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Lynden to Sell US$25.0 Million of Oil and Gas Properties to Breitburn Energy Partners L.P.
By: Marketwired .
Dec. 11, 2012 06:10 PM
VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 12/11/12 -- Lynden Energy Corp. (TSX VENTURE:LVL) reports that the Company's wholly owned subsidiary, Lynden USA Inc., has entered into a definitive agreement with BreitBurn Energy Partners L.P. of Los Angeles, California, for the sale of the Company's interest in 16 gross (7.0 net) Wolfberry Project wells and underlying leases covering approximately 1,440 gross acres (630 acres net to Lynden) for proceeds of US$25.0 million.
The sale will have an effective date of December 1, 2012, and is subject to customary closing conditions, including completion of due diligence by the buyer. The sale is expected to close in 2012. The purchase price will be subject to customary closing adjustments for a transaction of this type.
The Company has a 43.75% working interest in the wells to be sold and a right to earn a 43.75% working interest in the portion of the leases not already held by production. The Company's working interest partner in the assets has also entered into an agreement to sell its interest. The Company's net production, after royalties, from the wells to be sold is approximately 20% of the Company's production at December 1, 2012.
The sale is in line with the Company's stated objective to sell portions of its proven acreage in order to manage its working capital position and to redeploy funds to its less developed and unproven acreage, where the Company believes it can achieve the best returns for shareholders.
The Company's current plans call for 43 gross (18.14 net) Wolfberry Project wells to spud from July 1, 2012 to June 30, 2013 (fiscal 2013). The Company does not expect its drilling plans to change materially as a result of the sale.
The Company continues to believe that it will meet its forecasted December 31, 2012 net production exit rate, after royalties, of 900 - 1,000 boe/day.
The Wolfberry Project covers approximately 18,931 gross (16,979 net) acres, equivalent to approximately 6,730 acres net to Lynden's working interest.
Lynden Energy Corp. is in the business of acquiring, exploring and developing petroleum and natural gas rights and properties. The Company has various working interests in the Wolfberry Project and Mitchell Ranch Project, located in the Permian Basin in West Texas, USA.
ON BEHALF OF THE BOARD OF DIRECTORS
LYNDEN ENERGY CORP.
Colin Watt, President and CEO
NI 51-101 requires that we make the following disclosure: we use oil equivalents (boe) to express quantities of natural gas and crude oil in a common unit. A conversion ratio of 6 mcf of natural gas to 1 barrel of oil is used. Boe may be misleading, particularly if used in isolation. The conversion ratio is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.
FORWARD-LOOKING STATEMENTS DISCLAIMER: This news release contains forward-looking statements. The reader is cautioned that assumptions used in the preparation of such statements, although considered accurate at the time of preparation, may prove incorrect, and the actual results may vary materially from the statements made herein. Expectations of spudding 43 gross (18.14 net) Wolfberry Project wells from July 1, 2012 to June 30, 2013 (fiscal 2013), and expected timelines relating to oil and gas operations are subject to the customary risks of the oil and gas industry, and are subject to the company having sufficient cash to fund the drilling and completion of these wells. Achieving a December 31, 2012 net production exit rate, after royalties, of 900 - 1,000 boe/day, is subject to the customary risks of the oil and gas industry and is subject to the Company drilling and completing successful wells. For a more detailed description of these risks, and others, see www.lyndenenergy.com/riskfactors.html.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.
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