corporation") (TSX:WCM.A)(TSX:WCM.B) reported a net loss attributable to shareholders for the three months ended March 31, 2014 of $191,000 or ($0.02) per share compared to a net loss of $57,000 or ($0.01) per share for the same period in 2013.

To view a full copy of the Corporation's unaudited condensed interim financial results for the period ended March 31, 2014 including the Corporation's unaudited condensed interim consolidated financial statements and accompanying Management Discussion and Analysis ("MD&A"), please refer to SEDAR's website at www.sedar.com.


During the first quarter 2014, the Corporation completed strategic plans for each of its three operating platforms - self-storage facilities, private equity funds and natural gas assets and the focus is centered on building upon the foundation in and adding scale to each of the operating platforms. The Corporation achieved the following during the three months ended March 31, 2014:

--  Generated $583,000 in cash flow from operations; 

--  Recorded an unrealized gain of $405,000 on investments of Network 2012

--  Received a distribution of $75,000 from Real Storage Private Trust
    representing the Corporation's share of a 3% per annum distribution on
    invested capital which is paid quarterly; 

--  Generated an operating netback of $2.22 per mcf from the Shackleton
    Partnership 2011 LP; and  

--  Brought on stream Northpoint Resources Ltd.'s first horizontal well with
    production levels of approximately 2,300 mcf per day. 

As at March 31, 2014, Wilmington had assets under management in its operating platforms of approximately $148.0 million ($56.0 million representing Wilmington's share).


Wilmington continues to advance its principal objectives of making investments capable of generating appreciation in value as opposed to current income and to maximize shareholder returns by investing its own capital alongside partners and co-investors in hard assets and private equity funds. These assets are managed through the Corporation's operating platforms where Wilmington can add scale and improve valuations.


Storage Facilities

Real Storage Private Trust ("Trust")

The Trust (42.13% owned) owns 20 self-storage facilities comprising 787,000 square feet of rentable area and one development property. The Trust recorded significant period over period improvements in 2014 as the facilities in Western Canada, which were for the most part in the initial lease up stage, achieved stabilized occupancy levels. During the first quarter of 2014, same store occupancy levels averaged 82%, compared to 78% in 2013; same store operating margins improved to 52% in the first quarter of 2014 from 51% in the comparable quarter of 2013.

During the third quarter 2013, the Trust commenced quarterly distributions to its unit holders equivalent to 3% per annum on invested capital. For the three months ended March 31, 2014, the Trust declared a distribution of $178,000 (Corporation's share - $75,000). During 2014, the Trust plans on increasing the net rentable area of its property portfolio to over 1.0 million square feet.

Private Equity

Network Capital Management Inc. ("NCI") and Network 2012 Fund

NCI (50% owned) has funds under management now totaling approximately $41.5 million and the majority of Network's available capital has been successfully deployed in a strong mix of junior oil and gas and service companies. The Corporation invested $8.0 million of capital in the Network 2012 Fund and has received cumulative distributions of $716,000 to date. Plans are in place for NCI to raise an additional fund in 2014, which would represent the 16th fund raised by NCI since inception.

Natural Gas Assets

Shackleton 2011 Limited Partnership (the "Shackleton Partnership" or the "Partnership")

The Shackleton Partnership (59% owned) owns a 100% interest in natural gas wells in Southwestern Saskatchewan. The Shackleton Partnership's natural gas production volumes amounted to 595 boe per day for the first quarter of 2014. The weighted average price realized during the first quarter of 2014 was $4.30 per mcf and operating netbacks averaged $2.22 per mcf (realized price of $3.18 per mcf and netbacks of $1.90 per mcf for the comparable period in 2013). Of its 2014 production, approximately 50% has been hedged under fixed price contracts with an average price of $3.61 per GJ.

Given the improved natural gas pricing environment, the Partnership is focused on production optimization through well workovers and introducing new technology.

Northpoint Resources Ltd. ("Northpoint")

On July 30, 2013, the Corporation added to its natural gas platform by investing in Northpoint, a privately held oil and gas producer with assets in the Altares region of Northeastern British Columbia. The Corporation acquired a 36.5% ownership interest in Northpoint for total cash consideration of $2.2 million. In addition and as part of an overall recapitalization plan, the Corporation acquired $798,000 of a 10%, $5.0 million debenture issue by Northpoint which matures on August 1, 2017. Northpoint's achieved oil and natural gas sales volumes of 1,283 boe per day for the first quarter of 2014 compared to 1,286 boe per day during Q1 2013. During December 2013, Northpoint drilled its first horizontal well which is producing approximately 2,300 mcf per day (383 boe per day). Although the production fell short of original expectations, no significant rates of decline in production are being experienced. Plans call for drilling a second well in Q3 or Q4 of 2014.

The weighted average price realized during the first quarter of 2014 was $4.65 per mcf and operating netbacks averaged $1.66 per mcf (realized price of $3.52 per mcf and netbacks of $1.59 per mcf for the comparable period in 2013).


The Corporation believes that the foundation for achieving future growth through its three operating platforms - self-storage, private equity and oil and natural gas - is in place. In the years ahead, the Corporation expects to add scale to these operating platforms, improve valuations and earn attractive cash flow and total returns for shareholders.



                                                       For the three months 
                                                            ended March 31, 
(CDN $ Thousands, except per share amounts)                 2014       2013 
Natural gas sales                                          1,383      1,275 
Royalties                                                   (340)      (177)
Natural gas revenue                                        1,043      1,098 
Investment and other income                                   49         38 
                                                           1,092      1,136 
Petroleum operations                                         328        334 
General and administrative                                   300        340 
Depletion, depreciation and amortization                     342        388 
Stock-based compensation                                      28         46 
Foreign exchange (gain) loss                                  (2)        28 
Finance costs                                                 67         78 
                                                           1,063      1,214 
Income (loss) before share of equity accounted                              
 investments and income taxes                                 29        (78)
Share of net income from Real Storage Private Trust           85         23 
Share of net income (loss) from Network Capital                             
 Management Inc.                                               5        (22)
Share of net loss from Network 2012 Fund                     (43)       (38)
Share of net loss from Northpoint Resources Ltd.            (325)       --- 
Loss before income taxes from continuing operations         (249)      (115)
Income tax benefit                                          (148)       (16)
Net loss from continuing operations                         (101)       (99)
Income from discontinued operations, net of tax              ---         95 
Net loss                                                    (101)        (4)
Net loss attributable to:                                                   
  Owners of the Corporation                                 (191)       (57)
  Non-controlling interest                                    90         53 
                                                            (101)        (4)
Net loss per share from continuing operations                               
  Basic                                                    (0.02)     (0.02)
  Diluted                                                  (0.02)     (0.02)
Net loss per share                                                          
  Basic                                                    (0.02)     (0.01)
  Diluted                                                  (0.02)     (0.01)


                                                   (unaudited)     (audited)
As at                                                March 31,  December 31,
(CDN $ Thousands)                                         2014          2013
Non-current assets                                                          
Investment in Real Storage Private Trust                10,089        10,079
Investment in Network Capital Management Inc.               72            67
Investment in Network 2012 Fund                          8,703         8,341
Investment in Northpoint Resources Ltd.                  1,494         1,819
Northpoint Debenture                                       798           798
Natural gas property, plant and equipment               16,348        16,597
                                                        37,504        37,701
Current assets                                                              
Loan to Network Capital Management Inc.                     25            25
Income tax receivable                                      483           299
Receivables and other assets                               984         1,451
Cash and cash equivalents                                1,150           730
                                                         2,642         2,505
Total assets                                            40,146        40,206
Non-current liabilities                                                     
Decommissioning liabilities                                806           792
Deferred tax liabilities                                   140            65
                                                           946           857
Current liabilities                                                         
Accounts payable and accrued liabilities                   962           991
Revolving Loan Facility                                  4,800         5,200
                                                         5,762         6,191
Total liabilities                                        6,708         7,048
Shareholders' equity                                    29,243        29,053
Non-controlling interest                                 4,195         4,105
Total equity                                            33,438        33,158
Total liabilities and equity                            40,146        40,206


                                                       For the three months 
                                                            ended March 31, 
(CDN $ Thousands)                                           2014       2013 
Net loss                                                    (101)        (4)
Items that may subsequently be reclassified to net                          
  Share of other comprehensive income from Network                          
   2012 Fund                                                 405        261 
  Deferred income taxes on above items                        52         34 
Other comprehensive income from continuing operations        353        227 
Items that may subsequently be reclassified to net                          
  Other comprehensive income from discontinued                              
   operations, net of tax                                    ---         15 
Total other comprehensive income                             353        242 
Comprehensive income                                         252        238 
Comprehensive income attributable to:                                       
  Owners of the Corporation                                  162        185 
  Non-controlling interest                                    90         53 
                                                             252        238 

Executive Officers of the Corporation will be available at 403-800-0869 to answer any questions on the Corporation's financial results.

This news release contains forward-looking statements concerning the Corporation's business and operations. The Corporation cautions that, by their nature, forward-looking statements involve risk and uncertainty and the Corporation's actual results could differ materially from those expressed or implied in such statements. Reference should be made to the most recent Annual Information Form for a description of the major risk factors.

Wilmington Capital Management Inc.
Executive Officers
(403) 800-0869

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