Mr. Colin Watt reports

LYNDEN ENERGY REPORTS FINANCIAL RESULTS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2015

Lynden Energy Corp. has released financial and operating results for the three months ended Sept. 30, 2015. This press release should be read in conjunction with the company's Form 10-Q for the three months ended Sept. 30, 2015, filed on Nov. 13, 2015, with the U.S. Securities and Exchange Commission and Canadian securities regulators. All monetary references in this press release are to U.S. dollars.

Highlights

The company's financial and operating performance for the three months ended Sept. 30, 2015, included the following highlights:

• Primarily as a result of a significant drop in commodity prices, petroleum and natural gas sales decreased by 57 per cent as compared with the three months ended Sept. 30, 2014.
• Realized prices decreased 49 per cent per barrel of oil, 36 per cent per thousand cubic feet of gas and 63 per cent per barrel of natural gas liquids compared with the three months ended Sept. 30, 2014.
• Average daily production was 1,227 barrels of oil equivalent per day in the three months ended Sept. 30, 2015, compared with 1,424 barrels of oil equivalent per day in the three months ended Sept. 30, 2014.

Results of operations

Net loss for the three months ended Sept. 30, 2015, was $241,045 and nil per share and diluted share, compared with net income of $1,635,469 and one cent per share and diluted share for the three months ended Sept. 30, 2014. Net income decreased by $1,876,514 for the three months ended Sept. 30, 2015, compared with Sept. 30, 2014, primarily due to lower oil and gas revenues of $4,541,411, higher production and operating expenses of $214,489, lower depletion, depreciation and accretion of $456,819, lower general and administrative expenses of $22,374, lower exploration and impairment charges of $449,067, and lower income tax expense of $1,589,900 in the three months ended Sept. 30, 2015.

Petroleum and natural gas revenues

The attached table provides summary information regarding oil, natural gas and natural gas liquids revenues, production, average product prices, and average production costs and expenses for the three months ended Sept. 30, 2015, and 2014.

                                                        
                                   Three months ended Sept. 30, 
                                         2015             2014
Revenues
Oil                               $ 2,654,712      $ 6,248,076
Natural gas                           402,717          683,538
NGL                                   336,027        1,003,253
Total revenues                    $ 3,393,456      $ 7,934,867
Production
Oil (bbl)                              59,795           72,402
Natural gas (mcf)                     155,869          169,821
NGL (bbl)                              27,100           30,305
Total barrels of oil
equivalent (boe)                      112,873          131,010
Daily production averages
Oil (bbl/d)                               650              787
Natural gas (mcf/d)                     1,694            1,846
NGL (bbl/d)                               295              329
Total barrels of oil
equivalent (boe/d)                      1,227            1,424
Average prices
Oil (per bbl)                         $ 44.40          $ 86.30
Natural gas (per mcf)                  $ 2.58           $ 4.03
NGL (per bbl)                         $ 12.40          $ 33.11
Total barrels of oil
equivalent (per boe)                  $ 30.09          $ 60.57

Capital requirements and sources of liquidity

The company's primary sources of liquidity have been available cash on hand, cash generated from operations, borrowings under the company's credit facility, as well as 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.

During the three months ended Sept. 30, 2015, the company spent approximately $9-million on capital expenditures on property, plant and equipment.

The company's fiscal 2016 (July 1, 2015, to June 30, 2016) capital budget for drilling, completion, recompletion and infrastructure was originally established at approximately $18.9-million and has since been revised downward to approximately $14.8-million, for the following:

• $6.1-million, or 41 per cent, for the participation in the drilling and completion of eight gross (3.25 net) Midland basin vertical Wolfberry wells: The company's revised fiscal 2016 budget contemplates a gross cost of a coming Wolfberry well of $1.6-million. Pursuant to the terms of the Midland basin participation agreement, the company's financing amount for the 3.25 net wells is equivalent to 3.71 wells.
• $7-million, or 47 per cent, for the participation in the drilling and completion of two gross horizontal Midland basin horizontal wells in Glasscock county: The first well has been budgeted at a gross cost of $8.3-million, with the second well budgeted at a gross cost of $7-million. Well design, in particular well length and completion approach, will be significant variables in the cost of these wells. The first of these wells has now been drilled, completed and tied into production, and the second well is not scheduled to be spudded until the fourth quarter of fiscal 2016. Pursuant to the terms of the company's Midland basin participation agreement, the company is financing approximately 50 per cent of the cost of the wells.
• $1.7-million, or 12 per cent, for the participation in the drilling and completion of three gross (1.5 net) vertical Mitchell Ranch project wells: The gross cost of the first of the three wells is expected to be $1.4-million, with the gross cost of subsequent wells expected to be $1-million.

Based upon current oil and natural gas price expectations for fiscal 2016, the company believes that its cash and cash equivalents on hand, its cash flow from operations and additional borrowings under its credit facility will provide the company with sufficient liquidity to execute its current capital program, excluding any acquisitions it may enter into. The company is not contractually bound to drill any wells to which it has not first consented.

The company's credit facility is a reducing revolving line of credit of up to $100-million. As at Sept. 30, 2015, the credit facility has a borrowing base of $37.5-million, of which $37-million has been drawn down. The bank is in the process of its review of the company's borrowing base and has indicated to the company, subject to additional internal bank approvals and the completion of customary documentation, that the borrowing base is expected to remain the same or to be increased by an amount not yet finalized. The bank's next engineering valuation of the company's oil and gas reserves and redetermination of the borrowing base is anticipated to be completed in the third quarter of fiscal 2016.

Amounts owing on the credit facility are payable when the credit facility expires in August, 2016, unless otherwise extended by the parties, or payable on demand on the event of default. As a result of the credit facility expiring in less than one year, the amount due under the credit facility has been classified as a current liability. The providers of the credit facility have advised that an extension, for an additional two years, of the credit facility has been approved, subject to documentation acceptable to the providers. The company is currently evaluating various options for financing its development plan prior to committing to an extension of the credit facility.

Current production levels

The company's wells are currently producing approximately 1,450 barrels of oil equivalent per day.

We seek Safe Harbor.