Birchcliff Energy : Announces Closing of Strategic Montney/Doig Acquisition in Gordondale and Increase of Borrowing Base to $950 Million

16-12 July 28, 2016

The purchase price for the Assets was approximately $625 million, subject to closing adjustments (the "Purchase Price"). The Purchase Price was funded through a bought deal financing of 107,520,000 subscription receipts of the Corporation ("Subscription Receipts") at a price of $6.25 per Subscription Receipt (the "Offering") and a private placement of 3,000,000 Subscription Receipts to an entity controlled by Mr. Seymour Schulich at a price of $6.25 per Subscription Receipt (the "Concurrent Private Placement"). The Offering and the Concurrent Private Placement closed concurrently on July 13, 2016 and the aggregate gross proceeds of $690.8 million were held in escrow pending completion of the Acquisition.

In accordance with their terms, each Subscription Receipt was deemed exchanged for one common share of the Corporation (an "Underlying Share") on July 28, 2016 and the gross proceeds of $690.8 million from the Offering and the Concurrent Private Placement were released from escrow in order for Birchcliff to complete the Acquisition. The Underlying Shares were issued effective at the time of the delivery to Computershare Trust Company of Canada (the escrow agent for the Subscription Receipts) of notice from the Corporation advising that all material conditions (other than the payment of the Purchase Price) necessary to complete the Acquisition had been satisfied or waived. Holders of Subscription Receipts are not required to take any action in order to receive the Underlying Shares.

Birchcliff has been advised by the Toronto Stock Exchange (the "TSX") that the Subscription Receipts will be delisted by the TSX after the close of trading on July 28, 2016 and the Underlying Shares will begin trading on the TSX today.

Birchcliff has increased its 2016 annual average production guidance to 49,000 to 51,000 boe/d from 40,000 to 41,000 boe/d, of which approximately 17% will be oil and NGL (up from 11%), and expects that its net capital expenditures for 2016 will be increased by approximately $36.5 million to approximately $140 million. Details of Birchcliff's updated capital expenditure program for 2016 are expected to be released on August 10, 2016, at which time the Corporation will update its 2016 guidance.

The table below sets forth Birchcliff's increased guidance for 2016 as a result of the completion of the Acquisition, the Offering and the Concurrent Private Placement:

1. Forecast average production from the Assets for the first half of 2016 is approximately 26,000 boe/d. The impact on 2016 is based on the closing date of the Acquisition of July 28, 2016 and therefore 2016 numbers do not represent full year 2016 average production.

2. Based on 152,350,906 common shares issued and outstanding as at the close of business on July 27, 2016 and 110,520,000 Underlying Shares that were issued in exchange for the 110,520,000 Subscription Receipts that were issued pursuant to the Offering and the Concurrent Private Placement.

3. After taking into account proceeds in the amount of $19.0 million received by the Corporation from a disposition completed in the Progress area on April 28, 2016. Forecast capital expenditures assume Birchcliff achieves its 2016 production targets. The Corporation's 2016 capital expenditure program assumes an annual average WTI price of US$45.00 per barrel of oil (revised from US$43.00 as announced on May 11, 2016), an AECO price of CDN$1.90 per GJ of natural gas and an exchange rate of CDN$/US$ of

   1.29 during 2016.

4. Assuming an annual average WTI price of US$45.00 per bbl of oil and an AECO price of CDN$1.90 per GJ of natural gas during 2016, and based on the completion of the Offering and the Concurrent Private Placement (after giving effect to the estimated expenses of the Offering and the Concurrent Private Placement) and the Acquisition (prior to giving effect to closing adjustments and costs of the Acquisition). Total debt is a non-GAAP measure. See "Advisories - Non-GAAP Measures".

The following is a summary of selected reserves information for the Assets and for the Corporation on a pro forma basis after giving effect to the Acquisition. The pro forma reserves information is not necessarily indicative of the results of operations that actually would have occurred if the events reflected therein had been in effect on the dates indicated or of the results that may be obtained in the future.

1. For the historical periods presented, the predecessor product types included conventional natural gas, tight oil and NGL.

2. Shale gas includes conventional natural gas classified wells, the production volumes of which are not material.

3. As at December 31, 2015 in the case of the Corporation and as at March 31, 2016 in the case of the Assets and based on forecast prices and costs. Reserves presented for the Corporation are based on the reserves estimation and economic evaluation prepared by Deloitte LLP ("Deloitte") effective December 31, 2015 in respect of Birchcliff's oil and natural gas properties (the "2015 Reserves Evaluation"). Reserves presented for the Assets are derived from the independent engineering evaluation of the oil, natural gas and NGL reserves attributable to the Assets prepared by McDaniel & Associates Consultants Ltd. ("McDaniel") effective March 31, 2016 (the "Birchcliff Report"). Readers should be cautioned that the price forecast schedule of Deloitte used in the 2015 Reserves Evaluation and the price forecast schedule of McDaniel used in the Birchcliff Report are different. Since the estimates of the Corporation's reserves and the estimates of the reserves associated with the Assets were estimated as at different dates, they have

been generated based on different assumptions in respect of commodity pricing, among other metrics. As a result, the presentation of the Corporation's reserves on a consolidated pro forma basis for the Acquisition would not reflect the actual combined estimate of the Corporation's reserves and those of the Assets as at December 31, 2015 and should not necessarily be viewed as predictive of the Corporation's reserves and future production on the completion of the Acquisition.

All information regarding the Assets contained herein, including all reserves and related information, financial information and all pro forma information reflecting the pro forma effects of the Acquisition, has been derived in part from information provided by the Vendor, including in connection with the Corporation's due diligence investigation, and other third parties.

The Corporation is also pleased to announce that, in connection with the closing of the Acquisition, its extendible revolving credit facilities (the "Credit Facilities") have been amended to increase the borrowing base to $950 million from $750 million. After giving effect to the increase in the borrowing base, the Credit Facilities are comprised of: (i) an extendible revolving syndicated term credit facility of

$900 million (increased from $710 million); and (ii) an extendible revolving working capital credit facility of $50 million (increased from $40 million).

In conjunction with the increase to the borrowing base, the lenders also agreed to waive the requirement to redetermine the borrowing base limit in connection with the delivery of the Corporation's next in-house engineering report which is required to be delivered by November 15, 2016.

AECO physical storage and trading hub for natural gas on the TransCanada Alberta transmission system which is the delivery point for various benchmark Alberta index prices

bbl barrel

boe barrels of oil equivalent

boe/d barrels of oil equivalent per day

GAAP generally accepted accounting principles GJ gigajoule

Mbbls thousand barrels

Mboe thousand barrels of oil equivalent Mcf thousand cubic feet

MM millions

MMcf million cubic feet NGL natural gas liquids

WTI West Texas Intermediate oil at Cushing, Oklahoma, the benchmark for North American crude oil pricing

This press release contains forward-looking statements and information (collectively referred to as "forward-looking information") within the meaning of applicable Canadian securities laws. Forward- looking information relates to future events or future performance and is based upon Birchcliff's current internal expectations, estimates, projections, assumptions and beliefs. All information other than historical fact may be forward-looking information. Information relating to reserves is forward-looking as it involves the implied assessment, based on certain estimates and assumptions, that the reserves exist in the quantities predicted or estimated and that the reserves can be profitably produced in the future. Words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate", "estimated", "forecast", "may", "will", "potential", "proposed" and other similar words that convey certain events or conditions "may" or "will" occur are intended to identify forward-looking information.

In particular, this press release contains forward-looking information relating to: the delisting of the Subscription Receipts on the TSX and the listing of the Underlying Shares on the TSX and the timing thereof; the impact of the Acquisition on the Corporation, including on its operations, production, reserves and financial condition; the production and oil and natural gas reserves of the Corporation and those associated with the Assets; the Corporation's 2016 guidance and other financial results before and after giving effect to the Offering, the Concurrent Private Placement and the Acquisition; and the expected release of the details of the Corporation's revised 2016 capital expenditure program and updated 2016 guidance and the timing thereof.

The forward-looking information contained in this press release is based upon certain expectations and assumptions, including: the Corporation's ability to develop the Assets and obtain the anticipated benefits therefrom; prevailing and future commodity prices and differentials, currency exchange rates, interest rates, inflation rates, royalty rates and tax rates; the state of the economy and the exploration and production business; the economic and political environment in which Birchcliff operates; the regulatory framework regarding royalties, taxes and environmental laws; anticipated timing and results of capital expenditures; the sufficiency of budgeted capital expenditures to carry out planned operations; results of operations; operating, transportation, marketing and general and administrative costs; the performance of existing and future wells, well production rates and well decline rates; well drainage areas; success rates for future drilling; reserves volumes and Birchcliff's ability to replace and expand oil and gas reserves through acquisition, development or exploration; the impact of competition; the availability of, demand for and cost of labour, services and materials; Birchcliff's ability to access capital; the ability to obtain financing on acceptable terms; the ability to obtain any necessary regulatory approvals in a timely manner; the ability of Birchcliff to secure adequate transportation for its products; Birchcliff's ability to market oil and gas; and Birchcliff's ability to efficiently integrate assets and employees acquired through acquisitions, including the Acquisition.

In addition, the Corporation's guidance for its annual average production for 2016, before and after giving effect to the Acquisition, assumes that the Corporation's capital expenditure program is carried out as contemplated, that no unexpected outages occur in the infrastructure that Birchcliff relies on to produce its wells and that any transportation service curtailments or unplanned outages that occur will be short in duration or otherwise insignificant, the construction of new infrastructure meets timing and operational expectations, existing wells continue to meet production expectations and future wells scheduled to come on production meet timing, production and capital expenditure expectations.