Gear Energy Ltd. Announces Fourth Quarter and Year-End 2014 Results

CALGARY, ALBERTA--(Marketwired - Mar 10, 2015) - Gear Energy Ltd. ("Gear" or the "Company") (TSX:GXE) is pleased to provide the following fourth quarter and year-end operating update to shareholders. For more information in conjunction with this release, please refer to Gear's Annual Audited Financial Statements, Management's Discussion and Analysis (MD&A) for the years ended December 31, 2014 and 2013, and 2014 Reserves Press Release titled "Gear Energy Ltd. Announces 30 Per Cent Increase in Year-End Reserves and 312 Per Cent Replacement of 2014 Production", all of which are available for review on Gear's website at www.gearenergy.com and on www.sedar.com.

1. Cash flow from operations and net debt are non-GAAP measures and are reconciled to the nearest GAAP measures under the heading "Non-GAAP Measures" in Gear's MD&A.
2. Net acquisitions exclude non-cash items for decommissioning liability and deferred taxes and is net of post-closing adjustments.

HIGHLIGHTS

Wildmere Lloyd: The polymer pilot continues to exceed expectations, now tracking at more than a four-fold increase in production with no breakthrough to date. The pilot will see continued injection through 2015 to further characterize the amenability of this large reservoir to polymer recovery enhancement techniques. Seven (4.8 net) horizontal wells were drilled in Wildmere including one dry and abandoned ("D&A"). The average results from this small program were slightly below expectations; however the remaining inventory of Lloydminster drilling is estimated to yield improved results through the use of lined multi-lateral drilling technology.

Wildmere Cummings: There were 15 horizontal wells drilled, including a pool extension well to the Southeast and a dual lateral well in the Northwest. Production has been characterized by predictable initial rates, low water cuts and low sand production. The economics of future drilling are expected to improve materially through the application of unlined multi-lateral horizontal drilling. The next well to be drilled, once prices improve, is planned as a quad-lateral well. The current recognized inventory of opportunities in the Cummings play exceeds 100 potential horizontal legs.

Wildmere GP: Exceptional results were realized from the two dual laterals drilled in this area. Average rates of 130 to 180 bbl/d were experienced for the first full month of production. Gear currently expects to drill two follow up wells when prices recover.

Morgan: Gear participated in the drilling of seven gross (four net) Lloydminster wells including one dual lateral well. Post optimization, average 30 day rates have been significantly above expectations averaging 150 bbl/d gross per well. This area is believed to have approximately 12 more horizontal legs worth of drilling in inventory.

Maidstone: There were 13 horizontal wells drilled into the Cummings pool including one D&A. The results mimic those seen in the Wildmere Cummings yielding a similar future plan to target the superior economics available through multi-lateral unlined drilling. Four vertical wells were also drilled into the Waseca formation realizing average 30 day peak rates over 80 bbl/d per well.

Paradise Hill: Gear drilled two successful horizontal wells into this new play. For the first 30 days the average rates have been over 95 bbl/d of oil per well. Gear land holdings in the area have now grown to almost seven net sections and with continued strong production; this could represent a material new core area for Gear.

Exploration: Inclusive of previous highlights, Gear drilled nine exploratory wells through 2014 with five of them successfully encountering new oil pools or significantly extending the boundaries of existing reservoirs. After a successful discovery well in Frenchman's Butte, the step out well drilled into expiring land was wet, and two of the three follow ups to the original discovery well realized water cuts that are uneconomic to produce at the current oil price. Seismic will be required before any further drilling is considered in the area. The exploratory well in Baldwinton encountered primarily water in the Cummings formation, however the 10 section land position remains prospective and will require seismic to optimize future drilling.

Forward-looking Information and Statements

This press release contains certain forward-looking information and statements within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "objective", "ongoing", "may", "will", "project", "should", "believe", "plans", "intends", "strategy" and similar expressions are intended to identify forward-looking information or statements. In particular, but without limiting the foregoing, this press release contains forward-looking information and statements pertaining to the following: Guidance estimates; expected facility investments; decreased future dependence on propane; planned follow-up wells; the number of future drilling locations; reduced operating costs; timing of capital development program; volume growth and a number of other matters, including future results from operations and operating metrics; future costs, expenses and royalty rates; future interest costs; and future development, exploration, acquisition and development activities (including drilling plans) and related capital expenditures.

The forward-looking information and statements contained in this press release reflect several material factors and expectations and assumptions of Gear including, without limitation: that Gear will continue to conduct its operations in a manner consistent with past operations; the general continuance of current industry conditions; the continuance of existing (and in certain circumstances, the implementation of proposed) tax, royalty and regulatory regimes; the accuracy of the estimates of Gear's reserves and resource volumes; certain commodity price and other cost assumptions; and the continued availability of adequate debt and equity financing and cash flow from operations to fund its planned expenditures. Gear believes the material factors, expectations and assumptions reflected in the forward-looking information and statements are reasonable but no assurance can be given that these factors, expectations and assumptions will prove to be correct.

The forward-looking information and statements included in this press release are not guarantees of future performance and should not be unduly relied upon. Such information and statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information or statements including, without limitation: changes in commodity prices; changes in the demand for or supply of Gear's products; unanticipated operating results or production declines; changes in tax or environmental laws, royalty rates or other regulatory matters; changes in development plans of Gear or by third party operators of Gear's properties, increased debt levels or debt service requirements; inaccurate estimation of Gear's oil and gas reserve and resource volumes; limited, unfavorable or a lack of access to capital markets; increased costs; a lack of adequate insurance coverage; the impact of competitors; and certain other risks detailed from time to time in Gear's public documents.

The forward-looking information and statements contained in this press release speak only as of the date of this press release, and Gear does not assume any obligation to publicly update or revise them to reflect new events or circumstances, except as may be required pursuant to applicable laws.

Barrels of Oil Equivalent

Disclosure provided herein in respect of BOEs may be misleading, particularly if used in isolation. A BOE conversion ratio of six Mcf to one Bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and do not represent a value equivalency at the wellhead. Additionally, given that the value ratio based on the current price of crude oil, as compared to natural gas, is significantly different from the energy equivalency of 6:1; utilizing a conversion ratio of 6:1 may be misleading as an indication of value.

Initial Production Rates

Any references in this document to initial production rates and 30 day production rates are useful in confirming the presence of hydrocarbons, however, such rates are not determinative of the rates at which such wells will continue production and decline thereafter and are not necessarily indicative of long-term performance or of ultimate recovery. Additionally, such rates may also include recovered "load oil" fluids used in well completion stimulation. While encouraging, readers are cautioned not to place reliance on such rates in calculating the aggregate production for Gear.