Longreach Advances Moroccan Exploration Programme

              Longreach Advances Moroccan Exploration Programme

  PR Newswire

  SAINT HELIER, Jersey, April 28, 2014

SAINT HELIER, Jersey, April 28, 2014 /PRNewswire/ --

2013 and fourth quarter results published 

In 2013, LONGREACH OIL AND GAS LIMITED (TSXV: LOI) (the Company or Longreach)
successfully advanced its exploration programme completing one promising well
and setting the stage for a highly prospective second well currently drilling
ahead. The Company's first exploration well, Koba-1 on its operated Sidi
Moktar exploration licence, encountered very encouraging natural gas resource
potential that indicated an estimated 45 metres of reservoir potential.
Longreach is currently drilling a second exploration well, Kamar-1, on the
property and has set casing above the first targeted reservoir. Future
operational activity in the Sidi Moktar area will be determined after the
completion, analysis and interpretation of the Koba-1 well and the Kamar-1
well. Longreach also plans to participate in an exploration well being drilled
on its non-operated Sidi Moussa Offshore licence in the third quarter of 2014.

The Company exited 2013 with cash of US$12.7 million and raised an additional
CAD$9.7 million through a private placement in April 2014. Longreach intends
to evaluate additional financing opportunities in 2014.

Longreach today filed its annual financial statements for the year ended
December 31, 2013, together with its Management's Discussion and Analysis in
respect of the Company's financial results for the year ended December 31,
2013. These documents are available on the Longreach website at
http://www.longreachoilandgas.com or under the Company's profile on SEDAR at
http://www.sedar.com .

Highlights 

Financial:

  *Cash position as at December 31, 2013, of US$12.7 million (US$34.2 million
    as at December 31, 2012; US$21.3 million as at September 30, 2013)
  *Working capital as at December 31, 2013, of US$3.9 million (US$32.6
    million as at December 31, 2012; US$18.9 million as at September 30, 2013)
  *Subsequent to year-end, completed an interim debenture financing of
    CAD$9.7 million in April 2014 and intends to obtain further financing in
    2014, which may include a rights offering or private placement

Operations Summary:

  *Sidi Moktar:

       *Commenced drilling of the Koba-1 well, targeting Lower Liassic and
         Upper Triassic clastic reservoirs. The Koba-1 well was drilled to a
         total depth of 3,100 metres and operations were completed in early
         January 2014. The well encountered a gross interval of approximately
         45 metres with reservoir potential.
       *On March 20, 2014, the Company commenced drilling of the Kamar-1
         well, targeting a Lower Liassic reservoir and Triassic clastic
         reservoirs. The Kamar-1 well has a planned total depth of 3,500
         metres and operations are anticipated to take approximately 70 days.
       *Following the Kamar-1 well, the Company will review the forward
         operational programme.

  *Foum Draa Offshore:

       *In late October 2013, the operator, Cairn Energy plc (Cairn Energy),
         commenced drilling the FD II-Alpha-1 exploration well located in
         1,500 metres of water approximately 120 kilometres offshore of
         Morocco. The well was drilled to a total depth of 5,255 metres
         (subsea), but did not encounter clastic reservoirs. The well has been
         plugged and abandoned.

  *Sidi Moussa Offshore:

       *Longreach has been advised that the operator, Genel Energy plc
         (Genel), has secured a rig to drill an exploration well targeting the
         Mid-Jurassic and Lower Triassic reservoirs in the third quarter of
         2014.

Operational Update 

Sidi Moktar Onshore (Net Working Interest 50%) 

Longreach has a 50 percent operating interest in the onshore Sidi Moktar
exploration licence. Sidi Moktar is comprised of three blocks (Sidi Moktar
West, Sidi Moktar South and Sidi Moktar North) totalling 2,683 square
kilometres, which cover the majority of the hydrocarbon basin of Essaouira,
located in central onshore Morocco. The blocks surround the producing Meskala
field, which is considered Morocco's major producing field and operated by the
Office National des Hyrdocarbures et des Mines (ONHYM), the Moroccan state
energy company. In 2011, the Meskala field produced approximately 3.6 million
cubic feet per day of natural gas and 168 barrels per day of condensate from
the Triassic reservoir. Four fields within Sidi Moktar have historically
produced 30.5 billion cubic feet (Bcf) of gas from Jurassic-aged reservoirs.

Sidi Moktar has a significant amount of historical exploration data available,
including 6,172 kilometres of 2D seismic, and 43 exploration and development
wells. Longreach has interpreted over 4,500 kilometres of existing 2D seismic
data and has completed the reprocessing of 1,750 kilometres of this data.
Longreach has also completed comprehensive petrophysical and petrographic
analyses of the neighbouring wells and outcrop sections to better understand
the reservoir and seal potential of the Lower Liassic and Triassic
stratigraphic sections. Subsequently, a portfolio of 12 prospects and leads
has been mapped, ranked and risked.

On November 15, 2013, Longreach announced an updated independent technical
report (effective date June 30, 2013) of the Company's petroleum assets,
including the Sidi Moktar licence, that was prepared by Gaffney, Cline &
Associates (GCA), a qualified reserves evaluator in accordance with National
Instrument 51-101 requirements using the Canadian Oil and Gas Evaluation
Handbook. GCA confirmed that Longreach's reinterpretation of the seismic and
other data had resulted in a new model for the structural evolution of the
Sidi Moktar area and concurs with Longreach's interpretation that the
anticlines are more likely formed by inversion of Permo-Triassic half grabens.
As a result, there is potential for hydrocarbon bearing clastic reservoirs to
be found below Jurassic carbonate seals. GCA's best estimate of unrisked
prospective resources are 420 Bcf of natural gas and 25.1 million barrels
(MMbbl) of condensate for the Koba prospect, with a geological chance of
success of 25 percent, and 91 Bcf of natural gas and 6.1 MMbbl of condensate
for the Kamar Subcrop prospect, with a geological chance of success of 11
percent. The Kamar-1 well is expected to test the Kamar Subcrop, as well as
the Kamar Onlap prospect (stratigraphically above the Kamar Subcrop) to which
GCA estimated 232 Bcf of natural gas and 13.9 MMbbl of condensate, with a
geological chance of success of six percent.

During 2013, the Company commenced drilling of the Koba-1 well, targeting the
Lower Liassic and Upper Triassic clastic reservoirs. The Koba-1 well was
drilled to a total depth of 3,100 metres and operations were completed in
early January 2014. The well encountered a gross interval of approximately 45
metres with reservoir potential. Over this section, a gas influx of over 10
percent was encountered throughout the interval with heavier hydrocarbon
components of condensate (over C5+). The Koba-1 well is currently suspended
and the Company is reviewing the logs to assess the options available.

On March 20, 2014, the Company commenced drilling of the Kamar-1 well,
targeting a Lower Liassic and Triassic clastic reservoirs. The Kamar-1 well
has a planned total depth of 3,500 metres and operations are anticipated to
take approximately 70 days. The Company plans to review the forward
operational programme following the completion of the Kamar-1 well.

Sidi Moussa Offshore (Net Working Interest 1.5%) and Foum Draa Offshore (Net
Working Interest 2.5%) 

In September 2009, Longreach agreed to terms to earn a 7.5 percent net working
interest in the Sidi Moussa Offshore licence and the Foum Draa Offshore
licence. Located directly west of the coastal city of Agadir, the two licences
cover an area of approximately 12,714 square kilometres.

On August 23, 2012, Longreach entered into a farm-out agreement with Genel
whereby Genel acquired a 60 percent operating equity interest in the Sidi
Moussa Offshore licence proportionally from Longreach and each of its joint
venture partners. Genel paid its equity interest share of past costs, being
US$129,990 net to Longreach, and is expected to pay the first US$50 million
towards drilling of the commitment well (including ONHYM's 25 percent carried
interest) required under the terms of the First Extension Period of the Sidi
Moussa Licence. Longreach's net interest in the Sidi Moussa Offshore licence
has been reduced from 7.5 percent to 1.5 percent as a result Genel's farm-in.
The Company has been advised by Genel that an offshore exploration well
targeting Mid-Jurassic / Lower Triassic reservoirs is anticipated to be
drilled in the third quarter of 2014.

On August 28, 2012, Longreach entered into a farm-out agreement with Cairn
whereby Cairn acquired a 50 percent operating equity interest in the Foum Draa
Offshore licence proportionally from Longreach and each of its joint venture
partners. In 2013, Cairn paid its equity interest share of past costs, being
US$150,000 net to Longreach, and paid the first US$60 million towards drilling
of the FD-1 exploration well (including ONHYM's 25 percent carried interest),
a commitment well under the terms of the First Extension Period of the Foum
Draa Licence. Longreach's net interest in the Foum Draa exploration licence
has been reduced from 7.5 percent to 2.5 percent as a result of Cairn's
farm-in.

In late October 2013, Cairn commenced drilling the FD II-Alpha-1 exploration
well located in 1,500 metres of water approximately 120 kilometres offshore of
Morocco. The well was drilled to a total depth of 5,255 metres (subsea), but
did not encounter clastic reservoirs where the primary target was a Late
Jurassic and Early Cretaceous deep-water turbidite slope fan. It did penetrate
the oldest stratigraphic section of any deep water exploration well along the
Moroccan margin. The well was subsequently plugged and abandoned.

Zag Basin  Onshore (Net Working Interest 22.5%) 

The operator of the Zag Basin, San Leon Energy Plc, completed a 15,000 square
kilometre aeromagnetic survey and a 1,674 kilometre 2D seismic survey on the
licence in January 2012, largely on the eastern part of the property area.
This was the first seismic data ever acquired on this licence. Interpretation
of the surveys has indicated a portfolio of structural leads.

Having successfully completed the minimum work programme obligations for the
Initial Period of the exploration licence, the joint venture partners elected
to move into the First Extension Period. The First Extension Period has a
minimum work programme requirement for one well to test either the Ordovician
formation or to drill to a minimum depth of 3,000 metres by May 2015.

About Longreach Longreach is an independent Canadian oil and gas company
focused on its significant land position in Morocco. The Company has a 50
percent operated interest in the Sidi Moktar licence area covering 2,683
square kilometres and is working closely with ONHYM as a committed long-term
partner to unlock the hydrocarbon potential of the region. Morocco offers a
politically stable environment to work within and has favourable fiscal terms
to energy producers. Longreach is a public company listed on the TSX Venture
Exchange under the symbol "LOI".

Additional information about the Company can be found at
http://www.longreachoilandgas.com and under the Company's SEDAR profile at
http://www.sedar.com .

Special Note Regarding Analogous Information 

Although the Company believes that production on the Meskala field, which is
adjacent to the Sidi Moktar licences, may indicate that production is possible
from the Koba structure, no assurance can be given by the Company that
commercial production on any of the Sidi Moktar exploration licences will be
achieved, or as to the levels of production that may be possible on any of the
Sidi Moktar exploration licences if production is achieved.

Special Note Regarding Estimates 

The unrisked prospective resources described above have been estimated using
probabilistic methods and are dependent on a petroleum discovery being made.

Prospective resources are 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. Prospective
resources are further subdivided in accordance with the level of certainty
associated with recoverable estimates assuming their discovery and development
and may be subclassified based on project maturity. The prospective gas and
condensate resources in the GCA report indicate exploration opportunities and
quantify the development potential in the event a commercial discovery is made
and should not be construed as reserves or contingent resources. The
prospective resources set out in the tables above are those undiscovered,
highly speculative gas and condensate resources estimated beyond gas and
condensate reserves or contingent gas and condensate resources where
geological and geophysical data suggest the potential for discovery of
petroleum but where the level of proof is insufficient for classification as
reserves or contingent resources. The unrisked prospective gas and condensate
resources are the range of volumes that GCA estimates could reasonably be
expected to be recovered in the event of discovery and development of these
resources.

Definitions 

The following terminology, consistent with the COGE Handbook and guidance from
Canadian securities regulatory authorities, was used to prepare the disclosure
relating to the prospective gas and condensate resources above.

" Best Estimate " (Best) 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.

" Low Estimate " (Low) 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.

" High Estimate " (High) 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.

Special Note Regarding Forward Looking Statements This press release contains
forward-looking statements. Such forward-looking statements relate to future
events or the Company's future performance. All statements other than
statements of historical fact are forward-looking statements. Forward-looking
statements are often, but not always, identified by the use of words such as
"may", "will", "should", "expect", "plan", "anticipate", "believe",
"estimate", "predict", "project", "potential", "targeting", "intend", "could",
"might", "continue" or the negative of these terms or other similar terms.
Forward-looking statements in this press release include, but are not limited
to, statements regarding the drilling of the Karmar-1 well at the Company's
operated Sidi Moktar onshore license area in Morocco; the ability of the
Company to successfully complete the drilling programme at Kamar-1 over the
next few weeks; the completion of evaluations and processing and
interpretation of data, the performance characteristics of the Company's oil
and gas properties, capital expenditure programmes, supply and demand for oil,
gas and commodities, prices for oil and gas, drilling plans, and realization
of the anticipated benefits of acquisitions.

Forward-looking statements are only predictions. Forward-looking statements
involve known and unknown risks, uncertainties and other factors that may
cause actual results or events to differ materially from those anticipated in
such forward-looking statements. Some of the risks and other factors which
could cause results to differ materially from those expressed in the
forward-looking statements contained in this press release include, but are
not limited to: general economic conditions in Canada, the Kingdom of Morocco
and globally; completing the proposed drilling programme at Kamar-1 in a
timely and fiscally prudent manner; industry conditions, including
fluctuations in the price of oil and gas, governmental regulation of the oil
and gas industry, including environmental regulation; fluctuation in foreign
exchange or interest rates; risks inherent in oil and gas operations;
political risk, including geological, technical, drilling and processing
problems; unanticipated operating events which could cause commencement of
drilling and production to be delayed; the need to obtain consents and
approvals from industry partners, regulatory authorities and other
third-parties; stock market volatility and market valuations; competition for,
among other things, capital, acquisitions of reserves, undeveloped land and
skilled personnel; incorrect assessments of the value of acquisitions or
resource estimates; any future inability to obtain additional funding, when
required, on acceptable terms or at all; credit risk; changes in legislation;
any unanticipated disputes or deficiencies related to title matters;
dependence on management and key personnel; and risks associated with
operating in and being part of a joint venture.

Although the forward-looking statements contained in this press release are
based upon factors and assumptions which management of the Company believes to
be reasonable, the Company cannot assure that actual results will be
consistent with its expectations and assumptions. Material factors and
assumptions which management of the Company has considered in connection with
making the forward-looking statements in this press release include that the
Company will be able to successfully complete the drilling programme at
Kamar-1 and to successfully evaluate, process and interpret data. Undue
reliance should not be placed on the forward-looking statements contained in
this news release as there can be no assurance that the plans, intentions or
expectations upon which they are based will occur. These statements speak only
as of the date of this press release, and the Company does not undertake any
obligation to publicly update or revise any forward-looking statements except
as expressly required by applicable securities laws.

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. 

This news release does not constitute an offer to sell or a solicitation of an
offer to buy any securities of Longreach in any jurisdiction in which such
offer, solicitation or sale would be unlawful. The securities referred to
herein have not been and will not be registered under the United States
Securities Act of 1933 (the "U.S. Securities Act") or any state securities
laws and may not be offered or sold within the United States or to U.S.
Persons (as defined in the U.S. Securities Act) unless registered under the
U.S. Securities Act and applicable state securities laws, or an exemption from
such registration is available. 

For further information:Martin Arch Chief Financial Officer and Secretary Tel:
+44(0)203-137-7756

(LOI.)
 
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