Edge Resources Inc. Full Year and Q4 Results

FOR IMMEDIATE RELEASE

TSX Venture Exchange Symbol: EDE

AIM Exchange Symbol: EDG June 25, 2014

EDGE RESOURCES INC. Calgary, Alberta

Edge Resources Inc. Announces Full Year and Q4 Results

Edge Resources Inc. ("Edge" or the "Company"), is pleased to announce its audited results for the 12 month period ended 31 March 2014 and the three month period ended 31 March 2014 ("Q4"), highlights of which are set out below.

· Record annual revenue of $10.0 million up 19% versus $8.4 million last year and record quarterly revenue of $3.19 million for Q4 up 76% versus $1.81 million on the same period last year

· Record total field netback of $4.3 million for the year and $1.36 million for Q4 versus $1.98 million and $0.34 million respectively for the previous year

· Total field netbacks increased to $21.22/boe for the year and $24.38/boe for Q4 versus $7.96/boe and $6.37/boe respectively for the previous year. Oil field netbacks for the year were $38.18/bbl and $35.79/bbl for Q4 versus $19.97/bbl and $17.09/bbl respectively for the previous year

· Net loss of $1.7 million for the year and $0.63 million for Q4 versus $6.7 million and $3.22 million respectively for the previous year

· Average daily Oil & NGL production of 291 bbls for the year and 350 bbls for Q4 versus 282 bbls and 243 bbls respectively for the previous year. The daily oil production rate exiting the year was 376 bopd

· Average daily Natural Gas production of 1,587 mcf for the year and 1,608 mcf for Q4 versus 2,390 mcf and 2,052 mcf respectively for the previous year, reflecting natural declines and the Company's focus on oil

· Record year-end Proved reserve value, with a 72% year-on-year increase to $69.2 million (equivalent to 23.5p per share)

· Record year-end Proved + Probable reserve value, which increased 44% from $89.4 million to $129.0 million (equivalent to 43p per share)

· The Company raised $3.6 million gross in equity in November 2013, allowing the company to conduct an accelerated capital programme in Eye Hill, which resulted in the drilling, completion, and tie-in/equipping of 4 gross (4 net) oil wells in Eye Hill

Brad Nichol, President and CEO of Edge, commented, "The last year has been an exceptional period for the company with oil production leading to record revenue levels as a result of a very successful drilling programme that utilised the proceeds from our over-subscribed November 2013 share offering. The decision taken in 2012 to focus on increasing oil exploration and production is paying dividends - and it is a direction and policy we intend to follow with increasing vigour going forward. On that note, and following on from my May 8th comments, a healthy rise in oil production combined with favourable market conditions has enabled us to continue to generate record levels of cash, which we intend to put to good use through the drill bit."

Detailed operating and financial results are presented in Edge's financial statements and related Management Discussion & Analysis ("MD&A"), which can be accessed on the Company's website (www.edgeres.com) and on SEDAR (www.sedar.com).

For more information, visit the company website: www.edgeres.com or contact:

Brad Nichol, President and CEO Phone: +1 403 767 9905

Sanlam Securities UK Limited, Joint Broker and NOMAD Phone: +44 (0)20 7628 2200

Simon Clements / James Thomas / Max Bascombe / Charles Long (Research)

SP Angel Corporate Finance LLP, Joint Broker Phone: +44 (0)20 3463 2260

John MacKay / Richard Parlons / Richard Hail / Zac Phillips (Research)

About Edge Resources Inc.

Edge Resources is developing a balanced portfolio of oil and natural gas assets from properties in Alberta and Saskatchewan, Canada. Management has focused consistently on:

1. Shallow, vertical, conventional well programmes with reduced capital, operational and geological risks

2. Very high or 100% working interests and fully operated assets

3. Pools and horizons with material reserves in place

The management team's high drilling success rate is based on the safe, efficient deployment of capital and a proven ability to efficiently execute in shallow formations, giving Edge Resources a sustainable, low-cost, competitive advantage.

Chief Executive's Statement

Edge has continued its strategy of operating in a conventional, shallow arena with properties that offer exceptionally large economic returns at lower than average risk. Even though natural gas pricing has improved in the past few months, our focus will continue to be on oil and the superior economic returns this commodity offers. This continues our previously stated strategy and is reflected in the most recent year with the majority of our revenue now being derived from oil and not gas.

Edge's new oil production has come from Eye Hill, near Lloydminster, Saskatchewan, a heavy oil area regarded as one of North America's most profitable plays. The Directors believe that Edge's land position is enviable, with a 100% working interest in 17.5 sections (17.5 square miles) in Eye Hill, located 100 miles due south of Lloydminster. We saw the potential in the largely underdeveloped land around Eye Hill and have since discovered three oil pools at our Eye Hill East sections. The first production well was drilled in February 2013 and has a production profile typical of a Cold Heavy Oil Production with Sand ("CHOPS") well; the well came on-stream at 60 bopd in April 2013 and rose to over 150 bopd in October 2013. This well is currently producing at approximately 100 bopd.

Following a drilling campaign in December 2013 and the resulting production, we have seen increases in both our reserves and monthly revenue throughout Q4 2013, as well as greater cash generation, which will allow the Company to self-fund drilling going forward.

Edge's focus will continue to be on conventional, shallow, developmental drilling, with the planned 2014 capital program concentrated on oil assets. The relatively low capital costs and low geological risks associated with these types of wells should allow the Company to increase near-term oil production and the associated cash flows relatively quickly. The Company expects to drill a number of these conventional oil wells on its existing lands in the coming months utilising existing cash that is being generated from our current producers. As financially prudent operators, future drilling programmes will be done within the parameters of free cash flow. 

In any endeavour we pursue we will maintain the fundamentals that have brought us the success we have enjoyed to date, namely high capital efficiencies delivering recycle ratios of greater than 2.5x and a fast payback on capital invested, which is typically less than 12 months.

Brad Nichol, President and Chief Executive Officer

June 25, 2014

Edge Resources Inc.

Balance Sheets

(amounts in Canadian dollars)

Edge Resources Inc.

Statements of Loss and Comprehensive Loss

(amounts in Canadian dollars)

Edge Resources Inc.

Statements of Changes in Shareholders' Equity

(amounts in Canadian dollars)

Edge Resources Inc.

Statements of Cash Flows

(amounts in Canadian dollars)

Edge Resources Inc.

Notes to the Financial Statements

As at and for the Years ended March 31, 2014 and 2013

(amounts in Canadian dollars)

1. Basis of preparation

These financial statements have been prepared on a going concern basis which presumes that the Company will be able to discharge its obligations and realize its assets in the normal course of business. The Company had a loss of $1.7 million and $6.7 million for the years ended March 31, 2014 and 2013, respectively. As at March 31, 2014, the Company had a working capital deficiency of $6.9 million (2013 - $17.2 million) that includes $6.6 million (2013 - $6.7 million) in bank debt (excluding derivative assets/liabilities and flow-through share premium). The Company had an unused credit line of $1.4 million on its revolving credit facility at March 31, 2014 (2013 - $5.3 million). At March 31, 2014, the Company was compliant with its lender's covenants. The bank is currently conducting its annual review of the lending facilities.

In November 2013, the Company raised an additional $3.4 million (net after expenses) in equity, which allowed the Company to conduct an accelerated capital program. Management believes that with the aforementioned equity raise, the successful capital program conducted during December 2013, the extension of the maturity date of its loans payable (note 5) and increased cash generated from operating activities, that the Company will generate sufficient funds to meet it foreseeable obligations in the normal course of operations.

The Company's ability to continue as a going concern is dependent upon its ability to attain profitable operations, generate sufficient funds to continue its exploration and development activities, to repay its debts as they come due, and continue to obtain sufficient capital from investors or other sources of financing to meet its current and future obligations.

Management considers the Company is a going concern and has prepared the financial statements on a going concern basis.

The Company prepares its financial statements in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB"). A summary of the significant accounting policies and methods of computation is presented in note 3 of the Financial Statements. Management's judgments, estimates and related assumptions used in the preparation of the financial statements for the years ended March 31, 2014 and 2013 are included in note 4 of the Financial Statements.

The financial statements have been prepared on a historical cost basis, except as otherwise allowed for in accordance with IFRS.

The Financial Statements are presented in Canadian dollars, which is the Company's functional currency.

The financial information set out above does not comprise the Company's statutory accounts for the periods ended 31 March 2014 or March 2013, but is derived from those accounts.

2. Exploration and evaluation assets

Exploration and evaluation assets include undeveloped lands and projects that management has not fully evaluated for technical feasibility and commercial viability. Capital expenditures represent the Company's share of costs incurred on exploration and evaluation assets during the year. Transfers to property, plant and equipment represent successful drilling and related land costs to which technical feasibility and commercial viability are determined to exist.

During the year ended March 31, 2014, the Company expensed $13,556 (2013 - $71,953) previously capitalized as exploration and evaluation assets because the lands expired or the projects were discontinued.

During the year ended March 31 2013, the Company disposed of certain undeveloped lands included in exploration and evaluation assets with a carrying value of $Nil. Accordingly, the total proceeds received of $300,000 were recognised as a gain in the year ended March 31, 2013.

3. Property, plant and equipment

(a) Disposition - asset swap

On May 15, 2013, the Company completed an asset swap transaction with an unrelated third party such that $200,000 of oil and natural gas interests were swapped for $200,000 of undeveloped lands. The carrying amount of the oil and natural gas interests was $15,000, including a decommissioning provision of $40,000, resulting in a gain on sale of $185,000 for the year ended March 31, 2014.

(b) The Company performed an impairment test at March 31, 2014 and based on the facts and circumstances, there was no impairment of the Company's property, plant and equipment. The following represent the forecast prices used to determine fair value in the March 31, 2014 impairment test:

(1) The benchmark prices listed above are adjusted for quality differentials, heat content, distance to market and other factors in performing the impairment test.

(2) Percentage change represents the change in each year after 2023 to the end of the reserve life.

(c) Impairment loss

For the year ended March 31, 2013, the impairment loss of $1,363,000 was related to the Willesden Green CGU and has been included in depletion and depreciation expense in the statement of loss. The impairment was a result of a change to proved and probable reserve estimates and related cash flows as determined by the Company's external reserve evaluators, as well as a significant decline in the forecast natural gas prices at March 31, 2013 compared to March 31, 2012.

The recoverable amount of the Willesden Green CGU was estimated as the fair value less costs to sell based on the net present value of the before tax net cash flows from oil and natural gas proved plus probable reserves estimated by the Company's external reserve evaluators discounted at a rate of 10% per annum.

The following represent the forecast prices used to determine fair value in the March 31, 2013 impairment test:

(1) The benchmark prices listed above are adjusted for quality differentials, heat content, distance to market and other factors in performing the impairment test.

(2) Percentage change represents the change in each year after 2022 to the end of the reserve life.

4. Bank debt

As at March 31, 2014, the Company had lending facilities with a Canadian chartered bank, consisting of an $8.0 million revolving demand credit facility of which $6.6 million ($5.4 million under bankers' acceptances and $1.2 million under prime-based lending) was drawn. The revolving facility is a borrowing base facility that is determined based on, among other things, the Company's current reserve report, results of operations, current and forecasted commodity prices and the current economic environment. The revolving credit facility contains standard commercial covenants for facilities of this nature. The Company also has available a risk management facility which allows the Company to conduct certain financial risk management options. The interest rate on the facility is bank prime plus 3.00% per annum. Bankers' acceptances are subject to a 4.25% acceptance fee plus an applicable market interest rate. The facilities are secured by a $50.0 million demand debenture and a general security agreement covering all assets of the Company. The revolving credit facility provides that advances may be made by way of direct advances, bankers' acceptances, or standby letters of credit/guarantee. Repayments for the revolving facility are interest only, subject to the banks right of demand.

The only financial covenant on the revolving facility is a requirement for the Company to maintain a current ratio (as defined in the credit agreement and further described in note 20 of the Financial Statements) of not less than 1.0:1.0, and such ratio is to be tested at the end of each fiscal quarter. A condition of the risk management facility is the Company must not hedge greater than 50% of its estimated forward production on a commodity by commodity basis, on a fixed price basis. The Company was in compliance with its credit facility covenants as at March 31, 2014 and throughout the year ended March 31, 2014.

The bank is currently conducting its annual review of the lending facilities.

5. Loans payable

As at March 31, 2014, the Company has a loan payable with a principal amount of $8.0 million, which bears interest at 10% per annum, is secured against all the assets of the Company as a second charge to the Company's lending facility (note 4), and is due January 31, 2017. Any interest and principal repayments for this loan are subject to the bank's prior approval. The loan payable is due to a company that is also a shareholder of the Company, and is repayable early at any time without penalty.

On August 29, 2013, the terms of the loan payable were amended, such that the previous principal amounts owing of $7,000,000 (due January 2014) and $1,000,000 (due January 2013), were consolidated into a total balance owing of $8,000,000 bearing simple interest at 10% per annum, with a due date of January 31, 2017. Under the terms of the new agreement, accrued interest is also due and payable January 31, 2017. The due date for interest owing on the previous loan amount was also extended to January 31, 2017. There were no fees associated with the amendment.

The following table summarizes changes in the loans payable:

6. Share capital

(a) Authorized

Unlimited number of voting common shares without par value

Unlimited number of preferred shares issuable in series

(b) Issued and outstanding

(c) Financings

Fiscal 2014

In November 2013, the Company closed a private placement whereby 35,000,006 common shares were issued at a price of approximately $0.10 per share (Great British Pound ("GBP") £0.06 per share), for gross cash proceeds of $3.6 million ($3.4 million net of finder's fees and other issuance costs).

Fiscal 2013

i) In May 2012, the Company closed a private placement of 21,666,667 common shares at $0.15 per share for cash proceeds of $3,250,000. Finder's fees totalling 5% of the proceeds were paid as to 2.5% in cash and 2.5% in common shares of the Company, being $81,250 and 541,666 common shares at $0.15 per share plus additional issuance costs of $14,985.

ii) In December 2012, the Company closed private placements whereby 19,649,250 common shares were issued at a weighted average price of $0.26 per share and 3,223,250 flow-through common shares were issued at a price of $0.32 per share, for gross cash proceeds of $6.1 million ($5.7 million net of finder's fees and other issuance costs). The issuance of flow-through shares resulted in the recognition of an obligation of $225,628 recorded as a flow-through share premium liability.

7. Availability of Reports & Accounts

Copies of the Report and Accounts will be posted to shareholders shortly, will be available from the Company's registered office Elveden House, Suite 1400, 717-7th Avenue SW, Calgary, Alberta T2P 0Z3 and will be available from the Company's website www.edgeres.com .

In addition to the Report and Accounts, the Management's Discussion and Analysis for the year ended March 31, 2014 is also available on the Company's website www.edgeres.com .