LGX Oil + Gas Inc. Announces First Quarter 2013 Results

CALGARY, May 13, 2013 /CNW/ – LGX Oil + Gas Inc. (“LGX” or the “Company”) (TSXV:OIL.V) is pleased to announce it has filed on SEDAR its unaudited financial statements and related Management’s Discussion and Analysis (“MD&A”) for the three months ended March 31, 2013.  Selected financial and operational information is outlined below and should be read in conjunction with LGX’s unaudited financial statements and the related MD&A which are available for review atwww.lgxoil.com or www.sedar.com.

FINANCIAL + OPERATIONAL HIGHLIGHTS ⁽¹⁾

Financial + Operational Highlights below present the historic financial position, results of operations and cash flows of Legacy Oil + Gas Inc.’s Southern Alberta Assets (“SA Assets”) for all prior periods up to and including July 5, 2012 and the results of operations from July 5, 2012forward to include both the SA Assets and LGX Oil + Gas Inc. (referred to collectively with its subsidiaries as “LGX” or the “Company”), unless otherwise indicated.  For a comparison to prior periods of Bowood Energy Inc., refer to page 10 of the MD&A of LGX Oil + Gas Inc. for the first quarter of 2013.

ACCOMPLISHMENTS

The comparison period used below is related to the first quarter 2012 results of Bowood Energy Inc. prior to the reverse acquisition on July 5, 2012 and therefore comparisons do not match Financial + Operational Highlights above.

• Increased average production from 564 Boe per day in the first quarter of 2012 to 913 Boe per day in the first quarter of 2013 (62 percent increase)

• Increased oil and NGL’s weighting from 23 percent in the first quarter of 2012 to 67 percent in the first quarter of 2013

• Increased funds generated from operations of $0.1 million ($0.01 per share) in the first quarter of 2012 to $1.1 million ($0.01 per share) in the first quarter of 2013 (690 percent increase)

• In spite of materially lower light oil prices (WTI decreased from US$102.94 per barrel to US$94.34 per barrel), LGX’s operating netbacks increased year over year from $13.28 per Boe in the first quarter of 2012 to $23.56 per Boe in the first quarter of 2013 (77 percent increase)

• Completed interpretation of a 95 square mile 3D seismic program, centred over the Company’s lands on the Blood Reserve, which has led to the identification of a number of anomalies in the Big Valley Formation and shallower horizons

Operations Overview

Alberta Bakken

LGX completed a 95 square mile 3D seismic program, centred over the Company’s lands on the Blood reserve.  Interpretation of the 3D seismic has led to the identification of a number of anomalies in the Big Valley Formation and shallower horizons.  The Company is currently surveying and acquiring surface access on four locations, and two exploratory wells are anticipated to be spud in the fall of 2013.

Manyberries

Since acquiring the property sixteen optimization projects have been completed to date, including oil well restarts and water injection re-configuration and workovers.  Work continues on high-grading Sunburst development drilling locations and further evaluating the horizontal drilling potential in the Swift Formation.

EVENTS AFTER THE REPORTING PERIOD

Agreed to, with the Company’s syndicate of Canadian banks, reaffirm the Company’s borrowing base at $25 million (including the $5 million acquisition line).  In addition, the term-out date for the facility was extended to April 30, 2014.  The borrowing base continues to be subject to periodic review.

OUTLOOK

The Company has completed and continues to identify a number of low cost optimization initiatives at Manyberries for 2013 that include oil well restarts, workovers and water injection reconfiguration, which are anticipated to have a positive effect on both production and reserves.  Work continues on high-grading Sunburst development drilling locations and further evaluating the horizontal drilling potential in the Swift Formation. The Company continues to be on track to meet its previously announced full year production guidance.

Positive results from the interpretation of the 95 square mile 3D seismic survey shot over LGX lands and the strong production results from the Big Valley and Banff formations recently announced from wells immediately offsetting LGX lands, have improved the confidence in the Banff and Big Valley as potential emerging light oil resource plays in Southern Alberta.  The Company is currently surveying and acquiring surface leases on four locations and a minimum of two exploratory wells are anticipated to be spud in the fall of 2013.  LGX has more than 168,000 net undeveloped acres in the Alberta Bakken fairway.

The management team at LGX continues to aggressively pursue opportunities that improve the upside potential, sustainability and autonomy of LGX.

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.

ANNUAL GENERAL MEETING

LGX’s Annual General Meeting, is scheduled for 3:00 pm on May 28, 2013 at The Petroleum Club, McMurray Room, located at 319 – 5th Avenue SW, Calgary, AB.

To view LGX’s audited financial statements, the related MD&A and the AIF for the years endedDecember 31, 2012, December 31, 2011 and December 31, 2010 please visit our web site atwww.lgxoil.com or www.sedar.com.  To the extent investors do not have access to the internet, copies of the audited financials the related MD&A and the AIF can be obtained on request without charge by contacting LGX at 403.441.2300 or at 4400, 525-8th Avenue SW, Calgary, Alberta, T2P 1G1.

Forward-Looking Information – This press release contains forward-looking statements. More particularly, it contains forward-looking statements concerning LGX’s planned exploration and development activities, the anticipated positive impact of optimization activities at Manyberries on production and reserves and the Company being on track to meet full year production guidance.

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 success of future drilling, development and completion activities, the performance of existing wells, the performance of new wells, the availability and performance of facilities and pipelines, the geological characteristics of LGX’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 and the availability of capital, labour and services. 

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 Legacy 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; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses, and health, safety and environmental risks), constraint in the availability of services, commodity price and exchange rate fluctuations, adverse weather conditions and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects, waterflood projects or capital expenditures.  These and other risks are set out in more detail in LGX’s Annual Information Form for the year ended December 31, 2012 dated April 2, 2013. 

The forward-looking statements contained in this press release are made as of the date hereof and LGX 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: When used in this press release, Boe means a barrel of oil equivalent on the basis of 1 Boe to 6 thousand cubic feet of natural gas. Boe per day means a barrel of oil equivalent per day. Boe’s may be misleading, particularly if used in isolation. A Boe conversion ratio of 1 Boe for 6 thousand cubic feet of natural gas 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.