CALGARY, May 12, 2014 /CNW/ - LGX Oil + Gas Inc. ("LGX" or
the "Company") (TSXV:OIL) is pleased to announce it has filed on
SEDAR its unaudited financial statements and related Management's
Discussion and Analysis ("MD&A") for the three months ended
March 31, 2014. Selected
financial and operational information is outlined below and should
be read in conjunction with LGX's unaudited financial statements
and the related MD&A which are available for review at
www.lgxoil.com or www.sedar.com.
FINANCIAL + OPERATIONAL HIGHLIGHTS
|
|
|
|
Three Months
Ended March 31 |
|
Unaudited (Cdn $, except per share
amounts) |
|
|
|
2014 |
2013 |
% change |
Financial |
|
|
|
|
|
|
Petroleum and natural gas sales, net of
royalties |
|
|
|
6,419,719 |
3,891,140 |
65 |
Funds generated by operations
(2) |
|
|
|
3,067,758 |
1,115,649 |
175 |
Per share basic |
|
|
|
0.03 |
0.01 |
200 |
Per share diluted
(3) |
|
|
|
0.03 |
0.01 |
200 |
Net income (loss) |
|
|
|
179,661 |
(1,153,625) |
(116) |
Per share basic |
|
|
|
- |
(0.01) |
(100) |
Per share diluted
(3) |
|
|
|
- |
(0.01) |
(100) |
Capital expenditures -
Exploration and development (4) |
|
|
|
1,931,988 |
480,220 |
302 |
Capital expenditures -
Acquisitions and dispositions (4) |
|
|
|
- |
- |
n/a |
Net debt and working capital surplus (deficit)
(2) |
|
|
|
(18,495,587) |
(9,307,723) |
99 |
Operating |
|
|
|
|
|
|
Production |
|
|
|
|
|
|
Crude oil and natural gas liquids
(Bbls per day) |
|
|
|
734 |
612 |
20 |
Natural gas (Mcf per day) |
|
|
|
1,285 |
1,806 |
(29) |
Barrels of oil equivalent (Boe per
day) (5) |
|
|
|
948 |
913 |
4 |
Average realized price |
|
|
|
|
|
|
Crude oil and natural gas liquids
($ per Bbl) |
|
|
|
97.12 |
75.54 |
29 |
Natural gas ($ per Mcf) |
|
|
|
5.82 |
2.95 |
97 |
Barrels of oil
equivalent ($ per Boe) (5) |
|
|
|
83.09 |
56.47 |
47 |
Netback ($ per Boe) (2)(5) |
|
|
|
|
|
|
Petroleum and natural gas
sales |
|
|
|
83.09 |
56.47 |
47 |
Royalties |
|
|
|
7.84 |
9.12 |
(14) |
Operating expenses |
|
|
|
24.42 |
21.77 |
12 |
Transportation expenses |
|
|
|
4.93 |
2.02 |
144 |
Operating Netback ($ per Boe)
(2)(5) |
|
|
|
45.90 |
23.56 |
95 |
Undeveloped land holdings (gross acres) |
|
|
|
118,979 |
202,579 |
(41) |
(net
acres) |
|
|
|
112,852 |
182,006 |
(38) |
Common Shares (000's) |
|
|
|
|
|
|
Common shares outstanding, end of period |
|
|
|
88,658 |
88,658 |
- |
Weighted average common shares (basic) |
|
|
|
88,658 |
88,658 |
- |
Weighted average common shares
(diluted) (3) |
|
|
|
88,658 |
88,658 |
- |
(1) Consolidated
financial and operating highlights for LGX Oil + Gas Inc. and all
of its subsidiaries ("LGX" or the "Company").
(2) Management uses funds
generated by operations, net debt and working capital surplus
(deficit) and operating netback to analyze operating performance
and leverage. These terms, as presented, do not have a
standardized meaning prescribed by International Financial
Reporting Standards and therefore they may not be comparable with
the calculation of similar measures for other entities.
(3) In calculating the net
income (loss) per share diluted, the Company excludes the effect of
outstanding stock options and share warrants outstanding and uses
the weighted average common shares (basic) where the Company has a
net loss for the period. In calculating, funds generated by
operations per share diluted, the Company includes the effect of
outstanding stock options and share warrants using the treasury
stock method.
(4) Refer to Capital
Expenditures in the Management Discussion and Analysis for the
three months ended March 31,
2014.
(5) Boe means barrel of oil
equivalent. All Boe conversions in this report are derived by
converting natural gas to oil equivalent at a ratio of six thousand
cubic feet of natural gas to one barrel of oil equivalent.
Boe may be misleading, particularly if used in isolation. A
Boe conversion rate of 1 Boe : 6 Mcf is based on an energy
equivalency conversion method primarily applicable at the burner
tip and does not represent a value equivalency at the
wellhead. Given that the value ratio of oil compared to
natural gas based on currently prevailing prices is significantly
different than the energy equivalency ratio of 1 Boe : 6 Mcf,
utilizing a conversion ratio of 1 Boe : 6 Mcf may be misleading as
an indication of value.
ACCOMPLISHMENTS
- Increased average production from 913 Boe per day in the first
quarter of 2013 to 948 Boe per day in the first quarter of 2014 (4
percent increase); increased oil production from 612 Boe per day in
the first quarter of 2013 to 734 Boe per day in the first quarter
of 2014 (20 percent increase)
- Increased oil and NGL's production weighting from 67 percent in
the first quarter of 2013 to 77 percent in the first quarter of
2014
- Increased funds generated from operations of $1.1 million ($0.01
per share) in the first quarter of 2013 to a record $3.1 million ($0.03
per share) in the first quarter of 2014 (175 percent increase)
- Increased operating netbacks from $23.56 per Boe in the first quarter of 2013 to
$45.90 per Boe in the first quarter
of 2014 (95 percent increase)
OPERATIONS REVIEW
Bakken
The Company continues to generate drilling
locations and acquire surveys on its emerging Alberta Bakken play, following the success of
the 14-2-9-24W4 ("14-2") Big
Valley (Three Forks) discovery well on the Blood Reserve.
The 14-2 well produced 445 Bbl per day of light oil for the first
60 days of production and is currently producing at a restricted
Maximum Rate Limitation (MRL) of 250 Bbl oil per day with
capability in excess of 400 Bbl per day of light oil. Initial
approval on the first follow-up well has been received and
environmental assessments will begin in mid May on further
locations.
Manyberries
LGX continues to operate its Manyberries property in accordance with the
provisions of the previously announced order for the protection of
the Greater Sage-Grouse (the "Emergency Order") and is continuing
to work with Environment Canada to get additional clarity on the
practical application of the Emergency Order. The Company expects
to be in a position to formulate long-term plans for this area in
the coming months.
OUTLOOK
LGX has budgeted to drill two horizontal
development wells, which are expected to spud in the second and
third quarters of 2014, along with performing re-completions of
previously drilled wells based on the 2013 drilling success.
Analysis of the 3-D seismic has indicated an area of potentially
highly fractured reservoir adjacent to a vertical well drilled in
2012. The Company has also identified significant potential in
uphole zones above the Big
Valley.
LGX is on track to meet its previously announced
production guidance and the management team continues to
aggressively pursue opportunities that improve the upside
potential, sustainability and autonomy of LGX.
ANNUAL GENERAL MEETING
LGX's Annual General Meeting, is scheduled for
3:00 pm on May
29, 2014 at The Petroleum Club, McMurray Room, located at 319 - 5th Avenue SW,
Calgary, AB.
To view LGX's audited financial statements, the
related MD&A and the AIF for the years ended December 31, 2013, December 31, 2012 and December 31, 2011 please visit our web site at
www.lgxoil.com or www.sedar.com. To the extent investors do
not have access to the internet, copies of the audited financials
the related MD&A and the AIF can be obtained on request without
charge by contacting LGX at 403.441.2300 or at 4400, 525-8th Avenue
SW, Calgary, Alberta, T2P 1G1.
LGX is a uniquely positioned, technically
driven, junior oil and natural gas company with a proven management
team committed to aggressive, cost-effective growth of light oil
reserves and production combined with high impact exploration
potential in southern Alberta. LGX's common shares trade on
the TSX Venture Exchange under the symbol OIL.
Forward-Looking Information - This press
release contains forward-looking statements. More particularly, it
contains forward-looking statements concerning: (i) the productive
capacity of the 14-2 well, (ii) planned drilling and development
activities and (iii) the Company being on track to meets its
previously announced production guidance.
The forward-looking statements contained in
this press release are based on certain key expectations and
assumptions made by LGX, including the operational parameters
specifically set out in this press release and expectations and
assumptions concerning: (i) the application of the previously
announced emergency order for the protection of the Greater
Sage-Grouse (the "Emergency Order") and the Species at Risk Act
(Canada) to the Corporation's
Manyberries property, (ii) the
success of future drilling, development and completion activities,
(iii) the performance of existing wells, (iv) the performance of
new wells, (v) the availability and performance of facilities and
pipelines, (vi) the geological characteristics of LGX's properties,
(vii) the successful application of drilling, completion and
seismic technology, (viii) prevailing weather and break-up
conditions, commodity prices, royalty regimes and exchange rates,
(ix) the application of regulatory and licensing requirements, and
* the availability of capital, labour and services.
Although LGX believes that the expectations
and assumptions on which the forward-looking statements are based
are reasonable, undue reliance should not be placed on the
forward-looking statements because LGX can give no assurance that
they will prove to be correct. Since forward-looking statements
address future events and conditions, by their very nature they
involve inherent risks and uncertainties. Actual results could
differ materially from those currently anticipated due to a number
of factors and risks. These include, but are not limited to, risks
associated with the oil and gas industry in general (e.g.,
operational risks in development, exploration and production; the
uncertainty of reserve estimates; the uncertainty of estimates and
projections relating to production, costs and expenses, and health,
safety and environmental risks), constraint in the availability of
services, constraint in the availability of capital, commodity
price and exchange rate fluctuations, adverse weather or break-up
conditions and uncertainties resulting from potential delays or
changes in plans with respect to exploration or development
projects or capital expenditures, uncertainties as to the
application and impact of the Emergency Order and uncertainties as
to the outcome of efforts by LGX to quash or amend the Emergency
Order or to obtain compensation for losses related to the Emergency
Order. These and other risks are set out in more detail in
LGX's Annual Information Form for the year ended December 31, 2013 dated March 24, 2014.
The forward-looking statements contained in
this press release are made as of the date hereof and the Company
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.
Meaning of Boe - Boe means barrel of oil
equivalent. All Boe conversions in this report are derived by
converting natural gas to oil equivalent at a ratio of six thousand
cubic feet of natural gas to one barrel of oil equivalent.
Boe may be misleading, particularly if used in isolation. A
Boe conversion rate of 1 Boe: 6 Mcf is based on an energy
equivalency conversion method primarily applicable at the burner
tip and does not represent a value equivalency at the
wellhead. Given that the value ratio of oil compared to
natural gas based on currently prevailing prices is significantly
different than the energy equivalency ratio of 1 Boe : 6 Mcf,
utilizing a conversion ratio of 1 Boe : 6 Mcf may be misleading as
an indication of value.
SOURCE LGX Oil + Gas Inc.