Razor Energy Corp. Announces 2018 Corporate Budget and Guidance

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CALGARY, ALBERTA–(Marketwired – Jan. 22, 2018) – Razor Energy Corp. (“Razor” or the “Company”) (TSX VENTURE:RZE) (www.razor-energy.com) is pleased to announce that its Board of Directors (the “Board”) have approved an acquisition, development and operations budget of $38.4 million for fiscal 2018. The diversity of the budget provides for capital allocation towards highly economic production growth in addition to long term operational and technological investments in power generation and oilfield information technology.

With exit 2017 production of approximately 4,700 boe/d, the 2018 budget anticipates an exit in excess of 5,400 boe/d resulting in top tier production growth rates of over 15%.

2018 BUDGET

Capital expenditures are expected to be allocated as follows:

Kaybob area drilling	$12.8 million
Reactivations, workovers and stimulations	$8.2 million
Other (natural gas power, oilfield IT, other)	$8.6 million
Land and other acquisitions	$5.9 million
End of life expenditures	$2.9 million

The development drilling program includes eight deviated wells targeting the oil prone Montney formation within the Company’s recently consolidated prolific Kaybob South Triassic A Pool.

Reactivations, workovers and stimulations include activities in both the Swan Hills and Kaybob areas. Also included are certain injection management activities of existing waterfloods which will complement current production levels while enhancing long term recoveries of oil in place.

Razor continues to address operating costs through heightened field efficiencies and capital investment. In 2018, capital investment in the operating function will include the design, purchase, and installation of natural gas fired power generation units in Swan Hills. In addition, a significant upgrade to the Swan Hills oilfield information system will provide considerable near and long-term enhancements. This project will positively impact operational awareness, preventative maintenance, personnel safety, and environmental protection through actionable and predictive analytics.

Land and other acquisitions include the recently completed Kaybob consolidation for an aggregate purchase price of $4.9 million.

End of life expenditures will address both the Alberta Energy Regulator’s requirements under its 2018 Inactive Well Compliance Program and other discretionary spending within the asset portfolio.

2018 GUIDANCE

Given the strength in light oil prices and Razor’s ability to grow production through a mix of development drilling and high frequency / low capital intensive projects, Razor expects to take a reasonably aggressive yet flexible approach to its 2018 budget. The capital budget will be reviewed continuously by management and the Board and adjusted in response to changes in light oil price assumptions and project economics. Razor remains steadfast in its conviction to maintain its financial advantage and build a top-tier junior oil and gas company.

The Company’s 2018 financial and operating guidance and assumptions are as follows:

Average daily production 2018
	Light oil (bbls/d)	3,573
	NGLs (bbls/d)	836
	Natural gas (mcf/d)	3,546
	Oil equivalent (boe/d)	5,000
Capital expenditures		$38.4 million
Term Loan (maturity January 31, 2021)		$45.0 million
Net debt⁽¹⁾, December 31, 2018 (“Exit Net Debt”)		$41.2 million
Funds flow from operations in 2018 (“2018 FFO”)⁽¹⁾		$18.6 million
Exit Net Debt to 2018 FFO⁽¹⁾		1.6x
Assumptions:
WTI (US$/bbl)		$60.00
Exchange rate (US$/C$)		0.80
Light sweet oil differential to WTI (C$/bbl)		($5.75)
Average corporate oil quality discount (C$/bbl)		($3.00)
AECO gas (C$/GJ)		$1.90

⁽¹⁾	“Funds flow from operations” and “net debt” do not have any standardized meaning prescribed by International Financial Reporting Standards (“IFRS“). See “Reader Advisories – Non-IFRS Measures”.

Razor intends to continue to pursue value-driven acquisitions. Specifically, Razor will pursue consolidation of land and production within the Company’s existing project areas, in addition to complementary shallow, light oil horizons within its Alberta core region. Razor remains focused on adding to its inventory of high quality projects to sustain longer-term growth.

ABOUT RAZOR

Razor is a publicly-traded junior oil and gas development and production company headquartered in Calgary, Alberta, concentrated on acquiring, and subsequently enhancing, producing oil and gas properties primarily in Alberta. The Company is led by experienced management and a strong, committed Board of Directors, with a long term vision of growth focused on efficiency and cost control in all areas of the business.

Razor started operations in the first quarter of 2017, through an acquisition of producing assets in the Swan Hills area. In the second quarter of 2017, Razor added to its asset base with the acquisition of complementary assets in the Kaybob area. In the fourth quarter of 2017 and first quarter of 2018, Razor consolidated working interest in certain units in the Kaybob area.

This portfolio of predominantly light oil assets provides a foundation for strong shareholder return through abundant low risk operations. Razor plans to concurrently grow Swan Hills and Kaybob, and execute on similar acquisitions, using its experience to extract upside value.

Razor is a pivotal leading-edge enterprise, balancing creativity and discipline, focused on growing an enduring energy company.

Razor currently trades on TSX Venture Exchange under the ticker “RZE”.