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Victory Energy Ramps Up Production 70% in 2Q

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   |    Thursday,August 27,2015

Victory Energy Corporation announced operating results for the three months ended June 30, 2015.

2015 Second Quarter Highlights:

• Oil and Gas revenues increased 13% from $237,977 to $269,631 for the three months ended June 30, 2015 compared to the three months ended June 30, 2014.
• Oil production increased 70% to 4,181(Bbl) from 2,461(Bbl) in the second quarter of 2014.
• BOE/d increased 58% to 63 barrels from 40 barrels in the second quarter of 2014.
• At June 30, 2015, the Company held a working interest in 37 gross wells located in the states of Texas and New Mexico. During the three months ended June 30, 2015, the Company participated in the completion of 5 (gross) and .1 (net) wells, respectively. All wells were successfully completed.
• Engaged MLV & Co. LLC to act as financial advisor with respect to the proposed $75 million credit facility, with initial availability based on agreed acquisitions.
• Terminated merger with Lucas Energy and entered settlement agreement providing Victory with five producing gross wells in the Eagle Ford area of south Texas.

Kenny Hill, Chief Executive Officer of Victory Energy, said: "Though we continue to face a challenging and uncertain commodity price environment, we made important progress during the quarter at accomplishing a number of strategic objectives we set for ourselves at the beginning of the year. Even without a commodity price hedge position, we were able to increase both daily production and revenues compared to the three months ended June 30, 2014. To prepare ourselves for opportunistic acquisitions, we were also able to establish a significant investment banking relationship and hope to begin deploying capital from that $75 million credit facility in the near future. We have already identified and began negotiating with a handful of sellers interested in divesting their proved producing properties. I'm hopeful that commodity prices will stabilize so that we have a more clear valuation model to negotiate and base our decisions on for these opportunities."

Through its partnership interest in Aurora Energy Partners, the company is able to acquire needed capital when ideal projects, with specific capital return and development profiles become available. At June 30, 2015, the Company held a working interest in 37 (gross) wells.

The Company's oil and gas revenue fluctuations are directly related to the volumes produced and the commodity prices paid over the respective periods presented. Oil and Natural Gas revenues increased $31,654 or 13% from $237,977 to $269,631 for the three months ended June 30, 2015 compared to the three months ended June 30, 2014.

Lease operating expenses decreased $11,459 to $42,504 or 21% from $53,963 for the three months ended June 30, 2015. The decline is primarily the result of a decrease in the per BOE lease operating expense rates of our new Eagle Ford area wells held by the Company during the three months ended June 30, 2015 versus June 30, 2014.

General and administrative expenses increased $89,117 or 9% to $1,070,830 for the three months ended June 30, 2015 from $981,713 for the three months ended June 30, 2014. The increase is primarily due to costs related to the Lucas Energy transaction for professional fees, legal fees for ongoing litigation and share based compensation to consultants used in investor development.

Net loss attributable to Victory Energy was $1,247,458, or a loss of ($0.04) per share, for the three months ended June 30, 2015 compared to Net Income of $272,189 and $0.01, respectively, in the second quarter of 2014. The net income for the three months ended June 30, 2014 was primarily attributable to the Company's sale of its Lighten Property in June 2014. The weighted average shares outstanding at June 30, 2015 were ~29.3 million shares compared to ~27.6 million as of December 31, 2014.