Reserves Summary

GLJ Petroleum Consultants Ltd. ("GLJ"), the Company's independent petroleum engineering firm, has evaluated Delphi's crude oil, natural gas and natural gas liquids reserves as at December 31, 2015 and prepared a reserves report ("GLJ Report") in accordance with National Instrument 51-101 "Standards of Disclosure for Oil and Gas Activities" and the "Canadian Oil and Gas Evaluation Handbook". GLJ's price forecast dated January 1, 2016 was used in the evaluation.

The following is summary reserves information detailed in the GLJ Report at December 31, 2015:

Net Present Value of Future Net Revenue

The estimated future net revenues associated with Delphi's reserves at December 31, 2015, based on the GLJ January 1, 2016 price forecast, are summarized in the following table.

Future Development Costs

Future development costs have been reduced by $122.1 million and $147.6 million for the total proved and total proved plus probable categories, respectively as a result of dispositions, undeveloped reserve conversions, reduced forecast development costs and FDC related to locations removed from the report due to economic considerations.

The following table provides the future development costs, undiscounted, included in the GLJ Report for total proved and total proved plus probable reserves.

Forecast Prices

The following is a summary of GLJ's January 1, 2016 price forecast used in the evaluation.

Reserves⁽¹⁾ Reconciliation

The following reconciliation of Delphi's reserves compares changes in the Company's Gross reserves at December 31, 2014 to the reserves at December 31, 2015, each evaluated in accordance with National Instrument 51-101 definitions.

In the total proved and total proved plus probable reserve categories of the report for the year ended December 31, 2015 negative revisions associated with both non-Montney and Montney reserves were reported due to both economic factors and technical revisions.

Finding and Development Costs

In 2015, corporate finding and development costs ("F&D"), including changes in FDC, were $12.04 per boe for proved producing reserves compared to the 2013-15 three year average of $14.54 per boe. Three year average corporate F&D costs are $12.31 per boe and $10.99 per boe for total proved and total proved plus probable reserves respectively. Including acquisitions and dispositions, three year average corporate finding, development, acquisition and disposition ("F,D&A") costs are $18.33 per boe, $16.81 per boe, and $17.01 per boe for proved producing, total proved and total proved plus probable reserves respectively.

One year F&D and one year F,D&A costs in the total proved and total proved plus probable categories are not meaningful in 2015 as the reduction in future development costs from 2014 to 2015 exceeded actual capital spent and total reserve additions, including technical revisions and economic factors, are also negative. One year F,D&A costs in the proved producing category is also not meaningful as disposition proceeds exceeded actual capital spent and total reserve additions are also negative.

For the Montney program, Delphi achieved F&D costs, including changes in FDC, of $10.12 per boe⁽¹⁾ for proved producing reserves compared to the 2013-15 three year average of $13.41 per boe⁽²⁾. Three year average Montney F&D costs are $11.71 per boe⁽²⁾ and $10.14 per boe⁽²⁾ for total proved and total proved plus probable reserves respectively. Three year average Montney F,D&A costs are $14.79 per boe⁽³⁾, $12.58 per boe⁽³⁾ and $10.62 per boe⁽³⁾ for proved producing, total proved and total proved plus probable reserves respectively. At December 31, 2015, the average gross estimated ultimate recoverable reserves of an extended reach, slickwater stimulated horizontal Montney well is 973 mboe, 900 mboe, 1,212 mboe and 1,065 mboe in the proved producing, total proved, proved plus probable producing and total proved plus probable categories respectively.

One year F&D and F,D&A costs in the total proved and total proved plus probable categories are not meaningful in 2015 as the reduction in future development costs from 2014 to 2015 exceeded actual capital spent and total reserve additions, including technical revisions and economic factors, are also negative.

⁽¹⁾ Capital invested of $46.7 million; change in FDC of -$3.9 million; reserve extensions, improved recovery, technical revisions and economic factors of 4.2 million boe.
⁽²⁾ Capital invested of $213.7 million; change in FDC of $0.6 million, $71.8 million and $147.2 million for proved producing, total proved and total proved plus probable respectively; reserve extensions, improved recovery, technical revisions and economic factors of 16.0 million boe, 24.4 million boe and 35.6 million boe for proved producing, total proved and total proved plus probable respectively.
⁽³⁾ Capital invested of $213.7 million; change in FDC of $0.6 million, $76.8 million and $167.0 million for proved producing, total proved and total proved plus probable respectively; acquisition costs of $22.6 million; reserve extensions, improved recovery, acquisitions, technical revisions and economic factors of 16.0 million boe, 24.9 million boe and 38.0 million boe for proved producing, total proved and total proved plus probable respectively.

Net Asset Value

The estimated net asset value of the Company at December 31, 2015 has been calculated using the before tax, net present value of reserves discounted at five and ten percent as follows:

Operations Update

Since the end of 2015, Delphi has added another Montney well (0.88 net) to its production base with the 14-27-60-23W5M ("14-27") well that was drilled at the end of 2015. 14-27 was completed in early January utilizing a 37 stage slickwater frac. The well was produced on clean-up over a 3.1 day period recovering approximately 14 percent of the initial load frac water. Over the last 24 hours prior to running production tubing, the well flowed on clean-up at an average rate of 7.2 million cubic feet per day ("mmcf/d") of raw gas and 1,384 barrels per day ("bbls/d") of wellhead condensate (192 bbls/mmcf of raw gas). Total production for the 14-27 well over this 24 hour period was approximately 2,670 barrels of oil equivalent per day ("boe/d"), including an estimated plant natural gas liquids ("NGL") yield of 34 bbls/mmcf of raw gas. 14-27 was brought on production at the beginning of February and is currently producing at a restricted rate of approximately 5.0 mmcf/d of raw gas and 550 bbls/d of wellhead condensate. Initial average production rates over the first 30 days will be reported once the data is available.

The Company has also drilled and completed the 13-21-60-23W5 ("13-21") well (0.66 net). The 13-21 well is the western-most Montney well drilled by Delphi and completed with slickwater fracs. It was drilled to a total depth of 5,690 metres with a horizontal lateral length of 2,781 metres. Delphi continues to optimize its completion techniques, as the 13-21 well was fraced over 37 stages with the largest sand tonnage and slickwater volumes for Delphi Montney wells to date. The 13-21 well was flowed on clean-up over a 2.8 day period, recovering approximately 17 percent of the initial load frac water. Over the last 24 hours prior to running production tubing, the well flowed on clean-up at an average rate of 6.1 mmcf/d of raw gas and 1,872 bbls/d of wellhead condensate (309 bbls/mmcf of raw gas). Total production for the 13-21 well over this 24 hour period was approximately 2,954 boe/d, including an estimated plant NGL yield of 34 bbls/mmcf of raw gas. 13-21 is expected to be brought on production at a restricted rate in March 2016.

Delphi has also commenced drilling of the 15-23-60-23W5 well (1.0 net) and is expected to finish in early March. Completion operations are scheduled after spring break-up conditions allow for access, likely early in the third quarter of 2016.

The Company continues to pursue opportunities to reduce operating costs at its Bigstone property. Delphi estimates $6.0 - $7.0 million in reduced operating costs in 2016 over 2015, as the more efficient Montney production replaces the lower netback properties disposed of in 2015. A new fuel gas pipeline accessing higher quality fuel gas has been installed and the 7-11 compression and dehydration facility has been expanded with an owned compressor replacing two existing rental compressors resulting in reduced maintenance and rental costs as well as increased throughput capacity. In addition, with the disposition of the lower netback properties, the Company has reduced its staff from 36 to 24 (34 percent), resulting in expected general and administrative savings of $2.0 - $2.5 million.

The following table has been updated to reflect new well production data since it was previously released and continues to illustrate the significant impact the slickwater hybrid fracturing technique has had on well performance at Bigstone in comparison to smaller conventional frac methods.

Initial Production (IP) Rate Well Performance ⁽¹⁾

Risk Management

On December 1, 2015, Delphi began delivering the majority of its natural gas production on its Alliance pipeline firm capacity into the Chicago market rather than the AECO market. Well in advance of commencement of these deliveries, the Company continued execution of its successful risk management strategy to protect its revenue stream into the Chicago market through NYMEX, Chicago basis and US/CDN foreign exchange rate contracts. As a result, the Company is very well hedged through 2016 with approximately 75 percent of its natural gas production hedged at an average price of Cdn. $4.43 per mcf (excluding transportation costs). For 2017, the Company has approximately 50 percent of its natural gas production hedged at an average price of Cdn. $4.24 per mcf (excluding transportation costs). Delphi also has approximately 43 percent of its condensate volumes hedged at a floor price of $76.49 per barrel. The table below summarizes the Company's current commodity price risk management contracts for 2016 and future years.

Outlook

Delphi continues to navigate this very challenging low commodity price environment with a singular focus on its core Bigstone Montney asset. This focused effort is successfully improving foundational cash generating efficiencies that will be more fully recognized as the rate of capitalization and production growth accelerates into the recovery phase of this commodity price cycle.

Continued innovation of our well design, driving costs lower, while maintaining full ownership and control of our infrastructure are both paramount in our continued effort towards top decile capital and cash generating efficiencies. Generating margin growth trumps production growth in the current environment. The Company's significant hedge position through 2016 and 2017, protects both the equity account and the balance sheet, while contributing to a meaningful capital program of four to five wells in 2016. Delphi's significant drilling inventory is immediately accessible to deliver production growth into a strengthening commodity price environment.

Delphi anticipates releasing its audited financial statements for the year ended December 31, 2015 on March 16, 2016 and its Annual Information Form by March 31, 2015, which will include all required National Instrument 51-101 reserves disclosure.

Certain financial and operating information included in this press release for the quarter and year ended December 31, 2015, such as, but not limited to, finding and development costs, production information, net asset value calculations, are based on unaudited financial results for the year ended December 31, 2015 and are subject to the same limitations as discussed under forward-looking statements outlined at the end of this release. These estimate amounts may change upon completion of the audited financial statements for the year ended December 31, 2015 and those changes may be material.

Delphi Energy is a Calgary-based company that explores, develops and produces oil and natural gas in Western Canada. The Company is managed by a proven technical team. Delphi trades on the Toronto Stock Exchange under the symbol DEE.

Forward-Looking Statements. The release contains forward-looking statements and forward-looking information within the meaning of applicable Canadian securities laws. These statements relate to future events or the Company's future performance and are based upon the Company's internal assumptions and expectations. All statements other than statements of present or historical fact are forward-looking statements. Forward-looking statements are often, but not always, identified by the use of any of the words "expect", "anticipate", "continue", "estimate", "may", "will", "should", "believe", "intends", "forecast", "plans", "guidance", "budget" and similar expressions.

More particularly and without limitation, this release contains forward-looking statements and information relating to petroleum and natural gas production estimates and weighting, projected crude oil and natural gas prices, future exchange rates, expectations as to royalty rates, expectations as to transportation and operating costs, expectations as to general and administrative costs and interest expense, expectations as to capital expenditures and net debt, planned capital spending, future liquidity and Delphi's ability to fund ongoing capital requirements through operating cash flows and its credit facilities, supply and demand fundamentals for oil and gas commodities, timing and success of development and exploitation activities, cash availability for the financing of capital expenditures, access to third-party infrastructure, treatment under governmental regulatory regimes and tax laws and future environmental regulations.

Furthermore, statements relating to "reserves" are deemed to be forward-looking statements as they involve the implied assessment, based on certain estimates and assumptions that the reserves described can be profitable in the future.

The forward-looking statements and information contained in this release are based on certain key expectations and assumptions made by Delphi. The following are certain material assumptions on which the forward-looking statements and information contained in this release are based: the stability of the global and national economic environment, the stability of and commercial acceptability of tax, royalty and regulatory regimes applicable to Delphi, exploitation and development activities being consistent with management's expectations, production levels of Delphi being consistent with management's expectations, the absence of significant project delays, the stability of oil and gas prices, the absence of significant fluctuations in foreign exchange rates and interest rates, the stability of costs of oil and gas development and production in Western Canada, including operating costs, the timing and size of development plans and capital expenditures, availability of third party infrastructure for transportation, processing or marketing of oil and natural gas volumes, prices and availability of oilfield services and equipment being consistent with management's expectations, the availability of, and competition for, among other things, pipeline capacity, skilled personnel and drilling and related services and equipment, results of development and exploitation activities that are consistent with management's expectations, weather affecting Delphi's ability to develop and produce as expected, contracted parties providing goods and services on the agreed timeframes, Delphi's ability to manage environmental risks and hazards and the cos t of complying with environmental regulations, the accuracy of operating cost estimates, the accurate estimation of oil and gas reserves, future exploitation, development and production results and Delphi's ability to market oil and natural gas successfully to current and new customers. Additionally, estimates as to expected average annual production rates assume that no unexpected outages occur in the infrastructure that the Company relies on to produce its wells, that existing wells continue to meet production expectations and any future wells scheduled to come on in the coming year meet timing and production expectations.

Commodity prices used in the determination of forecast revenues are based upon general economic conditions, commodity supply and demand forecasts and publicly available price forecasts. The Company continually monitors its forecast assumptions to ensure the stakeholders are informed of material variances from previously communicated expectations.

Financial outlook information contained in this release about prospective results of operations, financial position or cash flows is based on assumptions about future events, including economic conditions and proposed courses of action, based on management's assessment of the relevant information currently available. Readers are cautioned that such financial outlook information contained in this release should not be used for purposes other than for which it is disclosed.

Although the Company believes that the expectations reflected in such forward-looking statements and information are reasonable, it can give no assurance that such expectations will prove to be correct and such forward-looking statements should not be unduly relied upon. Since forward-looking statements and information address future events and conditions, by their very nature they involve inherent known and unknown risks and uncertainties. Delphi's actual results, performance or achievements could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits Delphi will derive therefrom. Should one or more of these risks or uncertainties materialize, or should assumptions underlying forward-looking statements prove incorrect, actual results may vary materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, the risks associated with the oil and gas industry in general such as operational risks in development, exploration and production, delays or changes in plans with respect to exploration or development projects or capital expenditures, the uncertainty of estimates and projections relating to production rates, costs and expenses, commodity price and exchange rate fluctuations, marketing and transportation, environmental risks, competition from others for scarce resources, the ability to access sufficient capital from internal and external sources, changes in governmental regulation of the oil and gas industry and changes in tax, royalty and environmental legislation. Additional information on these and other factors that could affect the Company's operations or financial results are included in the Company's most recent Annual Information Form and other reports on file with the applicable securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com).

Readers are cautioned that the foregoing list of factors is not exhaustive. Furthermore, the forward-looking statements contained in this release are made as of the date of this release for the purpose of providing the readers with the Company's expectations for the coming year. The forward-looking statements and information may not be appropriate for other purposes. Delphi undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws. The forward-looking statements contained in this release are expressly qualified in their entirety by this cautionary statement.

Basis of Presentation. For the purpose of reporting production information, reserves and calculating unit prices and costs, natural gas volumes have been converted to a barrel of oil equivalent (boe) using six thousand cubic feet equal to one barrel. A boe conversion ratio of 6:1 is based upon an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. This conversion conforms with the Canadian Securities Administrators' National Instrument 51-101 when boes are disclosed. Boes may be misleading, particularly if used in isolation.

As per CSA Staff Notice 51-327 initial test results and initial production performance should be considered preliminary data and such data is not necessarily indicative of long-term performance or of ultimate recovery.

Non-IFRS Measures. The release contains the terms "funds from operations", "funds from operations per share", "net debt", "operating netbacks" "cash netbacks" and "netbacks" which are not recognized measures under IFRS. The Company uses these measures to help evaluate its performance. Management considers netbacks an important measure as it demonstrates its profitability relative to current commodity prices and costs of production. Management uses funds from operations to analyze performance and considers it a key measure as it demonstrates the Company's ability to generate the cash necessary to fund future capital investments and to repay debt. Funds from operations is a non-IFRS measure and has been defined by the Company as cash flow from operating activities before accretion on long term and subordinated debt, decommissioning expenditures and changes in non-cash working capital from operating activities. The Company also presents funds from operations per share whereby amounts per share are calculated using weighted average shares outstanding consistent with the calculation of earnings per share. Delphi's determination of funds from operations may not be comparable to that reported by other companies nor should it be viewed as an alternative to cash flow from operating activities, net earnings or other measures of financial performance calculated in accordance with IFRS. The Company has defined net debt as the sum of long term debt and subordinated debt plus/minus working capital excluding the current portion of the fair value of financial instruments. Net debt is used by management to monitor remaining availability under its credit facilities. Operating netbacks have been defined as revenue less royalties, transportation and operating costs. Cash netbacks have been defined as operating netbacks less interest and general and administrative costs. Netbacks are generally discussed and presented on a per boe basis.