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Cardinal Energy Announces Closing of Wainwright Acquisition and Operations Update

CALGARY, ALBERTA -- (Marketwired) -- 08/25/14 -- Cardinal Energy Ltd. ("Cardinal" or the "Company") (TSX:CJ) is pleased to announce that its previously announced Wainwright Acquisition (the "Acquisition") has closed effective August 22, 2014.

The Acquisition adds 1,900 BOEPD (99% oil) of long life, low decline production. The Acquisition will allow Cardinal to expand its drilling program while still maintaining a less than 15% corporate decline rate.

With the full quarter of production from the Acquisition, Cardinal's production is expected to average approximately 8,500 - 8,800 BOEPD for the fourth quarter of 2014.

Operations Update:

Cardinal would also like to provide an update of the Glauconite Drilling activity in Bantry in 2014.

To date, the Company has drilled five Glauconite horizontal wells. Cardinal encountered a mechanical problem on one of these wells, which has produced at nominal average rates of 36 BOEPD. Management believes that it understands the issue behind the poor result in this well and believes it can mitigate the problem on a go forward basis.

The results from the four other Glauconite wells are as follows:

02-35-016-12W4: This was the first well drilled by Cardinal into the play. The well had an IP 30(1) rate of 555 BOEPD. The well commenced production in March of 2014 and has produced 77,000 BOE to date. The rate for this well for the last 30 days of production was an average of 370 BOEPD.

02-15-017-12W4: This well commenced production in late February of 2014. The initial 30 day rate on this well was 225 BOEPD and has produced an average of 180 BOEPD for the past 30 days. Current cumulative production is approximately 25,000 BOE.

15-22-016-12W4: This well was brought on production in mid-July of this year. The average 30 day production rate for this well was 227 BOEPD. This well has cumulative production of over 9,000 BOE in 43 days.

02-27-016-12W4: This well was brought on production in late July of this year. The average 30 day production rate was approximately 490 BOEPD. This well has cumulative production of approximately 16,000 BOE in the first 30 days of production.

(1)   IP30 rates are calculated on 720 hours of run time.                   

On average the four Glauconite horizontal wells are outperforming the type curve by over 60%. The decline after three months of production is approximately 20% versus the 34% decline in the same period on the type curve.

A graph is available at the following address:

The type curve that Cardinal uses has a EUR of 150,000 BOE on a proved reserve basis and 180,000 BOE on a proved plus probable reserve basis. Based on an average drilling, completion and tie in costs of $2.1 million, the wells drilled, exceed the type curve and have an IP30 cost of approximately $4,500 per flowing barrel.

These outstanding well economics will allow Cardinal to exceed its targeted growth in 2014 and will continue to provide the Company with the ability to keep its total payout ratio (see "Non-GAAP measures below) of approximately 60% intact going forward. The Company expects to add an additional 2-3 Glauconite horizontal wells to its 2014 drilling program. Cardinal estimates that it currently has 75 drilling locations for additional Glauconite horizontals and expects to increase this inventory following the evaluation of its recently completed seismic shoot.

About Cardinal Energy Ltd.

Cardinal is a junior Canadian oil focused company built to provide investors with a stable platform for dividend income and growth. Cardinal's operations are focused in all season access areas in Alberta.

Note Regarding Forward-Looking Statements and Other Advisories

This press release contains forward-looking statements and forward-looking information (collectively "forward-looking information") within the meaning of applicable securities laws relating to Cardinal's plans and other aspects of Cardinal's anticipated future operations, management focus, objectives, strategies, financial, operating and production results and business opportunities, including our drilling and development plans and the timing thereof anticipated decline rates, future production, drilling inventory, well economics and Cardinal's capital expenditure program and the results therefrom In addition, statements relating to "reserves" are also deemed to be forward looking statements, as they involve the implied assessment, based on certain estimates and assumptions, that the reserves described exist in the quantities predicted or estimated and that the reserves and resources can be profitably produced in the future. Forward-looking information typically uses words such as "anticipate", "believe", "project", "expect", "goal", "plan", "intend" or similar words suggesting future outcomes, statements that actions, events or conditions "may", "would", "could" or "will" be taken or occur in the future. The forward-looking information is based on certain key expectations and assumptions made by Cardinal's management, including expectations and assumptions concerning prevailing commodity prices, exchange rates, interest rates, applicable royalty rates and tax laws; future production rates and estimates of operating expenses; performance of existing and future wells; reserve and resource volumes; anticipated timing and results of capital expenditures; the success obtained in drilling new wells; the sufficiency of budgeted capital expenditures in carrying out planned activities; the timing, location and extent of future drilling operations; the state of the economy and the exploration and production business; results of operations; performance; business prospects and opportunities; the availability and cost of financing, labor and services; the impact of increasing competition; ability to market oil and natural gas successfully; Cardinal's ability to access capital, and obtaining the necessary regulatory approvals and satisfaction of the other conditions to closing the acquisition and on the timeframe contemplated.

Although the Company believes that the expectations and assumptions on which such forward-looking information is based are reasonable, undue reliance should not be placed on the forward-looking information because Cardinal can give no assurance that they will prove to be correct. Since forward-looking information addresses future events and conditions, by its very nature they involve inherent risks and uncertainties. Cardinal's actual results, performance or achievement could differ materially from those expressed in, or implied by, the forward-looking information and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking information will transpire or occur, or if any of them do so, what benefits that Cardinal will derive there from. Management has included the above summary of assumptions and risks related to forward-looking information provided in this report in order to provide securityholders with a more complete perspective on Cardinal's future operations and such information may not be appropriate for other purposes.

Readers are cautioned that the foregoing lists of factors are not exhaustive. Additional information on these and other factors that could affect Cardinal's operations or financial results are included in reports on file with applicable securities regulatory authorities and may be accessed through the SEDAR website (

These forward-looking statements are made as of the date of this press release and Cardinal disclaims any intent or obligation to update publicly any forward-looking information, whether as a result of new information, future events or results or otherwise, other than as required by applicable securities laws.

Non-GAAP measures

This press release contains the term "total payout ratio"which does not have a standardized meaning prescribed by International Financial Reporting Standards ("IFRS" or, alternatively, "GAAP") and therefore may not be comparable with the calculation of similar measures by other companies. Cardinal uses total payout ratio to analyze financial and operating performance. Cardinal feels this benchmark is a key measure of profitability and overall sustainability for the Company. Total payout ratio is not intended to represent operating profits nor should it be viewed as an alternative to cash flow provided by operating activities, net earnings or other measures of financial performance calculated in accordance with GAAP. "Total payout ratio" represents the ratio of the sum of dividends declared plus management's expectation of the amount of capital expenditures necessary to maintain our production divided by cash flow from operations. Total payout ratio is a key measure to assess Cardinal's ability to finance dividends, operating activities and capital expenditures.

Advisory Regarding Oil and Gas Information

Where applicable, oil equivalent amounts have been calculated using a conversion rate of six thousand cubic feet of natural gas to one barrel of oil. 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 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 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 Mcf: 1 Bbl, utilizing a conversion ratio at 6 Mcf: 1 Bbl may be misleading as an indication of value.

The historical type curves disclosed in this press release are for illustrative purposes only to demonstrate potential future well performance and do not constitute a guarantee of future well performance. These production type curves are constructed from well data representing only those wells deemed to be most indicative of the go-forward wells that we intend to develop. Future year inventory may result in well performance that deviates from these type curves. In this press release, estimated ultimate recovery is a representative value within the range of estimates of proved plus probable reserves per well as evaluated by Sproule Associates Limited effective December 31, 2013 based on forecast prices and costs.

Cardinal Energy Ltd.
M. Scott Ratushny
Chief Executive Officer and Chairman
(403) 216-2706

Cardinal Energy Ltd.
Douglas Smith
Chief Financial Officer
(403) 216-2709

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