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Quattro Announces $50 Million Capital Budget and $3 Million Increase in Term Facility

CALGARY, ALBERTA -- (Marketwired) -- 06/30/14 -- Quattro Exploration and Production Ltd. ("Quattro" or the "Company") (TSX VENTURE:QXP) is pleased to announce the approval of its $50 million capital budget, including a 3 year drilling program, which will commence in the 3rd Quarter of 2014 with Phase I being focused on its operated lands in Western Canada.

"The approval of this budget by our Board of Directors is an endorsement of the Quattro team's work and technical understanding of the potential within the Company's diverse land base." said Leonard Van Betuw, President and CEO. "We are now in the process of licensing the first 24 (net) wells of a 55 (net) well drilling program. These 24 wells are scheduled to be drilled in the next 12 months. We will also be continuing to increase production with our remediation and recompletion program within our existing oil and natural gas fields over the next 12 months, while drilling 23(net) development wells, 15 targeting oil and 8 targeting natural gas. In addition, we have budgeted 2 wells, 1(net) exploratory well within our 110,000 acre permit (50% net) situated in the Williston Basin of Saskatchewan. The first well is scheduled to be drilled in the 3rd quarter of 2014."

The Company anticipates that its development drilling efforts combined with its ongoing remediation and consolidation activities will carry Quattro's 2,500 boe/d exit target in 2014, up to 3,500 boe/d (net) in the 12 months ending June 30, 2015. The development wells are all incremental activities within the Company's operated properties and will be operated by Quattro. This positions Quattro to quickly tie in new production at minimal cost. The allocations of these activities are as follows, on a net/gross interest basis;

2 / 2 Vertical Oil Wells at Oak BC. - targeting the Halfway with in our current producing Pool

1 / 2 Horizontal Oil Wells in East Central Alberta - targeting the Ellerslie within our current producing Pool

4 / 4 Oil Wells at Rangeview Saskatchewan - targeting the Madison and Shaunavon

8 /40 Oil Wells at McMullen, Alberta - targeting the Wabiskaw

8 /10 Vertical Natural Gas Wells at Donalda, Alberta - targeting the Viking, Mannville and Belly River

23/60 Diversified between 16(net) oil and 8(net) natural gas wells, Quattro's net cost being approximately $13.5 million.

The proposed wells are located within Quattro's existing lands, operated by the Company where there is proven production and established well performance. Therefore they have been deemed to be low risk development wells, using proven drilling and completion techniques with unrestricted access into our existing facilities. The Phase I program is estimated to be completed at an average cost of $18,000 per bopd for oil and $7,200 per boe/d for natural gas.

1/2 Exploration Wells at Wood Mountain, Saskatchewan - Targeting the Bakken, Birdbear and Duperow

The Exploratory well in the Williston Basin and continuing exploration efforts are budgeted at $1.65 million and will be used to further evaluate the un-booked potential currently identified in southern Saskatchewan.

The balance of the budget totaling $35m has been allocated as follows: $20 million in Western Canada in 2015-2016 with the remaining $15 million in expenditures in Guatemala in the second half of 2015 and 2016.

The capital budget will be funded from cash on hand and the allocation of 70% of projected cash-flow from operations anticipated in the next 30 months. Phase I of the budget is supported by our trailing performance and engineering independently reviewed in May 2014, by our lender prior to the approval and funding of our updated fixed term loan.

The Company is also pleased to announce the negotiated increase in our term loan facility with Business Development Bank of Canada ("BDC"). The current loan of $5.125 million was replaced with an $8 million term loan with the additional amount used to payout a capital lease and the balance of $2.35m applied to working capital.

"We are pleased with the outcome of our negotiations." commented Leonard Van Betuw, "The prompt response from BDC is a strong endorsement of our past performance and our continuing operations. They continue to recognize our measured and continuing approach to operating within our cash-flow, while maintaining a conservative estimate of future pricing of oil and natural gas for long term planning. The new term loan represents a reduction in our interest rate to a fixed rate of 6.55% with fixed payment terms for both interest and principle that are less than $2.00 per boe at yearend 2014 and becoming less than $1.50 per boe by year end 2015. BDC's prompt attention to our request and their appreciation to the detail of our business plan speaks for itself."

The Company's budget and projections are based on the pricing of $4.25 per mcf for natural gas and a blended oil price of $80 per barrel for Western Select. These prices result in a blended commodity price for the Corporation of $42.50 per boe, which is projected to grow to $55 per boe by the end of 2015.

This announcement of Quattro's development drilling activities, which have been in the planning stages for the past 12 months, further expands on the details disclosed in in our projections and the anticipated expansion of Quattro's operating netbacks from $18.75/boe in the 1st quarter of 2014 to approximately $25/boe by the 4th quarter of 2015. The drilling of 24 (net) wells to increase oil production, and the incremental reduction in operating expenses, while continuing, remediation, re-activations and consolidation are budgeted to be achieved without any reduction in our long term budget for engineering and business development in Western Canada and Guatemala.

Quattro continues to diligently strengthen the foundation of the Company, as summarized in our operations and projections outlined in our 3 year organic plan, to achieve a rate of 6,000 boe/d by year-end 2016.

For further information we encourage investors to visit our Website, www.qxp-petro.com to review our current Corporate Presentation for details.

About Quattro Exploration and Production Ltd.

Quattro Exploration and Production Ltd. ("QXP") continues to focus on the conventional exploration and development of oil and natural gas reserves in Western Canada, with an expanding presence in Alberta and British Columbia. It's core low risk production base will provide the Company the capacity to aggressively pursue a series of high impact exploration and development efforts in Central and South America. Quattro intends to balance this portfolio of activities to assure its shareholders that it achieves material growth in both reserves and production.

This release includes certain statements that may be deemed "forward-looking statements". All statements in this release, other than statements of historical facts, that address future production, reserve potential, exploration drilling, exploitation activities and events or developments that the Company expects are forward-looking statements. Although the Company believes the expectations expressed in such forward looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements. Factors that could cause actual results to differ materially from those in forward looking statements include market prices, exploitation and exploration successes, continued availability of capital and financing, and general economic, market or business conditions. Investors are cautioned that any such statements are not guarantees of future performance and those actual results or developments may differ materially from those projected in the forward-looking statements. For more information on the Company, Investors should review the Company's registered filings which are available at www.sedar.com.

This news release shall not constitute an offer to sell or the solicitation of any offer to buy, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. The securities offered have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or applicable exemption from the registration requirements of the U.S. Securities Act and applicable state securities laws.

BOE presentation:

Barrel ("bbl") of oil equivalent ("boe") amounts may be misleading particularly if used in isolation. All boe conversions in this report are calculated using a conversion of six thousand cubic feet of natural gas to one equivalent barrel of oil (6 mcf=1 bbl) and is based on an energy conversion method primarily applicable at the burner tip and does not represent a value equivalency at the well head.

Trading in the securities of Quattro Exploration and Production Ltd. should be considered highly speculative. Neither the 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.

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