Lynden Energy Reports Financial Results for the Six Months Ended
December 31, 2013
VANCOUVER, BRITISH COLUMBIA--(Marketwired - Feb 28, 2014) -
Lynden Energy Corp. (TSX-VENTURE:LVL) (the "Company") reports its
second quarter 2014 results. Highlights for the six months ended
December 31, 2013 (the "Current Period"), compared to the six
months ended December 31, 2012 (the "Prior Period"), include:
- Total production increased 157% to 294,365 boe (1,598
boe/d)
- Gross revenues, net of royalties, increased 173% to
$16,016,198
- Sale of 12 gross (4.7 net) Wolfberry Project wells, to
BreitBurn Energy Partners L.P. for $19.3 million, effective
December 30, 2013. (the "BreitBurn Sale")
Production for the six months ended December 31, 2013 totaled
294,365 boe (1,598 boe/d). Production for the three months ended
December 31, 2013 totaled 141,277 boe (1,536 boe/d), a decrease of
8% over production in the three months ended September 30, 2013.
Production volumes in November and December 2013 were negatively
impacted as a result of suspensions of production due to severe
winter weather conditions.
All of the production is attributable to the Wolfberry Project.
The production mix, on a percent per boe basis, from the Wolfberry
Project is approximately 60% oil and 40% natural gas and associated
products.
Financial Results for the 6 months and 3 months ended December
31, 2013
This news release should be read in conjunction with the
Company's consolidated financial statements for the six months
ended December 31, 2013 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 $18,385,808 for the
Current Period compared to operating earnings of $14,486,807 for
the Prior Period. The Company's net earnings of $12,595,155 and
total comprehensive income of $12,295,936 for the Current Period
compared to net earnings of $10,485,597 and total comprehensive
income of $10,648,864 for the Prior Period. Significant components
of the Current Period net earnings were net revenue of $15,942,860,
depletion and depreciation of $4,716,132 gain on disposition of
property, plant and equipment of $9,937,842 and income tax expense
of $5,780,000.
Petroleum and Natural Gas ("P&NG") Revenue
The Company reported gross P&NG revenues of $20,888,456
(Prior Period - $12,243,919) for the Current Period, all from its
Wolfberry Project wells. In conjunction with the revenues, the
Company reported royalties paid of $4,872,258 (Prior Period -
$2,964,775) and paid production and operating expenses of
$2,148,810 (Prior Period - $1,505,529) for the Current Period. The
Company also incurred $4,716,132 (Prior Period - $3,485,932) of
depletion and depreciation for the Current Period. Average realized
prices for the Current Period, were $98 per barrel ("Bbl") of oil
and $4.65 per thousand cubic feet ("Mcf") of natural gas, compared
to $86 per Bbl of oil and $4.89 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 $9,305,437
for the three months ended December 31, 2013 compared to $6,202,197
for the three months ended September 30, 2013 ("Q1/2014"). In
conjunction with the revenues, the Company reported royalties paid
of $2,174,904 (Q1/2013 - $1,571,024) and paid production and
operating expenses of $1,154,131 (Q1/2013 - $834,113) for the three
months ended December 31, 2013. Average realized prices for the
three months ended December 31, 2013 were $94 per Bbl of oil and
$4.85 per Mcf of natural gas, compared to $101 per Bbl of oil and
$4.42 per Mcf of natural gas, for Q1/2014.
Liquidity
The Company has a $100 million (increased from $50 million
subsequent to December 31, 2013) reducing revolving line of credit.
Effective December 31, 2013, the line of credit had a $25 million
borrowing base of which $12.25 million was outstanding. The amount
drawn on the line of credit has decreased from $29 million at
September 30, 2013 primarily as a result of applying a portion of
the proceeds of the December 30, 2013 BreitBurn Sale against the
outstanding amount.
The Company anticipates financing the majority of its Wolfberry
Project capital expenditures through operating revenues, draw downs
on the line of credit, and cash on hand at December 31, 2013 of
approximately $14.5 million.
Operations Highlights
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 75 gross (31.0 net) wells tied-in and producing. As a result of
the BreitBurn Sale, during the three months ended December 31, 2013
there was a net decrease of 4 gross (2.0 net) wells tied into
production. At December 31, 2013, the Company had 3 gross (1.27
net) wells spud or drilled awaiting completion and/or tie-in.
The Company's current plans call for 24 gross (9.92 net)
Wolfberry Project wells to spud in the balance of calendar 2014
(March 1 to December 31, 2014) at an estimated cost to the Company
of $23.8 million. The Company's funding amount for the 9.92 net
wells is equivalent to 11.34 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.
Mitchell Ranch Project
The Company's Mitchell Ranch project covers approximately
102,000 acres of P&NG leases located primarily in Mitchell
County, West Texas where the Company has a 50% working interest in
approximately 67,000 acres, and a 1.25% overriding royalty interest
on approximately 35,000 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 $46,829 of net
revenue from sales from the Spade 17#1 well. The most recent
completion was carried out in mid-February 2014. The results from
this completion are pending. 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 has participated in a seismic shoot over a
portion of the ranch as a preparatory step for a new well program.
Initial processing and interpretation of the new seismic data and
of the existing seismic data covering much of the ranch is expected
in early 2014.
About Lynden
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.
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 24 gross (9.92 net) Wolfberry Project wells from March 1,
2014 to December 31, 2014, 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. For a more
detailed description of these risks, and others, see
http://lyndenenergy.com/risk-factors.
ON BEHALF OF THE
BOARD OF DIRECTORS
LYNDEN ENERGY
CORP.
Colin
Watt, President and CEO
Lynden Energy Corp.Colin WattPresident and CEO(604)
629-2991(604) 602-9311www.lyndenenergy.com
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