Emerald Oil Reports Fourth Quarter and Year End 2013 Financial and Operational Results

DENVER, CO – March 12, 2014 --- Emerald Oil, Inc. (NYSE MKT: EOX) (“Emerald” or the “Company”) today announced financial and operational results for the quarter and year ended December 31, 2013.

Highlights

McAndrew Rudisill, Emerald’s Chief Executive Officer, stated, “2013 was a transformational year for Emerald. We successfully drilled and completed multiple Middle Bakken and Three Forks wells, tripled our operated acreage position and monetized the majority of our non-operated assets. In 2014, our production will continue to grow as we add a third rig to our drilling program. The third rig is currently moving to location in our Easy Rider focus area and will soon begin drilling, earlier than originally anticipated. Due to the strong performance of our Low Rider Middle Bakken wells and positive indications from our Low Rider Three Forks wells, we are actively reviewing increased downspacing assumptions and raising our stated Low Rider type curve. We are very focused in 2014 on lowering operating expenses and driving greater drilling and completion cost effenciencies.”

2013 Production

For 2013, Emerald’s total production volumes on a BOE basis increased 80% as compared to 2012. Production increased due to the addition of 10.58 net productive operated Bakken/Three Forks wells in 2013. During 2013, Emerald realized an $87.16 average price per Bbl of oil (including settled derivatives) compared to an $85.05 average price per Bbl of oil during 2012. For detailed well performance data see Emerald’s corporate presentation (available on its website, www.emeraldoil.com).

2013 Year End Reserves

As of December 31, 2013, Emerald had total proved reserves of approximately 13.2 MMBoe, all of which were located in the Williston Basin. Emerald’s proved reserves increased approximately 147% during 2013 primarily as a result of our successful operated well program. Emerald sold substantially all of its year end 2012 reserves, which were comprised of non-operated assets, in September 2013.

Financial Results

Revenues from sales of oil and natural gas for the quarter ended December 31, 2013 were $17.9 million compared to $9.2 million for the same period in 2012. Revenues, not considering the effect of derivatives, for the year ended December 31, 2013 were $54.0 million compared to $28.1 million for the same period in 2012. The increase is primarily due to higher production as a result of the Company’s well completions and its acquisition of certain properties in its Low Rider project area.

Production expenses for the quarter ended December 31, 2013 were $3.8 million compared to $1.1 million for the same period in 2012. On a per unit basis, production expenses increased from $9.88 per BOE in 4Q2012 to $17.20 per BOE in 4Q2013. Production expenses for the year ended December 31, 2013 were $8.5 million compared to $2.7 million for the same period in 2012. On a per unit basis, production expenses increased from $7.98 per BOE sold in 2012 to $13.83 per BOE in 2013. This increase was primarily due to the costs associated with operating an increased number of producing wells and associated produced fluid volumes as a result of the Company’s well completions. Emerald experienced increases in operating expenses as we added new wells and maintained production from existing properties. Increased costs are primarily related to workovers, electronic submersible pump installation and gas lift installation, all of which have improved operational performance and reduced downtime in the Company’s wells. The Company continues efforts to decrease operating costs by centralizing all infield infrastructure. Emerald remains comfortable with its annual 2014 cost guidance of $11.00 per BOE.

General and administrative expenses for the quarter ended December 31, 2013 were $12.9 million compared to $7.2 million for the same period in 2012. Share-based compensation expenses are included in the employee compensation and related expenses, totaling $6.4 million in 4Q2013 compared to $4.6 million 4Q2012. General and administrative expenses for the year ended December 31, 2013 were $30.5 million compared to $12.9 million for the same period in 2012. Share-based compensentation expenses totaled $12.9 million in 2013 compared to $7.3 million in 2012. The increase is due to the Company’s change in corporate strategy to add operating capabilities to develop Emerald’s operated wells in the Williston Basin and the corresponding increases in personnel and infrastructure. This strategic change allows Emerald the opportunity to significantly grow production by using industry best practices and to control well design and capital expenditures to maximize its return on capital. Approximately $2.8 million of the share-based compensation expense during the year ended December 31, 2013 related to the one-time modification and accelerated vesting of equity grants associated with severance to a prior officer of the Company.

Adjusted EBITDA was $5.0 million for the fourth quarter 2013, as compared to $4.5 million in the same period in 2012, reflecting a 11% increase. For the full year ended December 31, 2013, Adjusted EBITDA was $20.2 million, as compared to $16.8 million for 2012, representing a 20% increase. Adjusted EBITDA is a non-GAAP financial measure. For additional information please refer to the reconciliation of this measure at the end of this news release.

During the quarter ended December 31, 2013, the Company recognized an unrealized non-cash loss on its warrant liability of $2.5 million. For the year ended December 31, 2013, the Company recognized an unrealized non-cash loss on its warrant liability of $7.1 million. This mark-to-market charge relates to the warrants attached to the preferred stock issued to White Deer Energy in February 2013. The warrant liability will correlate with Emerald share price movement on a quarterly basis. Each quarter going forward the Company will mark-to-market the warrants and adjust for the change in the statement of operations as a non-cash charge until the warrant is exercised or modifications are made to the warrants such that liability accounting is no longer required.

Conference Call

Emerald will host a conference call on Thursday, March 13, 2014 at 10:00 a.m. Eastern Time (8:00 a.m. Mountain Time) to discuss financial and operational results for the quarter and year 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.

EMERALD OIL, INC.
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31,

(Unaudited)

		2013				2012
ASSETS
CURRENT ASSETS
Cash and Cash Equivalents		$	144,255,438			$	10,192,379
Restricted Cash			15,000,512				—
Accounts Receivable – Oil and Natural Gas Sales			8,715,821				8,514,865
Accounts Receivable – Joint Interest Partners			31,523,204				4,058,291
Other Receivables			577,409				1,133,849
Prepaid Expenses and Other Current Assets			206,299				103,173
Total Current Assets			200,278,683				24,002,557
PROPERTY AND EQUIPMENT
Oil and Natural Gas Properties, Full Cost Method, at cost:
Proved Oil and Natural Gas Properties			211,015,067				167,618,422
Unproved Oil and Natural Gas Properties			57,015,315				61,454,831
Equipment and Facilities			1,837,744				—
Other Property and Equipment			890,811				385,023
Total Property and Equipment			270,758,937				229,458,276
Less – Accumulated Depreciation, Depletion and Amortization			(48,176,522	)			(80,230,517	)
Total Property and Equipment, Net			222,582,415				149,227,759
Restricted Cash			6,000,000				—
Prepaid Drilling Costs			—				100,193
Fair Value of Commodity Derivatives			68,396				25,397
Debt Issuance Costs, Net of Amortization			475,157				269,681
Deposits on Acquisitions			125,368				—
Other Non-Current Assets			357,644				260,775
Total Assets		$	429,887,663			$	173,886,362
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts Payable		$	63,168,422			$	39,169,037
Fair Value of Commodity Derivatives			921,401				206,645
Accrued Expenses			11,821,729				420,521
Advances from Joint Interest Partners			2,205,538				—
Total Current Liabilities			78,117,090				39,796,203
LONG-TERM LIABILITIES
Revolving Credit Facility			—				23,500,000
Asset Retirement Obligations			692,137				296,074
Warrant Liability			15,703,000				—
Other Non-Current Liabilities			56,327				—
Total Liabilities			94,568,554				63,592,277
COMMITMENTS AND CONTINGENCIES
Preferred Stock – Par Value $.001; 20,000,000 Shares Authorized;
Series B Voting Preferred Stock – 5,114,633 and 0 issued and outstanding at December 31, 2013 and December 31, 2012, respectively.  Liquidation preference value of $5,115 and $0, as of December 31, 2013 and December 31, 2012, respectively.			5,000				—
STOCKHOLDERS’ EQUITY
Common Stock, Par Value $.001; 500,000,000 Shares Authorized, 65,840,370 and 24,734,643 Shares Issued and Outstanding, respectively			65,840				24,735
Additional Paid-In Capital			416,301,344				180,439,530
Accumulated Deficit			(81,053,075	)			(70,170,180	)
Total Stockholders’ Equity			335,314,109				110,294,085
Total Liabilities and Stockholders’ Equity		$	429,887,663			$	173,886,362

EMERALD OIL, INC.
 (FORMERLY VOYAGER OIL & GAS, INC.)  
CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

		Year Ended December 31,
		2013				2012				2011
REVENUES
Oil and Natural Gas Sales		$	53,981,040			$	28,129,985			$	8,426,129
Net Losses on Commodity Derivatives			(2,656,535	)			(215,439	)			—
Total Revenues			51,324,505				27,914,546				8,426,129
OPERATING EXPENSES
Production Expenses			8,520,414				2,727,133				726,946
Production Taxes			5,702,521				2,955,015				717,440
General and Administrative Expenses			30,507,114				12,903,845				2,686,176
Depletion of Oil and Natural Gas Properties			17,310,059				12,770,718				3,546,466
Impairment of Oil and Natural Gas Properties			—				61,900,692				—
Depreciation and Amortization			144,492				53,818				30,831
Accretion of Discount on Asset Retirement Obligations			32,449				14,988				4,882
Gain on Sale of Oil and Natural Gas Properties			(7,371,804	)			—				—
Total  Operating Expenses			54,845,245				93,326,209				7,712,741
INCOME (LOSS) FROM OPERATIONS			(3,520,740	)			(65,411,663	)			713,388
OTHER INCOME (EXPENSE)
Interest Expense			(287,934	)			(2,614,240	)			(2,036,032	)
Warrant Revaluation Expense			(7,077,000	)			—				—
Gain on Acquisition of Business, Net			—				5,758,048				—
Other Income (Expense)			2,779				(28,244	)			(22,410	)
Total Other Income (Expense), Net			(7,362,155	)			3,115,564				(2,058,442	)
LOSS BEFORE INCOME TAXES			(10,882,895	)			(62,296,099	)			(1,345,054	)
INCOME TAX PROVISION			—				—				—
NET LOSS			(10,882,895	)			(62,296,099	)			(1,345,054	)
Less: Preferred Stock Dividends and Deemed Dividends			(20,279,197	)			—				—
NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS		$	(31,162,092	)		$	(62,296,099	)		$	(1,345,054	)
Net Loss Per Common Share – Basic and Diluted		$	(0.75	)		$	(4.91	)		$	(0.17	)
Weighted Average Shares Outstanding – Basic and Diluted			41,383,277				12,699,544				8,012,158

EMERALD OIL, INC.
 (FORMERLY VOYAGER OIL & GAS, INC.) 
CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

		Year Ended December 31,
		2013				2012				2011
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss		$	(10,882,895	)		$	(62,296,099	)		$	(1,345,054	)
Adjustments to Reconcile Net Loss to Net Cash Provided By (Used For) Operating Activities:
Depletion of Oil and Natural Gas Properties			17,310,059				12,770,718				3,546,466
Impairment of Oil and Natural Gas Properties			—				61,900,692				—
Depreciation and Amortization			144,492				53,818				30,831
Amortization of Debt Discount			—				—				163,356
Amortization of Debt Issuance Costs			127,857				1,929,561				82,191
Accretion of Discount on Asset Retirement Obligations			32,449				14,988				4,882
Net Losses on Commodity Derivatives			2,656,535				215,439				—
Net Cash Settlements Paid on Commodity Derivatives			(1,984,778	)			(34,191	)			—
Gain on Sale of Oil and Natural Gas Properties, Net			(7,371,804	)			—				—
Gain on Acquisition of Business			—				(7,213,835	)			—
Warrant Revaluation Expense			7,077,000				—				—
Share-Based Compensation Expense			12,885,209				7,318,690				728,546
Changes in Assets and Liabilities:
Increase in Trade Receivables – Oil and Natural Gas Revenues			(200,956	)			(5,267,453	)			(2,951,591	)
Increase in Accounts Receivable – Joint Interest Partners			(27,464,913	)			(4,058,291	)			—
(Increase) Decrease  in Other Receivables			556,440				(1,133,849	)			—
(Increase) Decrease in Prepaid Expenses and Other Current Assets			(103,126	)			(54,843	)			90,123
Increase in Other Non-Current Assets			(96,869	)			(100,100	)			—
Increase (Decrease) in Accounts Payable			2,831,342				30,123				(319,349	)
Increase (Decrease) in Accrued Expenses			8,412,533				214,399				(183,557	)
Increase in Other Non-Current Liabilities			56,327				—				—
Increases in Advances from Joint Interest Partners			2,205,538				—				—
Net Cash Provided By (Used For) Operating Activities			6,190,440				4,289,767				(153,156	)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of Other Property and Equipment			(505,788	)			(172,785	)			(157,892	)
Restricted Cash Deposited			(21,000,512	)			—				—
Increase in Deposits for Acquisitions			(125,368	)			—				—
Use of (Payments for) Prepaid Drilling Costs			100,193				(67,030	)			460,497
Proceeds from Sale of Oil and Natural Gas Properties, Net of Transaction Costs			129,432,743				—				—
Proceeds from Sales of Available for Sale Securities			—				—				242,070
Investment in Oil and Natural Gas Properties			(182,901,806	)			(66,212,818	)			(44,052,953	)
Net Cash Used For Investing Activities			(75,000,538	)			(66,452,633	)			(43,508,278	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from Issuance of Common Stock, Net of Transaction Costs			238,354,687				72,167,012				46,602,251
Proceeds from Issuance of Preferred Stock, Net of Transaction Costs			47,183,994				—				—
Payments on Preferred Stock			(50,000,000	)			—				—
Advances on Revolving Credit Facility and Term Loan			—				56,530,730				—
Payments on Revolving Credit Facility			(23,500,000	)			(33,030,730	)			—
Payments of Senior Secured Promissory Notes			—				(15,000,000	)			—
Payment of Assumed Liabilities			—				(20,303,903	)			—
Cash Paid for Finance Costs			(333,333	)			(1,935,131	)			(389,030	)
Preferred Stock Dividends and Deemed Dividends			(8,832,191	)			—				—
Proceeds from Exercise of Stock Options and Warrants			—				—				16,960
Net Cash Provided by Financing Activities			202,873,157				58,427,978				46,230,181

EMERALD OIL, INC.
 (FORMERLY VOYAGER OIL & GAS, INC.) 

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)
  
FOR THE YEARS ENDED DECEMBER 31, 2013, 2012 AND 2011

(Unaudited)

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, net gain on acquisition of business, net gain on sale of oil and natural gas properties, net gain (loss) from mark-to-market on commodity derivatives, less cash settlements received (paid) 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:

ADJUSTED EBITDA

Corporate Contact:

Emerald Oil, Inc.

Ryan Smith

Vice President of Capital Markets & Strategy

(303) 323-0008

info@emeraldoil.com

www.emeraldoil.com