CALGARY, Nov. 25, 2015 /CNW/ - LGX Oil + Gas Inc. ("LGX" or the "Company") (TSXV:OIL) is pleased to announce it has filed on SEDAR its unaudited financial statements and related Management's Discussion and Analysis ("MD&A") for the three and nine months ended September 30, 2015.  Selected financial and operational information is outlined below and should be read in conjunction with LGX's unaudited financial statements and the related MD&A which are available for review at www.lgxoil.com or www.sedar.com.

ACCOMPLISHMENTS

As a result of the Company's active cost cutting measures, LGX:

• Reduced operating expenses from $29.30 per Boe in the third quarter of 2014 to $20.09 per Boe in the third quarter of 2015 (31 percent decrease)
• Reduced transportation expenses from $4.35 per Boe in the third quarter of 2014 to $3.44 per Boe in the third quarter of 2015 (21 percent decrease)
• Reduced operating and transportation expenses from $26.43 per Boe in the second quarter of 2015 to $23.53 per Boe in the third quarter of 2015 (11 percent decrease)
• Reduced general and administrative expenses from $7.48 per Boe in the third quarter of 2014 to $2.76 per Boe in the third quarter of 2015 (63 percent decrease)

In addition, LGX:

• Increased production to 799 Boe/day in the third quarter of 2015 from 764 Boe/day in the third quarter of 2014 (5 percent increase)
• Increased oil and liquids production mix to 77 percent in the third quarter of 2015 from 70 percent in the third quarter of 2014 (10 percent increase)
• Increased production to 799 Boe/day in the third quarter of 2015 from 677 Boe/day in the second quarter of 2015 (18 percent increase)

OUTLOOK

The positive results from the 6-36 Banff completion over the quarter, sustained production from recent competitor offsets and the number of Banff oil shows and tests from previously drilled wells across the area have validated the geophysical and geological model for the play.  LGX estimates that up to 40 sections of LGX land offsetting the 6-36 well may be prospective for Banff oil production as well as for the established Big Valley play. The 6-36 well is currently shut-in due to suspected mechanical issues and will be worked over to be potentially brought back on production by the end of the year.

The Company has proven the concept of an over-pressured, oil saturated, light oil resource play over a broad area on its lands in the Big Valley and Banff formations.  Capital cost reductions have been demonstrated through the course of the 2014 program and additional savings are anticipated in the current low commodity price environment.  The Company has significant exposure to the upside of both plays and only a small portion of the potential has been recognized in the Company's reserve report.

The Company continues to work in accordance with the provisions of the previously announced order for the protection of the Greater Sage-Grouse (the "Emergency Order") and is continuing to work with Environment Canada to get additional clarity on the practical application of the Emergency Order.

With cash flows impacted by oil prices at six year lows, LGX is working proactively to ensure it has the ability to meet its financial obligations under its credit facilities. 

EVENTS AFTER THE REPORTING PERIOD

On October 28, 2015, LGX announced that Curt Labelle, Vice President Production of the Company, effective immediately is no longer an officer of the Company.

On November 16, 2015, LGX announced entering into a new banking facility with the Alberta Treasury Branch consisting of a $30 million revolving demand credit facility. The new facility replaces the previous $20 million revolving demand credit facility and a $10 million non-revolving term credit facility.  The new facility is a borrowing base facility subject to annual review by the lender, with the next review scheduled for no later than December 31, 2015. Upon review, there is no guarantee that the facilities will be maintained at their current levels.

LGX is a uniquely positioned, technically driven, junior oil and natural gas company with a proven management team committed to aggressive, cost-effective growth of light oil reserves and production combined with high impact exploration potential in southern Alberta.  LGX's common shares trade on the TSX Venture Exchange under the symbol OIL.

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.

Reader Advisories

This press release contains forward-looking statements. More particularly, it contains forward-looking statements concerning: (i) the prospectivity of LGX's properties with respect to the Big Valley and Banff Formation, (ii) the successful workover and timing of bringing production on of the 6-36 well and (iii) the anticipated future capital cost reductions.

The forward-looking statements contained in this press release are based on certain key expectations and assumptions made by LGX, including the assumptions specifically set out in this press release and expectations and assumptions concerning: (i) prevailing commodity prices; (ii) the availability and cost of capital, labour and services; (iii) the effectiveness of cost reduction initiatives; (iv) the performance of existing wells, (v) the availability and performance of facilities and pipelines, (vi) the geological characteristics of LGX's properties, (vii) prevailing weather and break-up conditions, royalty regimes and exchange rates, (viii) the application of regulatory and licensing requirements, and (ix) the application of the previously announced emergency order for the protection of the Greater Sage-Grouse (the "Emergency Order") and the Species at Risk Act (Canada) at LGX's Manyberries property.

Although LGX believes 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 LGX 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, including but not limited to, fluctuations in prevailing commodity prices, 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; and health, safety and environmental risks), uncertainty as to the availability and cost of capital, labour and services, exchange rate fluctuations, fluctuations in oil price differentials, unexpected adverse weather conditions and changes to existing laws and regulations.  These and other risks are set out in more detail in the AIF.

The forward-looking statements contained in this press release are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

Caution Respecting Boe

Meaning of Boe - Boe means barrel of oil equivalent.  All Boe conversions in this report are derived by converting natural gas to oil equivalent at a ratio of six thousand cubic feet of natural gas to one barrel of oil equivalent.  Boe may be misleading, particularly if used in isolation.  A Boe conversion rate of 1 Boe: 6 Mcf is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.  Given that the value ratio of oil compared to natural gas based on currently prevailing prices is significantly different than the energy equivalency ratio of 1 Boe : 6 Mcf, utilizing a conversion ratio of 1 Boe : 6 Mcf may be misleading as an indication of value.

SOURCE LGX Oil + Gas Inc.