Longreach Advances Moroccan Exploration Programme

              Longreach Advances Moroccan Exploration Programme  PR Newswire  SAINT HELIER, Jersey, April 28, 2014  2013 and fourth quarter results published  SAINT HELIER, Jersey, April 28, 2014 /PRNewswire/ - 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:         *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  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  Contact:  Martin Arch Chief Financial Officer and Secretary Tel: +44 203 137 7756  
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