Quarterly / Earnings Reports | Third Quarter (3Q) Update | Key Wells

LGX Oil + Gas Drills Two Wells in 3Q 2014

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   |    Tuesday,November 11,2014

LGX Oil + Gas Inc. has announced it has filed on SEDAR its unaudited financial statements and related Management's Discussion and Analysis for the three and nine months ended September 30, 2014.

Highlights

• Increased operating netbacks from $15.76 per Boe in the third quarter of 2013 to $36.43 per Boe in the third quarter of 2014 (78 percent increase)
• Reduced operating expenses from $43.46 per Boe in the third quarter of 2013 to $29.30 per Boe in the third quarter of 2014 (33 percent decrease)
• Reduced net loss from $8.3 million ( $0.09 per share) in the third quarter of 2013 to $1.1 million ( $0.01 per share) in the third quarter of 2014 (87 percent decrease)
• Entered into a new banking facility with the Alberta Treasury Branch consisting of a $20 million revolving demand credit facility and a $10 million non-revolving term credit facility. The features of the term credit facility include a two year committed term (subject to extension upon mutual consent) available in two tranches with full payment of the principle on maturity
• Drilled 2 gross (2.0 net) wells for a 100 percent success rate

Operations Review 

Big Valley and Banff

The Company spud both wells of its two well commitment on the Blood Reserve in the quarter. The 15-25-8-24W4M horizontal well spud mid-way through the quarter and was rig released near the end of the quarter, while the 13-2-9-24W4M horizontal well was spud at the end of the quarter and was rig released early in the fourth quarter. Both wells encountered over-pressured, oil saturated, fractured Big Valley (Three Forks) and Banff sections.

Subsequent to the third quarter, both wells were completed in the Big Valley Formation with multi-stage fracture stimulations and are in various stages of flowback and pressure build-up. The Company did not plan for an extended flowback test, choosing to test the wells through the nearly complete oil battery to reduce capital and operating costs. LGX's average and exit production guidance is dependent on the results from these wells and production results will be released as they are available.

Work is nearly complete on a multi-well battery that will treat the production from the two new wells and the 14-2 well drilled in 2013. The battery will enable more consistent well run times and reduced operating expenses.

Manyberries

The Company continued to complete workovers in the Manyberries field during the third quarter in accordance with the provisions of the previously announced order for the protection of the Greater Sage-Grouse and LGX is continuing to work with Environment Canada to get additional clarity on the practical application of the Emergency Order.