Business
Yangarra Announces a 47 Section Cardium Farm-In Agreement in the Willesden Green Area
CALGARY , Sept. 3, 2013 /CNW/ - Yangarra Resources Ltd. (" Yangarra " or the " Compa...
About this update from Yangarra Resources Ltd.
[{"type":"text","content":"\n\n\nCALGARY, Sept. 3, 2013 /CNW/ - Yangarra Resources Ltd. (\"Yangarra\" or the \"Company\") (TSXV:YGR) announces that it has entered into a 47 section Cardium\n Farm-In Agreement in the Willesden Green Area with an industry major\n (\"Farmor\").\n\n\nThe Farm-In Agreement\n\n\nThe Farm-In Agreement (\"Farm-in\") covers 47 gross (29 net) sections in\n the Willesden Green area that offset existing Yangarra land holdings.\n Yangarra has identified 61 gross (37 net) Cardium locations with\n similar geology to the Company's existing Cardium wells.\n\n\nYangarra will spend 100% of the capital costs on the earning wells to\n earn a 75% working interest in the section and will earn one section\n for each earning well drilled.\n\n\nYangarra has committed to drill 7 net earning wells over a two year\n period with a rolling-option thereafter.  The deal is structured to\n allow drilling on a two well pad basis, with the first well on the pad\n designated as the earning well with the second well drilled on a\n working interest basis.   Drilling and completion costs are\n significantly reduced by drilling on a two well pad-site.\n\n\nThe Company does not expect any infrastructure issues as the lands are\n either adjacent to existing Yangarra facilities or Farmor facilities.\n\n\nFunding\n\n\nThe Company also announces that it has signed a commitment letter (the\n \"Commitment Letter\") with Alberta Treasury Branches (\"ATB\") for a\n subordinated term loan facility of up to $20 million.   The key\n elements of the subordinated term loan include a two year committed\n term (subject to an extension for an additional year upon mutual\n consent), availability in three tranches at a floating rate currently\n less than 10% per annum, full payment of the principal on maturity with\n reserve-based financial covenants.  The Commitment Letter is subject to\n standard documentation and closing conditions that the Company expects\n to satisfy by September 30, 2013.  The Commitment Letter complements\n the Company's existing $45 million senior credit facility with ATB.\n\n\n2013 Capital Budget\n\n\nWith the Farm-in transaction the Company expects to drill an additional\n four wells in 2013, which will increase the Capital Budget to $35\n million, with cash flow expected to increase to $25 - $30 million and\n forecast ...