Progress Energy Resources : Petrus Resources Releases Year End 2018 Financial, Operating and Reserves Results

PETRUS RESOURCES ANNOUNCES YEAR END 2018 FINANCIAL, OPERATING & RESERVES RESULTS; SIGNIFICANT

INCREASE IN LIQUIDS WEIGHTING AND NET DEBT REDUCTION

CALGARY, ALBERTA, Thursday, March 14, 2019 - Petrus Resources Ltd. ("Petrus" or the "Company") (TSX: PRQ) is pleased to report financial and operating results for the three and twelve month periods ended December 31, 2018 and to provide 2018 year end reserves information as evaluated by Sproule Associates Limited ("Sproule"). The Company's Management's Discussion and Analysis ("MD&A") and audited consolidated financial statements dated as at and for the year ended December 31, 2018 are available on SEDAR (the System for Electronic Document Analysis and Retrieval) atwww.sedar.com.

In 2018, the Company's primary objectives were to improve its financial position and to increase its light oil weighting. This was done in order to increase the value of its production and funds flow per share. The Company's Ferrier Cardium asset base provides optionality between natural gas and light oil which allows the Company's development program to respond to changes in commodity pricing. The Company planned to invest $25 to $30 million in 2018, directed toward drilling Cardium light oil wells in Ferrier and targeted debt reduction of $10 to $15 million. Petrus substantially achieved these objectives in 2018: $24.1 million was invested in 2018 to drill 10 gross (4.3 net) Cardium light oil wells in Ferrier, each with a significantly higher number of multi-stage fracs than had been used in the past. The Company's December 2018 light oil weighting increased 59% from January 2018 and the full impact of the higher liquids weighting is expected to be represented in 2019(2). The Company ended 2018 with net debt(1) of $139.2 million, which is an $8.9 million or 6% decrease since December 31, 2017(1).

• • Light oil development - In 2018 Petrus set out to prove its Cardium light oil inventory and maximize its return on investment by significantly increasing the number of fracture stimulations used in its completion operations. Petrus drilled or participated in 2 gross (0.7 net) Cardium condensate wells during the first half of 2018. Petrus strategically deferred further capital development until the second half of 2018 in order to permit debt repayment early in the year as well as to provide time to analyze well performance to evaluate the new completion techniques. The Company's 2018 operated drilling program resumed in the second half of 2018 with 5 gross (2.9 net) Cardium light oil wells drilled and fracture stimulated with an average of 76 stages per one mile lateral length. The December test production, over a 14 day period, attributed to Petrus' 2.9 net additional wells was approximately 2,000 boe/d(3), which was comprised of 50% light oil (60% total liquids). The light oil test rates of approximately 1,000 boe/d nearly doubled Petrus' light oil production reported for the third quarter of 2018 of 1,243 boe/d. Petrus is pleased with the results of the 2018 drilling program and looks forward to continued development of its Cardium light oil in Ferrier in a consistent, disciplined manner. The Company plans to drill throughout 2019 within funds flow and repay $1 to $2 million of debt each quarter. Petrus' Board of Directors has approved a second quarter 2019 capital budget of $7 to $8 million, based on a current forecast for commodity futures pricing, anticipated service costs and current activity levels.

• • Increased liquids weighting - Fourth quarter average production was 7,934 boe/d in 2018 compared to 10,711 boe/d in 2017. The new liquids production related to the fourth quarter 2018 wells is not reflected for a full quarter as the wells were brought on stream in December. The new production is more valuable in the current commodity environment as the light oil and total liquids weighting have increased significantly. The Company's December 2018 light oil weighting increased 59% from January 2018. Similarly, the Company's December 2018 total liquids weighting was 40% which is a 43% increase from January 2018. The Company's operating netback increased 5% from $14.33 per boe(3) in 2017 to $15.08 per boe in 2018; however the full impact of the increase in liquids weighting is not reflected due to when the new wells were brought on-stream, in late December.

• • Company best F&D costs - In 2018, the Company realized Finding and Development ("F&D") costs of $5.15/boe and $8.16/boe for Proved Plus Probable ("P+P") and Total Proved ("TP"), respectively. These finding costs were the best in the Company's history. In terms of deploying capital to create reserves volume and value, this was the most effective year Petrus has ever had.

• • Reserve value growth - Petrus ended 2018 with $316 million and $507 million of Total Proved ("TP") and Proved Plus Probable ("P+P"), respectively, reserve values before-tax, discounted at 10%. The reserve values increased by 1% and 5%, respectively, from the December 31, 2017 Sproule Report. Absent of any changes to the December 31, 2017 Sproule Price forecast, the reserve values would have increased by 22% and 24%, respectively. In 2018, Petrus was also able to increase its Reserve Life Index in every reserve category.

• • Best in class operating costs - Total operating expenses were 6% lower from 2017 at $4.75 per boe in 2018 which is the lowest operating cost in the Company's history (a 57% decrease since 2012) and marks the third consecutive year of operating cost reductions. The Company continues to focus on optimizing its cost structure, particularly in the Ferrier area, through facility ownership and control.

• • Funds flow - Petrus generated funds flow of $5.0 million in the fourth quarter of 2018 which is lower than the $13.1 million generated in the fourth quarter of 2017 primarily due to significantly lower market price of Edmonton light oil and natural gas (AECO) during the fourth quarter of 2018. Relative to global oil prices (West Texas Intermediate), Western Canadian light oil traded at historically high differentials in the fourth quarter mainly due to insufficient take away capacity. On December 2, 2018 the Alberta government announced a production curtailment mandate of 325,000 boe/d of Alberta crude oil production effective January 1, 2019. In February, the Alberta government announced plans to transport 120,000 boe/d via rail by 2020. These measures were intended to help alleviate current take away capacity constraints impacting Alberta producers and to reduce storage levels. The temporary production reduction applies to all operators in Alberta producing in excess of 10,000 barrels per day of oil production. Petrus' oil production is within the 10,000 barrels per day and therefore the Company is exempt from reducing production. As a result of these measures, the differential for Western Canadian light oil prices has tightened significantly.

• • Commodity price risk mitigation - Petrus utilizes financial derivative contracts to mitigate commodity price risk and provide stability and sustainability to the Company's economic returns, funds flow and capital development plan. During the fourth quarter, the Company recognized a $1.3 million ($1.38 per boe) realized gain related to natural gas, offset by a $1.9 million ($2.61 per boe) realized loss related to light oil. As a percentage of fourth quarter 2018 production, Petrus has derivative contracts in place for 52%, at an average price of $2.00/mcf and 53% at an average price of $68.79/bbl, of its natural gas and oil and natural gas liquids production, respectively, for 2019.

• (1) Refer to "Non-GAAP Financial Measures".

• (2) Refer to "Advisories - Forward-Looking Statements".

• (3) Refer to "Oil and Gas Disclosures".

SELECTED FINANCIAL INFORMATION

OPERATIONS	Twelve months ended Dec. 31, 2018		Twelve months ended Dec. 31, 2017	Three months ended Dec. 31, 2018		Three months ended Sept. 30, 2018 Three months ended Jun. 30, 2018 Three months ended Mar. 31, 2018
Average Production Natural gas (mcf/d) Oil (bbl/d) NGLs (bbl/d)	37,101		43,747 1,823 1,103	30,480		33,461 1,243 1,519 39,126 45,543 1,484 1,530 1,241 1,475
	1,402	1,358
	1,433	1,496
Total (boe/d) Total (boe)	9,019 3,292,828	10,217 3,729,095	7,934 730,819	8,338 767,095 9,246 10,596 841,316 953,598
Natural gas sales weighting	69	%	71%	64	%	67% 71% 72%
Realized Prices Natural gas ($/mcf) Oil ($/bbl) NGLs ($/bbl)	1.73		2.39 59.56 31.52	1.95		1.50 77.24 45.27 1.24 2.18 75.29 73.91 41.53 46.50
	69.74	52.26
	40.50	29.01
Total realized price ($/boe)	24.40	24.26	21.91	25.79 22.92 26.50
Royalty income Royalty expense	0.12 (3.54	)	0.02 (3.56)	0.10 (3.34	)	0.32 (3.12) 0.05 (2.54) 0.03 (4.90)
Net oil and natural gas revenue ($/boe)	20.98	20.72	18.67	22.99 20.43 21.63
Operating expense Transportation expense	(4.75 (1.15	) )	(5.08) (1.31)	(5.28 (1.17	) )	(4.95) (0.98) (4.57) (4.36) (1.17) (1.26)
Operating netback (1) ($/boe)	15.08	14.33	12.22	17.06 14.69 16.01
Realized gain (loss) on derivatives ($/boe) Other income General & administrative expense Cash finance expense Decommissioning expenditures	(0.90 0.13	)	1.00 - (0.87) (1.88) (0.52)	(0.79 0.37	)	(2.69) 0.08 (0.74) 0.12 0.31 - (1.72) (1.63) (1.50) (2.53) (2.49) (1.96) (0.20) - (0.23)
	(1.57 (2.51 (0.14	) ) )		(1.46 (3.25 (0.21	) ) )
Funds flow and corporate netback (1) ($/boe)	10.09	12.06	6.88	10.00 9.95 12.63

Three months	Three months	Three months
FINANCIAL (000s except per share)	ended	ended	ended
Sept. 30, 2018	Jun. 30, 2018	Mar. 31, 2018
Oil and natural gas revenue	20,030	19,321	25,301
Net income (loss)	(8,048)	(10,615)	(5,684)
Net income (loss) per share
Basic	(0.16)	(0.21)	(0.11)
Fully diluted	(0.16)	(0.21)	(0.11)
Funds flow	7,685	8,364	12,105
Funds flow per share
Basic	0.16	0.17	0.24
Fully diluted	0.16	0.17	0.24
Capital expenditures	3,637	1,745	6,056
Net acquisitions (dispositions)	(50)	(269)	(123)
Weighted average shares outstanding
Basic	49,492	49,492	49,492
Fully diluted	49,492	49,492	49,492
As at period end
Common shares outstanding
Basic	49,492	49,492	49,492
Fully diluted	49,492	49,492	49,492
Total assets	322,335	330,359	343,161
Non-current liabilities	170,908	172,757	174,634
Net debt (1)	131,603	135,111	142,238
(1)Refer to "Non-GAAP Financial Measures".

Twelve months ended Dec. 31, 2018		Twelve months ended Dec. 31, 2017	Three months ended Dec. 31, 2018
80,716 (3,284) (0.07) (0.07) 33,184		90,569 (111,261) (2.28) (2.28) 45,003 0.92 0.92 72,750 4,741 48,825 48,825 49,492 49,492 353,445 173,272 148,066	16,064 21,063
			0.43
			0.43
			5,030
0.67			0.10
0.67			0.10
24,098			12,660
(448) 49,492			(6) 49,492
49,492			49,492
49,492			49,492
49,492	49,492
341,820	341,820
171,646	171,646
139,214	139,214

(2)Corporate netback is equal to funds flow which is a directly comparable GAAP measure. Petrus analyzes these measures on an absolute value and per unit basis.

%

OPERATIONS UPDATE

Production

Fourth quarter average production by area was as follows:

For the three months ended December 31, 2018	Ferrier	Foothills	Central Alberta	Total
Natural gas (mcf/d)	22,254	1,998	6,228	30,480
Oil (bbl/d)	812	160	386	1,358
NGLs (bbl/d)	1,317	5	174	1,496
Total (boe/d)	5,837	499	1,598	7,934
Natural gas sales weighting	58%	66%	65%	64%

Petrus set out in 2018 to prove its Cardium light oil inventory and maximize its return on investment by significantly increasing the number of fracture stimulations used in its completion operations. Petrus drilled or participated in 2 gross (0.7 net) Cardium condensate wells during the first half of 2018. Petrus strategically deferred further capital development until the second half of 2018 in order to permit debt repayment early in the year as well as to provide time to analyze well performance to evaluate the new completion techniques. The Company's 2018 operated drilling program resumed in the second half of 2018 with 5 gross (2.9 net) Cardium light oil wells drilled and fracture stimulated with an average of 76 stages per one mile lateral length. The December test production, over a 14 day period, attributed to Petrus' 2.9 net additional wells was approximately 2,000 boe/d, which was comprised of 50% light oil (60% total liquids). The light oil test rates of approximately 1,000 boe/d nearly doubled Petrus' light oil production reported for the third quarter of 2018 of 1,243 boe/d. Petrus is pleased with the results of the 2018 drilling program and looks forward to continue development of its Cardium light oil in Ferrier in a consistent, disciplined manner. The Company plans to drill evenly throughout 2019 within funds flow and repay $1 to $2 million of debt each quarter.

Fourth quarter average production was 7,934 boe/d in 2018 compared to 10,711 boe/d in 2017. Looking at the Company's recent change in total boe production rates is inaccurate as an evaluation of potential cash flow and value. In the current commodity price environment, as liquids weighting increases, cash flow and value can increase despite lower overall boe production. The new liquids production related to the fourth quarter 2018 wells is not reflected for a full quarter as the wells were brought on-stream in December. The resulting production is more valuable in the current commodity environment as the light oil and total liquids weighting has increased significantly. The Company's December 2018 light oil weighting increased 59% from January 2018. Similarly, the Company's December 2018 total liquids weighting was 40% which is a 43% increase from January 2018. The Company's operating netback increased 5% from $14.33 per boe in 2017 to $15.08 per boe in 2018; however the full impact of the increase in liquids weighting is not reflected due to when the new wells were brought on stream, in late December.

In 2018, the Company's drilling program proved that the Ferrier Cardium asset base provides optionality between natural gas or light oil development. This optionality permits the Company's development program to be agile and efficiently respond to changes in commodity pricing.

Petrus' Board of Directors has approved a first quarter 2019 capital budget of $8 to $10 million, based on a current forecast for commodity futures pricing, anticipated service costs and current activity levels. Management anticipates that the 2019 capital plan will be fully funded by funds flow, systematically scheduled evenly through the year to maintain flexibility, and permit debt reduction each quarter. In the first quarter of 2019 the Company expects to generate funds flow between $10 and $11 million, with the remaining $1 to $2 million to be directed toward debt repayment. The commodity price assumptions used for the first quarter 2019 capital budget were an average price of $1.31 C$/GJ for natural gas (AECO) and $53.03 US$/bbl for oil (WTI). Petrus' estimated first quarter average differential for Western Canadian light oil is estimated at $7.55 US$/bbl. The first quarter capital budget is expected to include the drilling of 5 gross (2.0 net) Cardium wells targeting the most condensate rich areas within the reservoir.

As part of the 2019 first quarter capital budget, Petrus has drilled 2 gross (1.2 net) Cardium light oil wells. The wells have finished drilling and offset the recently drilled 5 gross (2.9 net) wells from the fourth quarter 2018 drilling program. The 2 first quarter 2019 wells have 1.5 mile and 1.0 mile horizontal lateral lengths, respectively. Both wells are being fracture stimulated with 124 and 77 stages, respectively. Completion operations are currently ongoing and the wells' test volumes can flow inline as the wells were drilled from pre-existing surface locations. Both wells are expected to be on production by the end of March.

Petrus' Board of Directors has approved a second quarter 2019 capital budget of $7 to $8 million, based on a current forecast for commodity futures pricing, anticipated service costs and current activity levels. The second quarter budget will allow for debt repayment of $1 to $2 million in the quarter.

Petrus estimates the 2019 capital plan will maintain production year over year, increase its oil and total liquids weighting, and reduce debt throughout the year. Approximately 85% of the capital plan will be directed to development of Cardium light oil wells in the Ferrier area of Alberta, which we estimate will have payouts of less than one year and achieve its objective to increase its light oil production weighting and funds flow.

(1) Refer to "Advisories - Forward-Looking Statements".