Emerald Oil Reports Second Quarter 2015 Financial and Operational Results, Guidance Increase, Credit Facility and Term Loan Facility Update

DENVER, CO--(Marketwired - August 04, 2015) - Emerald Oil Inc. (NYSE MKT: EOX) ("Emerald" or the "Company") today announced financial and operational results for the quarter ended June 30, 2015, 2015 guidance increase, and Revolving Credit Facility ("Credit Facility") and Senior Secured Second Lien Term Loan Facility ("Term Loan Facility") updates.

Highlights

• Second quarter production of 453,495 BOE increased 33% as compared to 340,320 BOE in the second quarter of 2014. Daily production averaged 4,983 BOEPD, 7% above the midpoint and 4% above the high end of Emerald's second quarter 2015 guidance range;
• 2015 third and fourth quarter production guidance raised 400 Boe/d and 200 Boe/d, to 4,700-5,000 Boe/d and 4,200-4,500 Boe/d, respectively;
• Second quarter oil and gas revenue of $21.8 million;
• Second quarter Adjusted EBITDA of $5.0 million;
• Fall 2015 Credit Facility borrowing base redetermination resulting in an elected commitment of $135 million and a new covenant structure; and
• $100 million Term Loan Facility, with a $75 million initial draw, provided by Angelo, Gordon Energy Capital, LLC and affiliates ("Angelo Gordon"), expected to close in the third quarter in conjunction with the borrowing base redetermination.

Second Quarter 2015 Production

For the second quarter of 2015, Emerald's total production volumes on a BOE basis increased 33% as compared to the second quarter of 2014. During the second quarter of 2015, Emerald realized a $48.60 average price per Bbl of oil (including settled derivatives) compared to an $87.42 average price per Bbl of oil during the second quarter of 2014.

Financial Results

Revenues from sales of oil and natural gas for the second quarter of 2015 were $21.8 million compared to $31.3 million for the same period in 2014. The decrease was due to lower realized crude oil prices during the second quarter of 2015. Crude oil revenue accounted for approximately 99% of oil and natural gas sales.

Lease operating expenses for the second quarter of 2015 were $8.5 million compared to $3.4 million for the same period in 2014. On a per unit basis, lease operating expenses were $18.68 per BOE in the second quarter of 2015 compared to $9.90 per BOE in the second quarter of 2014. This increase on a per unit basis compared to 2014 was primarily due to regulatory and compliance related costs associated with gas capture and air emissions, and costs associated with increased production water hauling from new pads that were brought online further from disposal facilities. These two items that drove LOE higher in the second quarter are no longer relevant to our business due to the completion of the Low Rider midstream system. Emerald also incurred workover expenses for the second quarter of 2015 of $1.6 million, or $3.47 per BOE.

General and administrative expenses for the second quarter of 2015 were $3.9 million compared to $7.6 million for the same period in 2014. On a per unit basis, G&A expenses (excluding non-cash stock-based compensation) were $7.38 per BOE in the second quarter of 2015 compared to $13.66 per BOE in the second quarter of 2014. Share-based compensation expenses, which are included in G&A expense, totaled $0.5 million in the second quarter of 2015 compared to $3.0 million for the same period in 2014.

Adjusted EBITDA was $5.0 million for the second quarter of 2015, as compared to $17.4 million for the same period in 2014. Adjusted Net Income (Loss) was $(8.7) million for the second quarter of 2015. Emerald recognized a $61.4 million non-cash impairment expense for the quarter ended June 30, 2015 due primarily to the substantial declines in commodity prices. Adjusted EBITDA and Adjusted Net Income (Loss) are non-GAAP financial measures. For additional information please refer to the reconciliation of these measures at the end of this news release.

Updated 2015 Production and CAPEX Guidance

Assumes Emerald's variable one rig program for 2015.

* Drilling and Completion CAPEX through June 30, 2015 was $61.9 million.

Credit Facility, Term Loan Facility and Liquidity Update

Upon closing of the Term Loan, Emerald's lending syndicate has approved an amendment to the Company's Credit Facility. The amendment will include an updated senior secured debt to EBITDA covenant of 2.5x through March 31, 2016, and 1.5x for the remainder of 2016, a new total secured debt to EBITDA covenant of 4.5x through December 31, 2015, 4.0x through June 30, 2016, and 3.0x through the remainder of 2016, a new interest coverage covenant of 2.5x through 2016, and eliminated the total debt to EBITDA covenant through 2016. Additionally, as part of the Fall 2015 borrowing base redetermination, the banks approved a $135 million borrowing base. The next scheduled redetermination is Spring 2016.

In conjunction with the lending syndicate's new covenant structure and borrowing base redetermination, a $100 million delayed draw Term Loan Facility, provided by Angelo Gordon, is expected to close during the third quarter, subject to customary closing conditions. At closing, $75 million in proceeds shall be used to repay borrowings under Emerald's Credit Facility, and an additional $25 million in funds may be made available to meet future requirements. The Term Loan Facility has a three year maturity and bears interest at LIBOR plus 8.25 percent with a one percent LIBOR floor.

As of June 30, 2015, the Company has classified the balance of both the Credit Facility and the Convertible Notes as current liabilities. Upon closing the amendment to the Credit Facility during the third quarter of 2015, the Company expects to reclassify both the Credit Facility and the Convertible Notes back to long term liabilities.

Conference Call

Emerald will host a conference call on Wednesday, August 5, 2015 at 10:00 a.m. Eastern Time (8:00 a.m. Mountain Time) to discuss financial and operational results for the quarter end.

About Emerald

Emerald is an independent exploration and production operator that is focused on acquiring acreage and developing wells in the Williston Basin of North Dakota and Montana, targeting the Bakken and Three Forks shale oil formations and Pronghorn sand oil formation. Emerald is based in Denver, Colorado. More information about Emerald can be found at www.emeraldoil.com.

Forward-Looking Statements

This press release may include "forward-looking statements" within the meaning of the securities laws. All statements other than statements of historical facts included herein may constitute forward-looking statements. Forward-looking statements in this document may include statements regarding the Company's expectations regarding the Company's operational, exploration and development plans; expectations regarding the nature and amount of the Company's reserves; and expectations regarding production, revenues, cash flows and recoveries. When used in this press release, the words "will," "potential," "believe," "estimate," "intend," "expect," "may," "should," "anticipate," "could," "plan," "predict," "project," "profile," "model," or their negatives, other similar expressions or the statements that include those words, are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Company, which may cause actual results to differ materially from those implied or expressed by the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, fluctuations in oil and natural gas prices, uncertainties inherent in estimating quantities of oil and natural gas reserves and projecting future rates of production and timing of development activities, competition, operating risks, acquisition risks, liquidity and capital requirements, the effects of governmental regulation, adverse changes in the market for the Company's oil and natural gas production, dependence upon third-party vendors, and other risks detailed in the Company's periodic report filings with the Securities and Exchange Commission.

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In addition to reporting net income (loss) as defined under GAAP, we also present net earnings before interest, income taxes, depletion, depreciation, and amortization, accretion of discount on asset retirement obligations, impairment of oil and natural gas properties, warrant revaluation (gains) and expenses, net gain (loss) from mark-to-market on commodity derivatives, cash settlements received (paid), standby rig expenses and non-cash expenses relating to share based payments recognized under ASC Topic 718 ("Adjusted EBITDA"), which is a non-GAAP performance measure. Adjusted EBITDA consists of net earnings after adjustment for those items described in the table below. Adjusted EBITDA does not represent, and should not be considered an alternative to GAAP measurements, such as net income (loss) (its most directly comparable GAAP measure), and our calculations thereof may not be comparable to similarly titled measures reported by other companies. By eliminating the items described below, we believe the measure is useful in evaluating its fundamental core operating performance. We also believe that Adjusted EBITDA is useful to investors because similar measures are frequently used by securities analysts, investors, and other interested parties in their evaluation of companies in similar industries. Our management uses Adjusted EBITDA to manage our business, including in preparing our annual operating budget and financial projections. Our management does not view Adjusted EBITDA in isolation and also uses other measurements, such as net income (loss) and revenues to measure operating performance. The following table provides a reconciliation of net loss to Adjusted EBITDA for the periods presented:

In addition to reporting net income (loss) as defined under GAAP, we also present "adjusted income (loss)", which we define as net earnings before the effect of any impairment of oil and natural gas properties, unrealized gain (loss) from mark-to-market on commodity derivatives, mark-to-market on our warrant liability, share-based compensation expense and the other items described in the table below. Adjusted income (loss) is a non-GAAP performance measure. Adjusted income (loss) does not represent, and should not be considered an alternative to GAAP measurements, such as net income (loss), and our calculations thereof may not be comparable to similarly titled measures reported by other companies. By eliminating the items described below, we believe the measure is useful in evaluating our fundamental core operating performance. We also believe that adjusted income (loss) is useful to investors because similar measures are frequently used by securities analysts, investors, and other interested parties in their evaluation of companies in similar industries. Our management uses adjusted income to manage our business, including in preparing our annual operating budget and financial projections. Our management does not view adjusted income (loss) in isolation and also uses other measurements, such as net income (loss) and revenues to measure operating performance. The following table provides a reconciliation of net income (loss), to adjusted income (loss) for the periods presented:

Contact

Corporate Contact:

Emerald Oil Inc.
Mitch Ayer
Vice President - Finance & Investor Relations
(303) 595-5600
info@emeraldoil.com
www.emeraldoil.com