Longview Announces 2011 Year End Financial Results and Independent Reserve Report
Q4 2011 Production Increased by 12% over Q3 2011 and 2011 FD&A Cost of $16.43/boe
(TSX: LNV)
CALGARY, March 22, 2012 /CNW/ - Longview Oil Corp. ("Longview" or the "Corporation") is pleased to announce the financial and operating results for the year ended December 31, 2011 and the accompanying reserves as of December 31, 2011.
| Three months ended | Year ended | |||||||||||
| December 31, 2011 | September 30, 2011 | December 31, 2011 (1) | ||||||||||
| Financial ($000, except as otherwise indicated) | ||||||||||||
| Sales including realized hedging | $ | 43,303 | $ | 37,109 | $ | 112,778 | ||||||
| per share (2) | $ | 0.93 | $ | 0.79 | $ | 3.37 | ||||||
| per boe | $ | 68.99 | $ | 66.44 | $ | 68.60 | ||||||
| Funds from operations | $ | 21,047 | $ | 17,255 | $ | 53,736 | ||||||
| per share (2) | $ | 0.45 | $ | 0.37 | $ | 1.61 | ||||||
| per boe | $ | 33.53 | $ | 30.89 | $ | 32.69 | ||||||
| Net income and comprehensive income | $ | 4,320 | $ | 7,148 | $ | 20,529 | ||||||
| per share (2) | $ | 0.09 | $ | 0.15 | $ | 0.61 | ||||||
| Dividends declared | $ | 7,012 | $ | 7,013 | $ | 18,695 | ||||||
| per share (3) | $ | 0.15 | $ | 0.15 | $ | 0.40 | ||||||
| Expenditures on property, plant and equipment | $ | 25,625 | $ | 21,589 | $ | 54,957 | ||||||
| Working capital deficit (4) | $ | 20,074 | $ | 13,914 | $ | 20,074 | ||||||
| Bank indebtedness | $ | 91,355 | $ | 84,692 | $ | 91,355 | ||||||
| Shares outstanding at end of period (000) | 46,750 | 46,750 | 46,750 | |||||||||
| Basic weighted average shares (000) | 46,750 | 46,745 | 33,459 | |||||||||
| Operating | ||||||||||||
| Daily Production | ||||||||||||
| Crude oil and NGLs (bbls/d) | 5,120 | 4,554 | 4,690 | |||||||||
| Natural gas (mcf/d) | 10,215 | 9,103 | 9,514 | |||||||||
| Total boe/d @ 6:1 | 6,823 | 6,071 | 6,276 | |||||||||
| Average prices (including hedging) | ||||||||||||
| Crude oil and NGLs ($/bbl) | $ | 85.01 | $ | 80.76 | $ | 84.06 | ||||||
| Natural gas ($/mcf) | $ | 3.47 | $ | 3.91 | $ | 3.81 | ||||||
| Proved plus probable reserves | ||||||||||||
| Crude oil & NGLs (mbbls) | 29,897 | |||||||||||
| Natural gas (bcf) | 47.7 | |||||||||||
| Total mboe | 37,853 | |||||||||||
| Reserve life index (years) (5) | 15.1 | |||||||||||
| (1) | Longview's operations commenced on April 14, 2011 and the year ended December 31, 2011 includes financial and operational results for only 262 days. | ||||
| (2) | Based on basic weighted average shares outstanding. | ||||
| (3) | Based on shares outstanding at each dividend record date. | ||||
| (4) | Working capital deficit includes trade and other receivables, prepaid expenses and deposits, trade and other accrued liabilities and due to parent. | ||||
Longview Oil Corp. - Commencement of Operations
- Longview was incorporated on March 4, 2010 and completed its initial public offering (the "Offering") on April 14, 2011 at a price of $10 per common share issuing 17,250,000 shares and raising gross proceeds of $172.5 million (including full exercise of the over-allotment option on April 28, 2011).
- Concurrent with the closing of the Offering, Longview purchased certain oil-weighted assets from Advantage Oil & Gas Ltd. ("Advantage") for total consideration of $546.9 million, comprised of 29,450,000 common shares of Longview (representing a 63% equity ownership) and $252.4 million in cash (the "Acquisition"). The Acquisition had an effective date of January 1, 2011 and a closing date of April 14, 2011. As such the Reserves Reconciliation and Finding, Development and Acquisition cost analysis contained in this press release are based on the period January 1 to December 31, 2011.
- For further details of the Offering and Acquisition, please refer to the press release issued by Advantage on March 7, 2011 and the final prospectus filed by Longview on April 6, 2011, which are available at www.sedar.com and Longview's website at www.longviewoil.com.
Production Growth Drives 22% Increase in Funds from Operations
- Funds from operations for the fourth quarter of 2011 was $21.0 million or $0.45 per share, an increase of 22% as compared to the third quarter of 2011. Funds from operations were supported by increasing oil and liquids production (that comprised 93% of total sales revenue) and strong crude oil prices.
- Production for the fourth quarter of 2011 averaged 6,823 boe/d, an increase of 12% from 6,071 boe/d realized in the third quarter of 2011. Our 2011 capital program and well workover and reactivation activities were initially delayed due to poor field conditions from severe wet weather during much of the spring and summer. We were able to commence our Alberta capital expenditure program in July with the Saskatchewan program beginning in September. Notwithstanding the delays, we were able to expedite our efforts and complete our capital expenditure program. This activity significantly increased production and positively impacted funds from operations exhibiting our ability to deliver stable returns for our shareholders.
- Operating expense for the fourth quarter of 2011 was $18.36/boe, a slight decrease from the $18.47/boe realized in the prior quarter. During the third and fourth quarters we conducted a number of well workovers and reactivations primarily in SE Saskatchewan which resulted in higher than normal operating costs. We anticipate operating costs to be $16.00/boe to $17.00/boe during 2012 as fewer well workovers and reactivations are planned.
- Capital expenditures for the three months and year ended December 31, 2011 amounted to $25.6 million and $55.0 million, respectively. We deployed two drilling rigs in Alberta and an additional rig targeting the Midale formation in southeast Saskatchewan. For 2011 we drilled 20.7 net (30 gross) oil wells with a 100% success rate which contributed to the strong increase in production.
- As at December 31, 2011, Longview's bank debt was $91.4 million on a credit facility of $200 million (46% drawn) resulting in an unutilized capacity of approximately $108.6 million. Our strategy of maintaining a conservative financial structure has positioned Longview to execute a capital program that provides growth potential while paying a stable dividend to shareholders.
- Longview currently pays a monthly dividend of $0.05 per share and has declared and paid $18.7 million of dividends for the year ended December 31, 2011.
FD&A of $16.43/boe and Reserve Additions Replaced 146% of Production
- Sproule Associates Ltd. ("Sproule") was engaged as an independent qualified reserve evaluator to evaluate Longview's year end reserves (the "Sproule Report") in accordance with National Instrument 51-101 ("NI 51-101") and the Canadian Oil and Gas Evaluation Handbook ("COGE Handbook") (see Appendix 1 - Reserves Summary).
- Our 2011 capital program replaced 146% of production adding 3.3 mmboe of Proved plus Probable ("2P") reserves. At December 31, 2011 we had 2P reserves of 37.9 mmboe with proved reserves representing 55% of the total.
- Finding, Development & Acquisition ("FD&A") cost was $16.43/boe including the change in Future Development Capital ("FDC"), resulting in a one year recycle ratio of 2.2x using our 2011 annual operating netback of $36.36/boe.
- Longview's December 31, 2011 Net Asset Value is $15.12/share at a 10% discount rate pre-tax.
- The Corporation's 2P Reserve Life Index ("RLI") is 15.1 years using our fourth quarter 2011 average production rate.
Commodity Hedging Program
- Longview's hedging program for calendar 2012 includes crude oil hedges of 1,000 bbls/d at $97.10/bbl and 1,000 bbls/d at a floor price of $90.00/bbl.
- Additional details on our hedging program are available at our website at www.longviewoil.com.
Looking Forward
- Longview's operations commenced on April 14, 2011 and have since demonstrated solid financial and operating results, strong funds from operations supported by high crude oil prices, and production growth as we executed our capital program. We are targeting regular monthly dividends to shareholders of $0.05 per share and continue to focus on operations and executing our capital program.
- Our 2012 capital budget is approximately $73 million including the drilling of 25.3 net (34 gross) wells. We have contracted three rigs, two of which will target Alberta prospects with the additional rig targeting the Midale formation in southeast Saskatchewan. The capital expenditure program also includes analysis of cores that were taken from the Duvernay and Nordegg shale formations on a well that was drilled at Sunset in the fourth quarter of 2011. Detailed core analysis is expected by summer of 2012.
- We are looking forward to successfully executing our 2012 capital program, focusing on operational and cost efficiencies in order to increase returns and produce stable cash flows while maintaining a conservative financial structure. Longview's business strategy is to provide shareholders with attractive long term returns that combine both growth and yield by exploiting our assets in a financially disciplined manner and by acquiring additional long-life oil and gas assets of a similar nature.
- The following table summarizes operational guidance for Longview for the year ending December 31, 2012:
| Production average | 6,600 boe/d to 6,800 boe/d | |||||||||||||||
| % of oil & liquids | 77% | |||||||||||||||
| Exit rate | 6,800 boe/d to 7,000 boe/d | |||||||||||||||
| Production growth % | 8% | |||||||||||||||
| Royalty rate | 18% to 20% | |||||||||||||||
| Operating expense | $16.00/boe to $17.00/boe | |||||||||||||||
| Capital expenditures | $70 million to $75 million |
Financial Statements and MD&A
- Longview's audited financial statements for the year ended December 31, 2011 together with the notes thereto, and Management's Discussion and Analysis for the three months and year ended December 31, 2011 have been prepared in accordance with International Financial Reporting Standards ("IFRS") and posted on our website at www.longviewoil.com and filed under our profile on SEDAR at www.sedar.com.
APPENDIX 1 - Reserves Summary
Longview engaged our independent qualified reserves evaluator Sproule Associates Ltd. ("Sproule") to update the reserves analysis for the Company in accordance with National Instrument 51-101 and the COGE Handbook. Reserves and production information included herein is stated on a Company Interest basis (before royalty burdens and including royalty interests receivable) unless noted otherwise. This summary contains several cautionary statements that are specifically required by NI 51-101. In addition to the detailed information disclosed in this press release, more detailed information on a net interest basis (after royalty burdens and including royalty interests) and on a gross interest basis (before royalty burdens and excluding royalty interests) will be included in Longview's Annual Information Form ("AIF") and will be available at www.longviewoil.com and www.sedar.com. On April 14, 2011, Longview acquired certain oil-weighted assets from Advantage Oil & Gas Ltd. with an effective date of January 1, 2011 and a closing date of April 14, 2011. As such, Longview had no assets, reserves or operations prior to April 14, 2011.
Highlights - Company Interest Reserves (Working Interests plus Royalty Interests Receivable)
| December 31, 2011 | December 31, 2010 | |||||||
| Proved plus probable reserves (mboe) | 37,853 | - | ||||||
| Present Value of 2P reserves discounted at 10%, before tax ($000)(1) | $728,401 | - | ||||||
| Net Asset Value per Share discounted at 10%, before tax (2) | $15.12 | - | ||||||
| Reserve Life Index (proved plus probable - years) (3) | 15.1 | - | ||||||
| Reserves per Share (proved plus probable) (2) | 0.80 | - | ||||||
| Bank debt per boe of reserves (4) | $3.03 | - |
| (1) | Assumes that development of each property will occur, without regard to the likely availability to the Company of funding required for that development. | |
| (2) | Based on 46.75 million Shares outstanding at December 31, 2011 | |
| (3) | Based on Q4 average production and company interest reserves. | |
| (4) | Using boe's may be misleading, particularly if used in isolation. In accordance with NI 51-101, a boe conversion ratio for natural gas of 6 mcf: 1 bbl has been used which 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 based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency of 6:1, utilizing a conversion on a 6:1 basis may be misleading as an indication of value. |
Company Interest Reserves (Working Interests plus Royalty Interests Receivable)
Summary as at December 31, 2011
| |
Light & Medium Oil (mbbl) |
Heavy Oil (mbbl) |
Natural Gas Liquids (mbbl) |
Natural Gas (mmcf) |
Oil Equivalent (mboe) |
||||||||||||||||
| Proved | |||||||||||||||||||||
| Developed Producing | 8,727 | 1,462 | 1,233 | 19,787 | 14,719 | ||||||||||||||||
| Developed Non-producing | 384 | 160 | 50 | 664 | 704 | ||||||||||||||||
| Undeveloped | 3,720 | 456 | 216 | 6,328 | 5,448 | ||||||||||||||||
| Total Proved | 12,831 | 2,078 | 1,499 | 26,779 | 20,871 | ||||||||||||||||
| Probable | 9,510 | 3,009 | 970 | 20,958 | 16,982 | ||||||||||||||||
| Total Proved + Probable | 22,341 | 5,087 | 2,469 | 47,737 | 37,853 | ||||||||||||||||
Gross Working Interest Reserves (Working Interest only)
Summary as at December 31, 2011
| |
Light & Medium Oil (mbbl) |
Heavy Oil (mbbl) |
Natural Gas Liquids (mbbl) |
Natural Gas (mmcf) |
Oil Equivalent (mboe) |
|||||||||||||||
| Proved | ||||||||||||||||||||
| Developed Producing | 8,591 | 1,452 | 1,230 | 19,749 | 14,564 | |||||||||||||||
| Developed Non-producing | 380 | 157 | 50 | 664 | 697 | |||||||||||||||
| Undeveloped | 3,720 | 451 | 215 | 6,328 | 5,442 | |||||||||||||||
| Total Proved | 12,691 | 2,060 | 1,495 | 26,741 | 20,703 | |||||||||||||||
| Probable | 9,424 | 2,995 | 969 | 20,936 | 16,877 | |||||||||||||||
| Total Proved + Probable | 22,115 | 5,055 | 2,464 | 47,677 | 37,580 | |||||||||||||||
Present Value of Future Net Revenue using Sproule price and cost forecasts (1)(2)
($000)
| Before Income Taxes Discounted at |
||||||||||||||||||
| 0% | 10% | 15% | ||||||||||||||||
| Proved | ||||||||||||||||||
| Developed Producing | $ 541,681 | $ 329,787 | $ 281,573 | |||||||||||||||
| Developed Non-producing | 24,365 | 15,235 | 12,840 | |||||||||||||||
| Undeveloped | 172,094 | 89,383 | 66,604 | |||||||||||||||
| Total Proved | 738,140 | 434,405 | 361,017 | |||||||||||||||
| Probable | 736,970 | 293,996 | 214,048 | |||||||||||||||
| Total Proved + Probable | $ 1,475,110 | $ 728,401 | $ 575,065 |
| (1) | Longview's crude oil, natural gas and natural gas liquid reserves were evaluated using Sproule's product price forecast effective December 31, 2011 prior to the provision for income taxes, interests, debt services charges and general and administrative expenses. It should not be assumed that the discounted future revenue estimated by Sproule represents the fair market value of the reserves. | |
| (2) | Assumes that development of each property will occur, without regard to the likely availability to the Company of funding required for that development. |
Sproule Price Forecasts
The present value of future net revenue at December 31, 2011 was based upon crude oil and natural gas pricing assumptions prepared by Sproule effective December 31, 2011. These forecasts are adjusted for reserve quality, transportation charges and the provision of any applicable sales contracts. The price assumptions used over the next seven years are summarized in the table below:
| Year |
WTI Crude Oil ($US/bbl) |
Edmonton Light Crude Oil ($Cdn/bbl) |
Alberta AECO-C Natural Gas ($Cdn/mmbtu) |
Henry Hub Natural Gas ($US/mmbtu) |
Exchange Rate ($US/$Cdn) |
||||||||||||||||||||
| 2012 | 98.07 | 96.87 | 3.16 | 3.55 | 1.012 | ||||||||||||||||||||
| 2013 | 94.90 | 93.75 | 3.78 | 4.18 | 1.012 | ||||||||||||||||||||
| 2014 | 92.00 | 90.89 | 4.13 | 4.54 | 1.012 | ||||||||||||||||||||
| 2015 | 97.42 | 96.23 | 5.53 | 5.95 | 1.012 | ||||||||||||||||||||
| 2016 | 99.37 | 98.16 | 5.65 | 6.07 | 1.012 | ||||||||||||||||||||
| 2017 | 101.35 | 100.12 | 5.77 | 6.19 | 1.012 | ||||||||||||||||||||
| 2018 | 103.38 | 102.12 | 5.89 | 6.32 | 1.012 |
Net Asset Value using Sproule price and cost forecasts (Before Income Taxes)
The following net asset value ("NAV") table shows what is normally referred to as a "produce-out" NAV calculation under which the current value of the Company's reserves would be produced at forecast future prices and costs. The value is a snapshot in time and is based on various assumptions including commodity prices and foreign exchange rates that vary over time.
| Before Income Taxes Discounted at | ||||||||||||||||||||
| ($000, except per Share amounts) | 0% | 10% | 15% | |||||||||||||||||
| Net asset value per Share (1) - December 31, 2010 | $ 0.00 | $ 0.00 | $ 0.00 | |||||||||||||||||
| Present value proved and probable reserves | $ | 1,475,110 | $ | 728,401 | $ | 575,065 | ||||||||||||||
| Undeveloped acreage and seismic (2) | 92,108 | 92,108 | 92,108 | |||||||||||||||||
| Working capital (deficit) and other | (22,812) | (22,812) | (22,812) | |||||||||||||||||
| Bank debt | (90,979) | (90,979) | (90,979) | |||||||||||||||||
| Net asset value - December 31, 2011 | $ | 1,453,427 | $ | 706,718 | $ | 553,382 | ||||||||||||||
| Net asset value per Share (1) - December 31, 2011 | $ | 31.09 | $ | 15.12 | $ | 11.84 | ||||||||||||||
| (1) | Based on 46.75 million Shares outstanding at December 31, 2011. | |
| (2) | Internal estimate. |
Gross Working Interest Reserves Reconciliation
| Proved |
Light & Medium Oil (mbbl) |
Heavy Oil (mbbl) |
Natural Gas Liquids (mbbl) |
Natural Gas (mmcf) |
Oil Equivalent (mboe) |
|||||||||||||||||
| Opening balance Dec. 31, 2010 | - | - | - | - | - | |||||||||||||||||
| Extensions | - | - | - | - | - | |||||||||||||||||
| Improved recovery | - | - | - | - | - | |||||||||||||||||
| Infill Drilling | - | - | - | - | - | |||||||||||||||||
| Discoveries | - | - | - | - | - | |||||||||||||||||
| Economic factors | - | - | - | - | - | |||||||||||||||||
| Technical revisions | - | - | - | - | - | |||||||||||||||||
| Acquisitions | 13,935 | 2,311 | 1,703 | 30,267 | 22,993 | |||||||||||||||||
| Dispositions | - | - | - | - | - | |||||||||||||||||
| Production | (1,244) | (251) | (208) | (3,526) | (2,290) | |||||||||||||||||
| Closing balance at Dec. 31, 2011 | 12,691 | 2,060 | 1,495 | 26,741 | 20,703 | |||||||||||||||||
| Proved + Probable |
Light & Medium Oil (mbbl) |
Heavy Oil (mbbl) |
Natural Gas Liquids (mbbl) |
Natural Gas (mmcf) |
Oil Equivalent (mboe) |
|||||||||||||||||
| Opening balance Dec. 31, 2010 | - | - | - | - | - | |||||||||||||||||
| Extensions | - | - | - | - | - | |||||||||||||||||
| Improved recovery | - | - | - | - | - | |||||||||||||||||
| Infill Drilling | - | - | - | - | - | |||||||||||||||||
| Discoveries | - | - | - | - | - | |||||||||||||||||
| Economic factors | - | - | - | - | - | |||||||||||||||||
| Technical revisions | - | - | - | - | - | |||||||||||||||||
| Acquisitions | 23,359 | 5,306 | 2,672 | 51,203 | 39,870 | |||||||||||||||||
| Dispositions | - | - | - | - | - | |||||||||||||||||
| Production | (1,244) | (251) | (208) | (3,526) | (2,290) | |||||||||||||||||
| Closing balance at Dec. 31, 2011 | 22,115 | 5,055 | 2,464 | 47,677 | 37,580 | |||||||||||||||||
Finding, Development & Acquisitions Costs ("FD&A") (1)(2)(3)
2011 FD&A Costs - Gross Working Interest Reserves excluding Future Development Capital
| Proved | Proved + Probable | ||||||||||||||||||||
| Capital expenditures ($000) | $ | 55,033 | $ | 55,033 | |||||||||||||||||
| Acquisitions net of dispositions ($000) | 545,908 | 545,908 | |||||||||||||||||||
| Total capital ($000) | $ | 600,941 | $ | 600,941 | |||||||||||||||||
| Total mboe, end of year | 20,703 | 37,580 | |||||||||||||||||||
| Total mboe, beginning of year (4) | 19,830 | 36,530 | |||||||||||||||||||
| Production, mboe | 2,290 | 2,290 | |||||||||||||||||||
| Reserve additions, mboe | 22,993 | 39,870 | |||||||||||||||||||
| FD&A costs ($/boe) | |||||||||||||||||||||
| 2011 | $ | 26.14 | $ | 15.07 | |||||||||||||||||
| 2010 | $ | - | $ | - | |||||||||||||||||
| Three year average (4) | $ | 26.14 | $ | 15.07 | |||||||||||||||||
| F&D costs ($/boe) | |||||||||||||||||||||
| 2011 | $ | 17.40 | $ | 16.48 | |||||||||||||||||
| 2010 | $ | - | $ | - | |||||||||||||||||
| Three year average (4) | $ | 17.40 | $ | 16.48 | |||||||||||||||||
NI 51-101
2011 FD&A Costs - Gross Working Interest Reserves including Future Development Capital
| Proved | Proved + Probable | ||||||||||||||||||||
| Capital expenditures ($000) | $ | 55,033 | $ | 55,033 | |||||||||||||||||
| Acquisitions net of dispositions ($000) | 545,908 | 545,908 | |||||||||||||||||||
| Net change in Future Development Capital ($000) | 38,469 | 53,935 | |||||||||||||||||||
| Total capital ($000) | $ | 639,410 | $ | 654,876 | |||||||||||||||||
| Reserve additions, mboe | 22,993 | 39,870 | |||||||||||||||||||
| FD&A costs ($/boe) | |||||||||||||||||||||
| 2011 | $ | 27.81 | $ | 16.43 | |||||||||||||||||
| 2010 | $ | - | $ | - | |||||||||||||||||
| Three year average (4) | $ | 27.81 | $ | 16.43 | |||||||||||||||||
| F&D costs ($/boe) | |||||||||||||||||||||
| 2011 | $ | 29.56 | $ | 32.63 | |||||||||||||||||
| 2010 | $ | - | $ | - | |||||||||||||||||
| Three year average (4) | $ | 29.56 | $ | 32.63 | |||||||||||||||||
| (1) | Under NI 51-101, the methodology to be used to calculate FD&A costs includes incorporating changes in future development capital ("FDC") required to bring the proved undeveloped and probable reserves to production. For continuity, Longview has presented herein FD&A costs calculated both excluding and including FDC. | |
| (2) | The aggregate of the exploration and development costs incurred in the most recent financial year and the change during that year in estimated future development costs generally will not reflect total finding and development costs related to reserves additions for that year. Changes in forecast FDC occur annually as a result of development activities, acquisition and disposition activities and capital cost estimates that reflect Sproule's best estimate of what it will cost to bring the proved undeveloped and probable reserves on production. | |
| (3) | In all cases, the FD&A number is calculated by dividing the identified capital expenditures by the applicable reserve additions. Boes may be misleading, particularly if used in isolation. A boe conversion ratio of 6 MCF:1 BBL 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 based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency of 6:1, utilizing a conversion on a 6:1 basis may be misleading as an indication of value. | |
| (4) | Longview commenced operations on April 14, 2011 with the acquisition of certain oil-weighted assets from Advantage Oil & Gas Ltd. Therefore, for purposes of calculating finding, development and acquisitions costs, Longview has utilized reserves at the beginning of year according to Advantage's records. Additionally, the three year average figures are calculated beginning April 14, 2011. |
Forward-Looking Statements
Certain information regarding Longview set forth in this press release, including management's assessment of the Corporation's future plans and operations, contains forward-looking statements that involve substantial known and unknown risks and uncertainties. The use of any of the words "anticipate", "continue", "estimate", "expect", "may", "will", "project", "should", "believe" and similar expressions are intended to identify forward looking statements. Such statements represent Longview's internal projections, estimates or beliefs concerning, among other things, an outlook on the estimated amounts and timing of capital expenditures or other expectations, beliefs, plans, objectives, assumptions, intentions or statements about future events or performance. These statements are only predictions and actual events or results may differ materially. Although Longview believes that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee future results, levels of activity, performance or achievement since such expectations are inherently subject to significant business, economic, competitive, political and social uncertainties and contingencies. Many factors could cause Longview's actual results to differ materially from those expressed or implied in any forward-looking statements made by, or on behalf of, Longview.
In particular, forward-looking statements included in this press release include, but are not limited to, statements with respect to production behind-pipe; expected operating expenses for the fourth quarter end December 31, 2011; projected capital expenditures for the year ended December 31, 2011; focus of capital budget; the focus of and timing of capital expenditures; drilling plans; focus of the 2011 capital program; drilling of rigs; and crude oil and natural gas production levels. In addition, statements relating to "reserves" or "resources" are deemed to be forward looking statements, as they involve the implied assessment, based on certain estimates and assumptions, that the resources and reserves described can be profitably produced in the future.
These forward-looking statements are subject to numerous risks and uncertainties, certain of which are beyond the Corporation's control, including the impact of general economic conditions; volatility in market prices for crude oil and natural gas; industry conditions; volatility of commodity prices; currency fluctuation; imprecision of reserve estimates; liabilities inherent in crude oil and natural gas operations; environmental risks; incorrect assessments of the value of acquisitions and exploration and development programs; competition from other producers; the lack of availability of qualified personnel or management; changes in income tax laws or changes in tax laws and incentive programs relating to the oil and gas industry; hazards such as fire, explosion, blowouts, cratering, and spills, each of which could result in substantial damage to wells, production facilities, other property and the environment or in personal injury; stock market volatility; ability to access sufficient capital from internal and external sources and the other risks considered under "Risk Factors" in Longview's final prospectus dated April 6, 2011, which is available on www.sedar.com and www.longviewoil.com.
With respect to forward-looking statements contained in this press release, Longview has made assumptions regarding: current commodity prices and royalty regimes; availability of skilled labour; timing and amount of capital expenditures; future exchange rates; the price of oil and natural gas; the impact of increasing competition; conditions in general economic and financial markets; availability of drilling and related equipment; effects of regulation by governmental agencies; royalty rates and future operating costs.
Management has included the above summary of assumptions and risks related to forward-looking information provided in this press release in order to provide shareholders with a more complete perspective on Longview's future operations and such information may not be appropriate for other purposes. Longview's actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits that the Corporation will derive there from. Readers are cautioned that the foregoing lists of factors are not exhaustive. These forward-looking statements are made as of the date of this press release and the Corporation disclaims any intent or obligation to update publicly any forward-looking statements, whether as a result of new information, future events or results or otherwise, other than as required by applicable securities laws.
"boes" may be misleading, particularly if used in isolation. A boe conversion ratio of six thousand cubic feet of natural gas to one barrel of oil equivalent (6 Mcf: 1 bbl) 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 based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency of 6:1, utilizing a conversion on a 6:1 basis may be misleading as an indication of value.
Investor Relations
Toll free: 1-855-813-0313
LONGVIEW OIL CORP.
700, 400 -3rd Avenue SW
Calgary, Alberta
T2P 4H2
Phone: (403) 718-8000
Fax: (403) 718-8300
Web Site: www.longviewoil.com
E-mail: [email protected]
Share this article