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Lynden Energy Corp
Symbol LVL
Shares Issued 130,198,411
Close 2015-02-17 C$ 0.57
Market Cap C$ 74,213,094
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Lynden earns $509,461 (U.S.) in Q2 fiscal 2015

2015-02-18 02:05 ET - News Release

Mr. Colin Watt reports

LYNDEN ENERGY REPORTS FINANCIAL RESULTS FOR THE SIX MONTHS ENDED DECEMBER 31, 2014

Lynden Energy Corp. has released its second quarter fiscal 2015 results. (All monetary references in this press release are to U.S. dollars unless otherwise stated.) Highlights for the six months ended Dec. 31, 2014, compared with the six months ended Dec. 31, 2013, include:

  • Average daily production was 1,408 barrels of oil equivalent per day compared with 1,241 barrels of oil equivalent per day in the six months ended Dec. 31, 2013.
  • The total number of producing Wolfberry wells increased to 102 gross (41.68 net).
  • Primarily as a result of a significant drop in commodity prices, petroleum and natural gas sales decreased by 14 per cent as compared with the six months ended Dec. 31, 2013.
  • Realized prices decreased 23 per cent per barrel of oil and 14 per cent per thousand cubic feet of gas, and increased by 7 per cent per bbl of natural gas liquids compared with the six months ended Dec. 31, 2013.

Production for the six months ended Dec. 31, 2014, totalled 259,108 boe (1,408 boe per day). Production for the three months ended Dec. 31, 2014, totalled 128,098 boe (1,392 boe per day), a decrease of 2 per cent over production in the three months ended Sept. 30, 2014.

The production mix in the six months ended Dec. 31, 2014, on a per cent per boe basis, is approximately 55 per cent oil, 22 per cent natural gas and 23 per cent natural gas liquids.

Financial results for the six months and three months ended Dec. 31, 2014

This press release should be read in conjunction with the company's condensed consolidated interim financial statements for the six months ended Dec. 31, 2014, and the notes thereto, together with management's discussion and analysis, for the corresponding period, which are available in the company's Form 10-Q for the quarterly period ended Dec. 31, 2014, found under the company's profile on EDGAR and on SEDAR.

Results of operations

Six months ended Dec. 31, 2014, compared with six months ended Dec. 31, 2013

Net income for the six months ended Dec. 31, 2014, was $2,144,930 and two cents per share and diluted share, compared with net income of $13,245,863 and 11 cents per share and diluted share for the six months ended Dec. 31, 2013. Net income for the six months ended Dec. 31, 2014, decreased primarily because: (1) oil and gas revenues were lower by $2,245,201; (2) there was no gain on disposition of property, plant and equipment in the six months ended Dec. 31, 2014, compared with a gain of $9,937,842 in the six months ended Dec. 31, 2013; (3) depletion, depreciation and accretion were higher by $1,504,158 in the six months ended Dec. 31, 2013, and (4) off-set by income taxes being lower by $3,992,000.

Three months ended Dec. 31, 2014, compared with three months ended Dec. 31, 2013

Net income for the three months ended Dec. 31, 2014, was $509,461 and nil per share and diluted share, compared with net income of $9,607,922 and eight cents per share and diluted share for the three months ended Dec. 31, 2013. Net income for the three months ended Dec. 31, 2014, decreased primarily because: (1) oil and gas revenues were lower by $1,232,585; (2) there was no gain on disposition of property, plant and equipment in the three months ended Dec. 31, 2014, compared with a gain of $9,937,842 in the three months ended Dec. 31, 2013; (3) depletion, depreciation and accretion were higher by $804,034 in the three months ended Dec. 31, 2014; and (4) off-set by income taxes being lower by $3,448,100.

Petroleum and natural gas revenue

Six months ended Dec. 31, 2014, compared with six months ended Dec. 31, 2013

Oil revenues decreased 22 per cent from $13,664,391 for the six months ended Dec. 31, 2013, to $10,709,854 for the six months ended Dec. 31, 2014, as a result of a $22.2-per-barrel decrease in the company's average realized price of oil, which was only partially off-set by an increase in oil production volumes of 1,918 bbl. Natural gas revenues increased 34 per cent from $971,296 for the six months ended Dec. 31, 2013, to $1,300,288 for the six months ended Dec. 31, 2014, as a result of an increase in natural gas production volumes of 120,483 thousand cubic feet, which was off-set by a 60-cent-per-thousand-cubic-foot decrease in the company's average realized natural gas price. NGL revenues increased 25 per cent from $1,503,053 for the six months ended Dec. 31, 2013, to $1,883,397 for the six months ended Dec. 31, 2014, as a result of an increase in NGL production volumes of 8,715 bbl and partially compounded by a $2.13-per-barrel increase in the company's average realized NGL price.

Three months ended Dec. 31, 2014, compared with three months ended Dec. 31, 2013

Oil revenues decreased 23 per cent from $5,796,751 for the three months ended Dec. 31, 2013, to $4,461,778 for the three months ended Dec. 31, 2014, as a result of a $29.62-per-barrel decrease in the company's average realized price for oil, which was off-set by an increase in oil production volumes of 7,524 bbl. Natural gas revenues increased 52 per cent from $406,998 for the three months ended Dec. 31, 2013, to $616,750 for the three months ended Dec. 31, 2014, as a result of an increase in natural gas production volumes of 68,614,000 cubic feet , which was off-set by a decrease of 37 cents per thousand cubic feet in the company's average realized natural gas price. NGL revenues decreased 11 per cent from $987,508 for the three months ended Dec. 31, 2013, to $880,144 for the three months ended Dec. 31, 2014, as a result of a $2.55-per-barrel decrease in the company's average realized NGL price, off-set by an increase in NGL production volumes of 18,030 bbl.

Liquidity

Capital requirements and sources of liquidity

Historically, the company's primary sources of liquidity have been available from cash on hand, cash generated from operations, borrowings under the company's credit facility and proceeds from asset dispositions. To date, the company's primary use of capital has been for the acquisition, development and exploration of oil and natural gas properties.

The company's fiscal 2015 (July 1 to June 30, 2015) capital budget for drilling, completion, recompletion and infrastructure is approximately $34-million.

Details of the capital budget expenditures are as follows:

  • The company continues to carry out the Wolfberry vertical well development program on its Midland basin acreage. The company's budget contemplates a gross cost of a Wolfberry well of $2.1-million. The company's plans call for 15 gross (6.26 net) Wolfberry wells to spud in fiscal 2015 at an estimated cost to the company of approximately $15.0-million.
  • Two initial CrownQuest-operated horizontal wells are scheduled for the first half of calendar 2015 in Glasscock county. The company's budget contemplates a gross cost of a horizontal well of $9.0-million, for an estimated cost to the company of approximately $4.5-million per well.
  • Subject to proposals made by the operator, the company's budget contemplates three horizontal wells will be spudded on the Wolcott lease in fiscal 2015. The gross cost of a horizontal well is budgeted to be $8.5-million, for an estimated cost to the company of $2.1-million per well.
  • The company is also participating in drilling and completion of four new vertical wells in fiscal 2015 on the Mitchell Ranch project at a budgeted total cost to the company of $3.6-million

During the three and six months ended Dec. 31, 2014, the company spent approximately $11.5-million and $23.2-million on capital expenditures on property, plant and equipment. As at Dec. 31, 2014, six Wolfberry wells, one Wolcott horizontal well and two Glasscock county horizontal wells remain to be spudded under the 2015 capital budget.

We seek Safe Harbor.

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