Emerald Oil Reports Third Quarter 2015 Financial and Operational Results and Guidance Increase

DENVER, CO--(Marketwired - November 04, 2015) - Emerald Oil, Inc. (NYSE MKT: EOX) ("Emerald" or the "Company") today announced financial and operational results for the quarter ended September 30, 2015.

Highlights

• Third quarter production of 523,202 BOE increased 49% as compared to 351,755 BOE in the third quarter of 2014. Daily production averaged 5,687 BOEPD, 17% above the midpoint and 14% above the high end of Emerald's third quarter 2015 guidance range;
• 2015 fourth quarter production guidance raised 500 Boe/d to 4,700 - 5,000 Boe/d;
• Reduction of per unit LOE costs during the third quarter of 2015 to approximately $12.96 per BOE, a decrease of 31% compared to the second quarter of 2015;
• Third quarter oil and natural gas revenue of $17.8 million, not including effect of settled derivatives;
• Third quarter Adjusted EBITDA of $5.9 million

Third Quarter 2015 Production

For the third quarter of 2015, Emerald's total production volumes on a BOE basis increased 49% as compared to the third quarter of 2014. During the third quarter of 2015, Emerald realized a $37.65 average price per Bbl of oil (including settled derivatives) compared to an $82.61 average price per Bbl of oil during the third quarter of 2014.

Financial Results

Revenues from sales of oil and natural gas for the third quarter of 2015 were $17.8 million compared to $28.7 million for the same period in 2014. The decrease was due to lower realized crude oil prices during the third quarter of 2015. Crude oil revenue accounted for approximately 97% of oil and natural gas sales.

Lease operating expenses for the third quarter of 2015 were $6.8 million compared to $4.5 million for the same period in 2014. On a per unit basis, lease operating expenses were $12.96 per BOE in the third quarter of 2015 compared to $12.70 per BOE in the third quarter of 2014. Emerald also incurred workover expenses for the third quarter of 2015 of $1.4 million, or $2.71 per BOE.

General and administrative expenses for the third quarter of 2015 were $3.8 million compared to $5.5 million for the same period in 2014. On a per unit basis, G&A expenses (excluding non-cash stock-based compensation) were $6.50 per BOE in the third quarter of 2015 compared to $7.58 per BOE in the third quarter of 2014. Share-based compensation expenses, which are included in G&A expense, totaled $0.4 million in the third quarter of 2015 compared to $2.8 million for the same period in 2014.

Adjusted EBITDA was $5.9 million for the third quarter of 2015, as compared to $15.3 million for the same period in 2014. Adjusted Net Income (Loss) was $(12.1) million for the third quarter of 2015. Emerald recognized a $158.3 million non-cash impairment expense for the quarter ended September 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.

Revolving Credit Facility Update

The Company and its advisors are continuing to work with the bank group regarding a payment schedule for the previously announced borrowing base deficiency of $19.6 million. Additionally, Emerald and its advisors are working with a group of second lien term providers for a term debt solution to address both the borrowing base and working capital.

Conference Call

Emerald will host a conference call on Thursday, November 5, 2015 at 9:30 a.m. Eastern Time (7:30 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.

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: