CALGARY, June 24, 2015 /CNW/ - LGX Oil + Gas Inc. ("LGX" or the "Company") (TSXV: OIL) is pleased to provide completion test results from recent southern Alberta activity. Big Valley (Three Forks) Formation production from the horizontal well at 6-36-8-24 W4M was isolated and the Banff Formation was completed with a 6 m perforated interval in the build section of the intermediate casing and stimulated with a small volume acid job. The completion has achieved the following extended production test results:
The Banff Formation has been flowing back for 159 hours and has produced in excess of 2,700 Bbl of light oil for an average daily rate of approximately 420 Bbl oil per day over the test period. Peak oil rates in excess of 800 Bbl per day have been measured during the flow back period. The 6-36 well is still flowing 130 Bbl of oil per day at a flowing pressure of 1,000 kPa with a two percent water cut from the un-frac'd Banff Formation. LGX has a 100 percent interest in the well prior to recovery of 200 percent of the drilling, completion, equipping and tie-in costs, at which point its interest will revert to 80 percent. Please refer to important Reader Advisories at the end of this news release.
The Company will continue the evaluation of the well through the LGX 1-2 battery. The positive test results from 6-36 Banff completion and the number of Banff oil shows and tests from previously drilled wells have validated the geophysical and geological model for the play. LGX estimates that up to 40 sections of LGX land offsetting the 6-36 well may be prospective for Banff oil production as well as the already established Big Valley play.
LGX is a uniquely positioned, technically driven, junior oil and natural gas company with a proven management team committed to aggressive, cost-effective growth of light oil reserves and production combined with high impact exploration potential in southern Alberta. LGX's common shares trade on the TSX Venture Exchange under the symbol OIL.
Neither the 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.
Caution Respecting Initial Production Results - The production test results for the Banff Formation completion at the 6-36 well disclosed in this press release are initial results for the first 159 hours of production only and are not determinative of the rates at which such well will continue production and decline thereafter. Due to the likelihood of high initial declines from the tested rates, the test results are not indicative of long-term performance or ultimate recovery from the well. Readers are cautioned not to place undue reliance on such rates in considering the long-term performance of the well or the aggregate production of the Company.
Forward-Looking Information - This press release contains forward-looking statements. More particularly, it contains forward-looking statements concerning the prospectivity of LGX's properties with respect to the Banff Formation.
The forward-looking statements contained in this press release are based on certain key expectations and assumptions made by LGX, including expectations and assumptions concerning the geological characteristics of LGX's properties.
Although LGX believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because LGX can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, operational risks in development, exploration and production and risks associated with uncertainty in geological and seismic interpretation. These and other risks are set out in more detail in LGX's Annual Information Form for the year ended December 31, 2014 dated March 24, 2015.
The forward-looking statements contained in this press release are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
Meaning of Boe - Boe means barrel of oil equivalent. All Boe conversions in this report are derived by converting natural gas to oil equivalent at a ratio of six thousand cubic feet of natural gas to one barrel of oil equivalent. Boe may be misleading, particularly if used in isolation. A Boe conversion rate of 1 Boe: 6 Mcf is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio of oil compared to natural gas based on currently prevailing prices is significantly different than the energy equivalency ratio of 1 Boe : 6 Mcf, utilizing a conversion ratio of 1 Boe : 6 Mcf may be misleading as an indication of value.
SOURCE LGX Oil + Gas Inc.
For further information: Trent J. Yanko, P.Eng., President + CEO; Curt Ziemer, CGA, Vice President, Finance + CFO, 4400, 525 - 8th Avenue S.W., Calgary, AB T2P 1G1, Telephone: 403.441.2300