OIL

CALGARY, May 12, 2014 /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 months ended March 31, 2014.  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.

FINANCIAL + OPERATIONAL HIGHLIGHTS

(1)     Consolidated financial and operating highlights for LGX Oil + Gas Inc. and all of its subsidiaries ("LGX" or the "Company").
(2)     Management uses funds generated by operations, net debt and working capital surplus (deficit) and operating netback to analyze operating performance and leverage.  These terms, as presented, do not have a standardized meaning prescribed by International Financial Reporting Standards and therefore they may not be comparable with the calculation of similar measures for other entities.
(3)     In calculating the net income (loss) per share diluted, the Company excludes the effect of outstanding stock options and share warrants outstanding and uses the weighted average common shares (basic) where the Company has a net loss for the period.  In calculating, funds generated by operations per share diluted, the Company includes the effect of outstanding stock options and share warrants using the treasury stock method. 
(4)     Refer to Capital Expenditures in the Management Discussion and Analysis for the three months ended March 31, 2014.
(5)     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.

ACCOMPLISHMENTS

• Increased average production from 913 Boe per day in the first quarter of 2013 to 948 Boe per day in the first quarter of 2014 (4 percent increase); increased oil production from 612 Boe per day in the first quarter of 2013 to 734 Boe per day in the first quarter of 2014 (20 percent increase)
• Increased oil and NGL's production weighting from 67 percent in the first quarter of 2013 to 77 percent in the first quarter of 2014
• Increased funds generated from operations of $1.1 million ($0.01 per share) in the first quarter of 2013 to a record $3.1 million ($0.03 per share) in the first quarter of 2014 (175 percent increase)
• Increased operating netbacks from $23.56 per Boe in the first quarter of 2013 to $45.90 per Boe in the first quarter of 2014 (95 percent increase)

OPERATIONS REVIEW

Bakken

The Company continues to generate drilling locations and acquire surveys on its emerging Alberta Bakken play, following the success of the 14-2-9-24W4 ("14-2") Big Valley (Three Forks) discovery well on the Blood Reserve. The 14-2 well produced 445 Bbl per day of light oil for the first 60 days of production and is currently producing at a restricted Maximum Rate Limitation (MRL) of 250 Bbl oil per day with capability in excess of 400 Bbl per day of light oil. Initial approval on the first follow-up well has been received and environmental assessments will begin in mid May on further locations.

Manyberries

LGX continues to operate its Manyberries property 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. The Company expects to be in a position to formulate long-term plans for this area in the coming months.

OUTLOOK

LGX has budgeted to drill two horizontal development wells, which are expected to spud in the second and third quarters of 2014, along with performing re-completions of previously drilled wells based on the 2013 drilling success. Analysis of the 3-D seismic has indicated an area of potentially highly fractured reservoir adjacent to a vertical well drilled in 2012. The Company has also identified significant potential in uphole zones above the Big Valley.

LGX is on track to meet its previously announced production guidance and the management team continues to aggressively pursue opportunities that improve the upside potential, sustainability and autonomy of LGX.

ANNUAL GENERAL MEETING

LGX's Annual General Meeting, is scheduled for 3:00 pm on May 29, 2014 at The Petroleum Club, McMurray Room, located at 319 - 5th Avenue SW, Calgary, AB.

To view LGX's audited financial statements, the related MD&A and the AIF for the years ended December 31, 2013, December 31, 2012 and December 31, 2011 please visit our web site at www.lgxoil.com or www.sedar.com.  To the extent investors do not have access to the internet, copies of the audited financials the related MD&A and the AIF can be obtained on request without charge by contacting LGX at 403.441.2300 or at 4400, 525-8th Avenue SW, Calgary, Alberta, T2P 1G1.

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.

Forward-Looking Information - This press release contains forward-looking statements. More particularly, it contains forward-looking statements concerning: (i) the productive capacity of the 14-2 well, (ii) planned drilling and development activities and (iii) the Company being on track to meets its previously announced production guidance.

The forward-looking statements contained in this press release are based on certain key expectations and assumptions made by LGX, including the operational parameters specifically set out in this press release and expectations and assumptions concerning: (i) 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) to the Corporation's Manyberries property, (ii) the success of future drilling, development and completion activities, (iii) the performance of existing wells, (iv) the performance of new wells, (v) the availability and performance of facilities and pipelines, (vi) the geological characteristics of LGX's properties, (vii) the successful application of drilling, completion and seismic technology, (viii) prevailing weather and break-up conditions, commodity prices, royalty regimes and exchange rates, (ix) the application of regulatory and licensing requirements, and * the availability of capital, labour and services.

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. 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; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses, and health, safety and environmental risks), constraint in the availability of services, constraint in the availability of capital, commodity price and exchange rate fluctuations, adverse weather or break-up conditions and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures, uncertainties as to the application and impact of the Emergency Order and uncertainties as to the outcome of efforts by LGX to quash or amend the Emergency Order or to obtain compensation for losses related to the Emergency Order.  These and other risks are set out in more detail in LGX's Annual Information Form for the year ended December 31, 2013 dated March 24, 2014.

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.

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.