CALGARY, Dec. 16, 2013 /CNW/ - LGX Oil + Gas Inc. ("LGX" or the "Company") (TSXV: OIL) is pleased to provide completion results from recent southern Alberta drilling activity. LGX's Big Valley (Three Forks) Formation horizontal well at 13-2-9-24 W4M was recently completed with a 20 stage hydraulic fracture stimulation and has achieved the following extended production test results.
The 13-2 well has been flowing back for 136 hours up a 4.5 inch diameter frac string and has produced 9,360 Bbl of 31 degree API light oil for an average daily rate of approximately 1,650 Bbl oil per day and 570 Mcf per day of associated solution gas for an oil equivalent rate of 1,745 BOE per day over the test period. Peak oil rates in excess of 3,500 Bbl per day have been measured during the flow back period. The 13-2 well is still flowing 85 Bbls of oil per hour and 700 Mcf per day of natural gas with a 10 percent water cut. 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 plans to continue the evaluation of the well and has procured surface production equipment for installation post-flow back to facilitate a long-term production test. With the positive test results from 13-2 validating the geophysical and geological model, LGX estimates that up to 20 sections of LGX land offsetting the 13-2 well may be prospective for Big Valley and/or Banff oil production.
In addition, the Company and other producers have received notice from the Federal Minister of Environment of an Emergency Order for the Protection of the Greater Sage-Grouse pursuant to the Species at Risk Act (SARA) to address the imminent threats to the survival and recovery of the Greater Sage-Grouse, including protecting the habitat in southeast Alberta and southwest Saskatchewan identified in the order to help stabilize the Sage-Grouse population and begin its recovery. The area encompassed by the order includes LGX's Manyberries property. LGX is reviewing the order and is in consultation with other oil and natural gas producers, the Minister of Environment, the Province of Alberta and the Canadian Association of Petroleum Producers to understand and quantify the potential impacts of the order to LGX and its operations at Manyberries.
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.
The references in this news release to test production rates from the 13-2 well are useful in confirming the presence of hydrocarbons, however, such rates are not determinative of the rate at which the 13-2 well will commence production and decline thereafter. These test results are not necessarily indicative of long-term performance or ultimate recovery from the 13-2 well. While encouraging, readers are cautioned not to place reliance on such rates in calculating the aggregate production for the Company.
In this news release LGX has adopted a standard for converting thousands of cubic feet ("mcf") of natural gas to barrels of oil equivalent ("boe") of 6 mcf:1 boe. Use of boes may be misleading, particularly if used in isolation. The boe rate is based on an energy equivalent conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different than the energy equivalency of the 6:1 conversion ratio, utilizing the 6:1 conversion ratio may be misleading as an indication of value.
SOURCE: LGX Oil + Gas Inc.
For further information:
Trent J. Yanko, P.Eng.
President + CEO
Vice President, Finance + CFO
4400, 525 - 8th Avenue S.W.
Calgary, AB T2P 1G1