Click here to close now.

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.

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
Connected things, systems and people can provide information to other things, systems and people and initiate actions for each other that result in new service possibilities. By taking a look at the impact of Internet of Things when it transitions to a highly connected services marketplace we can understand how connecting the right “things” and leveraging the right partners can provide enormous impact to your business’ growth and success. In her general session at @ThingsExpo, Esmeralda Swartz...
"Plutora provides release and testing environment capabilities to the enterprise," explained Dalibor Siroky, Director and Co-founder of Plutora, in this SYS-CON.tv interview at @DevOpsSummit, held June 9-11, 2015, at the Javits Center in New York City.
In the midst of the widespread popularity and adoption of cloud computing, it seems like everything is being offered “as a Service” these days: Infrastructure? Check. Platform? You bet. Software? Absolutely. Toaster? It’s only a matter of time. With service providers positioning vastly differing offerings under a generic “cloud” umbrella, it’s all too easy to get confused about what’s actually being offered. In his session at 16th Cloud Expo, Kevin Hazard, Director of Digital Content for SoftL...
The 17th International Cloud Expo has announced that its Call for Papers is open. 17th International Cloud Expo, to be held November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA, brings together Cloud Computing, APM, APIs, Microservices, Security, Big Data, Internet of Things, DevOps and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding bu...
Countless business models have spawned from the IaaS industry. Resell Web hosting, blogs, public cloud, and on and on. With the overwhelming amount of tools available to us, it's sometimes easy to overlook that many of them are just new skins of resources we've had for a long time. In his General Session at 16th Cloud Expo, Phil Jackson, Lead Technology Evangelist at SoftLayer, broke down what we've got to work with and discuss the benefits and pitfalls to discover how we can best use them to d...
The 5th International DevOps Summit, co-located with 17th International Cloud Expo – being held November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA – announces that its Call for Papers is open. Born out of proven success in agile development, cloud computing, and process automation, DevOps is a macro trend you cannot afford to miss. From showcase success stories from early adopters and web-scale businesses, DevOps is expanding to organizations of all sizes, including the ...
In their general session at 16th Cloud Expo, Michael Piccininni, Global Account Manager - Cloud SP at EMC Corporation, and Mike Dietze, Regional Director at Windstream Hosted Solutions, reviewed next generation cloud services, including the Windstream-EMC Tier Storage solutions, and discussed how to increase efficiencies, improve service delivery and enhance corporate cloud solution development. Michael Piccininni is Global Account Manager – Cloud SP at EMC Corporation. He has been engaged in t...
SYS-CON Media announced today that CloudBees, the Jenkins Enterprise company, has launched ad campaigns on SYS-CON's DevOps Journal. CloudBees' campaigns focus on the business value of Continuous Delivery and how it has been recognized as a game changer for IT and is now a top priority for organizations, and the best ways to optimize Jenkins to ensure your continuous integration environment is optimally configured.
With major technology companies and startups seriously embracing IoT strategies, now is the perfect time to attend @ThingsExpo in Silicon Valley. Learn what is going on, contribute to the discussions, and ensure that your enterprise is as "IoT-Ready" as it can be! Internet of @ThingsExpo, taking place Nov 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 17th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading in...
The Internet of Things is not only adding billions of sensors and billions of terabytes to the Internet. It is also forcing a fundamental change in the way we envision Information Technology. For the first time, more data is being created by devices at the edge of the Internet rather than from centralized systems. What does this mean for today's IT professional? In this Power Panel at @ThingsExpo, moderated by Conference Chair Roger Strukhoff, panelists addressed this very serious issue of pro...
SYS-CON Events announced today that kintone has been named “Bronze Sponsor” of SYS-CON's 17th International Cloud Expo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. kintone promotes cloud-based workgroup productivity, transparency and profitability with a seamless collaboration space, build your own business application (BYOA) platform, and workflow automation system.
The most often asked question post-DevOps introduction is: “How do I get started?” There’s plenty of information on why DevOps is valid and important, but many managers still struggle with simple basics for how to initiate a DevOps program in their business. They struggle with issues related to current organizational inertia, the lack of experience on Continuous Integration/Delivery, understanding where DevOps will affect revenue and budget, etc. In their session at DevOps Summit, JP Morgenthal...
Buzzword alert: Microservices and IoT at a DevOps conference? What could possibly go wrong? In this Power Panel at DevOps Summit, moderated by Jason Bloomberg, the leading expert on architecting agility for the enterprise and president of Intellyx, panelists peeled away the buzz and discuss the important architectural principles behind implementing IoT solutions for the enterprise. As remote IoT devices and sensors become increasingly intelligent, they become part of our distributed cloud envir...
Explosive growth in connected devices. Enormous amounts of data for collection and analysis. Critical use of data for split-second decision making and actionable information. All three are factors in making the Internet of Things a reality. Yet, any one factor would have an IT organization pondering its infrastructure strategy. How should your organization enhance its IT framework to enable an Internet of Things implementation? In his session at @ThingsExpo, James Kirkland, Red Hat's Chief Arch...
"We provide a web application framework for building really sophisticated web applications that run on a browser without any installation need so we get used for biotech, defense, and banking applications," noted Charles Kendrick, CTO and Chief Architect at Isomorphic Software, in this SYS-CON.tv interview at @DevOpsSummit (http://DevOpsSummit.SYS-CON.com), held June 9-11, 2015, at the Javits Center in New York