Long Run Exploration Ltd. Provides an Operational Update
CALGARY, ALBERTA, Nov 26, 2012 (Menafn - MARKETWIRE via COMTEX) --Long Run Exploration Ltd. ("Long Run" or the "Company") is pleased to provide an operational update to the end of November,2012.
Long Run has drilled 20.8 wells (net) in the fourth quarter to-date,with an additional 10 wells (net) planned for the remainder of 2012.Of those already drilled, 5.8 (net) have been horizontal wellstargeting crude oil in the Montney zone in the Peace River area and 7(net) have targeted the Viking zone in the Edmonton area. After theimpact of the previously announced 180 million Saskatchewan Vikingasset sale of approximately 1,900 boe per day, Long Run's 2012 exitproduction rate is anticipated to be approximately 23,000 boe perday. 2013 annual average production volumes are forecast to beapproximately 25,000 boe per day targeting balanced oil and naturalgas production.
As indicated in the November 15, 2012 press release, Long Run hasannounced a 2013 capital spending program of between 260 - 270million, with approximately 50 percent of forecast spending targetingcrude oil in the Peace River Montney play at Normandville andGirouxville. The Company also plans on spending approximately 30percent of 2013 planned capital spending on the Edmonton Area Vikingplay at Redwater targeting light oil. Exploration drilling, landacquisition, and seismic will make up approximately 10 percent of the2013 budget. Long Run anticipates drilling approximately 130 wells(net) in 2013.
PEACE RIVER MONTNEY OIL PLAY
Long Run is currently producing approximately 7,400 boe per day fromboth the Normandville and Girouxville properties, of whichapproximately 60% is crude oil. Operating costs have been consistentat approximately 8.50 per boe. As part of the 2013 capital budget,the Company plans to drill more than 50 wells in these properties.
As a result of changes to drilling and well trajectory design, LongRun has reduced drilling days from an average of more than 11 days tojust over 8 days on the most recent 6 wells. Production rates haveincreased due to changes in completion methodology. These changes tocompletion methodology have increased average initial productionrates while maintaining drill, complete, and tie-in costs at 2.0million per well. The Company's most recent 12 wells recorded ratesaveraging more than 300 boe per day (70% crude oil) over the first 60days of production.
Long Run believes that through ongoing refinements to well design,bit selection, and completion methodology, this play will continue toyield positive results with strong capital efficiencies.
EDMONTON AREA VIKING OIL
The Company is currently producing 4,000 boe per day, 88% crude oil,from the Redwater property. Capital spending throughout 2013 will beapproximately 90 million with up to 70 wells planned.
Average drill times for this property have been consistently 5 daysand we believe the reliability of our drill times will continue. LongRun believes that the current on-stream cost of approximately 1.2million can be improved upon and efforts are underway to introduceefficiencies to reduce these costs. As part of the 2013 capitalprogram, we are pursuing improved oil rates and EURs by furtherrefining our drilling and completion techniques.
Long Run's exploration efforts continue, anchored by a dominant landposition of more than 600,000 net acres in the Peace River Arch. TheCompany has drilled initial exploratory wells in the Jack andJosephine areas and is planning on drilling at Flood before the endof the year. All of these exploratory wells target the TriassicMontney and Charlie Lake formations. The Company continues to expandthe scope of exploratory drilling on the Peace River Triassic fairwayand anticipate a number of 2013 wells will target new areas ofMontney, Charlie Lake, and Doig potential. Earlier in 2012 Long Rundrilled a Duvernay vertical test well to obtain reservoirinformation. Preliminary laboratory test results on core samples areencouraging and analysis is ongoing. We look forward to updatingresults in these projects as they become available.
Shivon Crabtree, Vice President, Finance and Chief Financial Officerwill be leaving Long Run in early 2013. Ms. Crabtree has providedstrong, ethical financial leadership to Long Run and its predecessorcompanies. She will assist in the succession process and will work toensure a smooth transition period for Long Run shareholders andstaff. Long Run management and its Board of Directors thank Ms.Crabtree for her many contributions and wish her all the best in thefuture.
Long Run is a Calgary-based intermediate oil company focused onlight-oil development and exploration in western Canada. For furtherinformation about Long Run, visit the Company's website atwww.longrunexploration.com.
Forward Looking Statements:
Certain information regarding Long Run in this news release includingmanagement's assessment of future plans and operations, anticipated2012 exit production rate, 2013 capital expenditure budget and thenature of expenditures, forecast 2013 average production rate andcommodity mix, expectation that Montney oil play will continue toyield positive results through ongong refinements as outlined andexpected continuance of reliability of drill times at Redwater andexpected improvements to on-stream costs are forward lookingstatements. Since forward-looking statements address future eventsand conditions, by their very nature they involve inherent risks anduncertainties including, without limitation, risks related to closingof the disposition, risks associated with oil and gas exploration,development, exploitation, production, marketing and transportation,loss of markets, volatility of commodity prices, currencyfluctuations, imprecision of reserve estimates, environmental risks,competition from other producers, inability to retain drilling rigsand other services, capital expenditure costs, including drilling,completion and facilities costs, unexpected decline rates in wells,wells not performing as expected, delays resulting from or inabilityto obtain required regulatory approvals and ability to accesssufficient capital from internal and external sources. As aconsequence, actual results may differ materially from thoseanticipated in the forward-looking statements.
Forward-looking statements or information are based on a number offactors and assumptions which have been used to develop suchstatements and information but which may prove to be incorrect.Although the Company believes that the expectations reflected in suchforward-looking statements or information are reasonable, unduereliance should not be placed on forward-looking statements becausethe Company can give no assurance that such expectations will proveto be correct. In addition to other factors and assumptions which maybe identified in this document, assumptions have been made regarding,among other things: the impact of increasing competition; the generalstability of the economic and political environment in which theCompany operates; the timely receipt of any required regulatoryapprovals; the ability of the Company to obtain financing onacceptable terms; field production rates and decline rates; theability to replace and expand oil and natural gas reserves throughacquisition, development and exploration results; the timing andcosts of pipeline, storage and facility construction and expansionand the ability of the Company to secure adequate producttransportation; future oil and natural gas prices; currency, exchangeand interest rates; the regulatory framework regarding royalties,taxes and environmental matters in the jurisdictions in which theCompany operates; and the ability of the Company to successfullymarket its oil and natural gas products. Readers are cautioned thatthe foregoing list of factors and assumptions is not exhaustive.Additional information on these and other factors that could affectLong Run's operations and financial results are included in reportson file with Canadian securities regulatory authorities and may beaccessed through the SEDAR website (www.sedar.com), at Long Run'swebsite (www.longrunexploration.com). Furthermore, the forwardlooking statements contained in this news release are made as at thedate of this news release and Long Run does not undertake anyobligation to update publicly or to revise any of the includedforward looking statements, whether as a result of new information,future events or otherwise, except as may be required by applicablesecurities laws.
Disclosure provided herein in respect of barrels of oil equivalent(boe) may be misleading, particularly if used in isolation. A boeconversion ratio of 6 Mcf: 1 Bbl is based on an energy equivalencyconversion method primarily applicable at the burner tip and does notrepresent a value equivalency at the wellhead. Given that the valueratio based on the current price of crude oil as compared to naturalgas is significantly different from the energy equivalency of 6:1;utilizing a conversion on a 6:1 basis may be misleading as anindication of value.
Initial Production Rates:
Initial production rates disclosed herein may not necessarily beindicative of long-term performance or ultimate recovery.
Long Run Exploration Ltd.
William E. Andrew
Executive Chairman and Chief Executive Officer
Long Run Exploration Ltd.
Dale A. Miller
Long Run Exploration Ltd.
Vice President, Capital Markets
Long Run Exploration Ltd.
(888) 598-1330 toll free
SOURCE: Long Run Exploration Ltd.
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