Calgary, Alberta--(Newsfile Corp. - March 7, 2019) - Leucrotta Exploration Inc. (TSXV: LXE) ("Leucrotta" or the "Company") is pleased to announce its 2018 year-end reserves as independently evaluated by GLJ Petroleum Consultants Ltd. ("GLJ") effective December 31, 2018 (the "GLJ Report"), in accordance with National Instrument 51-101 ("NI 51-101") and Canadian Oil and Gas Evaluation ("COGE") Handbook. All dollar figures are Canadian dollars unless otherwise noted.

2018 Highlights

• Increased proved plus probable reserves by 60% to 59.2 million boe.
• Increased proved reserves by 38% to 20.8 million boe.
• Reserve replacement of 1,805% on a proved plus probable basis and 546% on a proved basis.
• Achieved finding and development costs including changes in future development capital ("FDC") on a proved plus probable basis of $8.38 per boe.
• Lower Montney cumulative booked reserves on only 13 net sections of approximately 220 net sections in the Doe/Mica/Two Rivers Montney Core area.
• Upper Montney cumulative booked reserves on only 4.5 net sections of approximately 220 net sections in the Doe/Mica/Two Rivers Montney Core area.
• Increased Net Asset Value to $1.66 per share exclusive of land value ($2.23 per share including land at cost).

Strategic Focus

Since inception, Leucrotta's focus has been on defining and quantifying its large Montney resource by moving the various Montney zones from exploration through the appraisal and delineation phases and ultimately to the development ready phase. Leucrotta has identified 3 potential Montney zones on its lands that it is moving through the various phases.

Lower Montney Turbidite

The Lower Montney Turbidite is the most pervasive zone on Leucrotta's land base and characterized as being predominantly in the volatile light oil window. Leucrotta has internally estimated that there are potentially over 5 billion barrels of light oil originally in place in addition to potentially over 5 TCF of original gas in place on its lands in the Lower Montney Turbidite.

To date, Leucrotta estimates that it has moved the project from exploration phase through to development ready phase on 140 of the approximately 220 net sections of land. On the 140 sections, Leucrotta has completed the following:

• Collecting data to support the estimated resource in place including mapping the extent of such resource.
• Delineating a large portion of the lands with vertical and horizontal wells.
• Increased the frac intensity to successfully increase productivity and estimated recoveries.

Of note for 2018, the 5-19 well at north Mica not only proved a material extension of the productive area of the zone but added additional evidence that increased frac intensity has a positive effect on productivity and estimated recoveries.

The current reserve report reflects the development ready phase for the project but still has only 13 of the total approximately 220 net sections booked. When moving to full development, certain areas of focus to improve economics and enhance the values in the reserve report include:

• Reducing capital and operating costs through pad development and economies of scale.
• Increasing liquids yields through installation of deep cut plant (25% of booked reserves are currently oil and NGLs and deep cut plant could increase this to as much as an estimated 36%).
• Increasing recoveries and improving economics through extended length wells and further frac design enhancements.

The remaining 80 sections are in the appraisal phase. Leucrotta intends to drill a horizontal multi-frac well on the block in late 2019 or early 2020 to assess productivity.

Upper Montney

The Upper Montney is also pervasive on Leucrotta's land base but less delineated than the Lower Montney Turbidite. The Upper Montney lands straddle the volatile light oil window and the condensate-rich gas window, however, lack of delineation to this point leaves the line between the two somewhat interpretative. Leucrotta has internally estimated that there are potentially over 1.5 billion barrels of light oil originally in place in addition to potentially over 2.5 TCF of original gas in place on its lands in the Upper Montney.

To date, approximately 8 net sections of Leucrotta's lands that are located at Doe are considered development ready while the remaining lands are either in delineation or appraisal phases. The successful A10-08 well at Two Rivers (previously announced test rate (June 18, 2018) of 1,842 boepd including 685 boepd of light oil) will move a significant area surrounding this well to the delineation phase. Based on the success of the A10-08 well, Leucrotta intends to drill additional appraisal wells on the land base.

The current reserve base reflects the development ready phase of the Upper Montney at Doe with only 4.5 of the total approximately 220 net sections booked. Given the complementary effect of stacked zones, the Upper Montney would benefit in a similar nature from the commercial development of the Lower Montney Turbidite as described above.

Below Lower Montney ("BLM")

The BLM is the lowest portion of the Montney and has been successfully tested by other operators from Pouce Coupe to Kakwa. Leucrotta has gathered various geological information through drilling other wells on its lands and believes the lands are primarily located within the volatile light oil window. Leucrotta has internally estimated that there are potentially over 4 billion barrels of light oil originally in place in addition to potentially over 4 TCF of original gas in place on its lands in the Below Lower Montney. No reserves have been booked in this zone.

For 2019, Leucrotta intends to drill one horizontal multi-frac appraisal well to test the productivity of this zone.

Outlook for 2019

Leucrotta estimates as at March 31, 2019 it will have approximately $5 million net working capital and no debt in addition to an undrawn bank line of $25 million.

Leucrotta intends to remain conservative and debt-free during 2019 while executing on its most impactful capital projects from a value and future growth perspective. Projects would include building infrastructure to tie in existing wells to increase production and cash flow, drilling an appraisal well in the BLM and delineation wells in the Upper Montney to prove stacked zones for future development.

Expansion of infrastructure and moving to pad development is expected to start in mid-2020.

Overview of 2018 Reserve Bookings

Leucrotta had several positives in the 2018 GLJ Report which include:

• Positive technical revisions of 2,024 mboe (Proved plus probable).
• Increase of $84 million in overall value of reserves (proved plus probable 10% NPV) despite an estimated $20 million reduction due to change in pricing from 2017 to 2018.

Leucrotta has maintained a conservative philosophy to booking reserves and has only booked locations immediately offsetting previously drilled wells that cover a large geographic area. A total of 4 new wells and 21 new locations were booked. Positive reserve revisions were material at 2.0 million boe due primarily to well performance and higher liquid recoveries.

New locations booked within the Lower Montney Turbidite oil window averaged 872 mboe per well on a proved plus probable basis, which is consistent with the 2017 average booking of 855 mboe.

On a cumulative basis, Leucrotta has booked 17 horizontal Montney wells and 53 horizontal Montney locations of which 13 wells and 39 locations are in the Lower Montney Turbidite.

Leucrotta has estimated, based on mapping and other technical data, that it has over 1,000 potential Montney drilling locations (predominantly in the Lower Montney Turbidite). Leucrotta has initially estimated locations based on 3 to 4 wells per section per zone.

Leucrotta estimates that it has the current financial capability (assuming pricing and performance are comparable to the GLJ Report) to execute on the $330 million of FDC (first five year average of $60 million) included in the GLJ Report and therefore realize on the values presented. Should Leucrotta be able to obtain similar drilling results on future wells, there is a large potential value to be booked and subsequently realized given Leucrotta's large unbooked drilling inventory.

For additional information on reserves assigned to these drilling locations please see "Forward Looking Information - Potential Drilling Locations" at the end of this news release.

Capital Expenditures

Leucrotta's capital expenditures were focused predominantly in the Doe/Mica area to expand its land base, improve and expand infrastructure, and delineate its large Montney land base. Capital allocation by category is as follows:

Reserves Summary

Leucrotta's December 31, 2018 reserves as prepared by GLJ effective December 31, 2018 and based on the GLJ (2019-01) future price forecast are as follows ^(1,4):

Reserves Values

The estimated future net revenues before taxes associated with Leucrotta's reserves effective December 31, 2018 and based on the GLJ (2019-01) future price forecast are summarized in the following table ^(1,2,3,4):

Price Forecast

The GLJ (2019-01) price forecast is as follows:

Net Asset Value ("NAV")

Leucrotta's NAV as at December 31, 2018 and based on the GLJ (2019-01) future price forecast is as follows:

Reserve Life Index ("RLI")

Leucrotta's RLI presented below is based on estimated Q4 2018 average production of 3,202 boe per day.

Reserves Reconciliation

The following summary reconciliation of Leucrotta's working interest reserves compares changes in the Company's reserves as at December 31, 2018 to the reserves as at December 31, 2017 based on the based on the GLJ (2019-01) future price forecast ^(1,2):