Longreach's First Quarter Natural Gas Drilling Sets the Foundation for Promising 2014 Exploration Work in Morocco
SAINT HELIER, Jersey, May 30, 2014 /PRNewswire/ --
Exploration programme and funding plans continue to advance Q1 2014 results published
During the first quarter of 2014, LONGREACH OIL AND GAS LIMITED (TSXV: LOI) (the Company or Longreach) outlined detailed results of its first exploration well in Morocco, Koba-1, and commenced drilling of its second exploration well, Kamar-1, which subsequent to the quarter-end encountered two prospective natural gas zones in the Sidi Moktar licence in the Essaouira Basin of the North African nation.
"Our first two exploration wells captured extensive geological and petrophysical information that has helped define the presence of natural gas in the targeted Lower Liassic formation and the Lower Dogger/Upper Liassic formations. These promising results that have set the foundation for the planning we currently have underway to continue our exploration work in 2014. We ended the first quarter with cash of US$3.2 million. Subsequent to quarter end, in April 2014, we completed a private placement that raised CAD$9.7 million, which permitted the Company to continue with its contracted drilling activities of the Kamar-1 well. We continue to evaluate the results of our first two wells - Koba-1, drilled in late 2013, and Kamar-1 completed in May 2014. We are commencing discussions with investors to obtain further financing of additional exploration work in 2014," said Dennis Sharp, Longreach's Executive Chairman.
Longreach today filed its financial statements for the quarter ended March 31, 2014, together with its Management's Discussion and Analysis in respect of the Company's financial results for the quarter ended March 31, 2014. These documents are available on the Longreach website at http://www.longreachoilandgas.com or under the Company's profile on SEDAR at http://www.sedar.com.
- Cash position as at March 31, 2014, of US$3.2 million (US$12.7 million as at December 31, 2013)
- Working capital deficit as at March 31, 2014, of US$2.8 million (US$3.9 million working capital surplus as at December 31, 2013)
- Subsequent to the quarter-end, completed an interim debenture financing of CAD$9.7 million in April 2014 and intends to obtain further financing in 2014, which may include a rights offering or private placement
- Sidi Moktar:
- On March 20, 2014, the Company commenced drilling of the Kamar-1 well, targeting a Lower Liassic reservoir and Triassic clastic reservoirs. Subsequent to the quarter-end, the Kamar-1 well was drilled to a final total depth of 2,790 metres and intersected two distinct gas-bearing intervals. One is in the targeted Lower Liassic natural gas zone and has a gross interval of 110 metres as defined by petrophysical, wireline logs. The other is defined by the presence of significant natural gas volumes in the drilling mud within the Lower Dogger/Upper Liassic zone, which occurs over a gross interval of approximately 100 metres
- Following the Kamar-1 well, the Company will review the forward operational programme.
- Sidi Moussa Offshore:
- Longreach has been advised that the operator, Genel Energy plc (Genel), has secured a rig to drill an exploration well targeting the Mid-Jurassic and Lower Triassic reservoirs in the third quarter of 2014. Longreach holds a 1.5 percent working interest in this exploration block.
Longreach is an independent Canadian oil and gas company focused on its significant land position in Morocco. The Company has a 50 percent operated interest in the Sidi Moktar licence area covering 2,683 square kilometres and is working closely with ONHYM as a committed long-term partner to unlock the hydrocarbon potential of the region. Morocco offers a politically stable environment to work within and has favourable fiscal terms to energy producers. Longreach is a public company listed on the TSX Venture Exchange under the symbol "LOI".
Special Note Regarding Forward Looking Statements
This press release contains forward-looking statements. Such forward-looking statements relate to future events or the Company's future performance. All statements other than statements of historical fact are forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "estimate", "predict", "project", "potential", "targeting", "intend", "could", "might", "continue" or the negative of these terms or other similar terms. Forward-looking statements in this press release include, but are not limited to, statements regarding the drilling of the Karmar-1 well at the Company's operated Sidi Moktar onshore license area in Morocco; the ability of the Company to successfully complete the drilling programme at Kamar-1 over the next few weeks; the completion of evaluations and processing and interpretation of data, the performance characteristics of the Company's oil and gas properties, capital expenditure programmes, supply and demand for oil, gas and commodities, prices for oil and gas, drilling plans, and realization of the anticipated benefits of acquisitions.
Forward-looking statements are only predictions. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. Some of the risks and other factors which could cause results to differ materially from those expressed in the forward-looking statements contained in this press release include, but are not limited to: general economic conditions in Canada, the Kingdom of Morocco and globally; completing the proposed drilling programme at Kamar-1 in a timely and fiscally prudent manner; industry conditions, including fluctuations in the price of oil and gas, governmental regulation of the oil and gas industry, including environmental regulation; fluctuation in foreign exchange or interest rates; risks inherent in oil and gas operations; political risk, including geological, technical, drilling and processing problems; unanticipated operating events which could cause commencement of drilling and production to be delayed; the need to obtain consents and approvals from industry partners, regulatory authorities and other third-parties; stock market volatility and market valuations; competition for, among other things, capital, acquisitions of reserves, undeveloped land and skilled personnel; incorrect assessments of the value of acquisitions or resource estimates; any future inability to obtain additional funding, when required, on acceptable terms or at all; credit risk; changes in legislation; any unanticipated disputes or deficiencies related to title matters; dependence on management and key personnel; and risks associated with operating in and being part of a joint venture.
Although the forward-looking statements contained in this press release are based upon factors and assumptions which management of the Company believes to be reasonable, the Company cannot assure that actual results will be consistent with its expectations and assumptions. Material factors and assumptions which management of the Company has considered in connection with making the forward-looking statements in this press release include that the Company will be able to successfully complete the drilling programme at Kamar-1 and to successfully evaluate, process and interpret data. Undue reliance should not be placed on the forward-looking statements contained in this news release as there can be no assurance that the plans, intentions or expectations upon which they are based will occur. These statements speak only as of the date of this press release, and the Company does not undertake any obligation to publicly update or revise any forward-looking statements except as expressly required by applicable securities laws.
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.
This news release does not constitute an offer to sell or a solicitation of an offer to buy any securities of Longreach in any jurisdiction in which such offer, solicitation or sale would be unlawful. The securities referred to herein have not been and will not be registered under the United States Securities Act of 1933 (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons (as defined in the U.S. Securities Act) unless registered under the U.S. Securities Act and applicable state securities laws, or an exemption from such registration is available.
For further information:
Chief Financial Officer and Secretary
SOURCE Longreach Oil and Gas Limited