(3) In 2012, the acquisition costs related to corporate acquisitions reflect the fair market value. In prior years the acquisition costs related to the corporate acquisitions reflect the consideration paid plus the net debt assumed, both valued at closing and does not reflect the fair market value allocated to the acquired oil and gas assets under generally accepted accounting principles.
(4) Calculation includes reserve revisions. Long Run calculates FD&A costs which incorporate both the costs and associated reserve additions related to acquisitions net of any dispositions during the year. Since acquisitions can have a significant impact on Long Run's annual reserve replacement costs, the Corporation believes the FD&A costs provide a more meaning portrayal of Long Run's cost structure.
(5) The 2012 FD&A calculations were based on Long Run's reserves at December 31, 2012 evaluated by Sproule and WestFire's reserves at December 31, 2011. The FD&A calculations prior to 2012 were based on WestFire's reserves from December 31, 2009 to December 31, 2011.
The MD&A contains terms commonly used in the oil and gas industry, such as funds flow from operations, funds flow from operations per share, and operating netback. These terms are not defined by International Financial Reporting Standards (IFRS) and should not be considered an alternative to, or more meaningful than, cash provided by operating activities or net earnings as determined in accordance with IFRS as an indicator of Long Run's performance. Management believes that funds flow from operations is a useful financial measurement which assists in demonstrating the Corporation's ability to fund capital expenditures necessary for future growth or to repay debt. Long Run's determination of funds flow from operations may not be comparable to that reported by other companies. All references to funds flow from operations throughout this report are based on cash flow from operating activities before changes in non-cash working capital and abandonment expenditures. The Corporation calculates funds flow from operations per share by dividing funds flow from operations by the weighted average number of common shares outstanding.
Long Run uses the term net debt in the MD&A and presents a table showing how it has been determined. This measure does not have any standardized meaning prescribed by IFRS and therefore may not be comparable to similar measures presented by other companies.
Long Run is a Calgary-based intermediate oil company focused on light-oil development and exploration in western Canada. For further information about Long Run, visit the Company's website at www.longrunexploration.com.
Oil and Gas Information:
Barrels of oil equivalent ("boe") may be misleading, particularly if used in isolation. A boe conversion ratio of six thousand cubic feet of natural gas to one barrel of crude oil 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 based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency conversion ratio of 6:1, utilizing a conversion on a 6:1 basis is misleading as an indication of value.
The estimates of reserves and future net revenue for individual properties may not reflect the same confidence level as estimates of reserves and future net revenue for all properties, due to the effects of aggregation.
Most Popular Stories
- Slow Week Ahead of December FOMC Meeting
- Hispanics Seek to Grow School Board Members
- GM Bailout Saved 1.2 Million U.S. Jobs, Report Says
- 'Knockout Game': Myth or Menace?
- Questions Remain in Jenni Rivera's Death
- U.S. Companies Eager for Iranian Business
- Bitcoin Used to Buy Tesla Car
- Banks Fret as Volcker Vote Approaches
- Paul Walker Fans Pay Respects
- Yellen Set to Become One of World's Most Powerful Women