Advantage Announces High Liquid Yield Wells, Increases Montney Acreage & Provides Update on Operations & Strategic Alternatives

Advantage Announces High Liquid Yield Wells, Increases Montney Acreage & 
Provides Update on Operations & Strategic Alternatives Process 
CALGARY, Sept. 30, 2013 /CNW/ - Advantage Oil & Gas Ltd. ("Advantage" or the 
"Corporation") (TSX/NYSE: AAV) is pleased to announce the following updates. 
An updated investor presentation is also available on our website. 
Two Middle Montney Wells Demonstrate Free Condensate ("C5+")Yield of up to 50 
bbls/mmcf and Propane Plus ("C3+") Yield of up to 76 bbls/mmcf at Glacier 

    --  Two Middle Montney wells located on the Eastern portion of our
        land block at Glacier at 103/1-9-76-12W6 and 102/13-29-76-12W6
        were completed during the first quarter of 2013.  Both wells
        demonstrated significant liquid yields.
    --  The 103/1-9-76-12W6 well was production tested for 124 hours
        and flowed free condensate which averaged 50 bbls/mmcf over the
        production test period.  The final gas flow rate at the end of
        the production test period was 3.9 mmcf/d at a flowing pressure
        of 3,534 kpa. The estimated propane plus (C3+) yield based on a
        shallow cut liquids extraction process is 76 bbls/mmcf
        utilizing data obtained from the production test. The well has
        been on-stream for 169 days and has been re-tested with the
        latest results indicating similar yields.
    --  The 102/13-29-76-12w6 was production tested for 192 hours and
        flowed free condensate which averaged 24 bbls/mmcf over the
        production test period. The final gas flow rate at the end of
        the production test period was 5.3 mmcf/d at a flowing pressure
        of 3,358 kpa. The estimated propane plus (C3+) yield based on a
        shallow cut liquids extraction process is 57 bbls/mmcf
        utilizing data obtained from the test. The well has been
        on-stream for 214 days and has demonstrated strong production
    --  These wells demonstrated liquid yields that are much higher
        than the Middle Montney wells located on the western portion of
        our land block and higher than the estimated Glacier average
        shallow cut C3+ yield of 39 bbls/mmcf raw.  We believe the
        changes in liquid content are related to geological trends
        which can be utilized to identify high graded areas within the
        Montney at Glacier and within the regional fairway.

Additional Undeveloped Lands Acquired for Middle Montney Liquids Potential
    --  We have gained considerable geological and engineering
        experience in the liquids rich Middle Montney formation. Our
        knowledge and achievements have resulted in significant
        contingent resource growth and improved Middle Montney well
        results at Glacier.  Internal evaluations are underway to
        assess liquid extraction options.
    --  Our Middle Montney experience also led to identification of
        opportunities beyond Glacier and as a result, we acquired an
        additional 43.25 sections (27,680 acres) of 100% working
        interest Montney lands. These lands are located southeast of
        Glacier in a fairway that we believe is prospective for Middle
        Montney natural gas liquids. The lands were acquired from the
        Province of Alberta at a cost of $6.7 million.
    --  The acquired lands consist of three contiguous parcels. One
        parcel, containing 20.5 sections (13,120 acres), is located
        within one kilometer (0.6 miles) of our 100% owned southeast
        Glacier gas gathering pipeline. This pipeline is connected to
        our 100% owned Glacier gas plant. The other two parcels are
        located further southeast and offset an industry Middle Montney
        well which reports free condensate production in excess of 100
    --  These land parcels are held under licenses which will not
        expire until September 2017 and can be extended for an
        additional five years with the drilling of two horizontal
        wells.  These lands can also be continued indefinitely under
    --  Our total acreage position in the Montney has increased to
        125.65 gross (120.35 net) sections.

Glacier Wells with Revised Completion Techniques Continue to Demonstrate 
Sustained Improvement
    --  During the first half of 2013, 11 Montney wells completed with
        revised completion techniques were brought on-production. These
        wells consisted of six Upper Montney, three Middle Montney and
        two Lower Montney wells located across the Glacier land block
        and have produced an average of 200 days.
    --  Production from these wells continues to demonstrate stronger
        production rates when compared to wells that were completed
        using our previous completion technique after a similar
        production period. Additionally, the new wells are
        significantly outperforming the older wells in terms of
        cumulative production. For example, the 100/7-7-76-13w6 Lower
        Montney well which was completed with a high rate slick water
        frac utilizing an open hole packer system has produced 1.5 bcf
        compared to the older offset wells which produced 0.5 bcf after
        six months of production. This well is currently flowing at 8
    --  We have identified additional opportunities to further optimize
        our completion techniques in each of the Montney formations
        including the liquids rich Middle Montney. We expect these
        future changes could generate additional improvements in
        overall well results as we continue to evaluate multi-frac
        design technologies.

Glacier Production Exceeding Budget, Operating Costs Lower than Budget, 
Capital Program on-track
    --  Glacier working interest production based on field estimates
        for the third quarter of 2013 is approximately 110 mcfe/d
        (18,333 boe/d) which exceeds our internal budget.
    --  Operating costs at Glacier are estimated to average less than
        $0.30/mcfe ($1.80/boe) during the third quarter of 2013. 
        Operating cost optimization initiatives are continuing with the
        recent completion of a water disposal well which will reduce
        trucking and third party water disposal costs commencing in the
        fourth quarter of 2013. Additional third party gas was
        redirected to our Glacier plant in September and expected to
        continue through October 2013 which will provide processing
    --  Our Phase VI Glacier Capital program which is designed to ramp
        Advantage production to 135 mmcfe/d by Q2 2014 is progressing
        on-track with three drilling rigs.  Five of the 22 total wells
        in the program have been rig released to date.  We expect
        completion information from some of the new wells to be
        available by early November 2013.

Commodity Hedging Program
    --  Advantage has entered into a number of natural gas hedges in
        support of our two year Glacier development plan. Our natural
        gas hedges will reduce the volatility of future cash flows
        through to March 2016 and are particularly important during
        this current period of wider Canadian natural gas price
        differentials.  Our hedging positions are summarized in the
        following table:

                    Average          Net Forecast    Average Price

                    Production Hedged Production Hedged   $Cdn. AECO

Q3 2013 & Q4 2013       38.1 mmcf/d             39%         $3.45/mcf

Q1 2014 to Q4 2014      50.2 mmcf/d             39%         $3.81/mcf

Q1 2015 to Q4 2015      45.0 mmcf/d             27%         $3.91/mcf

Q1 2016                 42.7 mmcf/d             23%         $3.90/mcf
    --  Additional details on our hedging program are available at our
        website at

Strategic Alternatives Process Update
    --  As previously announced, the Company's financial advisors,
        FirstEnergy Capital Corp. and RBC Capital Markets, commenced a
        broad global marketing effort to solicit interest in a sale of
        the Corporation or another transaction to maximize value for
        all shareholders. The process is ongoing and the Corporation
        and its financial advisors are actively engaged and continue to
        coordinate with parties wishing to participate in the process. 
        Technical presentations are ongoing and interested parties have
        been scheduled.
    --  There can be no assurance that a transaction will be
        undertaken. Advantage does not intend to make any announcements
        regarding the process unless and until the Board of Directors
        has approved a specific transaction or course of action or
        otherwise determines that disclosure is necessary.

The information in this press release contains certain forward-looking 
statements, including within the meaning of the United States Private 
Securities Litigation Reform Act of 1995. These statements relate to future 
events or our future intentions or performance. All statements other than 
statements of historical fact may be forward-looking statements. 
Forward-looking statements are often, but not always, identified by the use of 
words such as "seek", "anticipate", "plan", "continue", "estimate", 
"demonstrate", "expect", "may", "will", "project", "predict", "potential", 
"targeting", "intend", "could", "might", "should", "believe", "would" and 
similar expressions and include statements relating to, but not limited to, 
the Corporation's objectives for its recently acquired Montney lands; 
anticipated effect of increased Montney acreage on resources, reserves and 
production; the Corporation's beliefs regarding effect of optimization of 
completion and frac designs on well completion; anticipated effect of 
additional opportunities on overall well results; operating cost optimization 
initiatives and anticipated timing of reduced trucking and third party water 
disposal costs; the Corporation's anticipated drilling and completion plans; 
anticipated timing of new completion information from the Phase VI Glacier 
Capital Program; the Corporation's development plan to increase production at 
Glacier and the anticipated production levels and timing thereof; expected 
effect of natural gas hedges on volatility of future cash flows; and status of 
the Corporation's strategic alternatives process. In addition, statements 
relating to "reserves" or "resources" are deemed to be forward-looking 
statements, as they involve the implied assessment, based on certain estimates 
and assumptions, that the resources and reserves described can be profitably 
produced in the future.

Advantage's actual decisions, activities, results, performance or achievement 
could differ materially from those expressed in, or implied by, such 
forward-looking statements and, accordingly, no assurances can be given that 
any of the events anticipated by the forward-looking statements will transpire 
or occur or, if any of them do, what benefits that Advantage will derive from 

These statements involve substantial known and unknown risks and 
uncertainties, certain of which are beyond Advantage's control, including, but 
not limited to: changes in general economic, market and business conditions; 
industry conditions; actions by governmental or regulatory authorities 
including increasing taxes and changes in investment or other regulations; 
changes in tax laws, royalty regimes and incentive programs relating to the 
oil and gas industry; the effect of acquisitions; Advantage's success at 
acquisition, exploitation and development of reserves; unexpected drilling 
results, changes in commodity prices, currency exchange rates, capital 
expenditures, reserves or reserves estimates and debt service requirements; 
the occurrence of unexpected events involved in the exploration for, and the 
operation and development of, oil and gas properties; hazards such as fire, 
explosion, blowouts, cratering, and spills, each of which could result in 
substantial damage to wells, production facilities, other property and the 
environment or in personal injury; changes or fluctuations in production 
levels; delays in anticipated timing of drilling and completion of wells; 
individual well productivity; competition from other producers; the lack of 
availability of qualified personnel or management; credit risk; individual 
well productivity; changes in laws and regulations including the adoption of 
new environmental laws and regulations and changes in how they are interpreted 
and enforced; our ability to comply with current and future environmental or 
other laws; stock market volatility and market valuations; liabilities 
inherent in oil and natural gas operations; uncertainties associated with 
estimating oil and natural gas reserves; competition for, among other things, 
capital, acquisitions of reserves, undeveloped lands and skilled personnel; 
incorrect assessments of the value of acquisitions; geological, technical, 
drilling and processing problems and other difficulties in producing petroleum 
reserves; ability to obtain required approvals of regulatory authorities; 
failure to complete an acceptable transaction pursuant to the Corporation's 
strategic alternatives process; and ability to access sufficient capital from 
internal and external sources.

Many of these risks and uncertainties and additional risk factors are 
described in the Corporation's Annual Information Form which is available at and Readers are also referred to risk 
factors described in other documents Advantage files with Canadian securities 

With respect to forward-looking statements contained in this press release, 
Advantage has made assumptions regarding: conditions in general economic and 
financial markets; effects of regulation by governmental agencies; current 
commodity prices and royalty regimes; future exchange rates; royalty rates; 
future operating costs; availability of skilled labor; availability of 
drilling and related equipment; timing and amount of capital expenditures; the 
impact of increasing competition; the price of crude oil and natural gas; that 
the Corporation will have sufficient cash flow, debt or equity sources or 
other financial resources required to fund its capital and operating 
expenditures and requirements as needed; that the Corporation's conduct and 
results of operations will be consistent with its expectations; that the 
Corporation will have the ability to develop the Corporation's crude oil and 
natural gas properties in the manner currently contemplated; current or, where 
applicable, proposed assumed industry conditions, laws and regulations will 
continue in effect or as anticipated; and the estimates of the Corporation's 
production and reserves volumes and the assumptions related thereto (including 
commodity prices and development costs) are accurate in all material respects.

These forward-looking statements are made as of the date of this press release 
and Advantage disclaims any intent or obligation to update publicly any 
forward-looking statements, whether as a result of new information, future 
events or results or otherwise, other than as required by applicable 
securities laws.

References in this press release to initial production test rates, initial 
"productivity", initial "flow" rates, "flush" production rates and "behind 
pipe production" are useful in confirming the presence of hydrocarbons, 
however such rates are not determinative of the rates at which such wells will 
commence production and decline thereafter and are not indicative of long term 
performance or of ultimate recovery. While encouraging, readers are cautioned 
not to place reliance on such rates in calculating the aggregate production 
for Advantage.

Barrels of oil equivalent (boe) and thousand cubic feet of natural gas 
equivalent (mcfe) may be misleading, particularly if used in isolation. Boe 
and mcfe conversion ratios have been calculated using a conversion rate of six 
thousand cubic feet of natural gas equivalent to one barrel of oil. A boe and 
mcfe conversion ratio of 6 mcf:1 bbls 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 
based on the current price of crude oil as compared to natural gas is 
significantly different from the energy equivalency of 6:1, utilizing a 
conversion on a 6:1 basis may be misleading as an indication of value.

The following abbreviations used in this press release have the meanings set 
forth below:

mcf         thousand cubic feet

mcfe        thousand cubic feet of natural gas equivalent, using the
            ratio of 6 mcf of natural gas to 1 bbl of oil

mmcfe       million cubic feet of natural gas equivalent, using the
            ratio of 6 mcf of natural gas to 1 bbl of oil

mmcf        million cubic feet

mmcf/d      million cubic feet per day

bbl         barrel

NGLs        natural gas liquids

Boe/d       barrels of oil equivalent per day  

SOURCE  Advantage Oil & Gas Ltd. 
Investor Relations Toll free: 1-866-393-0393  Advantage Oil & Gas Ltd. 700, 
400 - 3rd Avenue SW Calgary, Alberta T2P 4H2 Phone: (403) 718-8000 Fax: (403) 
718-8300 Web 
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CO: Advantage Oil & Gas Ltd.
ST: Alberta
-0- Sep/30/2013 06:01 GMT
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