Building a Sustainable Exploration Company. August 2014

Transcription

1 Building a Sustainable xploration Company August 2014

2 Forward-Looking Statements This presentation contains forward-looking statements concerning the Corporation. More particularly, it contains forwardlooking statements concerning forecasted 2014 average production and the potential exploration, development and recovery opportunities associated with the Corporation's properties. The forward-looking statements are based on certain key expectations and assumptions made by the Corporation, including expectations and assumptions concerning the success of future drilling and development activities, the performance of existing wells, the performance of new wells, the availability and performance of facilities and pipelines, the geological characteristics of the Corporation's properties, the successful application of drilling, completion and seismic technology, prevailing weather conditions, commodity prices, royalty regimes and exchange rates, the application of regulatory and licensing requirements, the availability of capital, labour and services and the availability of external capital, including bank debt and the application of the Federal mergency Order, for the protection of the reater Sage-rouse (the mergency Order ) to the Corporation s Manyberries property. Although the Corporation 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 the Corporation 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, risks associated with the oil and gas industry in general (e.g., operational risks in development, exploration and production; risk that there will be delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses, the uncertainty of well performance, and health, safety and environmental risks), uncertainty as to weather conditions, uncertainty as to the availability of labour and services, commodity price and exchange rate fluctuations uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures, changes to existing laws and regulations uncertainties as to the practical application of the mergency Order and the outcome of efforts by the corporation to quash or amend the mergency Order. These and other risks are set out in more detail in the Corporation's Annual Information Form which has been filed on SDAR and can be accessed at The forward-looking statements contained in presentation are made as of the date hereof and the Corporation 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. 2

3 LX Management Objectives Create a company with sustainable cash flow to internally fund an aggressive exploration and development program, targeting light oil in southern Alberta Cost-effective per share growth in reserves, production and cash flow xplore for technology-driven resource play opportunities with favourable risk/reward profiles Continually maximize operational, cost and financial efficiencies Maintain financial flexibility through strong balance sheet 3

4 Corporate Profile TSX Trading Symbol OIL Common Shares 88.7 million Warrants 6.0 million Options 7.2 million Insiders Own Basic & Fully Diluted 20% & 24% L Share Ownership (incl. above) 18% nterprise alue Net Debt (as of June 30, 2014) Bank Line (including $10 million non-revolving term credit facility) $59.3 million $17.1 million $30 million 4

5 2014 Year to Date Results 906BOD +2% year over year $4.9Million +81% year over year $0.06per share +100% year over year $41.34per Boe +55% year over year 5

6 Net Asset alue Per Share LX NA per Basic Common Share using the Proved plus Probable reserve value at December 31, 2013 and forecast pricing and costs ($MM except share and per share amounts) Proved Plus Probable Reserve alue NP10 BT (incl. future capital) $75.4 Undeveloped Land (111,622 $500/acre) $55.8 Net Debt ($17.1) Total Net Assets (basic) $114.1 Basic Common Shares Outstanding (MM) 88.7 stimated NA per Basic Common Share $1.29 6

7 Cash Flow + Development Inventory+ xploration Upside Stable, concentrated production base in southern Alberta Completed a 95 square mile 3D seismic program on the Blood Reserve Two wells drilled on the Blood Reserve in prior year to satisfy 2013 drilling commitments 2014 budget of $18.5 million targeted at drilling two offset wells to the 14-2 success. First well spudded in August 2014, second well to spud in September Undeveloped land 111,622 net acres including 109,990 prospective for Alberta Bakken Borrowing base at $30 million including $10 million non-revolving term credit facility Significant, strategic light oil asset in Manyberries, AB provides cash flow, exploitation and development drilling inventory 7

8 Southern Alberta Bakken Alberta Basin Bakken Play Bakken oil system - Banff/xshaw/Big alley formations tight oil resource play LX owns 109,990 net acres on play fairway 95 square mile 3D seismic survey shot Key 1979 Big alley producer (10-30) adjacent to lands 250 MBbl to date Two wells drilled in October 2013 (14-2 and 10-15) resulting in 14-2 at 530 BOPD (30 day IP) and cased for future potential P+P reserve bookings of 370 MBO per well Up to 20 sections of LX land offsetting the 14-2 discovery may be prospective for Big alley and/or Banff oil production Additional prospective light oil targets include the Second White Specks, Barons, Mannville and Nisku formations BANFF DISCORY WLL IP90: 305 BOPD F R25 C R23W4M BANFF WLL CURR: 224 BOPD IP90: 330 BOPD CUM: 100 MBBL F J J C Curr: 274 BOPD FC TORC Cum: FC 30.3 MBBL IP90: 177 BOPD HORIZONTALS CURR: 29 BOPD C F BANFF WLL CUM: 66.7 MBBL IP60: 240 BOPD J F J F F J Curr: 90 BOPD IP90: 307 BOPD FI Cum: 32.5 MBBL CURR: 112 BOPD F F U F J J J CUM: 86.5 MBBL F F J J F W4 A FC 2014 BUDT WLL L A A W4 J J JFK F LX LOCATION U J J W BUDT WLL FC S W4 LX LOCATION J J INDRA FC BLOOD BI ALLY RTICAL WLL CUM: MBBL J J FFC FC IP90: 84 BOPD CURR: 68 BOPD CUM: 17 MBBL IP90: 130 BOPD CURR: 125 BOPD CUM: MBBL LX HZ. BLOOD W DRILL- J J POTNTIAL FOR R-NTRY AND HORIZONTAL L J F F F J F F NARP HORIZONTALS J J LX Land LX 3D Seismic Blood First Nation Reserve Big alley Well Control Banff/xshaw/Big alley Shows/Prod. F FC J J F KF LU F LX PNNY W OIL DISCORY CURR: 125 BOPD CUM: 63.2 MBBL LX KAINAI HZ. JKIPP W4 IP90: 97 BOPD CURR: 14 BOPD T7 CUM: 29.3 MBBL SOUTHRN ALBRTA LX 95 SQ. MI. 3D SISMIC MONTANA W DRILL T5 LX HZ. SPRINCO W4 CUM: 3.9 MBBL T3 L FI F 8

9 Big alley and Banff Hz Well Performance 100,000 90,000 80,000 Cumulative Oil Production (Bbl) 70,000 60,000 50,000 40,000 30,000 LX Penny 14-2 Strong Performance 20,000 10, Month

10 Manyberries, AB Upside Opportunities Identified: 46 (40.0 net) vertical and horizontal development drilling locations targeting banked oil in existing pools Numerous well reactivations and water injection conversions Potential for significant infill horizontal drilling inventory targeting the Swift Formation Offsetting Swift horizontal well was drilled in late 2010 IP of 120 Boe/d, low water cut; currently 60 Boe/d with recovery of 78 MBoe Successful well workover program in 2014 has added 100 Boe/d mergency Order for the protection of the reater Sage-rouse issued by the federal government, effective February 18, 2014: LX and other operators have filed an application with the Federal Court to quash the Order and will seek additional relief to protect their interests Working with nvironment Canada to further clarify the practical application of the Order C.I: 2 meters L N D LX Land LX Land Locations Locations W4M Type Well Minimal Development Activity on the Asset in the last 3 years Offsetting Swift Horizontals 10

11 Manyberries, AB Potential Horizontal Drilling Target in Swift Formation 11

12 Right Team + Right Assets + Right Time xperienced management team with a proven record of aggressively growing oil and natural gas companies on a cost-effective per share basis Current economic conditions provide a good entry point for a reinvigorated, high-growth junior oil and natural gas company Strategically focused on predominantly light oil opportunities in southern Alberta Targeted acquisition and consolidation strategy coupled with development and high impact exploration Delineation of extensive undeveloped land base, exploitation of current drilling inventory and expansion of opportunity suite through internally generated prospects and strategic acquisitions 12

13 Independent Reserve ngineers LJ Petroleum Consultants Ltd. Bank ATB Financial Auditors PricewaterhouseCoopers LLP Legal McCarthy Tétrault LLP Contact Information 4400, th Avenue SW ighth Avenue Place Calgary, Alberta T2P 11 Tel: Fax: mail: info@lgxoil.com Website: TSX: OIL