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Press release from CNW Group

Longview Announces Reduced 2012 Capital Spending in Response to Lower Oil Prices to Maintain Balance Sheet Strength

Tuesday, June 19, 2012

Longview Announces Reduced 2012 Capital Spending in Response to Lower Oil Prices to Maintain Balance Sheet Strength17:43 EDT Tuesday, June 19, 2012(TSX: LNV)CALGARY, June 19, 2012 /CNW/ - Longview's Board of Directors has approved a $27 million reduction in our 2012 capital expenditure program to $46 million and revised operational guidance for the year ending December 31, 2012. These actions are being taken in response to the current weakness in global oil markets and the increase in differentials between posted Canadian oil prices and the WTI futures price caused by a lack of pipeline take away capacity for Canadian crude oil.  The reduction in capital expenditures is consistent with Longview's strategy of maintaining financial discipline and a strong balance sheet in response to weaker than anticipated commodity prices.The current monthly dividend of $0.05 per share will remain unchanged subject to review and approval by the Board of Directors each month.Guidance and Capital BudgetThe following table summarizes the revised operational guidance for Longview for the year ending December 31, 2012:    Average Production  6,400 boe/d    % oil & liquids  77%    Exit production rate  6,400 boe/d    Royalty rate  19% to 20%    Operating expenses  $17.50/boe     Capital expenditures  $46 millionBased on the revised guidance, funds from operations for calendar 2012 is estimated at $61 million using the following commodity price assumptions:      WTI oil price (US$/bbl)      $90.98   Canadian differential ($/bbl)    $10.33   Cdn/U.S. exchange rate     $0.98   Nymex natural gas price (US$/mmbtu)  $2.47   AECO ($/mcf)      $2.08         Longview's commodity price hedging positions are included in the funds from operations estimate.Production is anticipated to be negatively impacted during the second quarter of 2012 due to spring breakup conditions when road bans and lease access restrictions prevent regular well maintenance.  In addition production will be impacted by facilities maintenance at several locations including a scheduled third party facility turnaround outage of approximately three weeks at our Nevis property.The Company will continue to focus its capital spending on oil weighted projects.  The 2012 capital expenditure program consists of the following:AreaTargetFormationTypeofWell# of Wells    Gross     Net S.E. SaskatchewanMidale/Frobisher     Hz 10 8.8    Ferrier/Pembina, ABCardiumHz 5 1.1 Eyehill/Lashburn, SK    Sparky/WasecaVt 5 4.2 Nevis, ABWabamunHz 4 4.0 Westerose, ABBelly RiverHz 1 1.0 Chip Lake, ABRock CreekHz 1 0.6 OtherVariousVt 1 1.0 Total   27 20.7         In Alberta, we have deferred the drilling of 7 gross (6.8 net) higher cost horizontal wells that require multi-stage fracing, 1 gross (1 net) water injection well and infrastructure required to bring this production on-stream.We added 4 gross (3.8 net) wells in SE Saskatchewan that are lower cost and are anticipated to have higher return economics. These wells will target the Midale and Frobisher formations where our geological and engineering analysis has identified additional opportunities in our large land holdings in SE Saskatchewan.Longview will continue to high grade our inventory of drilling locations and invest in opportunities that we believe provide strong economics during low commodity price cycles.2012 Hedging UpdateLongview's hedging program is designed to stabilize cash flow and enhance our ability to fund dividend payments and capital expenditures during periods of commodity price volatility.  The following table summarizes our 2012 crude oil hedges:      Period Contract Bbls/d CDN$/bbl             Calendar 2012 Fixed 1,000 $97.10/bbl   Calendar 2012 Collar 1,000 Floor $90.00/bbl Ceiling $102.25/bbl          Forward-Looking StatementsCertain information regarding Longview set forth in this press release, including management's assessment of the Corporation's future plans and operations, contains forward-looking statements that involve substantial known and unknown risks and uncertainties.  The use of any of the words "anticipate", "continue", "estimate", "expect", "may", "will", "project", "should", "believe" and similar expressions are intended to identify forward looking statements. Such statements represent Longview's internal projections, estimates or beliefs concerning, among other things, an outlook on the estimated amounts and timing of capital expenditures or other expectations, beliefs, plans, objectives, assumptions, intentions or statements about future events or performance. These statements are only predictions and actual events or results may differ materially. Although Longview believes that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee future results, levels of activity, performance or achievement since such expectations are inherently subject to significant business, economic, competitive, political and social uncertainties and contingencies. Many factors could cause Longview's actual results to differ materially from those expressed or implied in any forward-looking statements made by, or on behalf of, Longview. In particular, forward-looking statements included in this press release include, but are not limited to, statements with respect to targeted average production and 2012 exit production; expected operating expenses for the year ended December 31, 2012; future royalty rates; projected capital expenditures for the year ended December 31, 2012; focus of capital budget; the focus of and timing of capital expenditures; drilling plans; timing of drilling of rigs; and crude oil and natural gas production levels. In addition, statements relating to "reserves" or "resources" are deemed to be forward looking statements, as they involve the implied assessment, based on certain estimates and assumptions, that the resources and reserves described can be profitably produced in the future.These forward-looking statements are subject to numerous risks and uncertainties, certain of which are beyond the Corporation's control, including the impact of general economic conditions; volatility in market prices for crude oil and natural gas; industry conditions; volatility of commodity prices; currency fluctuation; imprecision of reserve estimates; liabilities inherent in crude oil and natural gas operations; environmental risks; incorrect assessments of the value of acquisitions and exploration and development programs; competition from other producers; the lack of availability of qualified personnel or management; changes in income tax laws or changes in tax laws and incentive programs relating to the oil and gas industry; hazards such as fire, explosion, blowouts, cratering, and spills, each of which could result in substantial damage to wells, production facilities, other property and the environment or in personal injury; stock market volatility; ability to access sufficient capital from internal and external sources and the other risks considered under "Risk Factors" in Longview's annual information form for the year ended December 31, 2011 which is available on respect to forward-looking statements contained in this press release, Longview has made assumptions regarding: current commodity prices and royalty regimes; availability of skilled labour; timing and amount of capital expenditures; future exchange rates; the price of oil and natural gas; the impact of increasing competition; conditions in general economic and financial markets; availability of drilling and related equipment; effects of regulation by governmental agencies; royalty rates and future operating costs.Management has included the above summary of assumptions and risks related to forward-looking information provided in this press release in order to provide shareholders with a more complete perspective on Longview's future operations and such information may not be appropriate for other purposes. Longview's actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits that the Corporation will derive there from. Readers are cautioned that the foregoing lists of factors are not exhaustive. These forward-looking statements are made as of the date of this press release and the Corporation disclaims any intent or obligation to update publicly any forward-looking statements, whether as a result of new information, future events or results or otherwise, other than as required by applicable securities laws."boes" may be misleading, particularly if used in isolation. A boe conversion ratio of six thousand cubic feet of natural gas to one barrel of oil equivalent (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.  For further information: Investor RelationsToll free: 1-855-813-0313LONGVIEW OIL CORP. 700, 400 -3rd Avenue SW Calgary, Alberta T2P 4H2 Phone:  (403) 718-8000 Fax:      (403) 718-8300 Web Site: E-mail: