Long Run Exploration Ltd. Announces Closing of Business Combination Involving Guide Exploration Ltd. and WestFire Energy Ltd. to F

Tue Oct 23, 2012 12:29pm EDT

* Reuters is not responsible for the content in this press release.

  CALGARY, ALBERTA, Oct 23 (MARKET WIRE) --
Long Run Exploration Ltd. (TSX:GO) (TSX:LRE) ("Long Run" or the
"Company") is pleased to announce the successful completion of the
previously announced business combination of Guide Exploration Ltd.
("Guide") and WestFire Energy Ltd. ("WestFire") pursuant to a plan of
arrangement (the "Arrangement"). As a result of the Arrangement, previous
shareholders of Guide are entitled to receive 0.4167 common shares of
Long Run for each outstanding common share of Guide previously held.
Common shares of WestFire will continue to represent common shares of
Long Run on a one-for-one basis. After giving effect to the Arrangement,
Long Run has approximately 110 million voting common shares outstanding
and 15.5 million non-voting shares outstanding.

    Letters of transmittal have been forwarded to registered shareholders of
Guide to be utilized in order to exchange their common shares of Guide
for common shares of Long Run. It is anticipated that the common shares
of Guide will be delisted from the Toronto Stock Exchange (the "TSX") and
the common shares of Long Run will commence trading in substitution for
the common shares of WestFire on the TSX under the trading symbol "LRE"
within two to three business days from the date hereof.

    Long Run is also pleased to announce that it has in place $500 million in
credit facilities from a syndicate of Canadian and International banks.
The credit facilities are comprised of a $450 million revolving facility
having a three year term maturing on May 31, 2015 and a $50 million
non-revolving facility with a maturity date of May 31, 2013. The bank
syndicate is jointly led by The Bank of Nova Scotia and National Bank of
Canada, and includes Alberta Treasury Branches; Wells Fargo Bank N.A.,
Canadian Branch; HSBC Bank Canada; The Toronto-Dominion Bank; Union Bank,
Canada Branch; JPMorgan Chase Bank, N.A., Toronto Branch; and United
Overseas Bank Limited. 

    Light-Oil Growth from a Strong Base of Production

    Long Run is currently producing approximately 25,000 boe per day,
comprised of approximately 50% crude oil and NGLs. Crude oil production
is expected to increase as capital investment into an impressive list of
light-oil projects ramps up in 2013. Long Run's strong portfolio of
producing properties is further strengthened by multiple years of high
netback light-oil weighted development opportunities in the Montney oil
fairway of Alberta at Normadville / Girouxville, the Viking oil play in
Alberta at Redwater, as well as a footprint in west central Saskatchewan
Viking oil. The Company also has low-decline natural gas properties in
Alberta at Kaybob and Boyer which complement our more aggressive
light-oil growth agenda. In addition to a deep inventory of repeatable
light-oil development projects within the existing portfolio of
properties, there is a significant number of emerging exploration
concepts currently being tested on Long Run lands, including early-stage
work on the Duvernay.

    Added to the foundation of strategic light-oil development opportunities,
Long Run expects to realize immediate cost benefits through reduced field
operational expenditures. As a fulsome portfolio rationalization process
unfolds in the coming months, it is anticipated that a number of non-core
properties, representing relatively modest production volumes, could be
sold. The net impact of these sales is expected to reduce Long Run's bank
indebtedness, providing a stable platform from which the Company is
anticipated to grow. Long Run's emphasis on cost containment, capital
efficiency and balance sheet strength is a key strategy for the Company. 

    Supported by a land base of approximately 1.8 million net acres and a
reserve base of approximately 96 mmboe, proved plus probable, Long Run is
well-positioned to create meaningful long-term value for shareholders
through the development of light-oil projects while remaining fiscally
prudent. 

    Management and Board of Directors

    As previously announced, the Long Run management team will be led by
William E. Andrew as Executive Chair and Chief Executive Officer, and
Dale A. Miller as President. The strength of this management team as one
with a proven track record of long-term value-creation and consistent
production growth in western Canada bodes well for Long Run shareholders.
The Board of Directors of Long Run is comprised of William E. Andrew,
Dale A. Miller, Jeffery E. Errico, Michael Graham, Brad R. Munro and
Patricia Newson from Guide, John Brussa from Guide and WestFire, Ed
Chwyl, Michael McGovern, and Paul Dimitriadis, who is the Chief Operating
Officer of Sprott Resource Corp., a significant shareholder of Long Run,
from WestFire. 

    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.

    ADVISORIES 

    Forward Looking Statements: 

    Certain information regarding Long Run in this news release including
management's assessment of future plans and operations, the expected
increase in capital investment, expected cost benefits through reduced
field operational expenditures and expected property sales and the
effects thereof are forward looking statements. Since forward-looking
statements address future events and conditions, by their very nature
they involve inherent risks and uncertainties including, without
limitation, risks related to the effect of the business combination and
resulting operations, risks associated with oil and gas exploration,
development, exploitation, production, marketing and transportation, loss
of markets, volatility of commodity prices, currency fluctuations,
imprecision of reserve estimates, environmental risks, competition from
other producers, inability to retain drilling rigs and other services,
capital expenditure costs, including drilling, completion and facilities
costs, unexpected decline rates in wells, wells not performing as
expected, delays resulting from or inability to obtain required
regulatory approvals and ability to access sufficient capital from
internal and external sources. As a consequence, actual results may
differ materially from those anticipated in the forward-looking
statements. 

    Forward-looking statements or information are based on a number of
factors and assumptions which have been used to develop such statements
and information but which may prove to be incorrect. Although the Company
believes that the expectations reflected in such forward-looking
statements or information are reasonable, undue reliance should not be
placed on forward-looking statements because the Company can give no
assurance that such expectations will prove to be correct. In addition to
other factors and assumptions which may be identified in this document,
assumptions have been made regarding, among other things: the impact of
increasing competition; the general stability of the economic and
political environment in which the Company operates; the timely receipt
of any required regulatory approvals; the ability of the Company to
obtain financing on acceptable terms; field production rates and decline
rates; the ability to replace and expand oil and natural gas reserves
through acquisition, development and exploration results; the timing and
costs of pipeline, storage and facility construction and expansion and
the ability of the Company to secure adequate product transportation;
future oil and natural gas prices; currency, exchange and interest rates;
the regulatory framework regarding royalties, taxes and environmental
matters in the jurisdictions in which the Company operates; and the
ability of the Company to successfully market its oil and natural gas
products. Readers are cautioned that the foregoing list of factors and
assumptions is not exhaustive. Additional information on these and other
factors that could affect Long Run's operations and financial results are
included in reports on file with Canadian securities regulatory
authorities and may be accessed through the SEDAR website
(www.sedar.com), at Long Run's website (www.longrunexploration.com).
Furthermore, the forward looking statements contained in this news
release are made as at the date of this news release and Long Run does
not undertake any obligation to update publicly or to revise any of the
included forward looking statements, whether as a result of new
information, future events or otherwise, except as may be required by
applicable securities laws. 

    BOES:

    Disclosure provided herein in respect of barrels of oil equivalent (boe)
may be misleading, particularly if used in isolation. A boe conversion
ratio of 6 Mcf: 1 Bbl 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 of 6:1; utilizing a conversion on a
6:1 basis may be misleading as an indication of value. 

    Reserves:

    Reserves disclosed hereto are the combined gross reserves of WestFire and
Guide which are derived from the respective independent reserve
evaluations as of December 31, 2011, are evaluated by Sproule Associates
Limited, in the case of Guide, and GLJ Petroleum Consultants Ltd., in the
case of WestFire.

Contacts:
Long Run Exploration Ltd.
William E. Andrew
Executive Chairman and Chief Executive Officer
(403) 261-6012

Long Run Exploration Ltd.
Dale A. Miller
President
(403) 261-6012

Long Run Exploration Ltd.
Jason Fleury
Vice President, Capital Markets
(403) 261-6012
information@longrunexploration.com
www.longrunexploration.com

Copyright 2012, Market Wire, All rights reserved.

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