LGX Oil + Gas Inc. Announces First Quarter 2014 Results and Record Funds Flow from Operations

Source Press Release
Company LGX Oil + Gas Inc. 
Tags Financial & Operating Data
Date May 12, 2014

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   or  .

FINANCIAL + OPERATIONAL HIGHLIGHTS

         Three Months Ended March 31   
Unaudited (Cdn $, except per share amounts)         2014  2013  % change 
Financial              
Petroleum and natural gas sales, net of royalties        6,419,719  3,891,140  65 
Funds generated by operations (2)        3,067,758  1,115,649  175 
  Per share basic        0.03  0.01  200 
  Per share diluted (3)        0.03  0.01  200 
Net income (loss)        179,661  (1,153,625)  (116) 
  Per share basic         -    (0.01)  (100) 
  Per share diluted (3)         -    (0.01)  (100) 
Capital expenditures - Exploration and development (4)        1,931,988  480,220  302 
Capital expenditures - Acquisitions and dispositions (4)         -     -     n/a   
Net debt and working capital surplus (deficit) (2)        (18,495,587)  (9,307,723)  99 
Operating             
Production             
  Crude oil and natural gas liquids (Bbls per day)        734  612  20 
  Natural gas (Mcf per day)        1,285  1,806  (29) 
  Barrels of oil equivalent (Boe per day) (5)        948  913 
Average realized price             
  Crude oil and natural gas liquids ($ 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  or  .  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.

Source: EvaluateEnergy® ©2019 EvaluateEnergy Ltd