Palliser Oil & Gas Corporation Provides Operations Update

/NOT FOR DISTRIBUTION IN THE UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/

CALGARY, Oct. 7, 2013 /CNW/ - Palliser Oil & Gas Corporation ("Palliser" or the "Company") (TSX VENTURE:PXL) is pleased to provide an operations update.

The Company continues to focus its abilities on expanding production shipped by rail. The Company completed the construction of a clean oil treating facility in the third quarter which is estimated to increase the Company's capacity to ship approximately 75% of corporate production by rail, up from its previous capacity of approximately 50%. Commissioning of the cleaning facility required a build in production inventory during the third quarter, which negatively affected third quarter 2013 sales volumes, but the Company commenced shipping clean oil at the start of the fourth quarter. This facility will have a positive impact on fourth quarter and future realized heavy oil pricing.

The third quarter of 2013 saw lower average production compared to the record production achieved in the second quarter of 2013. A prolonged spring breakup that extended well into the third quarter contributed to significant downtime on several wells, and delayed the majority of budgeted third quarter capital projects until late in the quarter, which allowed production declines to outpace additions.

As a result of these factors, third quarter 2013 production is estimated to average 2,350 boe/d, down from 2,773 boe/d in the second quarter. The Company is currently forecasting 2013 average production of 2,500 - 2,550 boe/d, down from the original guidance of 2,700 - 2,800 boe/d. The Company estimates current production, based on field data, is approximately 2,500 boe/d and is forecasting exit production to be 2,800 - 2,900 boe/d.

Capital expenditures for the third quarter are estimated to be $6 million with approximately $6 million remaining in the 2013 capital budget to be spent in the fourth quarter.

For further information regarding Palliser Oil & Gas Corporation, the reader is invited to visit the Company's website at www.palliserogc.com.

Palliser is a Calgary-based emerging junior oil and gas company currently focused on high netback heavy oil production in the greater Lloydminster area of both Alberta and Saskatchewan.

Forward-Looking Statements
Certain statements contained herein constitute forward-looking statements or information (collectively "forward-looking statements") within the meaning of applicable securities legislation, including, but not limited to management's assessment of future plans and operations, including: commodity focus; drilling plans and potential locations; expected production levels; expected transportation methods; development and acquisition plans; certain economic factors; and capital expenditures.  With respect to forward-looking statements herein, Palliser has made assumptions regarding, among other things; future capital expenditure levels; future oil and natural gas prices; "differentials" between West Texas Intermediate and Western Canadian Select benchmark pricing; future oil and natural gas production levels; future water disposal capacity; future exchange rates and interest rates; ability to obtain equipment and services in a timely manner to carry out development activities; ability to market oil and natural gas successfully to current and new customers; the ability to ship volumes by rail; the impact of increasing competition; the ability to obtain financing on acceptable terms; and the ability to add production and reserves through development and exploitation activities. Although Palliser believes that the expectations reflected in the forward-looking statements contained herein, and the assumptions on which such forward-looking statements are made, are reasonable, there can be no assurance that such expectations will prove to be correct. Readers are cautioned not to place undue reliance on forward-looking statements included herein, as there can be no assurance that the plans, intentions or expectations upon which the forward-looking statements are based will occur. By their nature, forward-looking statements involve numerous risks and uncertainties that contribute to the possibility that the forward-looking statements will not occur, which may cause Palliser's actual performance and financial results in future periods to differ materially from any estimates or projections.  Additional information on these and other factors that could affect Palliser's results are included in reports on file with Canadian securities regulatory authorities, including the Company's Annual Information Form, and may be accessed through the SEDAR website at www.sedar.com.

The forward-looking statements contained herein speak only as of the date hereof. Except as expressly required by applicable securities laws, Palliser does not undertake any obligation to, nor does it intend to, publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained herein are expressly qualified by this cautionary statement.  In addition, readers are cautioned that historical results are not necessarily indicative of future performance.

Production volumes are commonly expressed on a barrel of equivalent ("BOE") basis whereby natural gas volumes are converted at a ratio of six thousand cubic feet to one barrel of oil.  The intention is to convert oil and natural gas measurement units into one basis for improved analysis of results and comparisons with other industry participants. The term BOE may be misleading, particularly if used in isolation.  The conversion ratio is based on an energy equivalent method and does not represent an economic value equivalency at the wellhead.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this Press release.

SOURCE Palliser Oil & Gas Corporation

For further information:

Kevin J. Gibson
CEO
kgibson@palliserogc.com
(403) 209-5717

or

Allan B. Carswell
President and COO
acarswell@palliserogc.com
(403) 209-5709

or

Ivan J. Condic
Vice President, Finance and CFO
icondic@palliserogc.com
(403) 209-5718