Alpharetta, GA, May 21, 2015 (GLOBE NEWSWIRE) -- Legend Oil and Gas, Ltd. ("Legend" or the "Company") is pleased to announce the filing of our March 31, 2015 quarterly financial report.
The Company's quarterly report indicates many items which reflect the continued corporate restructuring that launched in mid-2014, as well as acquisition related items previously disclosed in Legend's Form 8-Ks.
Warren Binderman, Legend's President and Chief Financial Officer, notes that we had a significant loss during this quarter of approximately $8.9 million. However, he states, "when you break down the loss into its salient components, we incurred the following noncash items:
- Noncash charge of approximately $6.6 million for the mark to market value of embedded derivatives liabilities that resulted from the value of Hillair's conversion of preferred stock to common shares on May 2015,
- Loss of approximately $892,000 on the sale of oil and gas properties resulting from the sales of our Piqua and McCune properties,
- Impairment of our Van Pelt property of approximately $407,000, to a net realizable value of $50,000, and
- One time type legal and accounting transaction fees approximating $100,000, as a result of our acquisition of Black Diamond Energy/Maxxon.
These charges to Legend, which total approximately $8 million out of our $8.9 million net loss, were to a large part, one-time acquisition related costs, or GAAP related computation requirements.
Effective April 3, 2015, we closed on the acquisition of Black Diamond/Maxxon Energy. This acquisition brings us deeper into the oil services platform, with a wholly owned subsidiary that performs last mile hauling of oil in North Dakota (the "Bakken"). We expect that the second quarter will paint a much different picture of the consolidated companies, including our consolidated balance sheet, statement of operations and cash flows."
Andrew Reckles, Chairman and Chief Executive Officer states that "This quarter was not what I had hoped to see from our Oil and Gas Operations. Unfortunately our foray into Oklahoma; the Van Pelt lease, did not yield results of any material economic success. We as a Board felt it prudent to cease continued capital expense on this field and write the property down to what we feel is an appropriate recoverable land value. We wish it were different, but the facts are, after drilling several new wells and re-working several others, the production we have seen does not merit keeping the lease operational nor does it merit doing anything other than shutting the property in during the second quarter. On a much brighter note, our acquisition of Maxxon Energy is transitioning nicely along all fronts; technology integration, management integration, financial back office integration and other corporate matters. Maxxon has performed well since we closed the acquisition, with, unaudited revenue since closing of approximately $1.3mm. We continue to grow the fleet of trucks and trailers there, and we, as a company look forward to reporting our first consolidated quarter of operations in August of this year."
About Legend Oil and Gas Ltd.
Legend Oil and Gas Ltd. is both a managed risk, oil and gas exploration/exploitation, development and production company with activities currently focused on leases in southeastern Kansas, as well as a last mile hauler of oil in the Bakken (North Dakota).
Forward-looking Statements:
This press release contains forward-looking statements concerning future events and the Company's growth and business strategy. Words such as "expects," "will," "intends," "plans," "believes," "anticipates," "hopes," "estimates," and variations on such words and similar expressions are intended to identify forward-looking statements. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. Forward looking statements in this press release include statements about our drilling development program. These statements involve known and unknown risks and are based upon a number of assumptions and estimates that are inherently subject to significant uncertainties and contingencies, many of which are beyond the control of the Company. Actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, the timing and results of our 2014 drilling and development plan. Additional factors include increased expenses or unanticipated difficulties in drilling wells, actual production being less than our development tests, changes in the Company's business; competitive factors in the market(s) in which the Company operates; risks associated with oil and gas operations in the United States; and other factors listed from time to time in the Company's filings with the Securities and Exchange Commission including the Company's Annual Report on Form 10-K for the year ended December 31, 2013 and Form 10Q for the quarter ended March 31, 2014. The Company expressly disclaims any obligations or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company's expectations with respect thereto or any change in events, conditions or circumstances on which any statement is based.
Cautionary Note to U.S. Investors -- The United States Securities and Exchange Commission permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. We use certain terms in this press release, such as "probable," "possible," "recoverable" or "potential" reserves among others, that the SEC's guidelines strictly prohibit us from including in filings with the SEC. Investors are urged to consider closely the disclosure in our filings with the SEC.