Operations Update

Caracal Energy Inc. - Operations Update

CALGARY, March 5, 2014 /CNW/ - Caracal Energy Inc. ("Caracal" or the "Company")
(LSE:CRCL) is pleased to provide an update of exploration, development and
production operations in the Republic of Chad.

Highlights include:

·         Current production increased to 14,200 gross barrels oil per day
("bopd"), from 12,000 bopd as reported on January 20, 2014;

·         Production at the Badila field is continuing from the original three
wells with a 15-20% water-cut, in line with expectations;

·         Badila-7 is currently drilling at 1,260 meters and Badila-9 is
expected to spud over the next 7 days. Both of these wells are expected to
provide additional production rate capacity;

·         Mangara-6 has been completed and testing of the Cretaceous E sands is
underway. The comprehensive completion program is also testing the Cretaceous D
and C sands. Mangara-6 is expected to be on production later this year when the
Mangara field is brought on stream;

·         Mangara-4 has been successfully side-tracked and cased as a
Cretaceous E sands producer;

·         The first of the four new drilling rigs contracted in 2014 has
arrived at the port in Cameroon, on schedule, and should be on site in Q2;

·         The 2014 exploration program is underway in the Kibea - Beche area,
where 3D seismic is nearing completion; and

·         The Company's first oil sales tanker lifting is now expected before
the end of March 2014.

Gary Guidry, Chief Executive Officer, said:

"We are making good progress maximizing throughput at our Badila production
facilities, and we are on schedule to expand the fluid handling capacity at
Badlia later this summer. In addition, we are nearing completion of the
production facilities at Mangara and the pipeline connecting Mangara to Badila,
and we are looking forward to having the Mangara field on stream later this
year.

An exciting milestone will be moving a drilling rig to the Kibea - Beche area
in the next two months, kicking off our 2014 high impact exploration program
where we plan to test approximately one billion barrels in gross unrisked
"Prospective Resources."(1)

Production

With Badila-6 now on stream, current production is 14,200 bopd, up from 12,000
bopd in January and in line with the Company's expectations for the period and
the Company's guidance of 22,000 to 26,000 bopd annual average 2014 production.
Production from the Badila field has been stable since the commissioning of the
facilities was completed in December 2013, with oil production, water
production and well pressure consistent with forecasts.

Badila processing capacity, previously constrained to 14,000 barrels of fluid
per day (bfpd") has now been expanded to 25,000 bfpd with the completion of the
southern processing terminal ("SPT"). The SPT will handle excess Badila
production until expansion of the Badila facilities is completed, which is
expected during the third quarter of 2014. Water rates, relative to total fluid
from the Badila field, are stable between 15 and 20%, in line with
expectations. Production from the Badila field has been increasing since the
commissioning of these facilities was completed in December 2013.

Operations at Badila currently include the drilling of Badila-7 with rig
GWD-96, and preparations to spud Badila-9 with rig GWD-158. The GWD-158 rig is
capable of deep drilling and once Badila-9 drilling is finished, will be move
it to the Kibea - Beche area for a continuous spring/summer exploration
drilling program. GWD-96 will continue in the Badila field, drilling Badila
wells for additional production rate capacity.

Oil Sales

The Company's line fill contribution was completed in January 2014 and
additional production accumulated as inventory. The sale of the Company's
inaugural cargo from the Kribi sales terminal is committed, with the lifting
scheduled for the latter part of March 2014. Tanker liftings are typically
between 900,000 and 1,000,000 barrels of oil. The Company will jointly lift
with its partner, GlencoreXstrata (therefore, approximately 560,000 barrels of
oil will be net to the Company).

Exploration and Development: Drilling Operations

The Company has commenced the mobilization process of an additional four
drilling rigs, which will bring the total rig count to six drilling rigs by the
end of 2014. In addition, two completion rigs will be mobilized into country
during 2014, to bring the total completion rig count to three. One of these new
completion rigs also has the ability to drill medium depth wells.

The first of the four additional drilling rigs has arrived in the port of
Douala, Cameroon. It is scheduled to arrive in Chad and commence drilling
during the second quarter of 2014.

Bitanda: Exploration Well

The Company has plans to test the Bitanda exploration well in the coming
months. Currently, the workover/completions rig remains in Mangara, testing and
completing Mangara-6.

Kibea and Beche: Seismic Acquisition and Drilling

The Company has mobilized a seismic contractor to shoot 2D and 3D seismic
throughout its asset base in Chad. Much of the planned 1,500 line-kilometers of
2D seismic is completed and was focused on well placement for structures to be
drilled in the 2014-2016 exploration programs as well as further evaluation of
additional prospects currently not included in the Company's estimates.

Of the 700 square kilometers ("Km2") planned for 2014, 450 Km2 will be focused
on the Kibea discovery and nearby Beche exploration area, which includes three
prospects with similar structures to the discovery at Kibea. Currently, the
seismic has been shot over the Kibea field and nearly competed over the Beche
area. Preliminary processing indicates that the seismic acquired is of
excellent quality. The three prospects in the Beche exploration area are
assessed 420 million barrels of Pmean unrisked gross recoverable Prospective
Resource in aggregate, according to the McDaniel Resource Report.(1) Kibea is a
light oil discovery (33 - 35 degrees API) with 45.9 million barrels of gross 2P
reserves, and 105.0 million barrels of gross 3P reserves according to the
McDaniel Reserves Report.(2)

The first well, Kibea-2, scheduled for the second quarter of 2014, in the Kibea
- Beche trend will be an appraisal and deep test on the Kibea structure. The
Kibea-2 well will provide a test of deep Cretaceous potential identified on
prior 2D well data acquired on Kibea-1 and the new 3D seismic. According to the
McDaniel Resource Report, gross unrisked prospective resources below in the
Kibea discovery are 40.1-76.9 million barrels on Pmean and P10 basis,
respectively.(1) In addition, oil samples to be acquired during testing of
existing discovered reservoirs in Kibea-2 will provide development and pipeline
design information. Drilling two of the three Beche exploration prospects is
expected to commence in Q3 2014, once Kibea-2 is tested.

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 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.

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 programmes, 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. Well-test results are not necessarily indicative
of long-term performance or ultimate recovery.

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) 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
McDaniel Reserves Report and McDaniel Resources Report, each as defined below.

A description of the uncertainties and significant positive and negative
factors associated with the estimates of 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.

____________________________________
1 Report prepared by McDaniel & Associates Consultants Ltd. ("McDaniel"), an
independent qualified reserves evaluator, evaluating the prospective resources
of the Company effective as of June 30, 2013 (the "McDaniel Resource Report").
2 Report prepared by McDaniel, an independent qualified reserves evaluator,
evaluating the reserves of the Company effective as of December 31, 2013 (the
"McDaniel Reserve Report").

SOURCE: Caracal Energy Inc.

For further information:

Caracal Energy Inc.
Gary Guidry, President and Chief Executive Officer
Trevor Peters, Chief Financial Officer
[phone]

Longview Communications - Canadian Media Enquiries
Alan Bayless [phone]
Joel Shaffer [phone]

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

(CRCL)