CALGARY, March 24, 2014 /CNW/ - LGX Oil + Gas Inc. ("LGX" or the
"Company") (TSXV:OIL) is pleased to announce it has filed on SEDAR its
audited financial statements and related Management's Discussion and
Analysis ("MD&A") for the year ended December 31, 2013 as well as its
annual information form ("AIF") for the year ended December 31, 2013.
Selected financial and operational information is outlined below and
should be read in conjunction with LGX's audited financial statements,
the related MD&A and the AIF which are available for review at www.lgxoil.com or www.sedar.com.
FINANCIAL + OPERATIONAL HIGHLIGHTS
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Three Months Ended
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Year Ended
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December 31
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December 31
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(Cdn $, except per share amounts)
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2013
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2012
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% change
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2013
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2012
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% change
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Financial
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Petroleum and natural gas sales, net of royalties
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4,520,788
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2,775,518
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63
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17,387,700
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4,046,322
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330
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Funds generated by operations (2)
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1,125,835
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463,043
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143
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4,432,350
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324,598
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1,265
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Per share basic
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0.01
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0.01
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-
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0.05
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0.01
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400
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Per share diluted (3)
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0.01
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0.01
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-
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0.05
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0.01
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400
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Net income (loss)
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(7,775,472)
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(7,023,085)
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11
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(20,326,748)
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3,419,269
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(694)
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Per share basic
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(0.09)
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(0.11)
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(18)
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(0.23)
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0.15
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(253)
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Per share diluted (3)
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(0.09)
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(0.11)
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(18)
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(0.23)
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0.15
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(253)
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Capital expenditures (excluding acquisitions)
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12,782,541
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7,379,378
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73
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15,321,445
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9,936,095
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54
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Net acquisitions (cash consideration) (5)
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-
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42,378,028
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(100)
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-
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42,378,028
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(100)
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Net debt and working capital surplus (deficit) (2)
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(19,635,864)
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(9,906,927)
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98
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(19,635,864)
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(9,906,927)
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98
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Operating
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Production
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Crude oil and natural gas liquids (Bbls per day)
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718
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430
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67
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619
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146
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324
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Natural gas (Mcf per day)
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1,482
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1,528
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(3)
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1,673
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871
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92
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Barrels of oil equivalent (Boe per day) (4)
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965
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685
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41
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898
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291
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209
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Average realized price
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Crude oil and natural gas liquids ($ per Bbl)
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78.26
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72.18
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8
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84.60
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74.10
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14
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Natural gas ($ per Mcf)
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3.46
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3.32
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4
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3.05
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2.69
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13
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Barrels of oil equivalent ($ per Boe) (4)
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63.55
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52.71
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21
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63.99
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45.23
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42
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Netback ($ per Boe) (2)
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Petroleum and natural gas sales
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63.55
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52.71
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21
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63.99
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45.23
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41
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Royalties
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12.63
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8.67
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46
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10.94
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7.24
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51
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Operating expenses
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29.09
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22.41
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30
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28.52
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19.26
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48
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Transportation expenses
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3.13
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2.19
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43
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2.65
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1.80
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47
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Operating Netback ($ per Boe) (2)
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18.70
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19.44
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(4)
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21.88
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16.93
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29
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Undeveloped land holdings (gross acres)
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119,668
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209,619
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(43)
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119,668
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209,619
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(43)
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(net acres)
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113,541
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186,477
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(39)
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113,541
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186,477
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(39)
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Common Shares (000's)
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Common shares outstanding, end of period
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88,658
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88,658
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-
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88,658
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88,658
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Weighted average common shares (basic)
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88,658
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65,180
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36
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88,658
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23,143
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283
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Weighted average common shares (diluted) (3)
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88,658
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65,180
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36
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88,658
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23,143
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283
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(1)
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The reader is cautioned that the Financial + Operational Highlights
above present the historic financial position, results of operations
and cash flows of Legacy Oil + Gas Inc.'s Southern Alberta Assets ("SA
Assets") for all prior periods up to and including July 5, 2012 and the
results of operations from July 5, 2012 forward include both the SA
Assets and LGX Oil + Gas Inc. (referred to collectively with its
subsidiaries as "LGX" or the "Company"), unless otherwise indicated.
Refer to the common-control transaction and reverse acquisition in the
Management's Discussion and Analysis "(MD&A") of LGX Oil + Gas Inc. for
the fourth quarter of 2013 and audited consolidated financial
statements for the year ended December 31, 2013. For a comparison of
the quarter to prior quarters of Bowood Energy Inc., refer to page 15
of the MD&A of LGX Oil + Gas Inc. for the fourth quarter of 2013.
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(2)
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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.
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(3)
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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.
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(4)
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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.
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(5)
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For the three months and year ended December 31, 2012, the Company
issued 4,069,767 common shares valued at $3,011,628 as part
consideration for the acquisition of Manyberries properties in
Southeast Alberta on November 7, 2012. For the year ended December 31,
2012, the Company issued 13,746,669 common shares to former Bowood
Energy Inc. shareholders valued at $17,870,670 as part of the SA Assets
reverse acquisition of LGX.
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ACCOMPLISHMENTS
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Increased average production from 291 Boe per day in 2012 to 898 Boe per
day (69 percent light oil and natural gas liquids) in 2013 (209 percent
increase); increased average production from 685 Boe per day in the
fourth quarter of 2012 to 965 Boe per day in the fourth quarter of 2013
(41 percent increase)
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Increased funds generated from operations from $0.3 million in 2012 to
$4.4 million in 2013 (1,265 percent increase); increased funds
generated from operations from $0.01 per share in 2012 to $0.05 per
share in 2013 (400 percent increase)
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Reduced general and administrative ("G&A") costs from $12.64 per Boe in
2012 to $6.83 per Boe in 2013 (46 percent decrease); reduced G&A from
$10.28 per Boe in the fourth quarter of 2012 to $4.67 per Boe in the
fourth quarter of 2013 (55 percent decrease)
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Reduced operating expense from $43.46 per Boe in the third quarter of
2013 to $29.09 per Boe in the fourth quarter of 2013 (33 percent
decrease)
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Increased gross proved plus probable reserves from 4.4 MMBoe at December
31, 2012 to 5.6 MMBoe at December 31, 2013 (27 percent increase);
proved plus probable reserve additions replaced 464 percent of
production in the year
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Achieved finding and development costs of $25.57 per Boe (including
change in future development capital) for 2013
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Drilled 2 gross (2.0 net) Big Valley oil wells with a 100 percent
success rate in 2013
2014 GUIDANCE
LGX expects to spend $13.4 million in 2014 focused on light oil
development with the majority of capital (90 percent) directed to
drilling, completions and tie-ins on the Alberta Bakken play. The
capital spending is distributed as follows: drilling, completions and
tie‐ins - $11.2 million; re-completions and workovers - $1.9 million
and other - $0.3 million.
LGX is planning to drill 2 gross (1.6 net) development wells in 2014,
targeting high quality light oil on the Alberta Bakken play. No capital
has been budgeted for acquisitions, although the Company continues to
evaluate new opportunities, both within and beyond its core areas.
LGX anticipates a 2014 average production rate of 1,100 Boe per day and
exit rate of 1,400 Boe per day. The operational parameters used in the
budget are as follows:
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Exit Production - 1,400 Boe per day (83 percent light oil and NGL)
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Average Production - 1,100 Boe per day (79 percent light oil and NGL)
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Royalty Rate - 17.5 percent
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Operating Costs - $22.25 per Boe
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Transportation Costs - $3.00 per Boe
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Common Shares Outstanding (basic, weighted average) - 88.7 million
OUTLOOK
Following the success of the 14-2 well (530 Bbl per day of light oil for
the first 30 days of production) in the Company's emerging Alberta
Bakken play, LGX has identified numerous locations on its 95 square
mile 3D seismic program, centred over its lands on the Blood reserve.
LGX has budgeted to drill two development wells, which are expected to
spud in the second and third quarters of 2014, along with performing
re-completions on the Blood Reserve 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 is evaluating this area further for potential re-entry to drill
a horizontal leg that would open up another development area on the
Blood Reserve.
The management team at LGX 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 amount of planned
capital expenditures for 2014, (ii) the breakdown of planned capital
expenditures by class and area, (iii) planned drilling and development
activities, and (iv) the anticipated 2014 average and exit rates of
production.
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.
