Lynden Energy Reports Financial Results for the Six Months Ended December 31,
VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 03/01/13 -- Lynden
Energy Corp. (TSX VENTURE:LVL) (the "Company") reports its second
quarter 2013 results. Highlights for the six months ended December
31, 2012 (the "Current Period"), compared to the six months ended
December 31, 2011 (the "Prior Period"), include:
-- Total production increased 222% to 188,110 boe (1,022 boe/d).
-- Gross revenues, net of royalties, increased 184% to $9,279,144.
-- Sale of 16 gross (7 net) Wolfberry Project wells, to BreitBurn Energy
Partners L.P. for $25 million, effective December 1, 2012 (the
Production for the six months ended December 31, 2012 totaled 188,110
boe (1,022 boe/d). Production for the three months ended December 31,
2012 totaled 97,880 boe (1,064 boe/d), an increase of 9% over
production in the three months ended September 30, 2012.
All of the production is attributable to the Wolfberry Project. The
production mix, on a percent per boe basis, from the Wolfberry
Project remains approximately 65% oil and 35% natural gas and
Financial Results for the 6 months and 3 months ended December 31,
This news release should be read in conjunction with the Company's
consolidated financial statements for the six months ended December
31, 2012 and the notes thereto, together with the MD&A for the
corresponding period, which are available under the Company's profile
on SEDAR at www.sedar.com. All monetary references in this news
release are to U.S. dollars unless otherwise stated.
Results of Operations
The Company reported operating earnings of $3,320,507 for the Current
Period compared to operating earnings of $1,426,539 for the Prior
Period. The Company's net earnings of $10,485,597 and total
comprehensive income of $10,648,864 for the Current Period compared
to net earnings of $1,418,905 and total comprehensive income of
$1,289,853 for the Prior Period. Significant components of the
Current Period net earnings were net revenue of $9,270,914, depletion
and depreciation of $3,485,932, gain on disposition of property,
plant and equipment of $11,166,300, and income tax expense of
Petroleum and Nat
ural Gas ("P&NG") Revenue
The Company reported gross P&NG revenues of $9,279,144 (Prior Period
- $5,043,844) for the Current Period, all from its Wolfberry Project
wells. In conjunction with the revenues, the Company reported
royalties paid of $2,964,775 (Prior Period - $1,486,182) and paid
production and operating expenses of $1,505,529 (Prior Period -
$635,193) for the Current Period. The Company also incurred
$3,485,932 (Prior Period - $1,718,927) of depletion and depreciation
for the Current Period. Average realized prices for the Current
Period, were $86 per barrel ("Bbl") of oil and $4.89 per thousand
cubic feet ("Mcf") of natural gas, compared to $89 per Bbl of oil and
$8.46 per Mcf of natural gas, for the Prior Period. The natural gas
selling price is reflective of the thermal value of gas and
associated products sold.
The Company also reported gross P&NG revenues of $6,202,197 for the
three months ended December 31, 2012 compared to $6,041,722 for the
three months ended September 30, 2012 ("Q1/2013"). In conjunction
with the revenues, the Company reported royalties paid of $1,571,024
(Q1/2013 - $1,393,751) and paid production and operating expenses of
$834,113 (Q1/2013 - $671,416) for the three months ended December 31,
2012. Average realized prices for the three months ended December 31,
2012 were $83 per Bbl of oil and $5.00 per Mcf of natural gas,
compared to $88 per Bbl of oil and $4.76 per Mcf of natural gas, for
Liquidity - Borrowing Base Increases
The Company has a $50 million reducing revolving line of credit.
Effective December 31, 2012, the line of credit had a $24 million
borrowing base of which $19.9 million was outstanding. As a result of
applying a portion of the proceeds of the BreitBurn Sale, there is
currently $10.5 million drawn on the line of credit. The Company is
seeking a further upward revision of the borrowing base.
The Company anticipates financing the majority of its Wolfberry
Project capital expenditures through operating revenues and upward
borrowing base revisions on the line of credit.
While the Company continues to have a working capital deficit at
December 31, 2012, it is the Company's view that the value of its
P&NG holdings is increasing at a rate significantly greater than the
working capital deficit. It is the Company's objective to sell
portions of its proven acreage in order to manage its working capital
position and to redeploy funds to its unproven acreage, where the
Company believes it can achieve the best returns for shareholders.
The Wolfberry Project
The Company is currently carrying out a rapid oil and gas development
program on its Wolfberry Project, where the Company now has 46 gross
(19.30 net) wells tied-in and producing. As a result of the BreitBurn
Sale, during the three months ended December 31, 2012 there was a net
decrease of 1 gross (0.57 net) well tied into production. At December
31, 2012, the Company had 3 gross (1.23 net) wells spud or drilled
awaiting completion and/or tie-in.
The Company's current plans call for 25 gross (10.61 net) Wolfberry
Project wells to spud in the balance of fiscal 2013 (January 1 to
June 30, 2013) at an estimated cost to the Company of $25.5 million.
The Company's funding amount for the 10.61 net wells is equivalent to
12.13 wells. The gross cost of a Wolfberry well is currently
approximately $2.1 million.
The Company's capital budget is subject to change depending upon a
number of factors, including economic and industry conditions at the
time of drilling, prevailing and anticipated prices for oil and gas,
the availability of sufficient capital resources for drilling
prospects, the Company's financial results and the availability of
lease extensions and renewals on reasonable terms.
The Company anticipates significant increases in daily production
volumes as development of the Wolfberry Project continues. The
Company is targeting a June 30, 2013 net production exit rate, after
royalties, of 1,200 boe/day. This guidance is forward-looking
information that is subject to a number of risks and uncertainties,
many of which are beyond the Company's control.
Mitchell Ranch Project
The Company's Mitchell Ranch project covers approximately 103,400
acres of P&NG leases located primarily in Mitchell County, West Texas
where the Company has a 50% working interest in approximately 67,400
acres, and a 1.25% overriding royalty interest on approximately
36,000 acres subject to a term assignment with a large, independent
exploration and production company.
The Company currently has one (0.5 net) producing well, the Spade
17#1, where several rounds of completions have been carried out.
During the Current Period, the Company received $56,234 of net
revenue from sales from the Spade 17#1 well. The Mitchell Ranch
Project is in the exploration and evaluation stage and as such, the
net revenues have been credited to capitalized costs.
As a result of significant new drilling activity in the general area
around the Mitchell Ranch Project, the timing of the new wells has
been pushed out in order to best incorporate the results of other
operators into the development plan on the Mitchell Ranch Project.
The Company anticipates participating in a seismic sh
oot over a
portion of the ranch in fiscal 2013 as a preparatory step for a new
Lynden Energy Corp. is in the business of acquiring, exploring and
developing petroleum and natural gas rights and properties. The
Company has various working interests in the Wolfberry Project and
Mitchell Ranch Project, located in the Permian Basin in West Texas,
USA and in the Paradox Basin Project, located in the State of Utah,
NI 51-101 requires that we make the following disclosure: we use oil
equivalents (boe) to express quantities of natural gas and crude oil
in a common unit. A conversion ratio of 6 mcf of natural gas to 1
barrel of oil is used. Boe may be misleading, particularly if used in
isolation. The conversion ratio is based on an energy equivalency
conversion method primarily applicable at the burner tip and does not
represent a value equivalency at the wellhead.
FORWARD-LOOKING STATEMENTS DISCLAIMER: This news release contains
forward-looking statements. The reader is cautioned that assumptions
used in the preparation of such statements, although considered
accurate at the time of preparation, may prove incorrect, and the
actual results may vary materially from the statements made herein.
Expectations of spudding 25 gross (10.61 net) Wolfberry Project wells
from January 1, 2013 to June 30, 2013, participating in a seismic
shoot over a portion of the ranch in fiscal 2013, and expected
timelines relating to oil and gas operations are subject to the
customary risks of the oil and gas industry, and are subject to the
company having sufficient cash to fund the drilling and completion of
these wells. Expectations of obtaining upward borrowing base
revisions on the line of credit are subject to the customary risks of
the oil and gas industry, and are subject to drilling and completing
successful wells, and prevailing and anticipated prices for oil and
gas. Achieving a June 30, 2013 net production exit rate, after
royalties, of 1,200 boe/day, is subject to the customary risks of the
oil and gas industry and is subject to the Company drilling and
completing successful wells. For a more detailed description of these
risks, and others, see www.lyndenenergy.com/riskfactors.html.
ON BEHALF OF THE BOARD OF DIRECTORS
LYNDEN ENERGY CORP.
Colin Watt, President and CEO
Neither the TSX Venture Exchange nor its Regulation Services Provider
(as that term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this news
Lynden Energy Corp.
President and CEO
(604) 602-9311 (FAX)
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