Hyperion Exploration Corp. – Focused on Cardium Light Oil in West Central Alberta

Overview

Hyperion Exploration Corp. (TSXV:HYX) is a publicly traded, high growth junior light oil and gas company resulting from the recapitalization of Triple 8 Energy Ltd. in July 2010. Based in Calgary, Alberta, its primary operations are in North Pembina, Buck Lake, Garrington, Niton, and Chip Lake areas of Alberta, as well as in the Paradise area in north eastern British Columbia. Focused on Cardium light oil, Hyperion’s business strategy involves organic growth through the drill-bit and by acquiring assets, which lead to lower risk, scalable and repeatable development projects.

Investment Highlights

• 64 net drilling locations, 56 targeting light oil
• Quarter on quarter growth in production, cash flow, net backs, and reserves since recapitalization
• Proven management team, each with at least 15 years experience in oil and gas exploration and publicly traded companies
• Strong balance sheet: raised $75 million in equity in 2011 and an undrawn $24 million credit facility as of November 2011

Chief Projects

Hyperion’s properties in Alberta lie within the Western Canada Sedimentary Basin, largely prospective in the Cardium formation. According to the Alberta Geological survey, the Cardium formation is of significant geological interest because: “it possesses a colossal hydrocarbon storage capacity, manifest in a series of stratigraphic traps, the largest of which is the supergiant Pembina Field.” Hyperion’s Alberta-based properties are well-serviced by local infrastructure.

Within the 3 months ended September 30, 2011, Hyperion began producing from 2 gross (2 net) new wells in the Garrington area from the Cardium formation. These wells helped to increase production to a quarterly average of 1,050 barrels of oil equivalent (6:1) per day (boe/day) from 943 boe/day in Q2  and an increase in operating funds flows with a third quarter funds flow of $2.47 million or $0.05 per share compared with a second quarter funds flow of $2.17 million.

Production results from the 2011 drill program have surpassed Hyperion’s original estimates and market expectations. Hyperion expects to use its remaining 2011 budgeted capital to build upon its initial drill results from its Cardium light oil drill program on its Alberta-based properties within Pembina, Garrington, and Buck Lake.

Garrington:

Hyperion Exploration Corp. acquired the Garrington asset in March 2011. Comprised of 3.25 net sections of land, the property has two wells currently in production and continue to outperform Hyperion’s internal expectations and most comparable wells in the area.

Of the wells drilled during the third quarter of 2011, 2 gross (2.0 net) wells in the Garrington area commenced production in September.

The first well, 9-27, achieved a production rate of 478 boe/day over the first 30 days of production. The second well, 8-27 achieved a production rate of 282 boe/day over the first 30 days. Both wells have significantly outperformed initial production expectations.

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Eighteen additional drilling locations at the Garrington property, which include 7 Cardium light oil and 11 locations targeting Glauconite light oil, Elkton liquids-rich gas, and Ellerslie light oil have also been identified.

Buck Lake:

Hyperion Exploration Corp. acquired the 4.35 net section Buck Lake asset in March 2011.

The first well, 4-16, has produced an average of 374 boe/day over the first 30 days of production. The well has continued to exceed Hyperion’s internal 30 day, average of 175 boe/day. Twelve additional net Cardium horizontal light oil drilling locations at Buck Lake have also been identified to-date.

Hyperion plans to spud the second Buck Lake well (0.6 net) in late December, 2011 or early January, 2012 and anticipates commencement of production in the first quarter of 2012.

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Pembina:

In October 2010, Hyperion acquired its 11.5 net sections Pembina asset.

Hyperion’s 2011 capital budget includes the drilling of two, 100% working interest, Cardium horizontal light oil wells on the Pembina property. Both of these wells have been drilled, completed, and on production. Updates will be provided when further production data is available.

Similar to the Garrington wells, these have been drilled from a common pad, saving both time and costly drill moves. Early in 2011, Hyperion drilled 2 gross (0.8 net) Cardium horizontal light oil wells on the Pembina property. Both wells went into production in late March 2011 and have exceeded estimates and continue to outperform. Additional exploration has identified 7 Cardium locations within the Pembina property.

Management

Executive:

Trevor Spagrud – President, CEO and Director
Mr. Spagrud was the former President, CEO, and Director of Titan Exploration Ltd., former VP of Engineering for Enterra Energy, and former VP Operations for Big Horn Resources.

Larry Hammond – Chief Operating Officer
Mr. Hammond is the former VP Canadian Operations for Enerplusan, was a team lead with Encana & Pan Canadian, and was the Lead Petroleum Engineer with Hibernia.

Doug Bailey – Chief Financial Officer
Mr. Bailey was an energy restructuring Consultant, the former CFO for Canadian Phoenix, and was an Interim CFO on numerous publically traded energy companies.

Tim Gee – Vice President, Engineering
Mr. Gee was the Manager of Engineering for Berkana Energy (Quatro Resources), and the Engineering Team Lead for NAL Oil & Gas Trust, Ocelot.

Ryan Heath – VP Land & Business Development
Mr. Heath was the Vice President for Land & Business Development for Severo Energy Corp.and the Senior Land Negotiator for Paramount: NCE Petrofund.

Steve Horth – Manager, Exploration
Mr. Horth was the Senior Geologist of Titan Exploration Ltd. Starpoint, Cougar, Dominion, Marathon, Tarragon, and Opinac.

Directors:

Rod Maxwell - Managing Director, Stonebridge Merchant Capital
Mr. Maxwell was a director of a number of publicly-traded oil and gas companies and energy related service companies.

Dan O’Neil - President, CEO and Director Surge Energy Inc.
Mr. O’Neil was a director of a number of publicly-traded oil and gas companies and energy related service companies; former President and CEO of Breaker Energy Ltd.

Greg Turnbull - Regional Managing Partner, McCarthy Tetrault LLP
Mr. Turnbull was a director of a number of publicly-traded oil and gas companies.

Greg Bay - Founding Partner, Cypress Capital Management
Mr. Bay was a director of a number of publicly-traded oil and gas companies and energy related service companies.