Long Run Explor Ltd Ord WFREF

I received a response last week from Bill Andrew

[barneyj44]

I emailed Laura about a couple of my concerns and Bill emailed me back last week, have to give him credit as he is obviously very busy, below is his response, I am sure he is fine with me passing on this information , stay tuned until next week. Thank you for your email. 2014 was a complicated year for Long Run. We entered the year with a strong balance sheet. What we felt was lacking was a good solid third core area that would take the pressure off Girouxville/Normandville and provide better project economics than the Redwater Viking play. Early in 2014 we had an opportunity to transact with Crew on an asset package focused on liquids rich gas in the Deep Basin fairway at Wapiti, Elmworth, Kakwa and Edson/Pine Creek. That acquisition followed up by a larger acquisition of Crocotta that consolidated holdings in the Edson/Pine creek area brought us a third very strong core area of Cardium liquids rich natural gas with an excellent inventory of locations. We elected to do a large portion of these acquisitions with debt rather than issuing equity with a plan to then sell off $125-$150 million in non core assets. The plan was good but our timing was wrong. We came out with our non-core asset package in mid-September with bids due in early November. As prices dropped so dropped interest in our non-core assets. As a result we did not complete the planned sales and we will need to manage our debt until such time that the assets can be marketed again. Our 2015 operating and capital plan is being finalized and will be released along with 2015 guidance and any other news soon. We are very aware of the current strip price on oil and the impact on our funds flow balance sheet. Fortunately approximately 30% of our production is hedged for 2015. That eases the price shock to some extent. Going forward we need a capital program that maintains current production levels and does no add additional debt. To accomplish this we need WTI price in the $75 plus range or if WTI is lower additional source of capital from a reduced dividend and/or asset sale. We are selling downs with other firms that have debt to funds flow levels above 1.5 to 1. In addition we have had hedge funds liquidate their holding aggressively. On a personal level the sale of 10,000 shares was an ongoing charitable commitment that I had for tax planning. In hindsight bad timing but I believe you will see that any sales of LRE stock have been greatly outweighed by purchases. As CEO and Chairman I have very few times in the year when I am not blacked out from buying or selling Long Run shares. Trust this helps, Bill Andrew CEO & Chair Long Run Exploration