CALGARY, ALBERTA -- (Marketwired) -- 05/07/13 -- Long Run Exploration Ltd. ("Long Run" or the "Corporation") (TSX: LRE) is pleased to report financial and operational results for the quarter ended March 31, 2013. This represents the first full quarter of operations as Long Run, a significant milestone in the evolution of the Corporation. Long Run aggressively drilled both the Montney and the Viking this quarter, adding more than 3,000 boe per day of production from 2012 fourth quarter exit volumes to first quarter 2013 exit volumes. The majority of production additions in the first quarter were crude oil volumes, a trend which Long Run expects to continue through 2013. Given strong first quarter results driven by operational results which met or exceeded expectations, Long Run awaits the end of Spring break up and a return to executing the 2013 capital program.
The unaudited financial statements of Long Run for the period ended March 31, 2013 and the related Management's Discussion and Analysis ("MD&A") can be accessed on-line on SEDAR at www.sedar.com or on Long Run's website at www.longrunexploration.com.
HIGHLIGHTS
-- First quarter 2013 exit production of approximately 26,300 boe per day was ahead of budget forecast. Continued operational improvements in the Montney at Girouxville / Normandville and in the Viking at Redwater were responsible for increased exit production volumes. Long Run continues to be on-track to meet its 2013 full-year average production guidance of 25,000 boe per day.-- Due to an active first quarter development program and successful efforts in the Montney and Viking, production for the first quarter of 2013 averaged 23,611 boe per day. This is an increase of 167 percent over the first quarter of 2012 and an increase of 10 percent over the fourth quarter of 2012. 2013 first quarter liquids production represented 52 percent of total production.-- First quarter 2013 development capital expenditures targeted crude oil in the Montney and the Viking. -- The Corporation drilled 18 net wells in the Montney oil play at Girouxville / Normandville, all of which were completed, equipped and on-stream before the end of the quarter. -- At Redwater, Long Run drilled 30 (28.6 net) light-oil wells.-- Funds flow from operations for the first quarter of 2013 was $48.6 million ($0.39 per share diluted). This represents an increase of approximately 66 percent from the $29.4 million realized in the first quarter of 2012, and approximately 27 percent higher than the $38.4 million generated in the fourth quarter of 2012.
FIRST QUARTER FINANCIAL AND PRODUCTION RESULTS
-- First quarter production averaged 23,611 boe per day, weighted approximately 52 percent to oil and natural gas liquids. Compared to the first quarter 2012, production increased approximately 167 percent due to the fourth quarter 2012 business combination with Guide Exploration Ltd. and to a successful first quarter capital program which achieved strong production results from crude oil development plays.-- Higher production volumes in the first quarter increased funds flow from operations to approximately $48.6 million or $0.39 per share (diluted), a 27 percent (18 percent per share) increase over the $38.4 million or $0.33 per share (diluted) generated in the fourth quarter of 2012.-- Funds flow from operations was impacted by higher operating costs ($13.53 per boe) in the first quarter of 2013 as compared with $11.78 per boe in the fourth quarter of 2012. Operating costs increased due to normal-course workover activity across our crude oil properties and lower natural gas volumes at Boyer due to cold weather during the months of January and February.-- The net loss of $0.8 million during the first quarter of 2013, compared to earnings of $1.2 million in the first quarter of 2012 and a loss of $56.6 million in the fourth quarter of 2012. The first quarter 2013 net loss included a $10.8 million unrealized loss on derivative financial contracts. The fourth quarter 2012 loss included an impairment of $128.0 million on oil and natural gas properties.-- Capital expenditures totaled $103.9 million in the first quarter of 2013 with the Montney and Viking constituting the bulk of development spending.-- On March 28, 2013, Long Run completed a $13.5 million transaction in the Cherhill area of Alberta. The transaction focused on the strategic consolidation of crude oil and solution natural gas processing capacity and infrastructure, developed and undeveloped acreage, as well as production which was averaging approximately 2,400 mcf/d of natural gas and 200 barrels per day of crude oil and natural gas liquids at the time of closing.-- Subsequent to the end of the quarter, Long Run renewed its three-year, revolving credit facility of $450 million and extended the facility to May 31, 2016. The bank syndicate is jointly led by The Bank of Nova Scotia and National Bank of Canada, and includes a broad syndicate of Canadian and international banks.
