Longreach Advances Moroccan Exploration Programme

 2013 and fourth quarter results published  SAINT HELIER, Jersey, April 28, 2014 /CNW/ - 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  www.longreachoilandgas.com or under the Company's profile on SEDAR at  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:       o 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.       o 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.       o Following the Kamar-1 well, the Company will review the forward         operational programme.         --  Foum Draa Offshore:       o 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:       o 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  www.longreachoilandgas.com and under the Company's SEDAR profile at  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.    SOURCE  Longreach Oil and Gas Limited  Martin Arch Chief Financial Officer and Secretary Tel: +44 203 137 7756  To view this news release in HTML formatting, please use the following URL:  http://www.newswire.ca/en/releases/archive/April2014/28/c5393.html  CO: Longreach Oil and Gas Limited NI: OIL ERN  
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