Oil and Gas Division Results for First Quarter 2013
LER is the head entity of the Company's Oil and Gas Group headquartered in Houston, Texas. As previously announced, on 12 October 2012 the Company though its wholly-owned subsidiaries issued $US265 million of senior secured notes (Notes) bearing interest at 12.5% per annum due 31 October 2017.
The Company is required under the terms of these Notes to report periodically on production and financial results of LER. All results quoted are based in US dollars.
Oil and Gas Revenue
For the three months ended 30 September 2012, LER's total revenues were $24.9 million, which were comprised of $24.8 million of oil revenues and $33,000 of gas revenues. During the Quarter, LER sold 250,473 barrels of oil and 15,108 Mcf of natural gas net to its revenue interest, with daily sales averaging 3,878 gross (2,750 net) BOEPD for the period (99% oil). The average sales price was $99.18 per barrel of oil and $2.21 per Mcf of natural gas, amounting to an average sales price for the Quarter of $98.32 per BOE, or $95.41 per BOE including the effect of hedges.
For the three months ended 30 September 30 2012, cash operating expenses were $9.4 million, including, lease operating expense of $2.8 million ($11.11 per BOE), re-engineering and workover expense of $1.3 million ($5.33 per BOE), production taxes of $1.3 million ($4.98 per BOE or 5.07% of revenue), ad valorem taxes of $284,000 ($1.12 per BOE or 1.14% of revenue) and general and administrative expenses of $3.7 million ($14.76 per BOE).
During the first Quarter of 2013, LER focused on drilling and completing new wells as well as recompletions of existing wells within its core acreage in Texas.
LER drilled and completed six new exploitation wells. Four of the six new drilled wells were in the Barbers Hill field in Chambers County, Texas and the other two were in the Hoskins Mound field, located in Brazoria County, Texas. LER also recompleted four existing wells during the Quarter. All four of these wells were in the Barbers Hill field.
LER commenced pre-packing operations in the development of the 100-mile snow-packed access road which will support the winter exploration and delineation drilling program at the Company's Umiat oilfield on Alaska's North Slope. Mobilization of the man camp, drill rig and related support equipment into Umiat will commence in December 2012 upon completion of snow road construction. Drilling operations are anticipated to last through late April 2013.
Mr Peter Bond, CEO of Linc Energy, said "Scott Broussard, Linc Energy's President of Oil & Gas division, and I remain confident that the oil & gas team will meet the production target of 6,000-7,000 barrels per day by the end of December this year. This last Quarter has set the oil & gas division up for an exciting 12 months of increased production and resource expansion. It is also fantastic to see that the Umiat winter drilling program has started, with the commencement of construction of the snow road to the field on time and on budget."
View the full Linc Energy announcement at the link below:
Linc Energy Limited