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Legacy announces results of resource assessment


CALGARY, Nov. 12, 2012 /CNW/ - Legacy Oil + Gas Inc. ("Legacy" or the "Company") (TSX:LEG) is pleased to announce the results of an independent resource assessment on certain of its assets.  This resources assessment further demonstrates the significant light oil resource potential contained in a number of Legacy's resource plays.  These plays represent a substantial resource base of strong capital efficiency investments and will comprise the majority of Legacy's capital budget in the coming years.  The magnitude of the aggregate of these plays will ensure the sustainability of Legacy's business model in a variety of economic and industry conditions.

Assessment of the Company's Discovered Oil Initially In-Place ("DOIIP") and Discovered Contingent Oil Resources (together the "CORA") have been completed by Sproule Associates Limited ("Sproule"), an independent qualified reserves evaluator, on behalf of the Company, covering the Company's interest in the Spearfish, Bakken, Torquay and Chinkeh formations.  The report was recently completed and is effective April 30, 2012.  This news release contains certain information from the CORA, but does not contain the report in its entirety.

Company Working Interest


                                                                                     
                     Ultimate Recoverable Oil(  Discovered Contingent Oil
          Discovered            (2))                  Resources((3))       Portion of
             Oil
          Initially     Low      Best     High     Low      Best     High     Lands
                                                                           Attributed
           in-Place  Estimate Estimate Estimate Estimate Estimate Estimate DOIIP((4))

Formation
((1))        (MBbl)   (MBbl)   (MBbl)   (MBbl)   (MBbl)   (MBbl)   (MBbl)       (%)
                                                                                     

Spearfish    494,953   27,539   39,556   60,978   23,043   32,320   47,781       37.8

Bakken       240,052   18,417   36,412   54,355   10,138   23,522   37,705       71.9

Torquay      140,259   13,156   20,657   32,021   11,199   17,480   27,949       66.7

Chinkeh      137,613    4,260    9,628   15,001    3,973    9,271   14,568       41.6
                                                                                     

Total(
(5))       1,012,877   63,371  106,253  162,355   48,353   82,593  128,003       52.2
                             
                  Recovery Factor
             Low      Best     High
          Estimate Estimate Estimate

Formation    (%)      (%)      (%)
                                    

Spearfish      5.6      8.0     12.3

Bakken         7.7     15.2     22.6

Torquay        9.4     14.7     22.8

Chinkeh        3.1      7.0     10.9
                                    

Total          6.3     10.5     16.0

Notes:

(1)   The Spearfish formation is located within Legacy's properties at
      Pierson, Manitoba and Bottineau County North Dakota.  The Bakken
      and Torquay formations are located within certain of Legacy's
      properties in southeast Saskatchewan.  The Chinkeh formation is
      located within Legacy's property at Maxhamish, British Columbia. 
      These properties and Legacy's interest in them are described in
      detail in Legacy's Annual Information Form dated March 20, 2012
      for the year ended December 31, 2012 (the "AIF").

(2)   Represents Discovered Oil Initially-in-Place less Discovered
      Unrecoverable Oil Initially-in-Place.

(3)   Represents Discovered Oil Initially-in-Place, less Discovered
      Unrecoverable Oil Initially-in-Place, Reserves and Cumulative
      Production.

(4)   The Sproule report only assessed Discovered Oil Initially
      In-Place and Discovered Contingent Oil Resources.  The referenced
      percentages reflect the portion of Legacy's total applicable land
      interest to which Discovered Oil Initially In-Place and
      Discovered Contingent Oil Resources have been attributed.

(5)   These volumes are arithmetic sums that include probabilistically
      aggregated volumes of Contingent Resources.  Readers should be
      aware statistical principles indicate that an arithmetic sum of
      probabilistically aggregated volumes may be misleading as to the
      volumes that may actually be recovered, particularly pertaining
      to Low and High estimates.

(6)   See under the heading "Definitions and Preparation" at the bottom
      of this release for further information concerning the disclosure
      contained in the above table.

(7)   There are risks and uncertainties associated with the recovery of
      resources.  The economic viability of Legacy's Contingent
      Resources is undetermined, as economic studies have not yet been
      completed.  There is no certainty that it will be commercially
      viable to produce any portion of the resources.  See below under
      the heading "Preparation and Definitions" for a description of
      such risks and uncertainties and a description of the
      contingencies which must be overcome to enable the classification
      of Contingent Resources as Reserves.  See the AIF under the
      heading "Risk Factors" for risks and uncertainties affecting
      Legacy and the oil and natural gas exploration and production
      industry in general.

In reviewing the above information, it is important to note:
    --  A significant portion of Legacy's lands in the above noted
        formations as well as a number of areas (including the
        Company's interest in the 1.3 billion Bbl (gross) DOIIP field
        at Turner Valley and Mississippian Conventional) were not
        assessed in the CORA.
    --  The Company's Undiscovered Oil Initially In-Place and
        associated Prospective Resources were not included in the scope
        of the CORA.
    --  No attempt was made to estimate contingent natural gas or NGL
        resources in the scope of the CORA.
    --  The discovered contingent oil resources exclude current
        Reserves volumes and cumulative production.

CONTIGENT RESOURCE ASSESSMENT SUBSTANTIATES LEGACY STRATEGY

Through a series of strategic acquisitions and a successful, methodical 
appraisal, delineation and development drilling program, Legacy has control 
and comprehension of a significant light oil resource base.  More than 2,000 
net locations have been identified and substantial waterflood recovery 
potential exists.

Legacy was founded on the principles of building a sustainable business model 
and the critical components are:
    --  Free cash flow (after satisfying production declines)
    --  Depth of resource and inventory
    --  Low cost structure and/or high margins
    --  Execution proficiency
    --  Financial flexibility and balance sheet strength

As a result of Legacy's strong operating and financial results over the course 
of 2012, the strategic term debt transaction and significant contingent oil 
resource assessment results, the Company continues to demonstrate that we have 
all the elements in place for sustained, cost-effective, per share growth for 
the foreseeable future.  The foundation and evolution of Legacy continues to 
differentiate it from its peers and provides the basis for long-term value 
creation for shareholders.

Legacy is a uniquely positioned, well‐capitalized, technically driven, 
intermediate oil and natural gas company with a proven management team 
committed to aggressive, cost‐effective growth of light oil reserves and 
production in large hydrocarbon in-place assets and resource plays. Legacy's 
common shares trade on the Toronto Stock Exchange under the symbol LEG.

Definitions and Preparation

The Discovered Oil Initially In-Place and Discovered Contingent Oil Resource 
assessments in the Sproule report were prepared in accordance with the 
definitions, standards and procedures contained in the Canadian Oil and Gas 
Evaluation Handbook (the "COGE Handbook") and National Instrument 51-101 - 
Standards of Disclosure for Oil and Gas Activities ("NI 51-101").

Definitions

The following definitions from the COGE Handbook are used in this press 
release:

"Contingent Resources" means those quantities of petroleum estimated to be 
potentially recoverable from known accumulations using established technology 
or technology under development, but which do not currently qualify as 
Reserves and are not commercially recoverable due to one or more 
contingencies.  Contingencies may include factors such as economic, legal, 
environmental, political and regulatory matters or a lack of markets.

"Cumulative Production" means the cumulative quantity of petroleum that has 
been recovered at a given date.

"Discovered Oil Initially-in-Place" or "DOIIP" means that quantity of oil that 
is estimated, as of a given date, to be contained in known accumulations prior 
to production. The recoverable portion of discovered oil initially-in-place 
includes Cumulative Production, Reserves, and Contingent Resources; the 
remainder is categorized as unrecoverable.

"Discovered Unrecoverable Oil Initially-In-Place" or "Discovered Unrecoverable 
DOIIP" is that portion of DOIIP which is estimated, as of a given date, not to 
be recoverable by future development projects. A portion of these quantities 
may become recoverable in the future as commercial circumstances change or 
technological developments occur; the remaining portion may never be recovered 
due to the physical/chemical constraints represented by subsurface interaction 
of fluids and reservoir rocks.

"Reserves" means estimated remaining quantities of petroleum anticipated to be 
recoverable from known accumulations, as of a given date, based on the 
analysis of drilling, geological, geophysical, and engineering data; the use 
of established technology; and specified economic conditions, which are 
generally accepted as being reasonable. Reserves are further classified 
according to the level of certainty associated with the estimates and may be 
sub-classified based on development and production status.

"Prospective Resources" means those quantities of petroleum estimated, as of a 
given date, to be potentially recoverable from undiscovered accumulations by 
application of future development projects.  Prospective resources have both 
an associated chance of discovery and a chance of development.

"Undiscovered Oil Initially-in-Place" means that quantity of oil that is 
estimated, as of a given date, to be contained in accumulations yet to be 
discovered. The recoverable portion of undiscovered oil initially-in-place is 
referred to as Prospective Resources; the remainder is categorized as 
unrecoverable.

Preparation

All estimates of Contingent Resources represent gross resources, meaning the 
company's working interest share in the Contingent Resources before deducting 
royalties and without including any royalty interests of the Company.

Sproule's estimates of Contingent Resources were determined using 
probabilistic methods.  Probabilistic aggregation of the low and high 
property estimates shown in the table might produce different total volumes 
than the arithmetic sums shown in the table.

"Low estimate" is considered to be a conservative estimate of the quantity of 
resources that will actually be recovered.  It is likely that the actual 
remaining quantities recovered will exceed the low estimate.  Those resources 
at the low end of the estimate range have the highest degree of certainty - a 
90 percent confidence level - that the actual quantities recovered will equal 
or exceed the estimate.

"Best estimate" is considered to be the best estimate of the quantity of 
resources that will actually be recovered.  It is equally likely that the 
actual remaining quantities recovered will be greater or less than the best 
estimate.  Those resources that fall within the best estimate have a 50 
percent confidence level that the actual quantities recovered will equal or 
exceed the estimate.

"High estimate" is considered to be an optimistic estimate of the quantity of 
resources that will actually be recovered. It is unlikely that the actual 
remaining quantities of resources recovered will meet or exceed the high 
estimate. Those resources at the high end of the estimate range have a lower 
degree of certainty - a 10 percent confidence level - that the actual 
quantities recovered will equal or exceed the estimate.

The Discovered Oil Initially-In-Place estimates include unrecoverable volumes 
and are not an estimate of the volume of the substances that will ultimately 
be recovered.

For Legacy, the contingencies which must be overcome to enable the 
classification of Contingent Resources as Reserves include, but are not 
limited to, regulatory application submission with no major issues raised, 
access to markets, intent to proceed by the operator and partners as evidenced 
by major capital expenditures planned within five years and the technical and 
economic success of development programs. The estimate of Contingent Resources 
has not been adjusted for risk based on the chance of development. The 
Contingent Resource estimates assume the same recovery process and well types 
currently being used to operate Legacy's properties, which were economic as at 
the date of this release.  Positive factors relevant to the Contingent 
Resource estimates include the extensive history of commercial petroleum 
production in the formations, including geological information and production 
performance history, the use of well-established economic recovery methods and 
well technology, and dominant production infrastructure ownership. 
Uncertainties associated with recovery of the estimated discovered resources 
include, but are not limited to, the current recovery factor for any specific 
location and the corresponding ultimate recovery factor, which uncertainties 
were reflected in the recovery factor distribution employed in the evaluation 
of the estimated discovered resources.  The timing of the recovery of these 
estimated discovered resources is also uncertain, and depends on factors 
including the priority assigned by the Company to development, technical and 
economic success and commodity prices.

Forward-Looking Information

All of the estimates of the quantities and recoverability of resources 
contained in this press release should be considered to be forward-looking 
statements.  These estimates are based on certain key assumptions made by 
Sproule and Legacy, including those specifically detailed in this press 
release.  These estimates are estimates only and there is no guarantee that 
they will prove to be accurate due to an number of risks and factors, 
including those specifically detailed in this press release and those risks 
and factors affecting Legacy and the oil and natural gas exploration industry 
in general set out in Legacy's Annual Information Form for the year ended 
December 31, 2011 dated March 20, 2012.

In addition, this press release contains forward looking statements concerning 
the expenditure of the majority of Legacy's capital budget in the coming years 
on the referenced properties, the number of net drilling locations that Legacy 
has and the waterflood potential of Legacy's properties.  These 
forward-looking statements are based on certain key expectations and 
assumptions made by Legacy, including expectations and assumptions concerning 
the success of future drilling, development and completion activities, the 
viability of waterflood projects, the availability and performance of 
facilities and pipelines, the geological characteristics of Legacy's 
properties, the application of regulatory and licensing requirements and the 
availability of capital.  Although Legacy 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 
Legacy 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.  These include, but are not limited to, risks associated with the 
oil and natural gas industry in general (e.g., operational risks in 
development, exploration and production; the uncertainty of reserve estimates; 
the uncertainty of estimates and projections relating to production, costs and 
expenses, and health, safety and environmental risks), constraint in the 
availability of services, commodity price and exchange rate fluctuations, 
adverse weather conditions and uncertainties resulting from potential delays 
or changes in plans with respect to exploration or development projects, 
waterflood projects or capital expenditures.  These and other risks are set 
out in more detail in Legacy's Annual Information Form for the year ended 
December 31, 2011 dated March 20, 2012.

The forward-looking statements contained in this press release are made as of 
the date hereof and Legacy 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.

Trent J. Yanko, P.Eng. President + CEO

Legacy Oil + Gas Inc. 4400, 525-8th Avenue SW Calgary, AB T2P 1G1

Telephone: 403.441.2300 Fax: 403.441.2017

Matt Janisch, P.Eng. Vice-President, Finance + CFO

Legacy Oil + Gas Inc. 4400, 525-8th Avenue SW Calgary, AB T2P 2V7

Telephone: 403.441.2300 Fax: 403.441.2017

SOURCE: Legacy Oil + Gas Inc.

To view this news release in HTML formatting, please use the following URL: 
http://www.newswire.ca/en/releases/archive/November2012/12/c6953.html

CO: Legacy Oil + Gas Inc.
ST: Alberta
NI: OIL FIELD 

-0- Nov/12/2012 10:00 GMT

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