Legacy Oil Plus Gas : + Gas Inc. announces second quarter 2014 results

August 11, 2014

LEGACY OIL + GAS INC. ANNOUNCES SECOND QUARTER 2014 RESULTS

NEWS RELEASE

CALGARY, ALBERTA (August 11, 2014) Legacy Oil + Gas Inc. ("Legacy" or the "Company") (TSX:LEG) is pleased to announce it has filed on SEDAR its interim financial statements and related Management's Discussion and Analysis ("MD&A") for the three and six months ended June 30, 2014. Selected financial and operational information is outlined below and should be read in conjunction with Legacy's interim financial statements and the related MD&A which are available for review at www.legacyoilandgas.com or www.sedar.com.

Petroleum and natural gas sales, net of royalties 139,203 113,547 23 281,829 214,395 31

Funds generated by operations (2) 75,219 71,335 5 157,523 133,389 18

Per share basic 0.46 0.46 - 0.98 0.89 10

Per share diluted (3) 0.46 0.45 2 0.97 0.88 10

Net income (loss) 18,818 (2,498) (853) 21,259 (2,673) (895) Per share basic 0.12 (0.02) (700) 0.13 (0.02) (750) Per share diluted (3) 0.11 (0.02) (650) 0.13 (0.02) (750)

Capital expenditures - Exploration and development (4) 74,215 70,915 5 214,553 178,192 20

Capital expenditures - Acquisitions and dispositions (4) 239,085 180,356 33 240,136 188,315 28

Net debt and working capital surplus (deficit) (2) (814,790) (664,657) 23 (814,790) (664,657) 23

Production

Crude oil (Bbls per day) 16,400 14,773 11 16,517 14,293 16

Heavy oil (Bbls per day) 71 104 (32) 63 114 (45) Natural gas (Mcf per day) 13,453 12,397 9 14,088 12,619 12

Natural gas liquids (Bbls per day) 1,511 1,221 24 1,728 1,299 33

Barrels of oil equivalent (Boe per day) (5) 20,224 18,164 11 20,656 17,809 16

Average realized price

Crude oil ($ per Bbl) 103.15 91.33 13 101.00 89.14 13

Heavy oil ($ per Bbl) 82.03 73.22 12 78.49 63.88 23

Natural gas ($ per Mcf) 4.46 3.95 13 4.90 3.81 29

Natural gas liquids ($ per Bbl) 43.60 53.47 (18) 61.23 57.94 6

Barrels of oil equivalent ($ per Boe) (5) 90.16 80.99 11 89.46 78.88 13

Netback ($ per Boe) (2)(5)

Petroleum and natural gas sales 90.16 80.99 11 89.46 78.88 13

Royalties 14.53 12.30 18 14.08 12.37 14

Operating expenses 15.60 13.71 14 15.72 13.79 14

Transportation expenses 2.95 2.68 10 2.94 2.79 5

Operating Netback ($ per Boe) (2)(5) 57.08 52.30 9 56.72 49.93 14

Undeveloped land holdings (gross acres) 642,026 440,763 46 642,026 440,763 46 (net acres) 499,488 347,726 44 499,488 342,726 46

Common shares outstanding, end of period 176,771 157,212 12 176,771 157,212 12

Weighted average common shares (basic) 161,877 154,777 5 159,922 149,100 7

Weighted average common shares (diluted) (3) 165,133 157,441 5 162,764 152,011 7

4400, 525 - 8th Avenue SW, Calgary, AB T2P 1G1 | p: 403.441.2300 | f: 403.441.2017 | www.legacyoilandgas.com

(1) Consolidated financial and operating highlights for Legacy Oil + Gas Inc. and all of its subsidiaries ("Legacy" or the "Company")

(2) Management uses funds generated by operations, net debt and working capital surplus (deficit) and operating netback to analyze operating performance and leverage. These terms, as presented, do not have a standardized meaning prescribed by International Financial Reporting Standards and therefore they may not be comparable with the calculation of similar measures for other entities.

(3) In calculating the net income (loss) per share diluted, Legacy excludes the effect of outstanding stock options, stock incentives and share warrants and uses the weighted average common shares (basic) where the Company has a net loss for the period. In calculating funds generated by operations per share diluted, the Company includes the effect of outstanding stock options, stock incentives and share warrants using the treasury stock method.

(4) Refer to Capital Expenditures in the Management Discussion and Analysis for the three and six months ended June 30, 2014.

(5) Boe means barrel of oil equivalent. All Boe conversions in this report are derived by converting natural gas to oil equivalent at a ratio of six thousand cubic feet of natural gas to one barrel of oil equivalent. Boe may be misleading, particularly if used in isolation. A Boe conversion rate of 1 Boe: 6 Mcf is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio of oil compared to natural gas based on currently prevailing prices is significantly different than the energy equivalency ratio of 1 Boe : 6 Mcf, utilizing a conversion ratio of 1 Boe : 6 Mcf may be misleading as an indication of value.

 Drilled 29 gross (25.7 net) light oil wells in the second quarter of 2014, with a 100 percent success rate

 Strong production results continued in the second quarter from activity in the Midale play, Turner Valley and North Dakota

Spearfish

 Increased average production from 18,164 Boe per day in the second quarter of 2013 to 20,224 Boe per day in the second quarter of 2014 (11 percent increase)

 Increased funds generated by operations of $71.3 million ($0.46 per share) in the second quarter of 2013 to $75.2 million ($0.46 per share) in the second quarter of 2014 (5 percent increase on an absolute basis). Funds generated by operations were reduced over 15 percent due to realized hedging losses in the quarter

 Increased operating netback from $52.30 per Boe in the second quarter of 2013 to $57.08 per Boe in the second quarter of

2014 (19 percent increase)

 Increased net income from a net loss of $2.5 million ($0.02 per share) in the second quarter of 2013 to net income of $18.8 million ($0.12 per share) in the second quarter of 2014 (853 percent increase on an absolute basis and 700 percent on a per share basis)

 Closed the acquisition of Highrock Energy Ltd. ("Highrock") comprised of 2,000 Boe per day of high netback light oil for total consideration of 18.9 million Legacy common shares and assumed net debt of $30.6 million in June 2014.

 On July 2, 2014, Legacy closed the acquisition of Corinthian Exploration Corp. ("Corinthian"), comprised of 2,800 Boe per day (86 percent high netback light oil), for total consideration of 20.1 million Legacy common shares and assumed net debt of approximately $34 million (subject to certain adjustments).

 Pro forma these two corporate acquisitions and assuming the sale of Corinthian's Elmworth asset, Legacy's 2014 estimated year end net debt to year end annualized funds flow from operations is expected to be 1.5 times based on recent strip pricing.

In the second quarter of 2014, the Company drilled 29 gross (25.7 net) oil wells, with a 100 percent success rate. Activity in the second quarter included the drilling of 11 gross (10.8 net) Midale horizontal wells in the Company's Pinto and Steelman areas. Legacy purchased two 3D seismic surveys on its Midale play, acquiring 15 square miles of data, and was successful at two strategic crown land sales, acquiring approximately 2,000 acres of undeveloped land in the Company's core areas. In addition the Company acquired 236 square miles of 3D seismic data through the Highrock and Corinthian acquisitions.
Production averaged 20,224 Boe per day in the second quarter despite the heavy rainfall and subsequent flooding in portions of southeast Saskatchewan, Manitoba and North Dakota that resulted in lost operational time and production time. The Company also experienced downtime at Turner Valley due to a budgeted turnaround at Quirk Creek and downtime at Steelman due to an unexpected turnaround at the third party operated Steelman gas plant. The second quarter production average includes only 18 days of the Highrock acquired production.
Legacy was able to resume operations quickly after spring break-up and the heavy rains and has been running up to eight drilling rigs and twelve service rigs in its core areas. Current production is estimated in excess of 26,000 Boe per day, positioning the Company to be on track to meet its full year upwardly revised production and capital expenditure guidance.

Legacy had an active quarter developing the Midale Formation with the drilling of 11 (10.8 net) wells in the Taylorton, Pinto and Steelman areas. This drilling included successful development, step out and exploration wells. Overall, the average 30 day initial production rates from the four wells with 30 days of production history was 300 Boe per day per well. Seven additional wells are in various stages of completion, flowback and early production. Two of these wells have been flowing back for more than two weeks at rates in excess of 350 Boe per day. Completion costs have been reduced by $150,000 per well and additional cost savings are anticipated.
Waterflood pilot projects are underway with one Midale water injector currently active in Steelman, another recently converted and a third to be converted later this year. Early waterflood response has already been observed in wells offsetting the first water injector.
Legacy was the first mover in the Midale play more than three years ago and has utilized its leading horizontal completion expertise to generate these tremendous results.

At Turner Valley, Legacy has continued to evolve drilling and completion practices to optimize both production rate and capital costs. Through the application of unique logging while drilling (LWD) tools, longer laterals in the best pay, integration of the 3D seismic interpretation and selective completion techniques, the last 12 wells drilled by Legacy have demonstrated a significant step- change in initial oil rate and water cut.
Legacy drilled 3 (2.5 net) wells in the second quarter 2014: Howe # 6, Denning #1 and Lansdell #2. All of these wells are dual lateral horizontals targeting only the Upper Porous 'A' and 'C' zones in the Rundle, in contrast to the last nine wells drilled in Turner Valley that were triple lateral horizontals that targeted these zones as well as the Lower Porous zone.
The Howe #6 and Denning #1 wells, brought on production in the second quarter, had an average 30 day initial production rate of
190 Boe per day per well. Legacy's Lansdell #2 well was brought on production early in the third quarter in excess of 275 Boe per day and continues to improve. These three dual lateral horizontal wells were drilled, completed, equipped and tied-in for an average all-in cost of approximately $4.6 million. The economics of the dual lateral wells compares favourably to the triple lateral horizontal wells that cost approximately $6 million as ultimate recovery from each type of well is expected to be similar (400+ MBoe). Legacy's drilling success with the dual lateral horizontals in the second quarter has proven up additional inventory and added confidence to the strong economics of the field-wide development.
The Herriman #7 and Hartell #8 wells brought on earlier this year continue to produce at impressive rates. Herriman #7 current production is 400 Boe per day at a 10 percent water cut and Hartell #8 current production is 350 Boe per day at a 1 percent water cut.
All 2014 wells utilized unique completion fluids and reached peak oil rates within days of first coming on production, a dramatic improvement when compared to all the previous horizontal wells drilled in Turner Valley to-date by both Legacy and the previous operator.

The Company drilled 9 (6.9 net) Spearfish wells in the second quarter of 2014. All wells were drilled in the Company's Bottineau County area in North Dakota. The wells continue to meet type curve with average 30 day initial production of 80 Bbls of oil per day per well. The average 90 day initial production rate from the four wells with enough history is 93 Bbls of oil per day per well, demonstrating production improvement over time. Four additional wells have been recently brought on production at an average rate of 97 Bbls of oil per day per well. The last five long (1,400 m lateral) wells drilled have demonstrated drill, complete, equip and tie-in costs of less than $1.6 million and the short (700 m lateral) wells are approximately $1.2 million.
Subsequent to the end of the second quarter of 2014, Legacy announced the acquisition of Corinthian Exploration Corp. which included their Spearfish acreage in Bottineau County, North Dakota. The North Dakota Spearfish play has benefited from improved economics and capital efficiencies as a result of reduced capital costs and higher initial production rates and the recently reduced North Dakota severance tax. Legacy's pro forma North Dakota Spearfish production base and development inventory position the
Company to materially benefit from these improvements and drive additional efficiencies with significantly enhanced economies of scale. Legacy's expanded operational footprint will also accelerate implementation of waterflood in the play.
The total Spearfish play development drilling inventory is now 571 net potential locations (82 percent unbooked). Applying other operators' results in the play, Legacy's location count could increase by 50 percent through downspacing. In addition, the Company has approval for a pilot waterflood in each of Manitoba and North Dakota. It is awaiting approval of a second pilot in Manitoba and is preparing for an application for a second pilot in North Dakota. Recovery factors of up to 14 percent are anticipated based on analogous pools.

The Company drilled 2 (2.0 net) Bakken wells in the second quarter of 2014. One of the wells drilled was an extended reach horizontal well at Taylorton. The Company has now drilled two extended reach horizontal wells off the same pad at Taylorton and is in the process of completing the more than 2,100 m of Bakken pay in each well with 50 stage fracture stimulations.

Legacy continues to evaluate and increase its Torquay (Three Forks) potential in the Taylorton/Pinto area. The Torquay oil at Taylorton/Pinto is sourced by the overlying Bakken shales, which are also the source for the Bakken oil accumulation. The source rocks are in the source "oil kitchen" and have locally generated the oil found there, similar to Flat Lake/Oungre. The Torquay in Taylorton/Pinto consists of a series of depositional cycles, with dolomitic siltstone beds forming the reservoir and shalier intervals separating them. At Taylorton/Pinto, the upper most cycle is typically 3 to 4.5 metres thick and up 5.5 metres, which is thicker than Flat Lake/Oungre. Porosity and permeability are in the same range as at Flat Lake/Oungre, with good residual oil saturations in the core.
The Company has participated in five Torquay wells and sees potential on over 60 sections of its land in the area. Legacy intends to test the Torquay with additional wells in the second half of 2014. The Company has secured operatorship of the first Torquay drill at Flat Lake and has recently spud a two mile horizontal well.

On July 2, 2014, Legacy closed the acquisition of Corinthian Exploration Corp., a private light oil company for total consideration of
20.1 million Legacy common shares and assumed net debt of approximately $34 million (subject to certain adjustments). Legacy acquired production of 2,800 Boe per day, weighted 86 percent towards high quality, high netback light oil and NGL assets, focused in the Company's North Dakota core area and in the Elmworth area of NW Alberta. The producing properties are predominately operated with high working interests, 3D seismic coverage and control of key producing infrastructure and are associated with a light oil prospective undeveloped land base.

The aggressive pace of development that started 2014 has been achieved again as the Company exited the second quarter of 2014. Legacy currently has 8 drilling rigs and 12 service rigs running in the field. Strong production results continue to be achieved in all plays while capital costs remain in-line with budget.
Production additions from 15 new Midale wells is expected in the third quarter along with results from the Company's first two extended reach Bakken horizontal wells at Taylorton and extended reach Torquay horizontal well at Flat Lake.
Pro forma the acquisitions of Highrock and Corinthian and assuming the sale of the Elmworth asset, Legacy's estimated 2014 year end net debt to year end annualized funds flow from operations will be approximately 1.5 times based on recent strip pricing.
The Company continues to pursue additional opportunities to enhance the balance sheet and production growth, capitalizing on the solid first step provided through both the Highrock and Corinthian corporate acquisitions. An enhanced balance sheet and additional growth opportunities position the Company for higher production and funds flow from operations growth. With current production in excess of 26,000 Boe per day, high activity levels in the field generating a number of operational catalysts and the
continued disciplined execution of its capital program, Legacy remains on track with its previously upwardly revised full year guidance of 23,100 Boe per day average, 27,350 Boe per day 2014 exit and $390 million of capital expenditures.

Mark Franko joined Legacy as Vice President, Legal and General Counsel during the quarter. He was most recently a partner with
McCarthy Tetrault LLP and has been the Corporate Secretary of Legacy since inception.

Management will be holding a conference call for investors, financial analysts, media and any interested persons on Tuesday, August
12, 2014 at 9:00 a.m. (MDT) (11:00 a.m. EDT) to discuss the 2014 second quarter results. The investor conference call details are as follows:
Participant Dial-In Number(s):

• Operator Assisted Toll-Free Dial-In Number: (888) 231-8191

• Local Dial-In Number: (403) 451-9838

• Conference ID: 76115169

Note: In order to join this conference call, you will be required to provide the Conference ID Number listed above.
Legacy is a uniquely positioned, well-capitalized, technically driven, intermediate oil and natural gas company with a proven management team committed to aggressive, cost-effective growth of light oil reserves and production in large hydrocarbon in-place assets and resource plays. Legacy's common shares trade on the TSX under the symbol LEG.
This press release shall not constitute an offer to sell, nor the solicitation of an offer to buy, any securities in the United States, nor shall there be any sale of securities mentioned in this press release in any state in the United States in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.
For further information please contact:

Trent J. Yanko, P.Eng.

President + CEO
Legacy Oil + Gas Inc.
4400 Eighth Avenue Place
525 - 8th Avenue SW
Calgary, AB T2P 1G1
Telephone: 403.441.2300
Fax: 403.441.2017

Matt Janisch, P.Eng.

Vice-President, Finance + CFO
Legacy Oil + Gas Inc.
4400 Eighth Avenue Place
525 - 8th Avenue SW
Calgary, AB T2P 1G1
Telephone: 403.441.2300
Fax: 403.441.2017

Forward Looking Statements

Forward-Looking Information - This press release contains forward-looking statements. More particularly, it contains forward-looking statements concerning: (i) Legacy's anticipated 2014 average and exit rates of production and 2014 capital expenditures and Legacy being on track to meet its full year production and capital expenditure guidance, (ii) anticipated additional cost savings with respect to Midale completions, (iii) the potential number of drilling locations and the potential recovery factor at Legacy's Spearfish property; (iv) planned drilling, development and waterflood activities, (v) Legacy's pro forma 2014 estimated year end net debt to year end annualized funds flow from operations following the acquisitions of Highrock and Corinthian and assuming the disposition of the Elmworth asset; and (vi) the expected ultimate oil recovery for certain wells at Turner Valley.

The forward-looking statements contained in this press release are based on certain key expectations and assumptions made by Legacy, including expectations and assumptions concerning the success of future drilling, development and completion activities, the performance of existing wells, the performance of new wells, the viability of waterflood projects, the availability and performance of facilities and pipelines, the geological characteristics of Legacy's properties, the successful application of drilling, completion and seismic technology, prevailing weather and break-up conditions, commodity prices, royalty regimes and exchange rates, the application of regulatory and licensing requirements, the availability of capital, labour and services, the creditworthiness of industry partners and the potential proceeds that may be realized from a sale of the Elmworth asset.

Although Legacy believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because Legacy can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, risks associated with the oil and gas industry in general (e.g., operational risks in development, exploration and production; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses, and health, safety and environmental risks), constraint in the availability of services, commodity price and exchange rate fluctuations, adverse weather or break-up conditions, uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects, waterflood projects or capital expenditures and the risk that Legacy may not be able to conclude a sale of the Elmworth asset on favorable terms or at all. These and other risks are set out in more detail in Legacy's Annual Information Form for the year ended December 31, 2013 dated March 25, 2014.

The forward-looking statements contained in this press release are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

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