Pinecrest Energy Inc. provide an update on the performance of the Company's waterflood schemes as well as an operational update.

The results to date from the Company's first joint waterflood in the Evi area have been encouraging. Water injection commenced on a continuous basis in May, 2012 with initial incremental oil response observed within 2-3 months. Since first response, oil production rates from the Company's joint offsetting wells have increased rapidly and significantly. Three wells (one horizontal and two vertical wells) offsetting the injector have increased by factors of between three and six times their respective rates prior to the commencement of water injection.

This response is consistent with those observed in other water injection scheme areas within the Company's Greater Red Earth core area. In aggregate, production has increased from 16 bbls/d to 88 bbls/d. These results provide support for the low cost repeatable upside associated with pressure maintenance by way of waterflooding.

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