JERSEY, CHANNEL ISLANDS--(Marketwired - Apr 29, 2013) - Longreach Oil & Gas Limited (TSX VENTURE: LOI)
29th April 2013
LONGREACH OIL AND GAS LIMITED
Q4 and Year End 2012 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 December 31, 2012. Today the Company filed its annual
financial statements for the year ended December 31, 2012 together with
the Management's Discussion and Analysis in respect of the Company's
financial results for the year ended December 31, 2012.
Highlights
Financial:
* Cash position as at December 31, 2012 of US$34.2m (US$10.5m as at
December 31, 2011; US$6.2m as at September 30, 2012)
* Working capital as at December 31, 2012 of US$32.6m (US$7.4m as
at December 31, 2011; US$5.0m as at September 30, 2012)
* Completed business combination between Longreach and APIC
Petroleum Corporation ("APIC"), concurrent with a subscription receipt
financing raising US$30m
Operational Update:
* Sidi Moktar:
o 520 km of new 2D seismic data acquired and processed, allowing
Longreach to finalise the well locations for the 2013 drilling
programme over the Koba and Kamar drill prospects and potentially
high-grade existing and additional leads to prospect status
o An updated independent assessment of the Company's prospective
resources on the Sidi Moktar licence, covering 12 prospects and
leads, was released in March resulting in a significant upgrade on
previous estimates
o Long lead items have been ordered ahead of drilling the Koba and
Kamar prospects this year
o Evaluation of technical and commercial bids following an
international tender process for a land rig is underway and nearing
completion
o Civil works for the preparation of the well sites are scheduled to
commence in May 2013
* Foum Draa Offshore:
o A rig has been secured. , subject to necessary approvals, to begin
operations on the Foum Draa licence in H2 2013.
Commenting, Andrew Benitz, CEO of Longreach, said:"2012 was a
transformational year for the Company. It set the
foundations for the current planned work programme, which is fully
funded and has the potential to create significant value for
shareholders. Morocco also attracted significant additional interest in
2012 and is today considered one of the most prospective and exciting
places to operate. As such we look forward to the remainder of this
year with excitement and confidence."
Results Statement
Over the course of 2012, Longreach has transformed itself into a
Company with a strong and balanced set of assets, ranging from near
term development potential to high impact exploration, supported by a
solid financial platform. As a result, in the year ahead Longreach has
in place a strong work programme that is fully funded and has the
potential to create significant shareholder value.
Operational Update
Sidi Moktar Onshore (Net Working Interest 50%)
Longreach has a 50% operating interest in the onshore Sidi Moktar
exploration licence ("Sidi Moktar"). Sidi Moktar is comprised of three
blocks (Sidi Moktar West, Sidi Moktar South and Sidi Moktar North)
totalling 4,711 square kilometres, which covers the majority of the
hydrocarbon basin of Essaouira, located in central onshore Morocco.
The blocks surround the producing Meskala field which is operated by
ONHYM, the Moroccan state energy company (Morocco's major producing
field). Four fields within Sidi Moktar have historically produced 30.5
Bcf of gas from Jurassic aged reservoirs.
The licence has a significant amount of historical exploration data
available to Longreach, including 6,172km of 2D Seismic and 43
exploration & development wells. Longreach has interpreted over 4,500km
of existing 2D seismic data and has completed the reprocessing of
1,750km of the existing data. Longreach has also completed a
comprehensive petrophysical analysis of the neighbouring wells to
better understand the reservoir and seal potential of the entire
Triassic stratigraphic section. Subsequently, a portfolio of 12
prospects and leads has been mapped. The neighbouring Meskala field is
currently producing from the Triassic.
During the period, the Company completed the acquisition of 520 km of
new 2D seismic data over the portfolio of prospects and leads in
fulfilment of the Licence commitment of 500km. Priority lines, over
Longreach's drill-ready targets, Koba and Kamar, have been processed
and incorporated into the Company's interpretation and the well
locations have been identified for the 2013 drilling programme.
On March 11, 2013, Longreach announced an updated independent
assessment of the Company's prospective resources on the Sidi Moktar
licence which has been completed by Gaffney, Cline & Associates
("Gaffney, Cline", or "GCA") in accordance with NI 51-101 requirements
using the COGE Handbook. GCA confirmed that Longreach's thorough
reinterpretation of the seismic and other data has 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 and that there is
potential for hydrocarbon bearing clastic reservoirs to be found below
the historical hydrocarbon discoveries. GCA's independent assessment
attributes gross prospective resource estimates of 349 Bcf of gas and
21 MMbbl of condensate (Best estimates) for the Koba prospect with a
Geological Chance of Success of 22% and 78 Bcf of gas and 5 MMbbl of
condensate for the Kamar prospect with a Geological Chance of Success
of 18%.
Post year end, Longreach also entered into a co-operation agreement
with another operator in Morocco to help facilitate the procurement of
a rig for a joint drilling programme. Evaluation of technical and
commercial bids following an international tender process for a land
rig is underway. As a result, Longreach expects the spudding of the
well to evaluate the Koba prospect to take place in Q3 this year.
Long lead items for the drilling of the Koba and Kamar prospects have
been ordered, including well heads, Christmas trees, casing and tubing.
Works to prepare the site for drilling are scheduled to commence in
May.
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% 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 kilometers (3.14 million acres).
On August 28, 2012, Longreach entered into a farm-out agreement with
Cairn Energy PLC ("Cairn") whereby Cairn, through its subsidiary
Capricorn Exploration and Development Company Limited, acquired a 50%
operated equity interest in the Foum Draa Offshore licence pro rata
from Longreach and each of its joint venture partners. The Foum Draa
farm-out to Cairn has been approved by Moroccan authorities and is now
complete.
Cairn paid its equity interest share of past costs, being US$1.5
million (US$150,000 net to Longreach) and will pay the first US$60
million towards drilling of the commitment well required under the
terms of the First Extension Period of the Foum Draa Licence (including
in relation to the ONHYM 25% carried interest). Longreach's net
interest in the Foum Draa exploration license is now 2.5%.
On August 23, 2012, Longreach also entered into a farm-out agreement
with Genel Energy plc ("Genel") whereby Genel acquired a 60% operated
equity interest in the Sidi Moussa Offshore licence pro rata from
Longreach and each of its joint venture partners. The Sidi Moussa
farm-out to Genel has been approved by Moroccan authorities and is now
complete. Genel will pay its equity interest share of past costs, being
US$1.5 million (US$150,000 net to Longreach) and will pay the first
US$50 million towards drilling of the commitment well required under
the terms of the First Extension Period of the Sidi Moussa Licence
(including in relation to the ONHYM 25% carried interest). Longreach's
net interest in the Sidi Moussa exploration licence has now been
reduced from 7.5% to 1.5% as a result of the approval received from the
Moroccan Energy Ministry.
Tarfaya Onshore (Net Working Interest 22.5%)
A total of 608 km of 2D seismic was acquired during 2011 focusing on
Triassic and Jurassic leads in the North East of the licence
Processing and interpretation of this new seismic is now complete.
Further geological and geophysical work studies are now being
conducted on the licence, ahead of a planned well programme for Q1
2014.
Zag Basin Onshore (Net Working Interest 22.5%)
The acquisition of 1,674 km of 2D seismic began during late 2011,
largely on the eastern part of the licence area. This was completed in
January 2012 and is the first seismic data ever acquired on the
licence. Processing is now complete and interpretation is on-going.
Further geological and geophysical work studies will be carried out
during the remainder of 2013. To date, no resources estimates on this
licence area have been completed.
Outlook
Longreach is today based on solid financial and technical foundations
that can be utilised as a spring board to make significant operational
progress and in turn potentially create exceptional shareholder value
both in the relative near and longer term. We are looking forward to
the drilling of a number of wells this year, which range from
reasonably low risk to high impact exploration. This work programme is
fully funded and, if successful, has the potential to again transform
Longreach's business going forward. We look forward to 2013 with great
excitement and renewed confidence in the future of Longreach.
-ENDS-
For Further Information:
Longreach
Andrew Benitz 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 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
sub-classified 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% 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% 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%
confidence level - that the actual quantities recovered will equal or
exceed the estimate.
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.
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
END
Contact Information:
Contacts:
RNS
Customer
Services
0044-207797-4400
http://www.rns.com