Invicta Energy Corp. Announces Financial and Operating Results for the First Quarter Ended March 31, 2012

CALGARY, May 25, 2012 /CNW/ - Invicta Energy Corp. ("Invicta" or the "Company") (TSXV: VCA) is pleased to report its financial and operating results for the three months ended March 31, 2012. Invicta's interim condensed financial statements and related management's discussion and analysis for three months ended March 31, 2012 have been filed and are available on the SEDAR website at www.sedar.com and may also be obtained on Invicta's website at www.invictaenergy.ca.

HIGHLIGHTS OF THE FIRST QUARTER

• Drilled 5 gross ( 2.7 net) horizontal oil wells at Kindersley, Saskatchewan.
• Increased average quarterly production 167% to 294 boe/d (75% light oil) from 110 boe/d reported in the first quarter of 2011.
• Production results from the first quarter drilling program at Kindersley have exceeded the Company's expected Viking type curves.
• Current corporate net production is approximately 320 boepd.
• Achieved operating costs for the quarter of $9.87/boe (13% decrease from Q1 2011c)
• Achieved funds flow from operations of $973,976 ($0.01/share) and earnings of $180,350 ($0.00/share) for the quarter.
• Achieved an average operating netback for the quarter of $54.54/boe.
• Renewed the credit facility with an immediate $1.5 million increase to $10 million and the ability to increase it to $18 million by drilling the proven undeveloped locations at Kindersley over the next four quarters.
• Prepared for drilling a further 16-18 gross (8.8-9.6 net) horizontal wells at Kindersley during the remaining quarters of 2012.

HIGHLIGHTS
		Three months ended
		March 31,
			2012		2011
		(unaudited)
Operations
Drilling
Oil wells (net)			5.0(2.7)		1.0(0.6)
Undeveloped land holdings (net acres)			41,700		27,500
Average daily production
	Crude oil (bbls/d)		220		50
	Natural gas (mcf/d)		443		359
	Total equivalent (boe/d)		294		110
Average product prices
	Crude oil (Cdn $/bbl)	$	87.18	$	86.80
	Natural gas (Cdn $/mcf)	$	1.96	$	3.68
	Total equivalent (Cdn $/boe)	$	68.10	$	51.41
	Royalties (Cdn $/boe)	$	3.69	$	6.75
	Production and operating costs (Cdn $/boe)	$	9.87	$	11.27
	Operating netback^(1) (Cdn $/boe)	$	54.54	$	33.39
Financial
Petroleum and natural gas revenue		$	1,822,784	$	506,177
Funds flow from operations^(1)		$	973,976	$	(190,525)
	Per share - basic and diluted	$	0.01	$	(0.01)
Earnings (loss)		$	180,350	$	(487,360)
	Per share - basic and diluted	$	0.00	$	(0.01)
Capital expenditures		$	3,082,955	$	792,609
Net debt^(1)		$	5,220,138	$	908,140
Shares outstanding (000)			75,567		35,650
Weighted average shares outstanding  (000)			75,480		35,646

^(1)

The term funds flow from operations should not be considered an alternative to, or more meaningful than, cash flow from operating activities as determined in accordance with IFRS as an indicator of the Company's performance. Funds flow from operating activities is a non-IFRS measure that represents loss and comprehensive loss before non-cash items such as depletion, depreciation and amortization, accretion expense, share-based compensation, issuances of shares for services and deferred tax.  Per share amounts are calculated using weighted average shares outstanding consistent with the calculation of loss per share. Other industry benchmarks and terms such as net debt and operating netback are not recognized measures under IFRS. Management believes these are useful supplemental measures of, firstly, the total amount of current and long-term debt the Company has, and secondly, the amount of revenues received after the royalties and operating costs. Net debt, which terms represent current assets less current liabilities is used to assess efficiency, liquidity and the general financial strength of the Company. Readers are cautioned, however, that these measures should not be construed as an alternative to other terms such as current debt or net earnings in accordance with IFRS as measures of performance. The Company's method of calculating these measures may differ from other companies, and accordingly, may not be comparable to measures used by other companies.

OPERATIONS UPDATE

Kindersley, Saskatchewan

During the first quarter of 2012, Invicta drilled 5 gross (2.7 net) horizontal oil wells at Kindersley, SK.  All five wells have been completed and placed on production prior to spring breakup. In addition, four of these wells were flowlined into existing infrastructure to enable continuous production through spring breakup. The best well in this program is still flowing at 80 bopd gross (40 bopd net) excluding solution gas after  three months of continuous production. As a result of this past winter's drilling program, additional locations are being prepared for the remainder of the year. Overall production results of the recent program have exceeded our type curve.

The current net production at Kindersley is 300 boepd (80% oil). On May 11, 2012 Invicta commenced its second quarter drilling program consisting of 6 gross (3.3 net) wells.

Central Alberta

Invicta continued development of its light oil prospects on its 40,400 gross (38,600 net) undeveloped acres in Central Alberta. First quarter activity focused on preparing to shoot a 20 square km 3D program at Dowling Lake which is expected to be completed in the second quarter. Although not presently included in the capital budget, Invicta contemplates drilling its first Alberta horizontal well in the fourth quarter of 2012.  Budgeted capital and location of the first well will be finalized following the results of the 3D seismic program.

Outlook

Invicta continues to be focused on growing production, reserves and funds flow through development drilling of its repeatable Kindersley light oil resource play.  The Company is on track to achieve the forecasted exit production rate of 675 -725 boepd (a 230% increase over the 2011 exit rate) by drilling 4-6 gross wells a quarter for the remainder of 2012. Following completion of the 2012 program, Invicta will still have in excess of 170 gross locations of drilling inventory at Kindersley.  Based on the renewal of the credit facility to $18 million and forecasted funds flow, the Company has the capital resources to drill 100% of the proven undeveloped locations at Kindersley by the end of the 2013 fiscal year.

About the Company

Invicta is a Calgary based, emerging junior oil and gas company exploring and developing light oil opportunities in Saskatchewan and Alberta.  The Company's current focus is the development of its Viking resource play in Kindersley, Saskatchewan.

Cautionary Statements:

This press release contains certain forward-looking statements (forecasts) under applicable securities laws relating to future events or future performance. Forward-looking statements are necessarily based upon assumptions and judgements with respect to the future including, but not limited to, the outlook for commodity markets and capital markets, the performance of producing wells and reservoirs, well development and operating performance, general economic and business conditions, weather, the regulatory and legal environment and other risks associated with oil and gas operations. In some cases, forward-looking statements can be identified by terminology such as "may", "will", "should", "expect", "projects", "plans", "anticipates" and similar expressions. These statements represent management's expectations or beliefs concerning, among other things, future operating results and various components thereof affecting the economic performance of Invicta. Undue reliance should not be placed on these forward-looking statements which are based upon management's assumptions and are subject to known and unknown risks and uncertainties, including the business risks discussed above, which may cause actual performance and financial results in future periods to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements. Accordingly, readers are cautioned that events or circumstances could cause results to differ materially from those predicted.

In the interest of providing Invicta shareholders and potential investors with information regarding the Company, including management's assessment of Invicta's future plans and operation, certain statements throughout this press release constitute forward looking statements.  All forward-looking statements are based on the Company's beliefs and assumptions based on information available at the time the assumption was made.  The use of any of the words "anticipate", "continue", "estimate", "expect", "may", "will", "project", "should", "believe" and similar expressions are intended to identify forward looking statements.  By its nature, such forward-looking information involves known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward looking statements.  Invicta believes the expectations reflected in those forward looking statements are reasonable but no assurance can be given that these expectations will prove to be correct and such forward looking statements contained throughout this press release should not be unduly relied upon.  These statements speak only as of the date specified in the statements. 

In particular, this press release may contain forward looking statements pertaining to the following:

• the performance characteristics of the Company's oil and natural gas properties;
• oil and natural gas production levels;
• capital expenditure programs;
• the quantity of the Company's oil and natural gas reserves and anticipated future cash flows from such reserves;
• projections of commodity prices and costs;
• supply and demand for oil and natural gas;
• expectations regarding the ability to raise capital and to continually add to reserves through acquisitions and development; and
• treatment under governmental regulatory regimes.

The material assumptions in making these forward-looking statements include certain assumptions disclosed in the Company's most recent management's discussion and analysis included in the material available on this press release.

The Company's actual results could differ materially from those anticipated in the forward looking statements contained throughout this press release as a result of the material risk factors set forth below, and elsewhere in this press release:

• volatility in market prices for oil and natural gas;
• liabilities inherent in oil and natural gas operations;
• uncertainties associated with estimating oil and natural gas reserves;
• competition for, among other things, capital, acquisitions of reserves, undeveloped lands and skilled personnel;
• incorrect assessments of the value of acquisitions and exploration and development programs;
• geological, technical, drilling and processing problems;
• fluctuations in foreign exchange or interest rates and stock market volatility;
• failure to realize the anticipated benefits of acquisitions;
• general business and market conditions; and
• changes in income tax laws or changes in tax laws and incentive programs relating to the oil and gas industry.

These factors should not be construed as exhaustive.  Unless required by law, Invicta does not undertake any obligation to publicly update or revise any forward looking statements, whether as a result of new information, future events or otherwise.

Barrels of oil equivalent (boe) may be misleading, particularly if used in isolation. A boe conversion ratio of six thousand cubic feet (mcf) of natural gas to one barrel (bbl) of oil is based on an energy conversion method primarily applicable at the burner tip and is not intended to represent a value equivalency at the wellhead. All boe conversions in this press release are derived by converting natural gas to oil in the ratio of six thousand cubic feet of natural gas to one barrel of oil. Certain financial amounts are presented on a per boe basis, such measurements may not be consistent with those used by other companies.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as the term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. 

Gordon Reese
President & CEO
[email protected]
[phone] ext 1

or

Carrie McLauchlin
Vice President, Finance & CFO
[email protected]
[phone] ext 4