Marquee Energy Ltd. has drilled six wells at Michichi and two wells at Lloydminster since the beginning of the fourth quarter of 2013 and is currently drilling a seventh well at Michichi. Both wells at Lloydminster and three of the six completed Michichi wells are now on production. The company plans to drill and tie-in two more wells at Lloydminster in the first quarter. Three of the six Michichi wells are completed and will be on production before the end of the quarter. The current well being drilled will complete the winter program, with new drilling to resume in June at Michichi and Lloydminster. Marquee has already begun to extensively apply 2D and 3D seismic to map both the Banff and Detrital (Mannville) oil plays at Michichi. As noted above, the first well location identified and drilled using 3D seismic is the Banff horizontal well that directly offsets the Acquisition. The Acquisition will contribute an additional 45 square miles of 3D seismic coverage. The combined database will be valuable in identifying and selecting future high quality, low risk horizontal oil drilling locations.

Production in the fourth quarter of 2013 averaged 2,113 boe/d and January 2014 production averged 3,800 boe/d (53% oil and liquids) based on field estimates. Anticipated production levels for the month were negatively impacted by a number of factors including cold weather, access issues, facility restrictions and lower than type curve results for the first two Michichi wells tied in late fourth quarter of 2013. Approximately 600 boe/d (60% gas) of production was impacted which included 380 boe/d (80% gas) on existing producing assets by weather and mechanical issues, and 220 boe/d (40% gas) related to a delay in the completion and tie-in of the last well drilled by Marquee in 2013 and third party facility restrictions on non-operated properties. Efforts are underway to have production affected by weather, mechanical problems and tie-in delays on-stream in the second quarter of 2014.

The company provided production and capital expenditure guidance for 2014. For the year, the company expects average production of 4,900-5,100 boe/d, and exit production of 5,600-5,700 boe/d.

For the year, the company expects capital program of $46 million.