Half Yearly Report

TSX Venture Exchange Symbol: EDE

AIM Exchange Symbol:EDG 1 December 2015

EDGE RESOURCES INC. Calgary, Alberta

Edge Resources Inc. Announces Half Year Results

Edge Resources Inc. ("Edge" or the "Company") is pleased to report its operating and financial results, for the second quarter and half year ended September 30, 2015 ("Q2 2016" and "H1 2016").

Like all oil and gas companies, Edge is not immune to the effects of a low-priced environment and our much lower revenues reflect this. In fact, we started positioning ourselves early for this protracted downturn and have continually reduced our field and office costs for more than a year - the success of our cost reductions are reflected below. We have also advertised our desire to become a consolidator of assets at a time like this when high quality assets are available on a broad basis. Although we have been disappointed by the lack of quality assets available over the past 6-12 months, we are now starting to see (i) asset quality improve and (ii) the quantity of assets available increase.

The board and management team are enthusiastic about building a strong asset base and positioning the Company for a strong future, with a focus on growth centred around strong returns on capital employed ("ROCE"). That will be the focus for the Company going forward.

Highlights for the period:

· Average quarterly (Q2 2016) production of 436 boe/day compared to 446 boe/day in the previous quarter and 474 boe/day one year earlier. Production held up well, despite Q2 2016 total capital spending of $142,000, the lowest quarterly capital expenditure in the history of the company

· Sales/Revenue:

o Average quarterly (Q2 2016) oil sales price of $33.51/bbl versus $80.42/bbl one year earlier (58% decline)

o Average quarterly (Q2 2016) natural gas sales price of $2.81/mcf versus $4.03 one year earlier (30% decline)

o Oil and natural gas sales for Q2 2016 of $1,269,782 versus $2,356,740 for the same quarter, one year earlier (46% decline)

· Costs:

o Year-on-year oil operating costs decreased by 46% for the second quarter, to $12.67/bbl from $23.50/bbl

o Year-on-year royalties for oil production decreased by 60% for the second quarter, to $5.75/bbl from $14.50/bbl

o Company quarterly General and Administrative ("G&A") costs decreased by 13%, continuing the trend of previous quarters' decreases. All-in G&A costs are now approximately $120,000 per month

· Cash used in operating activities was $318,000 for Q2 2016 versus a gain of $99,000 for the same quarter one year earlier

Brad Nichol, President and CEO of Edge, commented, "It was a difficult quarter for all oil and gas companies world-wide, and Edge was not immune. However, we kept production almost flat year-on-year, with almost no budget and in the heavy oil arena that is no small feat. I must congratulate our entire field and office-based operational team for their innovative approach to problem solving. They have rolled up their sleeves during these difficult days. The entire company has continued our quarterly trend of reducing costs, as well, which we believe has served all of our shareholders." Nichol added, "Recent developments on the potential acquisitions front have given us a degree of enthusiasm about the future. We have been working intently with our new capital partner and are very optimistic that we will be in a position to acquire positive-cash-flowing assets at very reasonable prices in the near future."

Detailed operating and financial results are presented in Edge's unaudited 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). The unaudited results for the three and six month periods ended September 30, 2015 are summarised below.

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 20 7628 2200

Simon Clements / James Thomas / Max Bascombe

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

John MacKay / Richard Hail

About Edge Resources Inc.

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

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

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

3. Pools and horizons with exceptionally high reserves in place

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

Edge Resources Inc.

Condensed Interim Balance Sheets

(amounts in Canadian dollars)

(unaudited)

Going concern 1

See accompanying notes to the condensed interim financial statements.

APPROVED BY THE BOARD,

(signed) "Scott Reeves" (signed) "Chris Cooper"

Director Director

Edge Resources Inc.

Condensed Interim Statements of Income (Loss) and Comprehensive Income (Loss)

(amounts in Canadian dollars)

(unaudited)

See accompanying notes to the condensed interim financial statements.

Edge Resources Inc.

Condensed Interim Statements of Changes in Shareholders' Equity

(amounts in Canadian dollars)

(unaudited)

See accompanying notes to the condensed interim financial statements.

Edge Resources Inc.

Condensed Interim Statements of Cash Flows

(amounts in Canadian dollars)

(unaudited)

See accompanying notes to the condensed interim financial statements.

Notes to the Condensed Interim Financial Statements

Three and six months ended September 30, 2015

(amounts in Canadian dollars)

(unaudited)

1. Going Concern

These condensed interim 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 and comprehensive loss of $2.0 million for the six month period ended September 30, 2015. As at September 30, 2015, the Company had a working capital deficiency of $8.0 million (March 31, 2015 - $7.7 million) that includes $7.7 million (March 31, 2015 - $6.4 million) in bank debt (excluding derivative assets/liabilities if any).

As per note 5, the Company has a revolving credit facility with a $17.0 million limit, and as of September 30, 2015, there was $9.3 million available for use. However, given the amount available for use under the facility is also limited by the "senior debt to cash flow" ratio, the actual limit will vary on a period by period basis. The calculations of the applicable ratios as of September 30, 2015 are presented in note 16 and the senior debt to cash flow ratio was not met at September 30, 2015. The breach has been communicated to the bank however, because the Company is currently in the process of finalizing the terms of its lending facilities, no waiver will be sought for this breach. As a result of significantly weaker future commodity price forecasts, Management expects the lending limit on the revolving facility to be reduced although the amount of the reduction cannot be predicted at this time. As part of finalizing the terms of its lending facilities, Management is also in discussion with the bank as to appropriate future financial covenants including the senior debt to cash flow covenant. Management actively forecasts applicable cash flows and will conduct an appropriate capital program based on estimated future credit facility availability. Management believes, despite the current significant decrease in world oil prices and its effect on Company cash flows, that with its current expected credit facility, and its near-term future equity-raising plans, that the Company will generate sufficient cash flows to meet its foreseeable obligations in the normal course of operations. Management has significantly delayed the Company's capital programs until the pricing environment further improves and has and continues to work on strategies to reduce general and administrative and operating costs subsequent to September 30, 2015.

Management has been and continues to be active in seeking alternative sources of funding to help accelerate its planned capital expenditure program, and to ultimately reduce its total debt. The Company cannot provide any assurance that sufficient cash flows will be generated from operating activities to reduce its working capital deficiency and to carry out its planned capital expenditure program.

The above-noted factors describe matters and conditions that indicate the existence of a material uncertainty that may cast significant doubt about the Company's ability to continue as a going concern. 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 to be a going concern and has prepared the financial statements on a going concern basis.

2. Basis of preparation

(a) Statement of compliance

These condensed interim financial statements are unaudited and have been prepared in accordance with International Accounting Standard ("IAS") 34, "Interim Financial Reporting" using accounting policies consistent with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB"). Certain information and disclosures normally included in the annual financial statements prepared in accordance with IFRS have been condensed or omitted.

The condensed interim financial statements should be read in conjunction with the Company's audited annual financial statements as at and for the year ended March 31, 2015 and the notes thereto. All accounting policies and methods of computation followed in the preparation of these condensed interim financial statements are consistent with those of the previous financial year.

(b) Management's judgements and estimates

The timely preparation of condensed interim financial statements requires management to make judgments, estimates and assumptions based on currently available information that affect the application of accounting policies and the reported amounts of assets, liabilities and contingent liabilities as at the balance sheet date and the reported amounts of revenues and expenses during the period. Accordingly, actual results may differ from these estimates. Estimates, underlying assumptions and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Accounting estimates will, by definition, seldom equal the actual results. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future years affected.

In preparation of these condensed interim financial statements, the significant judgments made by Management in applying the Company's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the annual financial statements as at and for the year ended March 31, 2015.

(c) Comparative financial statements

Certain prior periods' comparative figures have been restated to conform to the current year's presentation.

3. Property, plant and equipment

4. Bank debt

As at September 30, 2015, the Company had lending facilities with a Canadian chartered bank consisting of a $17 million revolving demand operating credit facility, of which $7.7 million was drawn ($0.7 million on the prime-based facility and $7.0 million drawn under guaranteed notes). The revolving facility is a borrowing base facility that is determined based on, among other things, the Company's current reserve report, the 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 1.75% per annum. Guaranteed notes are subject to a 2.75% acceptance fee plus an applicable market interest rate. The facilities are secured by a general security agreement covering all assets of the Company including a subordination agreement with the lender in note 6, and repayments are interest only, subject to the bank's right of demand. The revolving credit facility provides that advances may be made by way of direct advances, guaranteed notes, or standby letters of credit/guarantee.

The revolving facility has the following financial covenant requirements (calculations are presented in note 16):

· The working capital ratio must be maintained above 1.0 to 1. The working capital ratio is defined as current assets (excluding derivative assets if any) plus the undrawn availability of the revolving facility to current liabilities (excluding the current portion of bank debt and derivative liabilities if any).

· The senior debt to cash flow ratio must not exceed 3.0 to 1. The senior debt to cash flow ratio is defined as the amount drawn under the bank facility to net income for the trailing one year period from the balance sheet date adjusted for non-cash items, and less dividends declared and repayments of shareholder loans.

As per note 16, the senior debt to cash flow ratio was not met at September 30, 2015. The breach has been communicated to the bank however, because the Company is currently in the process of finalizing the terms of its lending facilities, no waiver will be sought for this breach. As a result of significantly weaker future commodity price forecasts, Management expects the lending limit on the revolving facility to be reduced although the amount of the reduction cannot be predicted at this time. As part of finalizing the lending facilities, Management is also in discussion with the bank as to appropriate future financial covenants including the senior debt to cash flow covenant.

In addition, the Company may not enter into any risk management agreements with a term greater than two years or for a volume greater than 60% of its forecasted production from proved producing reserves.

5. Loan payable

As at September 30, 2015, the Company has a loan payable with a principal amount of $8 million and which bears interest at 10% per annum. The loan is secured against all the assets of the Company as a second charge to the Company's lending facility (note 5), 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.

The following table summarizes changes in the loans payable:

6. Availability of the Financial Statements and MD&A

Copies of all the Company's Financial Statements and MD&A's will be available on the Company's website (www.edgeres.com) and on SEDAR (www.sedar.com).