CALGARY, May 30, 2016 /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, 2016.
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)
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Three Months
Ended March 31
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Unaudited (Cdn $,
except per share amounts)
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2016
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2015
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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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931,223
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2,774,557
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(66)
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Funds generated by
(used in) operations (2)
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(43,493)
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117,808
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(137)
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Per share
basic
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-
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-
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-
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Per share diluted
(3)
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-
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-
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-
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Net loss
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(2,357,921)
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(2,445,766)
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(4)
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Per share
basic
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(0.03)
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(0.03)
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-
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Per share diluted
(3)
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(0.03)
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(0.03)
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-
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Capital expenditures
- Exploration and development(4)
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1,320
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651,357
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(100)
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Net debt and working
capital deficit(2)
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(31,431,283)
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(30,864,791)
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2
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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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263
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609
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(57)
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Natural gas (Mcf per
day)
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985
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1,278
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(23)
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Barrels of oil
equivalent (Boe per day) (5)
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427
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822
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(48)
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Average realized
price
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Crude oil and natural
gas liquids ($ per Bbl)
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36.40
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49.78
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(27)
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Natural gas ($ per
Mcf)
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1.95
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2.55
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(24)
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Barrels of oil
equivalent ($ per Boe) (5)
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26.92
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40.84
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(34)
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Netback ($ per
Boe)(2)(5)
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Petroleum and natural
gas sales
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26.92
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40.84
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(34)
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Royalties
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2.95
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3.33
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(11)
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Operating
expenses
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14.06
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24.90
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(44)
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Transportation
expenses
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3.71
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3.04
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22
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Operating Netback ($
per Boe)(2)(5)
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6.20
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9.57
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(35)
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Undeveloped land
holdings (gross acres)
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88,287
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110,331
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(20)
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(net
acres)
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56,115
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104,525
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(46)
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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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Weighted average
common shares (basic)
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88,658
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88,658
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Weighted average
common shares (diluted) (3)
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88,658
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88,658
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(1)
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Consolidated
financial and operating highlights for LGX Oil + Gas Inc. and all
its subsidiaries ("LGX" or the "Company").
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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. Refer
to "Non IFRS Measures" in the Management Discussion and Analysis
for the three months ended March 31, 2016.
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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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Refer to Capital
Expenditures in the Management Discussion and Analysis for the
three months ended March 31, 2016.
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(5)
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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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OUTLOOK
Within the context of the current low oil price environment and
the temporary limits of the credit facility, there is uncertainty
surrounding the Company's ability to continue as a going concern.
Should the bank not extend the loan, the Company would need to seek
alternative forms of debt or equity financing, which would be
difficult in the current environment, or dispose of certain assets
to repay the outstanding indebtedness or face potential
insolvency. Low oil prices, declining production and the
Emergency Order at its Manyberries
property may reduce the ability of the Company to generate positive
cash flows from its operations and in turn may reduce the Company's
ability to develop or sell its properties.
EVENTS AFTER THE REPORTING PERIOD
On May 2, 2016, the Company closed
the previously disclosed agreement whereby LGX agreed to sell its
overriding royalty interests in North
Dakota to a private company for cash consideration of
$1.3 million.
On May 17, 2016, the Company
entered into an amended agreement with its lender to reduce the
credit facility to a temporary $30,100,000 available until the earlier of
May 31, 2016 or the lender making
demand for repayment in full of the Company's indebtedness to the
lender. There is no guarantee the lender will extend the
credit after this date. As of May 30th,
2016 no extension has been received. In addition, effective
January 31, 2016, interest on the
credit facility shall continue to accrue but shall not be payable
until further review. The Company is subject to certain reporting,
financial and non-financial covenants to the credit facility.
The credit facility restriction of the sum of the credit facility
borrowings plus other current liabilities less current assets not
exceeding $30,500,000 has been
temporarily suspended until further review.
To view LGX's audited financial statements, the related MD&A
and the AIF for the years ended December 31,
2015, December 31, 2014 and
December 31, 2013 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 403.441.2345 or at
4400, 525-8th Avenue SW, Calgary,
Alberta, T2P 1G1.
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) the anticipated impact on the Company in the
event the lender does not extend future credit and/or enforces upon
its existing loan and the ability of the Company to find any
additional source of funding; (ii)prevailing commodity prices;
(iii) the availability and cost of capital,
labour and services; (iv) the effectiveness of cost
reduction initiatives; (v) the performance of existing
wells, (vi) the availability and performance of
facilities and pipelines, (vii) the geological
characteristics of LGX's properties,
(viii) prevailing weather and break-up conditions,
royalty regimes and exchange rates, (ix) the
application of regulatory and licensing requirements, and *
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.