Operational Update and 2014 Guidance

Caracal Energy Provides Operational Update and 2014 Guidance

CALGARY, Jan. 20, 2014 /CNW/ - Caracal Energy Inc. (LSE: CRCL) ("Caracal
Energy" or the "Company") provides an operational update on its activities in
Chad and 2014 guidance.

Executive Summary

- Production has increased to approximately 12,000 gross barrels oil
per day ("bopd");

- On track to achieve first oil lifting in Q1 2014;

- Commissioned the Southern Processing Terminal ("SPT");

- Continued construction of the Mangara Central Processing Facility
(the "CPF"), 12 inch oil pipeline and 6 inch gas pipeline, all of which are
expected to be completed in Q1 2014;

- Ordered long lead facilities for the Badila expansion;

- Placed Badila-4 and Badila-5 on production at maximum producing rates
of approximately 1,000 and 5,000 bopd respectively;

- Mangara-6 development well was spud on November 19, 2013 and drilled
to a depth of 3,109 meters ("m"). Petrophysical evaluation in the Lower
Cretaceous C sands ("C sands") proved the zone to be oil bearing. A Drill Stem
Test ("DST") over the Lower Cretaceous E sands ("E sands") successfully flowed
oil to surface. The Company cored 18m of E sand, which showed clear signs of
oil pay. The Company believes that the E sands could have a positive impact on
reserves;

- Production flow tests conducted over the Krim-1 C sands measured
rates as high as 1,470 bopd and the D sands flow tested at up to 702 bopd. No
reserves were assigned to these C and D sands in the report by McDaniel &
Associates Consultants Ltd., an independent qualified reserves evaluator,
("McDaniel")(1);

- Drilled and cased the Bitanda-1 exploration well, which was spud on
December 5, 2013, and was rig released on December 31, 2013. Based on
petrophysical interpretation, there is a potential of 38 m of net reservoir
interval in the Upper Cretaceous M sands and 66 m in the D sands, which will be
subsequently tested;

- Commenced the 2014 2D and 3D seismic acquisition program;

- Finalized rig contracts and received definitive rig schedule from the
rig contractor for an additional four drilling rigs and two completion rigs,
bringing the total to six drilling rigs and three completion rigs;

- 2014 guidance of $475 -$525 million net capital expenditures ($375
-$425 million net of the remaining $100 million GlencoreXstrata plc carry),
22,000 - 26,000 bopd annual average gross production (11,000 - 13,000 bopd
working interest production) and funds flow from operations of $220 - $270
million.

Gary Guidry, Chief Executive Officer, said:

"We continue to increase production as additional wells are brought on stream
and facilities are commissioned. We are forecasting a 2014 exit rate of 40,000
to 45,000 bopd, an approximate 270 percent increase to the 2013 exit rate.
While we did not achieve our 2013 exit rate of 14,000 bopd, with the recent
commissioning of the South Processing Terminal, we anticipate meeting this
target by the end of January. With the signing of the drilling rig contract, we
have visibility on our 2014 and 2015 drilling program. We continue to be on
schedule to move a drilling rig to the Doseo Salamat area at the end of the
first quarter of 2014, which contains the Kibea discovery and targets
approximately a billion barrels out of the total 4.1 billion barrels of gross
mean unrisked prospective resources(2)".

Production

Between December 1, 2013 and January 18, 2014, gross production averaged 11,274
bopd with current production of approximately 12,000 bopd from Badila-1, 2, 4
and 5. The Company experienced facility challenges, primarily the ability to
handle water. These issues have been resolved through additional tankage and
the commissioning of the SPT.

The Company remains on schedule for its first lifting from the oil export
terminal in Kribi, Cameroon during March 2014. Caracal's entitlement of the
first lifting will be approximately 560,000 barrels ("bbls").

Exploration and Development - Drilling

The Company contracted additional rigs for arrival on the following definitive
dates:

Rig                            Size    Delivery date 
                                                     
GW 60 (Drilling)               1200 HP May 2014      
                                                     
GW 61 (Drilling)               1200 HP August 2014   
                                                     
GW 63 (Drilling)               1200 HP September 2014
                                                     
GW 64 (Drilling)               1200 HP September 2014
                                                     
GW 102 (Completion)            750 HP  May 2014      
                                                     
GW 103 (Drilling & Completion) 750 HP  June 2014     
                                                     

Krim-1 Exploration Well Update

As previously disclosed in the December 9th, 2013 press release, the Lower
Cretaceous E sands were tested open hole at up to 2,580 bopd over the following
intervals:

Interval          Maximum Oil Flowing Choke Total Flow    Gas-Oil   Gravity  
(mKB)             Rate*       WHP     Size  Duration (hr) Ratio     (Deg API)
                  (bopd)      (psig)  (in.)               (scf/stb)          
                                                                             
E (2,582 - 2,630) 2,580       120     64/64 29            100       34 - 37  
                                                                             

* - A total of 921 bbls of oil and 8 bbls of water/completion fluid recovered

In addition to the above test, the Company recently successfully tested the C
and D sands. The flow rates are summarized below:

Interval        Maximum Oil Flowing Choke Total Flow    Gas-Oil   Gravity  
(mKB)           Rate        WHP     Size  Duration (hr) Ratio     (Deg API)
                (bopd)      (psig)  (in.)               (scf/stb)          
                                                                           
C (2,012-2,166) 1,470*      140     96/64 38            519       36       
                                                                           
D (2,219-2,520) 702**       120     1/2   38            -         35       
                                                                           

* - A total of 1,600 bbls of oil and less than 1 bbl of water/completion fluid
recovered

** - A total of 557 bbls of oil and 1 bbl of water/completion fluid were
recovered.

There was no evidence of water or pressure depletion during the tests of the C,
D and E sands. There are currently limited reserves assigned to the E sands and
no reserves assigned to the C and D sands(1).

Bitanda-1: Exploration Well Update

The Bitanda exploration well ("Bitanda-1") was spud on December 5, 2013. The
well reached total depth of 2,497 m on December 20, 2013 and the rig was
released on December 31, 2013. Based on petrophysical interpretation, there is
a potential of 38 m of net reservoir interval in the Upper Cretaceous M sands
and 66 m in the D sands, which will be subsequently tested.

Mangara-6: Combined Development and Exploration Well Update

The Company has logged and cased the C sand reservoir and subsequently drilled
the E sands to a total depth of 3,108 m.

A DST over the E sands flowed oil to surface. The Company cored 18 m in the E
sands, which showed clear signs of oil pay. The Company believes that the E
sands have the potential to add significant reserves.

The Company has tested E sands potential in Mangara-5, Mangara-6 and in Krim-1
and is currently evaluating the additional potential upside across a broad
area.

Exploration and Appraisal - Seismic Acquisition

The Company commenced 2D seismic acquisition throughout its concessions on
schedule and is currently acquiring data. The 250 lineal km in DOB/DOI blocks
is acquired. The 1,500 km of 2D seismic acquisition will focus on well
placement for structures in the 2014-2016 exploration drilling program, as well
as to identify additional prospects currently not captured in the Company's
resource estimates. The Company anticipates the new 2D seismic will provide
additional information sufficient to potentially convert identified leads into
drillable prospects.

Kibea and Beche:

The Company also commenced its 3D seismic acquisition program in the Kibea area
on schedule. Of the 708 square kilometers ("km2") planned for 2014, 455 km2
will focus on the Kibea discovery and the nearby Beche exploration area. The
Beche area includes three prospects similar to the discovery at Kibea. The
seismic data acquisition continues to progress on schedule.

Kibea is a light oil discovery (33 - 35 degrees API) with 45.9 MMbbls of gross
2P reserves based on the September 30, 2013 McDaniel Report. The McDaniel
Resource Report(2) estimates additional prospective resources in the Kibea
discovery of 20.0 MMbbl on a gross unrisked Pmean basis.

The Company is scheduled to move a drilling rig to the Doseo Salamat area by
the end of Q1, 2014. In addition to the Kibea discovery, the gross unrisked
prospective resources(2) for the top prospects in the area include the following:

Prospect P90     P50     Pmean   P10     COS 
         (MMbbl) (MMbbl) (MMbbl) (MMbbl) (%) 
                                             
Beche    38.8    116.1   169.7   358.0   29.2
                                             
Beche-B  25.4    79.3    116.8   244.2   24.6
                                             
Beche-C  32.7    95.9    141.5   300.8   21.0
                                             
TOTAL                    428.0               
                                             

Construction Projects - Mangara Development

The 97 km of 12 inch oil and 6 inch natural gas shipping pipelines from Mangara
to Badila are nearing completion, and are expected to be completed in March
2014.

During the last 60 days, the Company focused its efforts on commissioning the
SPT. The SPT was completed in January, 2014 and will temporarily process
additional Badila crude oil until the Badila expansion is completed.

Due to the focus on the SPT, the Mangara field CPF is expected to be fully
commissioned in March 2014.

2014 Guidance

The Company's forecasted work program for 2014 is as follows:

- Drill and complete 20 to 22 development wells;

- Drill 8 to 10 exploration wells;

- Commission the Mangara pipeline and CPF;

- Expand the Mangara and Badila processing facilities;

- Commence the FEED and land acquisition for the Doseo pipeline.

The expected costs and production from the above program as are follows:

- Production: 22,000 to 26,000 gross bopd (11,000 to 13,000 working
interest bopd);

- Capital: $765 to $845 million gross ($375 to $425 million net to
Caracal and after the $100 million GlencoreXstrata plc carry);

- Annual funds flow from operations: $220 to $270 million, $1.50 to
$1.85 per share;

- Q4 2014 annualized funds flow from operations: $439 to $480 million,
$3.00 to $3.28 per share.

About Caracal Energy Inc.

Caracal Energy Inc. is an international exploration and development company
focused on oil and gas exploration, development and production activities in
the Republic of Chad, Africa. In 2011, the Company entered into three
production sharing contracts ("PSCs") with the government of the Republic of
Chad. These PSCs provide exclusive rights, along with its partners, to explore
and develop reserves and resources over a combined area of 26,103 km2 in
southern Chad. The PSCs cover two world-class oil basins with oil discoveries,
and numerous exploration prospects.

The Company's shares trade on the London Stock Exchange under the symbol CRCL.

The most recent Corporate Presentation dated January 2014 can be found on the
Company's website at www.caracalenergy.com.

Cautionary Statements

This announcement contains certain forward-looking information and statements.
Forward-looking information typically contains statements with words such as
"intend", "target", "anticipate", "plan", "estimate", "expect", "potential",
"could", "will", or similar words suggesting future outcomes. Information
relating to reserves and resources is deemed to be forward-looking information,
as it involves the implied assessment, based on certain estimates and
assumptions, that the reserves and resources described exist in the quantities
predicted or estimated, and can be profitably produced in the future. The
Company cautions readers not to place undue reliance on forward-looking
information which by its nature is based on current expectations regarding
future events that involve a number of assumptions, inherent risks and
uncertainties, which could cause actual results to differ materially from those
anticipated by the Company. In addition, any forward-looking information is
made as of the date hereof, and each of the Company and its affiliates
expressly disclaim any obligation or undertaking to update, review or revise
such forward-looking information contained in this announcement to reflect any
change in its expectations or any change in events, conditions or circumstances
on which such information is based unless required to do so by applicable law.

Forward-looking information is not based on historical facts but rather on
current expectations and assumptions regarding, among other things, the timing
and scope of certain of the Company's operations and the timing and level of
production from the Company's properties, plans for and results of drilling
activity and testing programs, future capital and other expenditures (including
the amount, nature and sources of funding thereof), continued political
stability, and timely receipt of any necessary government or regulatory
approvals. Although the Company believes the expectations and assumptions
reflected in such forward-looking information are reasonable, they may prove to
be incorrect. Forward-looking information involves significant known and
unknown risks and uncertainties. A number of factors could cause actual results
to differ materially from those anticipated by the Company including, but not
limited to, risks associated with the oil and gas industry (e.g. operational
risks in exploration and production; inherent uncertainties in interpreting
geological data; changes in plans with respect to exploration or capital
expenditures; interruptions in operations together with any associated
insurance proceedings; reductions in production capacity, the uncertainty of
estimates and projections in relation to costs and expenses and health, safety
and environmental risks), the risk of commodity price and foreign exchange rate
fluctuations, the uncertainty associated with negotiating with foreign
governments, risk associated with international activity, including the risk of
political instability, the risk of adverse economic market conditions, the
actual results of marketing activities and the risk of regulatory changes.
Forward-looking information cannot be relied upon as a guide to future
performance.

Terms related to reserves and resources classifications referred to in this
announcement are based on definitions and guidelines in the Canadian Oil and
Gas Evaluation Handbook which are as follows.

"Proved reserves" are those reserves that can be estimated with a high degree
of certainty to be recoverable. It is likely that the actual remaining
quantities recovered will exceed the estimated proved reserves.

"Probable reserves" are those additional reserves that are less certain to be
recovered than proved reserves. It is equally likely that the actual remaining
quantities recovered will be greater or less than the sum of the estimated
proved plus probable reserves.

The qualitative certainty levels referred to in the definitions above are
applicable to individual reserves entities (which refers to the lowest level at
which reserves calculations are performed) and to reported reserves (which
refers to the highest-level sum of individual entity estimates for which
reserves estimates are presented). Reported reserves should target the
following levels of certainty under a specific set of economic conditions:

- at least a 90 percent probability that the quantities actually
recovered will equal or exceed the estimated proved reserves. This category of
reserves can also be denoted as 1P;

- at least a 50 percent probability that the quantities actually
recovered will equal or exceed the sum of the estimated proved plus probable
reserves. This category of reserves can also be denoted as 2P; and

- at least a 10 percent probability that the quantities actually
recovered will equal or exceed the sum of the estimated proved plus probable
plus possible reserves. This category of reserves can also be denoted as 3P.

Additional clarification of certainty levels associated with reserves estimates
and the effect of aggregation is provided in the COGE Handbook. The estimates
of reserves and future net revenue for individual properties may not reflect
the same confidence level as estimates of reserves and future net revenue for
all properties, due to the effects of aggregation.

"Prospective resources" are those quantities of petroleum estimated, as of a
given date, to be potentially recoverable from undiscovered accumulations by
application of future development projects. Prospective resources have both an
associated chance of discovery (geological chance of success or "COS") and a
chance of development (economic, regulatory, market, facility, corporate
commitment or political risks). The chance of commerciality is the product of
these two risk components. The prospective resource estimates referred to
herein have not been risked for either the chance of discovery or the chance of
development.

There is no certainty that any portion of the prospective resources will be
discovered. If a discovery is made, there is no certainty that it will be
developed or, if it is developed, there is no certainty as to the timing of
such development or that it will be commercially viable to produce any portion
of the prospective resources.

Figures related to the Company's reserves and resources are derived from the
September 30, 2013 McDaniel Report and the June 30, 2013 McDaniel Report.

A description of the uncertainties and significant positive and negative
factors associated with the estimates of reserves and resources in respect of
the September 30, 2013 McDaniel Report is contained in the Company's November
7, 2013 material change report and a description of the uncertainties and
significant positive and negative factors associated with the estimates of
reserves and resources in respect of the June 30, 2013 McDaniel Report is
contained in the Company's July 25, 2013 material change report. Copies of
these documents are available on the internet under the Company's profile at 
www.sedar.com.

Information relating to reserves and resources is deemed to be forward-looking
information, as it involves the implied assessment, based on certain estimates
and assumptions, that the reserves and resources described exist in the
quantities predicted or estimated, and can be profitably produced in the
future. Well-test results are not necessarily indicative of long-term
performance or ultimate recovery.

---------------------------------
(1) McDaniel Reserves Report effective September 30, 2013
(2) McDaniel Prospective Resources Report effective June 30, 2013

SOURCE: Caracal Energy Inc.

For further information:

Caracal Energy Inc.
Gary Guidry, President and Chief Executive Officer
Trevor Peters, Chief Financial Officer
403-724-7200

Longview Communications - Canadian Media Enquiries
Alan Bayless 604-694-6035
Joel Shaffer 416-649-8006

FTI Consulting - UK Media Enquiries
Ben Brewerton / Ed Westropp / Georgia Mann
+ 44 (0) 207 8313 3113
[e-mail]

(CRCL)