Lynden Energy Corp.
TSX VENTURE : LVL

Lynden Energy Corp.

July 05, 2011 09:00 ET

Lynden Converts 103,400 Acre Mitchell Ranch Project Option Into Lease; 35,000 Acres Leased to a Large Independent E & P Company

VANCOUVER, BRITISH COLUMBIA--(Marketwire - July 5, 2011) - Lynden Energy Corp. (TSX VENTURE:LVL) reports that the Company and its working interest partner, CrownRock L.P., have entered into a term assignment with a large, independent exploration and production company ("SeniorCo"), covering approximately 35,000 acres of the 103,400 acre Mitchell Ranch Project. Lynden and CrownRock have used the consideration paid by SeniorCo to exercise the option on the Mitchell Ranch Project. Accordingly, the entire 103,400 acre block has been converted to a single lease with a 36 month term which can be extended through subsequent continuous development on the lease.

Pursuant to the 30 month term assignment to SeniorCo, which can be extended by 90 day continuous development, Lynden and CrownRock retain a 2.5% (as to 1.25% each) overriding royalty interest on the term assignment acreage. The term assignment acreage is a contiguous block generally located in the southern third of the Mitchell Ranch Project.

The term assignment provides for the return to Lynden / CrownRock, two years after the expiration of the term of the assignment, of mineral rights above the base of the Strawn formation. The agreement between the parties also provides for the sharing of certain technical information on wells drilled by SeniorCo, which Lynden believes will greatly assist in the overall execution of Lynden's business strategy on the Mitchell Ranch Project.

The Mitchell Ranch Project is located in Coke, Mitchell, and Sterling counties of West Texas. All acreage is contained within a historical ranch that lies to the immediate west of the Jameson oil field and is approximately 10 miles south-east of the Iatan oil field. The Mitchell Ranch Project is focused on Permo-Pennsylvanian-aged detrital targets along the eastern shelf of the Permian Basin where there are numerous opportunities across several pay zones, all of which are shallower than 8,000 feet in drilling depth. Lynden has a 50% working interest in the 68,400 acres of the Mitchell Ranch Project not subject to the term assignment to SeniorCo.

Lynden is a Canadian-based oil and gas company with operations focused on our Wolfberry and Mitchell Ranch projects in the Permian Basin, West Texas, and our Paradox Basin Project, Utah.

ON BEHALF OF THE BOARD OF DIRECTORS

LYNDEN ENERGY CORP.

Colin Watt, President and CEO

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.

Contact Information

  • Lynden Energy Corp.
    Colin Watt
    President and CEO
    (604) 629-2991
    (604) 602-9311 (FAX)