Petrus Resources Ltd. ("Petrus" or the "company") announced an operations update as well as a 2018 outlook. The company's 2017 drilling program has been focused exclusively in the Ferrier area targeting liquids rich natural gas in the Cardium formation. Throughout 2017, the company drilled or participated in 18 gross (13.1 net) wells. This included two Extended Reach Horizontal ("ERH") wells related to the previously announced Ferrier farm-in agreement ("Farm-In"), each with approximately 100 stages of fracture stimulations. One of these ERH wells came on production on November 27, 2017, while the second ERH well is scheduled to be fracture stimulated and on production by the end of 2017. Subject to completion, the Farm-In is expected to contribute 16 gross (5.2 net) Cardium locations to the company's drilling inventory. In December, the company also participated in a non-operated ERH Cardium well (28% working interest) which is expected to come on production early in 2018. Petrus' field estimated production for the first week of December was approximately 10,800 boe/d. Petrus has grown its production by 52% since the third quarter of 2016 (average production of 7,100 boe/d). This production growth is all attributed to drilling in the Ferrier area.

The company's Board of Directors has approved a 2018 capital budget of $25 to $30 million, with excess funds flow to be directed toward debt repayment. The reduced capital budget, relative to the 2017 capital budget, is in response to the current commodity price outlook as well as the $10 million 2017 capital budget increase in the fourth quarter of 2017. Assuming capital investment of $25 million and a current forecast for commodity futures pricing, the company estimates the 2018 capital program will increase production year over year by 2% to an average annual 2018 production of approximately 10,350 boe/d. The 2018 capital is expected to be directed primarily to the development of the company's Ferrier liquids rich Cardium asset based on its economics and predictability. The program is expected to include the drilling of nine gross (4.4 net) Cardium wells targeting the most condensate rich areas within the reservoir. The 2018 capital program is expected to be funded through cash flow and working capital.

Based on the company's estimated year-end production of 11,000 boe/d and estimated 2017 capital expenditures of $70.2 million, including $13.7 million of capital for the Ferrier gas plant expansion, the company estimates its cost to add production in 2017 will be approximately $14,000 per boe/d. The capital expenditures exclude acquisition and disposition investment.