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Press release from CNW Group


Monday, November 01, 2010

LEGACY OIL + GAS INC. ANNOUNCES INCREASE TO CAPITAL SPENDING BUDGET AND INCREASED 2010 GUIDANCE19:04 EDT Monday, November 01, 2010CALGARY, Nov. 1 /CNW/ - Legacy Oil + Gas Inc. ("Legacy") (TSX:LEG) is pleased to announce that its board of directors today approved an increase to the Company's 2010 capital budget, from $130 million to $175 million.The increase to the capital expenditures is due to success at a number of the Company's core areas.  At Taylorton and Edenvale, success has led to increased drilling activity, as well as the construction and installation of new production facilities.  The Company has also been able to increase its dominant land position in the Maxhamish Chinkeh and North Dakota Spearfish plays.  In addition, Legacy accelerated the implementation of a number of capital projects from 2011 to late 2010 to capitalize on the Company's success at improving production run times, reducing operating costs and increasing production.  A specific breakdown of the planned capital spending increase is as follows:  drilling, completions and tie-ins - $21.0 million; tangible equipment - $17.0 million; abandonment and reclamation - $4.4 million; and land - $2.6 million.As a result of the increased capital budget, Legacy now expects to drill 95 gross (66.4 net) wells.  This incremental drilling is occurring in the later part of 2010 and is expected to lead to average production for 2010 of 8,900 Boe/d; which has been impacted by an outage at the Quirk Creek natural gas plant.  The facility was recently shut down for minor unscheduled maintenance that could last until the end of November 2010.  The majority of the Turner Valley field's natural gas and NGL production is processed at Quirk Creek. In addition, the Company has increased its exit guidance to more than 13,000 Boe/d, 126 percent growth over the 2009 exit rate.Production guidance stated above does not include any volumes from the recently announced acquisition of Bronco Energy Ltd., which is scheduled to close November 4, 2010, subject to receipt of all necessary securityholder and court approvals.Legacy is preparing to spud the first well of an initial three well Spearfish drilling program and expects to have results before the end of the year, with three follow-up drill-ready locations prepared.  In addition, the Company is currently drilling the first of a three well vertical program in Turner Valley targeting light oil in the Rundle zone and is planning to fracture stimulate the Cardium zone in a vertical well at Turner Valley after obtaining confirmation of the presence of light oil, further adding to the potential of the Cardium being an areally extensive, untapped light oil resource uphole from the main producing Rundle zone.  The results from these programs will provide input for setting Legacy's 2011 capital spending program, expected to be approved in January, 2011.Legacy is a uniquely positioned, technically driven intermediate oil and natural gas company with a proven management team committed to aggressive, cost-effective growth of light oil reserves and production in large hydrocarbon in-place assets and resource plays.  Legacy's common shares trade on the TSX under the symbol LEG.This press release shall not constitute an offer to sell, nor the solicitation of an offer to buy, any securities in the United States, nor shall there be any sale of securities mentioned in this press release in any state in the United States in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.Neither the TSX nor its Regulation Services Provider (as that term is defined in the policies of the TSX) accepts responsibility for the adequacy or accuracy of this RELEASE.FORWARD LOOKING STATEMENTS: This press release contains forward-looking statements. More particularly, this press release contains statements concerning anticipated production levels, planned capital expenditures, planned exploration and development activities, the anticipated timing of the receipt of initial drilling results from Legacy's Spearfish drilling program, the anticipated timing of the closing of the acquisition of Bronco Energy Ltd. and the anticipated timing of the approval of Legacy's 2011 capital spending program.The forward-looking statements contained in this press release are based on certain key expectations and assumptions made by Legacy, including expectations and assumptions concerning the success of future drilling and development activities, the performance of existing wells, the performance of new wells, the successful application of technology, prevailing commodity prices, royalty regimes and exchange rates, the availability of capital, labour and services, the satisfaction of all conditions to the completion of the acquisition of Bronco Energy Ltd. and the timing of completion of corporate planning and approval processes.Although Legacy 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 Legacy 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; 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), commodity price and exchange rate fluctuations, changes to existing laws and regulations and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures. Certain of these risks are set out in more detail in Legacy's Annual Information Form which has been filed on SEDAR and can be accessed at forward-looking statements contained in this press release are made as of the date hereof and Legacy 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: When used in this press release, Boe means a barrel of oil equivalent on the basis of 1 Boe to 6 thousand cubic feet of natural gas. Boe/d means a barrel of oil equivalent per day. Boe's may be misleading, particularly if used in isolation. A Boe conversion ratio of 1 Boe for 6 thousand cubic feet of natural gas is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.%SEDAR: 00023400EFor further information: Trent J. Yanko, P.Eng. President + CEO Legacy Oil + Gas Inc. 3900, Bow Valley Square II      205 - 5th Avenue S.W. Calgary, AB T2P 2V7 Telephone: 403.441.2300 Fax: 403.441.2017Matt Janisch, P.Eng. Vice-President, Finance + CFO Legacy Oil + Gas Inc. 3900, Bow Valley Square II 205 - 5th Avenue S.W. Calgary, AB T2P 2V7 Telephone: 403.441.2300 Fax: 403.441.2017