SecProbe.io

United States securities and exchange commission logo
May 8, 2023
Howard Crosby
Chief Executive Officer
LGX Energy Corp.
6 1/2 N. 2nd Ave., Suite 201
Walla Walla, WA 99362
Re:LGX Energy Corp.
Amendment No. 1 to Offering Statement on Form 1-A
Filed April 20, 2023
File No. 024-12189
Dear Howard Crosby:
            We have reviewed your amended offering statement and have the following
comments.  In some of our comments, we may ask you to provide us with information so we
may better understand your disclosure.
            Please respond to this letter by amending your offering statement and providing the
requested information.  If you do not believe our comments apply to your facts and
circumstances or do not believe an amendment is appropriate, please tell us why in your
response.
            After reviewing any amendment to your offering statement and the information you
provide in response to these comments, we may have additional comments.
Amendment No. 1 to Offering Statement on Form 1-A
Risk Factors
Risks Relating to Our Business and Industry
Our development and exploration projects require substantial capital expenditures ..., page 6
1.Please expand the discussion relating to your intent and the risks, if any, relating to the
sources of funds necessary to finance your future capital expenditures to additionally
provide the total dollar amount of the estimated future development capital required to
convert the probable undeveloped reserves disclosed as of March 31, 2023.  Refer to the
requirements in Rule 4-10(a)(26) of Regulation S-X.

 FirstName LastNameHoward Crosby
 Comapany NameLGX Energy Corp.
 May 8, 2023 Page 2
 FirstName LastName
Howard Crosby
LGX Energy Corp.
May 8, 2023
Page 2
Business
Drilling Activity, page 33
2.The value you have disclosed for net productive wells appears to be based on applying the
net revenue interest percentage, and not the working interest percentage, to the
corresponding gross value.  Please revise your disclosure, as necessary, to correct the
figure for the number of net productive wells drilling during the year ended April 30,
2023.  Refer to the guidance for the disclosure of net wells in Item 1205(a)(2) and the
definition of a net well or a net acre in Item 1208(c)(2) of Regulation S-K.  This comment
also applies to the disclosure of the figures for the number of net productive wells
presented on page 34 and net acreage amounts on page 36.
3.Please expand your disclosure to separately provide information, if material, relating to (i)
the number of gross and net productive and dry development and exploratory wells
drilled, (ii) the total number of gross and net productive wells, and (iii) the total gross and
net developed and undeveloped acres associated with your royalty and/or overriding
royalty interests.  For the purposes of disclosing net royalty wells and acres in which you
do not hold a working interest, consider the net revenue interest as a substitute for the
working interest.  Refer to Items 1205 and 1208 of Regulation S-K.
Natural Gas and Oil Reserves
Reserve Estimates, page 34
4.We note you disclose estimates of proved reserves as of March 31, 2023.  Please expand
your disclosure to additionally provide the information required by Items 1202(a)(1) and
(a)(2) regarding the net quantities of proved reserves as of your most recent fiscal year
end, e.g. as of April 30, 2022.
5.Please expand the disclosure relating to your probable reserves and cash flows to include
cautionary language clarifying that your estimates have not been adjusted for uncertainty,
and therefore may not be comparable and should not be summed with estimates of proved
reserves.  Please refer to Item 1202(a)(5) of Regulation S-K and to question 105.01 in the
Compliance and Disclosure Interpretations (“C&DIs”) regarding Oil and Gas Rules.
6.We note the figures for your estimated net present value discounted at 10% (“PV-10”) and
the standardized measure are identical; however, your discussion explains that these two
measures differ only in that that the standardized measure reflects estimated future income
taxes.  Please revise your disclosure as necessary to resolve this apparent inconsistency.
7.Please expand the discussion accompanying the presentation of your PV-10 and
standardized measure to clarify, if true, that future cash flows take into account the
estimated abandonment costs for your proved and probable properties.  Refer to FASB
ASC 932-235-50-36.

 FirstName LastNameHoward Crosby
 Comapany NameLGX Energy Corp.
 May 8, 2023 Page 3
 FirstName LastNameHoward Crosby
LGX Energy Corp.
May 8, 2023
Page 3
If the abandonment costs, including such costs related to your probable undeveloped
locations, have not been included, please explain to us your rationale for excluding these
costs from your calculations.
Productive Wells, page 34
8.We note disclosure on page 34 of seven total gross productive wells.  However, the table
on page 32 identifies six gross producing wells, one gross not completed well and one
gross well shut-in for repairs.  Please refer to the definition of a productive well in Item
1208(c)(3) of Regulation S-K and revise your disclosure, if you determine that the shut-in
well meets the requirements for disclosure as a productive well.
Volume, Prices and Production Costs, page 34
9.Please modify the disclosure of your production to provide the net revenue interest share
of your sales volumes by final product sold.  Refer to Instruction 1 to Item 1204 of
Regulation S-K.
10.Please expand your disclosure to provide the average production cost, not including ad
valorem and severance taxes, per unit of production.  Refer to Item 1204(b)(2) of
Regulation S-K.
Reserve Estimation Process, Controls and Technologies, page 35
11.We note your discussion indicates the estimates of reserves and net cash flows, including
estimates of PV-10 and the standardized measure shown on page 35, were prepared by
John V. Miller, the President of Adler Energy L.C.  However, the subsequent discussion
refers to year-end reserve reports prepared by reserve engineering firms.  Please revise
your disclosure as necessary to resolve this apparent inconsistency.

If your year-end estimates were prepared by an independent third party engineering firm,
unrelated to John V. Miller, please obtain and file a copy of the reserves report and
consent of the third party as exhibits to Form 1-A, including such reports relating to
estimates of reserves as of dates other than March 31, 2023.  Refer to Item 1202(a)(8) of
Regulation S-K and Item 17.11 of Part III of Form 1-A.
Developed and Undeveloped Acreage, page 36
12.Please revise your disclosure to resolve the apparent inconsistency in the figures relating
to the net developed and undeveloped acreage amounts presented on page 36 and the
combined total net acreage amount presented on page 32.
Proved Undeveloped Reserves, page 36
13.We note disclosure that there were no proved undeveloped reserves at March 31, 2023.
However, Item 1203(a) of Regulation S-K requires that you disclose information relating
to the total quantities of proved undeveloped reserves as of your most recent fiscal year

 FirstName LastNameHoward Crosby
 Comapany NameLGX Energy Corp.
 May 8, 2023 Page 4
 FirstName LastName
Howard Crosby
LGX Energy Corp.
May 8, 2023
Page 4
end, e.g. as of April 30, 2022.  If you did have proved undeveloped reserves as of April
30, 2022, please expand your disclosure to include the information required in Items
1203(a), 1203(b) and 1203(c) of Regulation S-K.
Notes to the Consolidated Financial Statements, page F-6
14.Please tell us how you considered the requirement to disclose the information, as
applicable, in FASB ASC 932-235-50-3 through 50-36 for the fiscal year ended April 30,
2022, to comply with Item 302(b) of Regulation S-K, applicable via Part 1 Item 11(h) of
Form S-1 and Parts II(a)(1)(ii) and F/S(c)(1) of Form 1-A.
            You may contact John Hodgin, Petroleum Engineer, at (202) 551-3699 or Brad Skinner,
Office Chief, at (202) 551-3489 if you have questions regarding engineering comments and
related matters.  Please contact Cheryl Brown, Staff Attorney, at (202) 551-3905 or Mitchell
Austin, Acting Legal Branch Chief, at (202) 551-3574 with any other questions.
Sincerely,
Division of Corporation Finance
Office of Energy & Transportation
cc:       Thomas J. Beener, Esq.