CALGARY, May 12, 2015 /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, 2015.
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(1)
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended March
31
|
|
Unaudited (Cdn $,
except per share amounts)
|
|
|
|
2015
|
2014
|
%
change
|
Financial
|
|
|
|
|
|
|
Petroleum and natural
gas sales, net of royalties
|
|
|
|
2,774,557
|
6,419,719
|
(57)
|
Funds generated by
operations (2)
|
|
|
|
117,808
|
3,067,758
|
(96)
|
|
Per share
basic
|
|
|
|
-
|
0.03
|
(100)
|
|
Per share diluted
(3)
|
|
|
|
-
|
0.03
|
(100)
|
Net income
(loss)
|
|
|
|
(2,445,766)
|
179,661
|
(1,461)
|
|
Per share
basic
|
|
|
|
(0.03)
|
-
|
n/a
|
|
Per share diluted
(3)
|
|
|
|
(0.03)
|
-
|
n/a
|
Capital expenditures
- Exploration and development(4)
|
|
|
|
651,357
|
1,931,988
|
(66)
|
Net debt and working
capital deficit(2)
|
|
|
|
(30,864,791)
|
(18,495,587)
|
67
|
Operating
|
|
|
|
|
|
|
Production
|
|
|
|
|
|
|
|
Crude oil and natural
gas liquids (Bbls per day)
|
|
|
|
609
|
734
|
(17)
|
|
Natural gas (Mcf per
day)
|
|
|
|
1,278
|
1,285
|
(1)
|
|
Barrels of oil
equivalent (Boe per day) (5)
|
|
|
|
822
|
948
|
(13)
|
Average realized
price
|
|
|
|
|
|
|
|
Crude oil and natural
gas liquids ($ per Bbl)
|
|
|
|
49.78
|
97.12
|
(49)
|
|
Natural gas ($ per
Mcf)
|
|
|
|
2.55
|
5.82
|
(56)
|
|
Barrels of oil
equivalent ($ per Boe) (5)
|
|
|
|
40.84
|
83.09
|
(51)
|
Netback ($ per
Boe)(2)(5)
|
|
|
|
|
|
|
|
Petroleum and natural
gas sales
|
|
|
|
40.84
|
83.09
|
(51)
|
|
Royalties
|
|
|
|
3.33
|
7.84
|
(58)
|
|
Operating
expenses
|
|
|
|
24.90
|
24.42
|
2
|
|
Transportation
expenses
|
|
|
|
3.04
|
4.93
|
(38)
|
Operating Netback ($
per Boe)(2)(5)
|
|
|
|
9.57
|
45.90
|
(79)
|
Undeveloped land
holdings (gross acres)
|
|
|
|
110,331
|
118,979
|
(7)
|
|
(net
acres)
|
|
|
|
104,525
|
112,852
|
(7)
|
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
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. Refer
to "Non IFRS Measures" in the Management Discussion and Analysis
for the three months ended March 31, 2015.
|
(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, 2015.
|
(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
As a result of the Company's active cost cutting measures,
LGX:
- Continued to reduce operating and transportation costs from
$29.35 per Boe in the first quarter
of 2014 to $27.94 per Boe in the
first quarter of 2015 (5 percent decrease)
- Reduced General and Administrative expenses from $7.71 per Boe in the first quarter of 2014 to
$2.92 per Boe in the first quarter of
2015 (62 percent decrease)
OUTLOOK
With cash flows impacted by oil prices at five year lows, LGX is
working proactively to ensure it has the ability to meet its
financial obligations under its credit facilities and satisfy the
2015 drilling commitments under its lease of lands on the Blood
Reserve. The Company is currently evaluating all possible
measures, including but not limited to: asset sales,
accessing third party capital, joint ventures and drilling
commitment extension.
LGX's credit facilities are currently subject to their annual
review by the lender. LGX was not in compliance with the
existing financial covenants under the credit facilities as at
March 31, 2015. The lender has not
demanded repayment of the senior, demand portion of the credit
facilities or accelerated repayment of the junior, term portion as
a result of LGX not being in compliance with the covenants.
LGX is in discussions with the lender with respect to the terms of
a renewal or replacement of the senior portion of the facility and
a relaxation or waiver of the financial covenants thereunder and
under the junior portion of the facility. The results
of such discussions, including any relaxation or waiver of
financial covenants, are uncertain and there is no guarantee that
LGX will be in compliance with the current or any revised financial
covenants in the future or that the facilities will be maintained
at their current levels.
LGX has proven the concept of an over-pressured, oil saturated,
light oil resource play over a broad area on its lands in the Big
Valley Formation. In addition, the potential for a second
exciting light oil play in the shallower Banff Formation has been
confirmed through the drilling of the Big
Valley wells to-date. Capital cost reductions have
been demonstrated through the course of the 2014 program and
additional savings are anticipated in the current low commodity
price environment. The Company has significant exposure to
the upside of both plays and only a small portion of the potential
has been recognized in the Company's reserve report.
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 27,
2015 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,
2014, December 31, 2013 and
December 31, 2012 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.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of
this release.
Forward-Looking Information
This press release contains forward-looking statements. More
particularly, it contains forward-looking statements
concerning: (i) the prospectivity of LGX's properties
with respect to the Big Valley and
Banff Formation and (ii) the anticipated future capital cost
reductions.
The forward-looking statements contained in this press
release are based on certain key expectations and assumptions made
by LGX, including the assumptions specifically set out in this
press release and expectations and assumptions concerning: (i)
prevailing commodity prices; (ii) the availability and cost of
capital, labour and services; (iii) the effectiveness of cost
reduction initiatives; (iv) the performance of existing wells, (v)
the availability and performance of facilities and pipelines, (vi)
the geological characteristics of LGX's properties, (vii)
prevailing weather and break-up conditions, royalty regimes and
exchange rates, (viii) the application of regulatory and licensing
requirements, and (ix) 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) at LGX's Manyberries property.
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, including but not limited to, fluctuations in
prevailing commodity prices, risks associated with the oil and gas
industry in general (e.g., 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 reserve estimates; the uncertainty of estimates and
projections relating to production, costs and expenses; and health,
safety and environmental risks), uncertainty as to the availability
and cost of capital, labour and services, exchange rate
fluctuations, fluctuations in oil price differentials, unexpected
adverse weather conditions and changes to existing laws and
regulations. These and other risks are set out in more
detail in the AIF.
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.
Caution Respecting Boe
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.