Welcome!

News Feed Item

Lightstream Announces Operational Update and $141 Million Asset Disposition

CALGARY, ALBERTA -- (Marketwired) -- 04/14/14 -- Lightstream Resources Ltd. ("Lightstream" or the "Company") (TSX:LTS) is pleased to provide an update on our operations and announce an agreement to sell our southeast Saskatchewan Conventional business unit royalty interest package for gross proceeds of $141 million.

Operational Update

Consistent with our investment profile in 2013, the first quarter of 2014 is projected to be our most active capital quarter for the year. In the first quarter of 2014 we drilled 50 wells, or approximately 55% of our annual program, with the Cardium continuing to be our busiest area. During the quarter we brought 25 wells on production and at March 31, 2014, we had 32 wells in inventory waiting to be brought on-stream. While some completion activities have continued into April, our current focus is on equipping and tie-in activity to get this inventory of drilled wells on production. We expect to have virtually all wells that were in inventory at quarter-end on-stream during the second quarter.

Production for the first quarter of 2014 averaged 44,000 barrels of oil equivalent per day (boepd) based on field estimates (80% light-oil and liquids weighting). This is approximately 3% lower than production for the fourth quarter of 2013. First quarter production was in line with our expectations and reflects dispositions completed during the quarter of 1,700 boepd (66% gas weighted), which was effectively offset through restored production from downtime (associated with cold weather earlier in the quarter) and production additions from new wells.

Q1 2014 Drilling Activity


                        Drilled      Completed   On Production Inventory(1) 
Business Unit         Gross    Net  Gross    Net  Gross    Net  Gross    Net
----------------------------------------------------------------------------
  Bakken                 18     14     14     11     12      9     10      6
  Conventional (SE                                                          
   SK)                    7      4      7      4      7      5      2      -
  Cardium (central                                                          
   AB)                   31     25     17     15     11     11     26     19
  Alberta/BC              7      7      -      -      -      -      7      7
----------------------------------------------------------------------------
Total                    63     50     38     30     30     25     45     32
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
(1)  Inventory refers to the number of wells pending completion and/or tie- 
     in at March 31, 2014.                                                  

As we enter the second quarter of 2014, we will remain active in the field bringing new wells on production and advancing a number of facility capital projects, including completing construction of a 3,500 bopd facility in our Swan Hills area. This facility is expected to be operational in May and will allow us to commence production from all 7 wells drilled and completed during our first quarter drilling program. We anticipate that our 2014 second quarter production will remain in line with the first quarter with new well production additions offsetting the impacts of spring break-up and our dispositions announced to-date in 2014. Drilling operations are not scheduled to restart until July.

Throughout the first quarter we continued to experience production restrictions of approximately 800 to 1,000 boepd due to various facility-related issues in several of our Cardium operating areas. We have three projects underway that should help us mitigate these restrictions, and as well manage future production additions. We expect these projects to be completed, and the resulting incremental production to be restored, during the second half of 2014.

Disposition Activity Update

In November 2013, we outlined a plan to sell at least $600 million of non-core assets over two years, which included some of our royalty interest assets in southeast Saskatchewan. Today we have finalized an agreement to sell this royalty package for gross proceeds of $141 million. TD Securities Inc. acted as our exclusive financial advisor on the transaction. The transaction is expected to close in early May and the divested assets include:


--  Production(1) net to Lightstream of 315 boepd (99% oil); 
--  Net operating income of approximately $15 million in 2013; and 
--  Approximately 200,000 acres of fee title lands, including 129,000 of
    undeveloped fee title acres and 71,000 leased fee title acres. 

                     Dispositions       Current                   Cumulative
                          To-Date   Transaction        Total         Metrics
----------------------------------------------------------------------------
Production            1,700 boepd  315 boepd(1)  2,015 boepd  $125,560/boepd
Reserves                  3 MMboe     0.8 MMboe    3.8 MMboe      $66.58/boe
Cash Flow                  $ 10 M      $15 M(2)        $25 M           10.1x
Disposition Proceeds      $ 112 M        $ 141M       $253 M                
----------------------------------------------------------------------------
(1)  Does not include LTS to LTS royalty barrels of 155 boepd, which are not
     included in the reported production                                    
(2)  $15 million of net operating income includes $10 million of reported   
     third party royalty income plus $5 million of royalties that will be   
     payable on the remaining working interest production retained by LTS   

With the sale of these assets, we are 85% of the way to achieving our 2014 goal of divesting $300 million of assets. In total, we have divested approximately 2,000 boepd of production (56% gas) for $253 million; or 10 times the associated net operating income of $25 million from these assets. With the proceeds of dispositions reducing our debt, the annualized interest savings is approximately $9 million for a net pro-forma impact to funds flow from operations of only $16 million.

Secured Term Credit Facility Update

We are also pleased to announce that our banking syndicate has agreed to extend the term of our covenant-based lending facility by an additional year, to June 2, 2017. As we continue to execute our disposition plan, we are applying all proceeds to repay debt and we will reduce the maximum lending amount (before the optional accordion feature) of our secured term credit facility by $100 million to $1.3 billion upon completion of the royalty transaction. All other terms and conditions remain unchanged.

2014 Guidance

We have previously updated our guidance based on Q1 2014 disposition activity. With the current disposition of royalty interest assets we have chosen to maintain our latest guidance, which reflects all disposition activity announced to date in 2014.


                                                                    GUIDANCE
Average Production (boe/d)                                   43,500 - 45,500
Exit Production (boe/d)                                      45,000 - 47,000
Oil and Liquids Weighting                                                80%
Funds Flow(1)                                                               
  Funds Flow from Operations ('000)                      $635,000 - $665,000
  Funds Flow per share(2)                                      $3.19 - $3.34
Dividends per share                                                    $0.48
Capital Expenditures(3)                                  $525,000 - $575,000
                                                                            
(1)  Commodity price assumptions include WTI US$95.00/bbl, AECO             
     CDN$4.00/Mcf, foreign exchange rate of US$/CDN$0.90, and corporate oil 
     differential of 10%.                                                   
(2)  Funds flow per share calculation based on 199 million shares           
     outstanding for 2014.                                                  
(3)  Projected capital expenditures exclude acquisitions, which are         
     evaluated separately.                                                  

Outlook

We are entering the second quarter with our production in-line with expectations, an inventory of wells that will be brought on during the coming weeks, and 2014 disposition proceeds of more than $250 million to-date. Our corporate foundation remains strong and we are executing our 2014 business plan. With assets that include approximately 200 MMboe of proved plus probable reserves, which are valued at $4.1 billion (net present value before taxes at December 31, 2013, discounted at 10%), and an inventory of over 2,000 drilling locations, our assets continue to provide a platform to generate long-term funds flow growth and returns for our shareholders. Plans for 2014 continue to be focused on execution of our capital plan and strengthening our balance sheet through asset sales. We are pleased with our progress so far this year and look forward to sharing future results.

Annual General Meeting Notice

Lightstream will host our Annual General Meeting for shareholders on May 14, 2014 at 9:00am (MDT) at the Metropolitan Conference Centre (333 - 4th Ave SW) in Calgary, Alberta. The meeting will also be available via webcast using the following link: www.gowebcasting.com/5213.

Those in attendance or participating in the webcast will have the opportunity to have questions responded to by management of the company.

Lightstream Resources Ltd. is an oil and gas exploration and production company combining light oil Bakken and Cardium resource plays with conventional light oil assets, delivering industry leading operating netbacks, strong cash flows and production growth. Lightstream is applying leading edge technology to a multi-year inventory of Bakken and Cardium light oil development locations, along with other emerging resource play opportunities. Our strategy is to deliver accretive production and reserves growth, along with an attractive dividend yield.

Forward-Looking Statements. Certain information provided in this press release constitutes forward-looking statements. Specifically, this press release contains forward-looking statements relating to: (i) the bringing onto production of inventory wells; (ii) the expected timing of the completion of the Swan Hills facility; (iii) anticipated second quarter rates of production; (iv) the expected timing of the restart of drilling activities, (v) the anticipated mitigating of production restrictions in the Cardium operating areas; (vi) the expected timing of the closing of the announced disposition; (vii) anticipated 2014 average and exit rates of production, oil and liquids weighting, funds flow from operations, dividends per share and capital expenditures. The forward-looking statements are based on certain key expectations and assumptions, including expectations and assumptions concerning the success of future drilling, completion, recompletion and development activities, the performance of new and existing wells, prevailing commodity prices and economic conditions, the market for asset dispositions and the ability of counterparties to close on dispositions, the availability and cost of labour and services, timing of pipeline and facilities construction, access to third party facilities and weather and access to drilling locations. Although we believe 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 we 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; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses, reliance on industry partners, risks that asset dispositions cannot be completed, availability of equipment and personnel, uncertainty surrounding timing for drilling and completion activities resulting from weather and other factors, changes in applicable regulatory regimes and health, safety and environmental risks), commodity price and exchange rate fluctuations, general economic conditions and the potential for counterparties to be unable to close dispositions. Certain of these risks are set out in more detail in our Annual Information Form which has been filed on SEDAR and can be accessed at www.sedar.com. Except as may be required by applicable securities laws, Lightstream assumes no obligation to publicly update or revise any forward-looking statements made herein or otherwise, whether as a result of new information, future events or otherwise.

BOEs. Natural gas volumes have been converted to barrels of oil equivalent ("boe"). Six thousand cubic feet ("Mcf") of natural gas is equal to one barrel of oil equivalent based on an energy equivalency conversion method primarily attributable at the burner tip and does not represent a value equivalency at the wellhead. Boes may be misleading, especially if used in isolation.

Well Counts. All references to well counts are on a net basis.

Contacts:
Lightstream Resources Ltd.
John D. Wright
President and Chief Executive Officer
403.268.7800
403.218.6075 (FAX)

Lightstream Resources Ltd.
Peter D. Scott
Senior Vice President and Chief Financial Officer
403.268.7800
403.218.6075 (FAX)

Lightstream Resources Ltd.
William A. Kanters
Vice President, Capital Markets
403.268.7800
403.218.6075 (FAX)
[email protected]
www.lightstreamresources.com

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
Why do your mobile transformations need to happen today? Mobile is the strategy that enterprise transformation centers on to drive customer engagement. In his general session at @ThingsExpo, Roger Woods, Director, Mobile Product & Strategy – Adobe Marketing Cloud, covered key IoT and mobile trends that are forcing mobile transformation, key components of a solid mobile strategy and explored how brands are effectively driving mobile change throughout the enterprise.
After more than five years of DevOps, definitions are evolving, boundaries are expanding, ‘unicorns’ are no longer rare, enterprises are on board, and pundits are moving on. Can we now look at an evolution of DevOps? Should we? Is the foundation of DevOps ‘done’, or is there still too much left to do? What is mature, and what is still missing? What does the next 5 years of DevOps look like? In this Power Panel at DevOps Summit, moderated by DevOps Summit Conference Chair Andi Mann, panelists l...
Virtualization over the past years has become a key strategy for IT to acquire multi-tenancy, increase utilization, develop elasticity and improve security. And virtual machines (VMs) are quickly becoming a main vehicle for developing and deploying applications. The introduction of containers seems to be bringing another and perhaps overlapped solution for achieving the same above-mentioned benefits. Are a container and a virtual machine fundamentally the same or different? And how? Is one techn...
Most companies are adopting or evaluating container technology - Docker in particular - to speed up application deployment, drive down cost, ease management and make application delivery more flexible overall. As with most new architectures, this dream takes a lot of work to become a reality. Even when you do get your application componentized enough and packaged properly, there are still challenges for DevOps teams to making the shift to continuous delivery and achieving that reduction in cost ...
My team embarked on building a data lake for our sales and marketing data to better understand customer journeys. This required building a hybrid data pipeline to connect our cloud CRM with the new Hadoop Data Lake. One challenge is that IT was not in a position to provide support until we proved value and marketing did not have the experience, so we embarked on the journey ourselves within the product marketing team for our line of business within Progress. In his session at @BigDataExpo, Sum...
MongoDB Atlas leverages VPC peering for AWS, a service that allows multiple VPC networks to interact. This includes VPCs that belong to other AWS account holders. By performing cross account VPC peering, users ensure networks that host and communicate their data are secure. In his session at 20th Cloud Expo, Jay Gordon, a Developer Advocate at MongoDB, will explain how to properly architect your VPC using existing AWS tools and then peer with your MongoDB Atlas cluster. He'll discuss the secur...
Keeping pace with advancements in software delivery processes and tooling is taxing even for the most proficient organizations. Point tools, platforms, open source and the increasing adoption of private and public cloud services requires strong engineering rigor - all in the face of developer demands to use the tools of choice. As Agile has settled in as a mainstream practice, now DevOps has emerged as the next wave to improve software delivery speed and output. To make DevOps work, organization...
Without a clear strategy for cost control and an architecture designed with cloud services in mind, costs and operational performance can quickly get out of control. To avoid multiple architectural redesigns requires extensive thought and planning. Boundary (now part of BMC) launched a new public-facing multi-tenant high resolution monitoring service on Amazon AWS two years ago, facing challenges and learning best practices in the early days of the new service.
Niagara Networks exhibited at the 19th International Cloud Expo, which took place at the Santa Clara Convention Center in Santa Clara, CA, in November 2016. Niagara Networks offers the highest port-density systems, and the most complete Next-Generation Network Visibility systems including Network Packet Brokers, Bypass Switches, and Network TAPs.
SYS-CON Events announced today that MobiDev, a client-oriented software development company, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place June 6-8, 2017, at the Javits Center in New York City, NY, and the 21st International Cloud Expo®, which will take place October 31-November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. MobiDev is a software company that develops and delivers turn-key mobile apps, websites, web services, and complex softw...
DevOps is often described as a combination of technology and culture. Without both, DevOps isn't complete. However, applying the culture to outdated technology is a recipe for disaster; as response times grow and connections between teams are delayed by technology, the culture will die. A Nutanix Enterprise Cloud has many benefits that provide the needed base for a true DevOps paradigm.
What sort of WebRTC based applications can we expect to see over the next year and beyond? One way to predict development trends is to see what sorts of applications startups are building. In his session at @ThingsExpo, Arin Sime, founder of WebRTC.ventures, will discuss the current and likely future trends in WebRTC application development based on real requests for custom applications from real customers, as well as other public sources of information,
DevOps tends to focus on the relationship between Dev and Ops, putting an emphasis on the ops and application infrastructure. But that’s changing with microservices architectures. In her session at DevOps Summit, Lori MacVittie, Evangelist for F5 Networks, will focus on how microservices are changing the underlying architectures needed to scale, secure and deliver applications based on highly distributed (micro) services and why that means an expansion into “the network” for DevOps.
In his session at Cloud Expo, Alan Winters, an entertainment executive/TV producer turned serial entrepreneur, will present a success story of an entrepreneur who has both suffered through and benefited from offshore development across multiple businesses: The smart choice, or how to select the right offshore development partner Warning signs, or how to minimize chances of making the wrong choice Collaboration, or how to establish the most effective work processes Budget control, or how to max...
Interoute has announced the integration of its Global Cloud Infrastructure platform with Rancher Labs’ container management platform, Rancher. This approach enables enterprises to accelerate their digital transformation and infrastructure investments. Matthew Finnie, Interoute CTO commented “Enterprises developing and building apps in the cloud and those on a path to Digital Transformation need Digital ICT Infrastructure that allows them to build, test and deploy faster than ever before. The int...