Birchcliff Energy : Announces Record Production in 2015, 2016 Capital Program of $140 Million and 2016 Production Guidance

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16-01 January 21, 2016

BIRCHCLIFF ENERGY LTD. ANNOUNCES RECORD PRODUCTION IN 2015, 2016 CAPITAL PROGRAM OF $140 MILLION AND 2016 PRODUCTION GUIDANCE Calgary, Alberta - Birchcliff Energy Ltd. ("Birchcliff") (TSX: BIR) is pleased to announce that its current production is approximately 42,000 boe per day. Birchcliff estimates that its 2015 annual average production was approximately 39,000 boe per day, which set a new annual average production record for Birchcliff. Estimated 2015 fourth quarter average production was also a record at approximately 40,500 boe per day. In addition, Birchcliff is pleased to announce that its board of directors has approved Birchcliff's 2016 capital expenditure program of $140 million, which is expected to be less than 2016 funds flow.

Jeff Tonken, President and Chief Executive Officer of Birchcliff, stated: "We are focused on protecting our balance sheet, maintaining production and continued investment in the Phase V expansion of our 100% owned Pouce Coupe South gas plant and related infrastructure to position us for future growth.

We expect that our $140 million capital expenditure program for 2016 will be less than our estimated funds flow for the year, thereby protecting our balance sheet and maintaining financial flexibility. We expect that our low cost structure, including our very low operating costs per boe, will result in material funds flow, even at the low-end of the commodity price cycle.

As a result of our high quality asset base, our forecast base production decline is low at approximately 20% for 2016 which gives us the ability to spend very little money to keep production flat. We expect that our 2016 annual average production rate of 40,000 to 41,000 boe per day will result in a year-over- year production increase of approximately 3% to 5%."

Birchcliff expects to release its unaudited financial results and a summary of its reserves evaluation for the year ended December 31, 2015 on February 10, 2016.

2016 CAPITAL EXPENDITURE PROGRAM HIGHLIGHTS

Birchcliff's 2016 capital expenditure program of $140 million (the "2016 Capital Program") is detailed below and is designed to achieve modest production growth, while further progressing the Phase V expansion of Birchcliff's 100% owned natural gas plant located in the Pouce Coupe South area (the "PCS Gas Plant"). Completion of the Phase V expansion of the PCS Gas Plant will be deferred and timed to the drilling of additional Montney/Doig horizontal natural gas wells beyond those contemplated by the 2016 Capital Program, which will be subject to future commodity prices.

Details of the 2016 Capital Program are as follows:

2016 Capital Program

Gross Wells	Net Wells	Capital ($millions)
Drilling & Development
Montney D1 Horizontal Gas Wells	8.0	8.0	34.1
Basal Doig/Upper Montney Horizontal Gas Wells	4.0	4.0	17.0
Montney D4 Horizontal Gas Wells	2.0	2.0	8.1
Charlie Lake Horizontal Light Oil Wells	1.0	1.0	2.5
2015 Carry Forward Capital(1)	-	-	5.2
Total Drilling & Development(2)	15.0	15.0	66.9
Facilities & Infrastructure(3)	39.5
Production Optimization	13.5
Land & Seismic	5.5
Other	14.6
Total Capital	$140.0 million

1. Primarily completion, equipping and tie-in costs associated with 2 (2.0 net) wells rig released at the end of 2015.

2. On a drill, case, complete, equip and tie-in basis.

3. Includes approximately $24.9 million of capital in 2016 for the PCS Gas Plant Phase V expansion.

The 2016 Capital Program is designed to accomplish the following:

1. spend less than funds flow, maintain Birchcliff's financial flexibility and protect its balance sheet;

2. achieve approximately 3% to 5% year-over-year annual average production growth;

3. continue funding of key facilities and infrastructure required for future growth;

4. optimize capital efficiencies, reduce costs and obtain the benefit of the low operating costs of the PCS Gas Plant;

5. support and progress Birchcliff's strategic exploration projects; and

6. a year-over-year increase in reserves.

Birchcliff expects to fund the 2016 Capital Program using internally generated funds flow and not increase its 2016 year-end debt over year-end 2015. The 2016 Capital Program is projected to be less than Birchcliff's expected funds flow for 2016, based on a forecast average WTI price of US$40.00 per barrel of oil and a forecast average AECO price of CDN$2.50 per GJ of natural gas during 2016. As the 2016 Capital Program is projected to be less than Birchcliff's expected funds flow for 2016, this will provide Birchcliff with continued financial flexibility and protect its balance sheet.

Under the 2016 Capital Program, Birchcliff expects to drill a total of 15 (15.0 net) wells, which consists of 14 (14.0 net) Montney/Doig horizontal natural gas wells in the Pouce Coupe area and 1 (1.0 net) Charlie Lake horizontal light oil well at Worsley, which is addressing Birchcliff's only significant land expiry in 2016.

The 2016 Capital Program includes approximately $39.5 million for facilities and infrastructure, which continues Birchcliff's investment in the Phase V expansion of the PCS Gas Plant that will increase processing capacity to 260 MMcf per day from 180 MMcf per day. Birchcliff currently estimates that approximately $30 million will be required to complete the field construction of the PCS Gas Plant. Birchcliff had previously announced that the Phase V expansion would be completed in the fall of 2016.

Based on commodity prices and general economic conditions, Birchcliff now expects that the Phase V expansion will be completed in early 2017. The completion of Phase V of the PCS Gas Plant will be deferred and timed to coincide with the drilling of additional Montney/Doig horizontal natural gas wells, so that no operational momentum will be lost and ensuring capital is only spent when required.

In addition, preliminary planning and permitting work has been initiated for the Phase VI expansion of the PCS Gas Plant which is being designed to increase processing capacity to 340 MMcf per day from

260 MMcf per day. Birchcliff had previously announced that the Phase VI expansion would be completed in early 2018. Birchcliff now expects that the Phase VI expansion will be completed in late 2018 or early 2019, depending primarily on commodity prices and general economic conditions.

Birchcliff will continue to monitor economic conditions and commodity prices and, where deemed prudent, will adjust the 2016 Capital Program to respond to changes in commodity prices and other material changes in the assumptions underlying the 2016 Capital Program. Actual spending may vary due to a variety of factors, including commodity prices, economic conditions, results of operations and costs of labour, services and material. Birchcliff has the flexibility to adjust the level of its capital expenditures as circumstances warrant.

2016 PRODUCTION GUIDANCE

Birchcliff's 2016 Capital Program is targeting annual average production of 40,000 to 41,000 boe per day, which represents a range of 3% to 5% growth over Birchcliff's annual average production of approximately 39,000 boe per day in 2015. This 2016 production guidance reflects that Birchcliff will conduct a major turnaround operation at the PCS Gas Plant for approximately ten days during the summer.

As Birchcliff's mature base production has low declines, less capital is required to maintain production thereby allowing Birchcliff to grow even though commodity prices have severely weakened and funds flow is reduced.

2015 YEAR-END DEBT AND CAPITAL EXPENDITURES

Capital expenditures for 2015 were approximately $250 million, which were in line with Birchcliff's previous guidance. Total debt (including working capital deficit) at year-end 2015 was approximately

$645 million. Birchcliff's $800 million revolving credit facility has a three-year term to May 11, 2018 and contains no financial covenants.

2015 PRODUCTION

During 2015, Birchcliff's production was adversely impacted by both firm and interruptible transportation service curtailments on TransCanada's NGTL System.

Birchcliff estimates that its annual average production in 2015 was approximately 39,000 boe per day, which is in line with its previous production guidance range of 39,000 to 40,000 boe per day and sets a new production record for Birchcliff. This record annual average production represents a 16% increase over Birchcliff's 2014 annual average production of 33,734 boe per day.

Birchcliff estimates that its fourth quarter average production in 2015 was approximately 40,500 boe per day, which is slightly below Birchcliff's previous production guidance range of 41,000 to 42,000 boe per day. Fourth quarter average production in 2015 consisted of approximately 87% natural gas, 9% light oil and 4% NGLs.

Birchcliff estimates that its exit production in 2015 was approximately 41,200 boe per day, which is in line with Birchcliff's previous production guidance range of 41,000 to 42,000 boe per day.

ABBREVIATIONS

AECO	physical storage and trading hub for natural gas on the TransCanada Alberta transmission system which is the delivery point for various benchmark Alberta index prices
bbl	barrel
boe	barrel of oil equivalent
GJ	gigajoule
Mcf	thousand cubic feet
MMcf	million cubic feet
WTI	West Texas Intermediate oil at Cushing, Oklahoma, the benchmark for North American crude oil pricing

NON-GAAP MEASURES

This press release uses "funds flow" and "total debt" which do not have standardized meanings prescribed by generally accepted accounting principles and therefore may not be comparable to similar measures presented by other companies where similar terminology is used. "Funds flow" denotes cash flow from operating activities before the effects of decommissioning expenditures and changes in non- cash working capital. "Total debt" is calculated as the revolving term credit facilities plus non-revolving term credit facilities as they appear on Birchcliff's condensed statements of financial position plus working capital deficit. Management utilizes funds flow as a key measure to assess Birchcliff's efficiency and its ability to generate the cash necessary to fund future growth through capital investments, pay dividends on preferred shares and repay debt. Management uses total debt as a key measure to assess the liquidity of Birchcliff.

ADVISORIES Estimated Amounts: As Birchcliff is still in the process of finalizing its fourth quarter and year-end results for 2015, the historical production, capital expenditure and financial amounts contained in this press release are management's best estimates, unaudited and are subject to change upon completion of Birchcliff's audited financial statements for the financial year ended December 31, 2015. Boe Conversions: Boe amounts have been calculated by using the conversion ratio of 6 Mcf of natural gas to 1 bbl of oil. Boe amounts may be misleading, particularly if used in isolation. A boe conversion ratio of 6 Mcf to 1 bbl 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 based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency of 6:1, utilizing a conversion on a 6:1 basis may be misleading as an indication of value. Operating Costs: References in this press release to "operating costs" exclude transportation and marketing costs. Forward-Looking Information: This press release contains forward-looking information within the meaning of applicable Canadian securities laws. Forward-looking information relates to future events or future performance and is based upon Birchcliff's current internal expectations, estimates, projections,