Mr. Colin Watt reports

LYNDEN ENERGY REPORTS FINANCIAL RESULTS FOR THE NINE MONTHS ENDED MARCH 31, 2015

Lynden Energy Corp. has released its third-quarter fiscal 2015 results. Highlights for the nine months ended March 31, 2015, compared with the nine months ended March 31, 2014, include:

• Average daily production was 1,389 boe/d (barrels of oil equivalent per day), compared with 1,162 boe/d in the nine months ended March 31, 2014.
• The total number of producing Wolfberry wells increased to 105 gross (43.02 net).
• Primarily as a result of a significant drop in commodity prices, petroleum and natural gas sales decreased by 20 per cent as compared with the nine months ended March 31, 2014.
• Realized prices decreased 31 per cent per bbl (barrel) of oil, 16 per cent per thousand cubic feet of gas and 30 per cent per bbl of natural gas liquids (NGL) compared with the nine months ended March 31, 2014.

Production for the nine months ended March 31, 2015, totalled 380,618 boe (1,389 boe/d). Production for the three months ended March 31, 2015, totalled 121,510 boe (1,350 boe/d), a decrease of 3 per cent over production in the three months ended Dec. 31, 2014.

The production mix in the nine months ended March 31, 2015, on a per-cent-per-boe basis, is approximately 54 per cent oil, 22 per cent natural gas and 24 per cent NGL.

Financial results for the nine months and three months ended March 31, 2015

This press release should be read in conjunction with the company's condensed consolidated interim financial statements for the nine months ended March 31, 2015, and the notes thereto, together with the management discussion and analysis for the corresponding period, which are available in the company's Form 10-Q for the quarterly period ended March 31, 2015, found under the company's profile on EDGAR and on SEDAR. All monetary references in this press release are to U.S. dollars unless otherwise stated.

Results of operations

Nine months ended March 31, 2015, compared with nine months ended March 31, 2014

Net income for the nine months ended March 31, 2015, was $33,063 and nil per share and diluted share, compared with net income of $15,499,542 and 13 cents per share and 12 cents per diluted share for the nine months ended March 31, 2014. Net income for the nine months ended March 31, 2015, decreased primarily because oil and gas revenues were lower by $4,268,968; there was no gain on disposition of property, plant and equipment in the nine months ended March 31, 2015, compared with a gain of $10,214,019 in the nine months ended March 31, 2014; depletion, depreciation and accretion were higher by $2,228,828 in the nine months ended March 31, 2015; production and operating expenses were higher by $986,064, which was offset by lower income taxes of $4,187,044.

Three months ended March 31, 2015, compared with three months ended March 31, 2014

Net loss for the three months ended March 31, 2015, was ($2,111,867) and (two cents) per share and diluted share, compared with net income of $2,253,679 and two cents per share and diluted share for the three months ended March 31, 2014. Net income decreased by $4,365,546 as at March 31, 2015, compared with March 31, 2014, for the three months ended March 31, 2015, primarily due to lower oil and gas revenues of $2,023,767; higher production and operating expenses of $562,538; higher depletion, depreciation and accretion of $724,670; higher general and administrative expenses of $399,908; and a share of loss in equity investment of $431,919 in the three months ended March 31, 2015.

Petroleum and natural gas revenue

Nine months ended March 31, 2015, compared with nine months ended March 31, 2014

Oil revenues decreased 24 per cent from $17,961,450 for the nine months ended March 31, 2014, to $13,685,535 for the nine months ended March 31, 2015, as a result of a $30.52 per bbl decrease in the average realized price of oil only partially offset by an increase in oil production volumes of 20,531 bbl. Natural gas revenues increased 9 per cent from $1,645,430 for the nine months ended March 31, 2014, to $1,785,493 for the nine months ended March 31, 2015, as a result of an increase in natural gas production volumes of 112,358,000 cubic feet offset by a 65-cent per-thousand-cubic-feet decrease in the average realized natural gas price. NGL revenues decreased 6 per cent from $2,255,378 for the nine months ended March 31, 2014, to $2,122,262 for the nine months ended March 31, 2015, as a result of a $9.92 per bbl decrease in the average realized NGL price partially offset by an increase in NGL production volumes of 23,016 bbl.

Three months ended March 31, 2015, compared with three months ended March 31, 2014

Oil revenues decreased 31 per cent from $4,297,059 for the three months ended March 31, 2014, to $2,975,681 for the three months ended March 31, 2015, as a result of a $46.27 per bbl decrease in the average realized price for oil, offset by an increase in oil production volumes of 17,686 bbl. Natural gas revenues decreased 28 per cent from $674,134 for the three months ended March 31, 2014, to $485,205 for the three months ended March 31, 2015, as a result of a $2.57-per-thousand-cubic-feet decrease in the average realized natural gas price, offset by an increase in natural gas production volumes of 43,421,000 cubic feet. NGL revenues decreased 68 per cent from $752,325 for the three months ended March 31, 2014, to $238,865 for the three months ended March 31, 2015, as a result of a $24.91 per bbl decrease in the average realized NGL price, offset by an increase in NGL production volumes of 6,898 bbl. The increased production volumes of oil, natural gas and NGLs was primarily due to the continuing Wolfberry well development program and the resulting increase in the number of wells tied in and producing.

Liquidity

Capital requirements and sources of liquidity

Historically, the company's primary sources of liquidity have been available 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.

As at March 31, 2015, the credit facility had a borrowing base of $40-million, of which $27.3-million had been drawn down. Subsequent to March 31, 2015, the credit facility lender advised the company that the borrowing base under the credit facility would be, subject to the completion of customary documentation, reduced to $37.5-million.

The company's fiscal 2015 (July 1, 2014, to June 30, 2015) capital budget for drilling, completion, recompletion and infrastructure was established at approximately $34-million.

During the three and nine months ending March 31, 2015, the company spent approximately $1.0-million and $24.2-million on capital expenditures on property, plant and equipment. As a result of a significant decrease in oil, natural gas and NGL prices, management is observing reductions in drilling and completion costs undertaken, or anticipated to be undertaken, in the second half of fiscal 2015.

As at March 31, 2015, three Wolfberry wells, one Wolcott horizontal well and two Glasscock County horizontal wells remain to be spudded under the fiscal 2015 capital budget. As a result of scheduling changes, it is now anticipated that one of the two gross horizontal Midland basin wells, and one of the three gross horizontal Wolcott lease wells will not be spudded by June 30, 2015, and as a consequence are now included in the company's capital budget for the first half of fiscal 2016 (July 1, 2015, to Dec. 31, 2015).

The first half of fiscal 2016 (July 1, 2015, to Dec. 31, 2015) capital budget for drilling, completion, recompletion and infrastructure is approximately $9.2-million, for the following:

• $3.4-million, or 37 per cent, for the participation in the drilling and completion of four gross vertical Midland basin wells;
• $4.0-million, or 43 per cent, for the participation in the drilling and completion of one gross horizontal Midland basin well;
• $1.8-million, or 20 per cent, for the participation in the drilling and completion of one horizontal Wolcott lease well.

We seek Safe Harbor.