Storm Resources Ltd. Announces Acquisition in the Montney Formation of the Umbach-Nig Area of North Eastern British Columbia ...

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE
UNITED STATES. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A
VIOLATION OF U.S. SECURITIES LAWS.


Storm Resources Ltd. ("Storm") (TSX VENTURE:SRX) has entered into an agreement
to acquire a 100% working interest in 29 sections of undeveloped land in the
Umbach-Nig area prospective for liquids rich natural gas from the Montney
formation (the "Acquisition"). Included in the Acquisition are two horizontal
wells producing 359 Boe net per day (19% natural gas liquids or "NGL") from the
Montney formation. The total cost of the Acquisition is $87.7 million, which
consists of $30.0 million in cash plus 13.6 million common shares ("Common
Shares") of Storm with a deemed value of $4.23 per Common Share, being the
closing price of the Common Shares on the TSX Venture Exchange on January 22,
2014. Closing of the Acquisition is subject to customary conditions, including
receipt of applicable regulatory approvals, and is expected to occur on or about
January 31, 2014. 


As a result of the Acquisition, Storm will be updating its 2014 guidance, as set
forth below.


The cash portion of the Acquisition will be satisfied from funds advanced under
Storm's credit facility, which amounts shall be repaid from $34.8 million of
gross proceeds from a bought deal financing and non-brokered private placement
of Common Shares at a price of $4.10 per Common Share.


DETAILS AND RATIONALE FOR THE TRANSACTION

The Acquisition increases Storm's Montney land holdings in the Umbach-Nig area
to 140 net sections (98,000 net acres) and includes two 100% working interest
horizontal wells with one producing from the upper Montney and the other from
the lower Montney. In the third quarter of 2013, production from both horizontal
wells totaled 359 Boe per day with NGL recovery averaging 38 bbls per Mmcf
sales. The majority of the production is from the C-42-A horizontal well
producing from the upper Montney at a current rate of 1.6 Mmcf per day gross raw
gas with 1.4 Bcf gross raw gas produced to-date. Storm management forecasts
ultimate recovery from this well to be 5.0 Bcf gross raw gas.


The acquired lands are contiguous with Storm's existing Umbach South lands. In
2013, Storm drilled and commenced production from five Montney horizontal wells
(all 100% working interest) at Umbach South which are adjacent to the acquired
lands. The five horizontal wells averaged 3.7 Mmcf per day gross raw gas over
the first 90 operating days and first year production is forecast to be 2.4 Mmcf
per day gross raw gas (based on comparing operated day rates over the first 90
days or over the first 180 days, if available). Storm management forecasts
ultimate recovery from the five horizontal wells to average 4.4 Bcf gross raw
gas and NGL recovery is expected to be similar to Storm's adjacent Umbach South
lands. At Umbach South, in the third quarter of 2013, NGL recovery was 35
barrels per Mmcf sales, shrinkage from raw gas to sales was 12%, and the
operating netback was $19.15 per Boe (average AECO daily index price for the
quarter was $2.31 per GJ). 


Further details regarding the Acquisition are provided below:



--  The Common Shares forming a portion of the consideration under the
    Acquisition will be distributed to the vendor's shareholders assuming
    that the vendor's shareholders vote in favor of the distribution of the
    Common Shares at a special meeting expected to be held on March 11,
    2014; 
    
--  Adds 26% to Storm's land position at Umbach-Nig and adds 7% to corporate
    production; 
    
--  Common Share dilution associated with the Acquisition and the associated
    equity issue is 25%; 
    
--  DPIIP in the upper Montney for the 29 sections of land to be acquired is
    estimated by Storm management to be 1.6 Tcf assuming 52 metres of
    thickness, 6% average porosity, and reservoir pressure of 18,000 to
    23,000 kPa (represents 21% of Storm's entire land position in the
    Umbach-Nig area); 
    
--  Storm management views the middle Montney as prospective across the
    Acquisition; 
    
--  The allocation of the purchase price is 11% to acquire cash flow and
    reserves associated with two producing horizontal wells, 30% for 20
    sections of undeveloped land and 59% for nine sections of land where
    Storm management estimates 35 horizontal wells remain to be drilled in
    the upper Montney based on existing vertical wells plus producing
    horizontal wells (assuming four horizontal wells per section with 32%
    recovery of estimated DPIIP); and 
    
--  Storm management expects two to three horizontal wells will be drilled
    on the acquired lands in 2014 with additional wells being planned for
    2015. 



The Acquisition adds materially to Storm's land position in an area where Storm
has gained meaningful proprietary knowledge from drilling a total of 15
horizontal wells over the past three years. Production rates on the last ten
horizontal wells have improved by 50% to 60% from earlier horizontal wells. In
addition, horizontal wells drilled on the acquired lands will benefit from being
near Storm's gathering pipelines and a new facility that is expected to start-up
in September 2014. The capacity of the new facility is designed to be expandable
from 24 Mmcf per day to 48 Mmcf per day which will allow for significant, low
cost growth in production into 2015. 


The Common Shares to be distributed to the vendor's shareholders provide for
continued participation in the upside associated with exploitation of the
Montney formation in the Umbach-Nig area. Storm's higher level of activity over
the next two to three years is expected to result in accelerated growth in asset
value for all shareholders. In addition, Storm's ownership of infrastructure in
the area (pipelines and field compression) is expected to result in lower
operating costs and improved capital efficiencies.


UPDATED 2014 GUIDANCE

The following sets forth Storm's updated guidance for full year 2014 estimates.



                                         2014 Guidance         2014 Guidance
                                             provided                updated
                                     November 14, 2013   January 22, 2014(2)
----------------------------------------------------------------------------
Estimated year-end debt plus                                                
 working capital deficiency(1)   $50.0 - $55.0 million         $50.0 million
Estimated average operating                                                 
 costs                          $8.00 - $10.00 per Boe $8.00 - $9.00 per Boe
Estimated average royalty rate                                              
 (on production revenue before                                              
 hedging)                                    14% - 15%             14% - 15%
Estimated operations capital,                                               
 excluding acquisitions &                                                   
 dispositions                            $81.0 million         $78.0 million
Estimated cash G&A net of                                                   
 recoveries                               not provided          $3.9 million
Forecast fourth quarter average                                             
 production                        7,300 - 7,800 Boe/d   7,500 - 7,900 Boe/d
                                       (21% oil + NGL)       (20% oil + NGL)
Forecast average annual                                                     
 production                        5,200 - 6,450 Boe/d   5,500 - 6,500 Boe/d
                                       (21% oil + NGL)       (21% oil + NGL)
----------------------------------------------------------------------------

1.  Includes value of publicly listed securities. 
2.  Guidance updated January 22, 2014 includes the Acquisition and the
    Equity Financings. 



Operations capital in the updated guidance was reduced to $78.0 million from
$81.0 million because the drilling of one horizontal well at Umbach was moved
forward into the fourth quarter of 2013 instead of being drilled in 2014. Major
expenditures included in the updated 2014 operations capital guidance are:




--  $47.0 million at Umbach to drill 10 horizontal wells (10.0 net) with 9
    horizontal wells (9.0 net) being completed and tied in; and 
    
--  $19.0 million to expand infrastructure at Umbach, which includes $14.0
    million to construct a new field compression facility, expandable from
    initial capacity of 24 Mmcf per day to 48 Mmcf per day (Storm
    anticipates an additional investment of $8.0 million for the expansion
    to occur in 2015). 



Storm's production in the fourth quarter of 2013 was approximately 4,750 Boe per
day based on field estimates and is forecast to increase to an average of 7,500
to 7,900 Boe per day in the fourth quarter of 2014 (60% year over year growth)
as a result of the acquisition and Storm's planned horizontal drilling program
in the Umbach-Nig area. 


The updated guidance for 2014 assumes an average natural gas price at AECO of
$3.35 per GJ and an Edmonton Par oil price of $89 per barrel. Including the
Acquisition, corporate production is expected to be 5,000 to 5,500 Boe per day
until September 2014 when the new facility at Umbach will be operational.
Adjusted net debt is forecasted to be approximately $50 million at the end of
2014 (net of the value of a public company investment), which is approximately
1.0 times forecast annualized funds from operations in the fourth quarter of
2014.


THE EQUITY FINANCINGS

Storm has entered into an agreement with a syndicate of underwriters led by
FirstEnergy Capital Corp. and including Peters & Co. Limited, National Bank
Financial Inc., Clarus Securities Inc., RBC Capital Markets, Cormark Securities
Inc. and Macquarie Capital Markets Canada Ltd. (collectively, the
"Underwriters") to issue, on a bought deal basis, 7,250,000 Common Shares at a
price of $4.10 per Common Share, for aggregate gross proceeds of $29.7 million
(the "Bought Deal Financing"). In addition, contemporaneously with the
completion of the Bought Deal Financing, Storm announces that it will issue up
to 1,250,000 Common Shares to directors, officers, and employees of Storm, at a
price of $4.10 per Common Share, for aggregate gross proceeds of up to $5.1
million (the "Non-Brokered Financing", together with the Bought Deal Financing,
the "Equity Financings"). Aggregate gross proceeds of the Equity Financing will
be up to $34.9 million, with up to 8,500,000 Common Shares being issued.


Closing is expected to occur on or about February 14, 2014, and is subject to
certain conditions including, but not limited to, the receipt of all necessary
approvals including the approval of the TSX Venture Exchange. 


The net proceeds of the Equity Financings will be used to repay indebtedness in
respect of funds advanced under Storm's credit facility to satisfy the cash
portion of the purchase price of the Acquisition. The Common Shares issuable
pursuant to the Bought Deal Financing will be offered in all provinces of Canada
by way of a short form prospectus. The Common Shares issuable pursuant to the
Non-Brokered Financing will be offered by way of private placement exemptions in
all of the provinces of Canada and will be subject to a four-month hold period
under applicable Canadian securities laws. Closing of the Equity Financings will
be conditional on closing of the Acquisition.


READER ADVISORIES 

Boe Presentation - For the purpose of calculating unit revenues and costs,
natural gas is converted to a barrel of oil equivalent ("Boe") using six
thousand cubic feet ("Mcf") of natural gas equal to one barrel of oil unless
otherwise stated. Boe may be misleading, particularly if used in isolation. A
Boe conversion ratio of six Mcf to one barrel ("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. All Boe measurements and
conversions in this report are derived by converting natural gas to oil in the
ratio of six thousand cubic feet of gas to one barrel of oil. Mmcf means 1,000
Mcf. Tcf means 1,000 Mmcf.


Discovered-Petroleum-Initially-in-Place ("DPIIP") - is defined in the Canadian
Oil and Gas Evaluation Handbook (COGEH) as the quantity of hydrocarbons that are
estimated to be in place within a known accumulation. DPIIP is divided into
recoverable and unrecoverable portions, with the estimated future recoverable
portion classified as reserves and contingent resources. There is no certainty
that it will be economically viable or technically feasible to produce any
portion of this DPIIP except for those portions identified as proved or probable
reserves.


Forward-Looking Statements - The information in this press release contains
certain forward-looking statements. These statements relate to future events or
our future performance. All statements other than statements of historical fact
may be forward-looking statements. Forward-looking statements are often, but not
always, identified by the use of words such as "seek", "anticipate", "plan",
"continue", "estimate", "expect", "may", "will", "project", "predict",
"potential", "targeting", "intend", "could", "might", "should", "believe",
"would" and similar expressions. In particular, and without limitation, forward
looking statements in this press release includes, but is not limited to:
working capital, debt, average production, reserves, undeveloped land holdings,
ultimate recover factors, planned drilling and development activities, the
potential number of drilling locations at Storm's properties, estimated 2014
exit rate production, estimated 2014 capital expenditures, anticipated benefits
from the Acquisition, the use of proceeds of the financings, the anticipated
closing date of the Acquisition and financings, shareholder meeting dates,
Storm's facilities and expansions and timing thereof, capital efficiencies, the
receipt of required regulatory and third party approvals, Storm's capital
program, production, production guidance, drilling plans and commodity prices. 


These statements involve substantial known and unknown risks and uncertainties,
certain of which are beyond Storm's control, including: the impact of general
economic conditions; industry conditions; changes in laws and regulations
including the adoption of new environmental laws and regulations and changes in
how they are interpreted and enforced; fluctuations in commodity prices and
foreign exchange and interest rates; stock market volatility and market
valuations; 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, reserves, undeveloped lands and skilled personnel;
incorrect assessments of the value of acquisitions; changes in income tax laws
or changes in tax laws and incentive programs relating to the oil and gas
industry; geological, technical, drilling and processing problems and other
difficulties in producing petroleum reserves; and obtaining required approvals
of regulatory authorities, including the approval of the TSX Venture Exchange.
The intended use of proceeds of the financings by Storm may change if the board
of directors of Storm determines that it would be in the best interests of Storm
to deploy the proceeds for some other purpose. Storm's actual results,
performance or achievement could differ materially from those expressed in, or
implied by such forward-looking statements and, accordingly, readers should not
place undue reliance on the forward-looking statements and information contained
in this press release. No assurances can be given that any of the events
anticipated by the forward-looking statements will transpire or occur or, if any
of them do, what benefits Storm will derive from them. 


Readers are cautioned that the foregoing list of factors is not exhaustive.
Additional information on these and other factors that could affect the
operations or financial results of Storm are included in reports on file with
applicable securities regulatory authorities and may be accessed through the
SEDAR website (www.SEDAR.com) and on Storm's website
(www.stormresourcesltd.com). The forward-looking statements contained in this
press release are made as of the date hereof and Storm undertakes no obligation
to publicly update or revise any forward-looking statements or information,
whether as a result of new information, future events or otherwise, unless
required by applicable securities laws.


Financial Outlooks - The estimates of 2014 year end net debt and 2014 funds from
operations contained in this press release are financial outlooks within the
meaning of applicable securities laws. These financial outlooks have been
prepared by management of Storm to provide an outlook of Storm's anticipated
funds from operations for a full year of

operations with its current assets and based on management's expectations and
assumptions as to a number of factors, including commodity pricing, production,
operating expenses and royalties. Readers are cautioned that this information
may not be appropriate for any other purpose. Management does not have firm
commitments for all of the costs, expenditures, prices or other financial
assumptions used to prepare the financial outlooks or assurance that such
results will be achieved. The actual results of Storm will likely vary from the
amounts set forth in the financial outlooks and such variation may be material.
Storm and its management believe that the financial outlooks have been prepared
on a reasonable basis, reflecting the best estimates and judgments, and
represent, to the best of management's knowledge and opinion, Storm's expected
expenditures and results of operations following completion of the Acquisition.
However, because this information is highly subjective and subject to numerous
risks, including the risks discussed under the note regarding Forward Looking
Statements, it should not be relied on as necessarily indicative of future
results. Except as required by applicable securities laws, Storm undertakes no
obligation to update this information.


In this press release GJ means gigajoule and kPA means kilopascal.

The securities offered have not been and will not be registered under the U.S.
Securities Act of 1933, as amended, and may not be offered or sold in the United
States absent registration or applicable exemption from the registration
requirements. This news release does not constitute an offer to sell or the
solicitation of any offer to buy nor will there be any sale of these securities
in any province, state or jurisdiction in which such offer, solicitation or sale
would be unlawful prior to registration or qualification under the securities
laws of any such province, state or jurisdiction. 


NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT
TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS
RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.


FOR FURTHER INFORMATION PLEASE CONTACT: 
Storm Resources Ltd.
Brian Lavergne, President and CEO
Donald G. McLean, CFO
Carol Knudsen, Manager, Corporate Affairs
403-817-6145
www.stormresourcesltd.com