Exploration & Production | Quarterly / Earnings Reports | Second Quarter (2Q) Update

Hyperion Exploration Switching to ERH Wells

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Hyperion Exploration Corp. has announced it has filed on SEDAR its unaudited condensed interim financial statements and related Management's Discussion and Analysis (MD&A) for the three and six months ended June 30, 2014.

Financial and Operational Highlights

-- 18% increase in operating netback (Q2 2014 - $38.04/boe) quarter over
quarter;

-- Management has completed the technical work, supported by industry
results, to incorporate long reach horizontal well technology at its
Niton/McLeod Cardium light oil play. This is expected to increase Tier 1
locations IRR (internal rate of return) to 100%; and

-- $1 million reduction in bank indebtedness.

Operations Update and Outlook

The Company has further reduced indebtedness during the quarter. Hyperion has a Proved plus Probable Developed Producing reserves (P+PDP) Net Asset Value (NAV) of $0.86 per share with no future development capital (FDC) required and total Proved plus Probable (P+P) NAV of $1.44 per share with FDC of $54.3 million.

All wells at Niton/McLeod included in the reserves evaluated in the McDaniel Report and included in the NAV were based upon short reach horizontal (SRH) wells. Further drilling at Niton/McLeod will utilize extended reach horizontal (ERH) wells which have the potential to significantly increase NAV per well compared to SRH wells. These NAV calculations include management's estimates of value for undeveloped land ($11.6 million), proprietary seismic and other assets ($1.3 million).

Hyperion continues to pursue opportunities to initiate its ERH development drilling program at Niton/McLeod.

Based on industry results, drilling an ERH well has the potential to more than double the initial production of a SRH well. The evolution to ERH wells in the Cardium at Niton/McLeod (29,030 net acres) is expected to improve capital efficiency in excess of 20% and accelerate capital payouts to less than 1.5 years.

Based on lands currently captured, and with the successful implementation of an ERH development program, the Company has an un-booked inventory of 51.6 ERH and 31.0 SRH wells at Niton/McLeod. As noted above, all wells at Niton/McLeod included in the reserves evaluated in the McDaniel Report were based upon SRH wells. The Company plans to convert wells currently booked as SRH to ERH where it has sufficient contiguous lands.

Hyperion's credit facility is at $28 million and will be reduced to $26 million as at September 1, 2014. Hyperion's lender will also conduct an interim review of Hyperion's credit facility in September 2014.