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Lightstream Adds Cardium, Bakken Wells in Q3; Ups Production

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Lightstream Resources Ltd. has reported an update on our third quarter operations.

Third quarter production was approximately 45,100 barrels of oil equivalent per day (boepd) (78% light oil and liquids weighted), based on field estimates, a 17% increase over third quarter 2012. The Cardium business unit produced approximately 20,600 boepd and the Bakken business unit produced approximately 16,000 boepd, with the remainder coming from the Saskatchewan Conventional and AB/BC business units. Our gas weighting increased slightly during the third quarter, primarily due to increased associated (solution) gas from recently added Cardium light oil production.

As expected, our third quarter average production rate of 45,100 boepd was relatively flat to the second quarter of 2013. Our third quarter 2013 volume does not include over 1,000 boepd (70% oil) of Cardium production in the central Alberta and west Pembina areas which has been restricted due to constraints on existing gas conservation and processing infrastructure. Additional capacity is being added in the area, and we expect these current restrictions to be alleviated in the first half of 2014.

Cardium

In the Cardium business unit, we drilled 13 wells and placed 8 wells on production in the quarter. Year-to-date, we have drilled 38 wells and brought 42 wells on production, with 10 wells waiting to be placed on production at the end of the third quarter. We plan to drill 10 more wells in the Cardium by the end of the year.

Bakken - Saskatchewan

In southeast Saskatchewan, we drilled 11 wells in the third quarter and placed 8 wells on production, bringing our year-to-date totals to 36 wells drilled and 32 wells on production. At the end of the third quarter, we had 8 wells waiting to be placed on production. We plan to drill another 14 wells in southeast Saskatchewan by year end. We also resumed our southeast Saskatchewan optimization program in the third quarter, which was first implemented in 2012 and is materially mitigating our Bakken base well declines.

We continue to be active in our new resource play area, particularly in the Swan Hills region, where we brought an additional 4 wells on production during the quarter. We are currently producing approximately 1,480 boepd (97% light oil and liquids weighted) in the Swan Hills area. So far this year, we have drilled 9 wells on our new plays and had 1 well waiting to be placed on production at the end of the quarter, with an additional 3 wells planned to be drilled in the fourth quarter.

Guidance Update

As our resource play assets mature and our base decline rates gradually reduce, we continue to work towards levelling out our production profile and increasing our annual average production levels on a year over year basis. As we enter the fourth quarter, we are on target to exceed the lower end of our forecasted 8% to 12% annual average production growth (46,000 to 48,000 boepd) and we continue to target exit production in excess of 47,000 boepd. By addressing facility challenges and executing the remaining components of our 2013 capital program, we believe these achievements will be met within our capital budget of $700 to $725 million.

We are currently finalizing our operational and financial plans for next year and remain committed to improving our sustainability ratio (cash outflows compared to cash inflows), lowering our debt to cash flow ratio and improving our liquidity through the many options available to us, which include, but are not limited to, modulating capital expenditures, selling assets, terming-out debt, altering our dividend program or issuing equity. Over the long-term, we continue to target a sustainability ratio of 100% and a debt to cash flow ratio of 2.0 or less. We plan to announce further details with respect to these options when we release our 2014 guidance later in the fourth quarter of 2013.