JERSEY, CHANNEL ISLANDS--(Marketwire - Apr 30, 2012) -
30th April 2012
LONGREACH OIL AND GAS LIMITED
Q4 and Year End Results
LONGREACH OIL AND GAS LIMITED (TSX-V: LOI), an oil & gas company
focused on Morocco ("Longreach" or the "Company"), is pleased to
announce its financial and operating results for the fourth quarter and
the 12 months to 31 December, 2011. Today the Company filed its annual
financials statements for the year ended December 31, 2011 together
with the management's discussion & analysis in respect of the Company's
financial results.
Highlights
Operational:
* Geological and Geophysical work programme completed on Foum Draa
and Sidi Moussa offshore licences
* Farm-out of offshore licences underway, together with joint
venture partners
* Close of Sidi Moktar farm-in during September, giving Longreach
operatorship and a net 50% working interest (post ONHYM back in)
* Extensive geological and geophysical interpretation of existing
data on Sidi Moktar is well underway, including interpretation of over
6,000km of 2D seismic and the 43 historical wells drilled on the
acreage
* Prospect evaluation underway on Sidi Moktar aimed at identifying
a suitable location to shoot new seismic programme
* 1,674 km of 2D seismic on Zag was completed in January 2012, with
processing and interpretation expected to be completed this year
* Completion in September of 608km 2D infill seismic programme on
Tarfaya, concentrating on the J North prospect. Processing and
interpretation of the new seismic nearing completion
Financial / Management:
* Cash of CND$10.5m (CND$5.2m Dec 2010) - fully funded for current
work programmes
* Working capital of CND$7.4m (CND$3.2m Dec 2010 / CND$9.9m Sept
2010)
* Strengthened investor base with completion of $10.1m equity
financing in July 2011
Commenting, Bryan Benitz, Chairman and CEO of Longreach, said:
"Longreach completed all its work programme commitments during 2011.
Extensive new seismic acquisitions were completed on the Tarfaya and
Zag licences and completion of G&G work on the offshore licences has
enabled Longreach and joint venture partners to begin a farm-out
process to attract industry partners for the drill phase. We added the
Sidi Moktar onshore licence to our portfolio and are well underway with
the interpretation of existing data on this licence.
We remain well funded to complete our work programme commitments this
year, which will see Longreach develop the resource potential on our
licences and advance us further to drill stage. "
Results Statement
Longreach remained in a strong financial position at the year end with
cash and cash equivalents of CND$10.5m, providing the Company with
sufficient funding for its current planned work programme. Cash
decreased from CND$11.8m in the final quarter of the year in principal
due to costs related to new seismic acquisition on Zag and seismic
interpretation costs on Sidi Moktar.
The working capital surplus at the year end stood at CND$7.4m versus
CND$9.9m at the end of the third quarter and CND$3.2m at the same time
last year.
Operational Update
Sidi Moktar Onshore (Net Working Interest 50%)
On 19 September 2011, the previously announced Sidi Moktar farm-in was
signed. Longreach has acquired a 50% operating interest (post ONHYM
back in), comprising three blocks totalling 4,711 square kilometres and
with resource estimates of 111 Bcf (Low Estimate), 292 Bcf (Best
Estimate) and 776 Bcf (High Estimate) of undiscovered gas
initially-in-place. The licence has a significant amount of historical
exploration data available to Longreach, including 6,172km2 of 2D
Seismic and 43 exploration & development wells.
Longreach's exploration licence consists of three blocks surrounding
the producing Meskala field (Morocco's major producing field) which is
owned by ONHYM, the Moroccan state company. According to information
available from ONHYM, four fields within Sidi Moktar have historically
produced 30.5 Bcf of gas from Jurassic aged reservoirs.
In consideration for the acquisition of that interest, Longreach will
be responsible for carrying out a work programme of acquiring,
processing and interpreting 100 km2 of 3D seismic data and drilling of
two exploration wells.
Longreach began data loading and data interpretation in October 2011
and intends to complete a prospect high grading evaluation to identify
a suitable location to shoot the new seismic programme.
Sidi Moussa & Foum Draa Offshore (Net Working Interest 7.5%)
In September 2009, Longreach agreed to terms to earn a 7.5% net
interest in the Sidi Moussa & Foum Draa offshore licences. Located
directly west of Agadir, the licences cover an area of approximately
12,714 square kilometres (3.14 million acres).
Extensive high quality 2D and 3D seismic work has been completed on
these licences, including 5,260 km2 of 3D seismic shot in 2001/2002.
On Foum Draa, the reprocessing of 1,500km2 of 3D seismic (PSTM) is now
complete. The processing of PSDM (500km2) was completed during Q4
2011. On Sidi Moussa the reprocessing of 2,000km of 2D seismic has
been completed together with geological interpretation.
Extensive geological and geophysical interpretation has enabled
Longreach and its joint venture partners to identify 33 prospects and
leads. Netherland, Sewell & Associates Inc. independently evaluated
14 identified prospects and 8 additional leads in the Sidi Moussa and
Foum Draa licences. In Foum Draa these are predominately lower
Cretaceous diapir related structures. In Sidi Moussa the identified
prospects are fault related structures in the Jurassic or Triassic.
Drill ready targets have been identified; project economics and well
planning has been analysed.
Subsequent to completing the geological and geophysical work programme,
the joint venture partners have announced their intention to seek an
industry partner for the drill phase of these licences, through a
farm-out.
Tarfaya Onshore (Net Working Interest 22.5%)
In April 2010, the reprocessing of 1,400km of the original 2D seismic
shot on the Tarfaya licence was completed. To date 15 prospects and
leads have been identified, the most prospective of which are located
in the north east section of the licence, including the J North
prospect, which has an area of 105km2. The results of the seismic
reprocessing allowed the joint venture partners to plot co-ordinates
for a 2D infill seismic programme over the most prospective area. In
July 2011, a 2D seismic programme commenced, with the acquisition
completed on time and within budget on 23 September 2011. A total of
608km of 2D seismic was shot by seismic contractor Novaseis, beyond the
minimum work programme requirement of 500km. Processing and
interpretation of this new seismic is nearing completion.
Zag Basin Onshore (Net Working Interest 22.5%)
Having completed successfully the reconnaissance permit requirements, a
full exploration permit was signed with ONHYM in September 2009. The
exploration licence is for 8 years, split into three work phases.
Following successful completion of the Tarfaya seismic programme,
Noveseis were contracted to acquire new 2D seismic on Zag. In total
1,674 km of 2D seismic, largely on the eastern part of the licence area
was acquired. This was completed in January 2012 and is the first
seismic data ever acquired on this licence. Processing and
interpretation is expected to be completed this year. There is no
resource estimate on this licence area yet.
Outlook
The Company has continued to make progress across its licence portfolio
and believes that it is well placed to continue to make further
progress during 2012. Longreach believes that Morocco remains an
extremely supportive country to operate in, with strong growth in the
demand for hydrocarbons and significant resource potential. We look
forward to continuing our operation in the year ahead.
For Further Information:
Longreach
Bryan Benitz Chairman & CEO +44 20 3137 7756
Pelham Bell Pottinger
Mark Antelme / Philip Dennis / Rollo Crichton-Stuart +44 207 861 3232
Additional information on Longreach Oil and Gas Limited can be found at
www.longreachoilandgas.com or through Longreach's investor relations
agent.
Additional information on Longreach Oil and Gas Limited can also be
found at www.sedar.com
Special Note Regarding Forwarding Looking Statements:
This press release contains forward-looking statements. These
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 the completion of evaluations and processing and
interpretation of data, the performance characteristics of the
Company's oil and gas properties, capital expenditure programs, 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; 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 political risk; 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 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. 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.
Special Note Regarding Certain Estimates
Longreach cautions readers that volumes described in this press release
as prospective resources and gas initially-in-place are an arithmetic
sum of multiple estimates, which statistical principles indicate may be
misleading as to volumes that may actually be recovered. Readers
should give attention to the estimates of individual classes and
appreciate the differing probabilities of recovery associated with
each. The probability associated with the high estimate would be
considered far less likely than the best estimate, and conversely, the
low estimate would be expected to be much higher than the presented
arithmetic sum. Prospective resources and gas initially-in-place are
undiscovered resources. There is no certainty that any portion of the
resources will be discovered. If discovered, there is no certainty
that it will be commercially viable to produce any portion of the
resources. Longreach is not able to assign a more specific category to
such estimates of prospective resources or gas initially-in-place until
additional seismic data has been obtained and the results of that data,
and of geological and geophysical studies, have been completed.
Special Note Regarding the Use of Analogous Information
The Company cautions that information regarding the Meskala licence
contained in this press release is "analogous information" as that term
is used in the Canadian Oil and Gas Evaluation Handbook ("COGE
Handbook"), and is not the result of an independent estimate prepared
by a qualified reserves evaluator or auditor nor has such information
been prepared in accordance with the COGE Handbook. Although the
Company believes that production on the Meskala field, which is
adjacent to the Sidi Moktar licences, may indicate that production is
possible on the Kechoula field, 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.
Neither 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 information is provided by RNS
The company news service from the London Stock Exchange
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