Apr. 19, 2011 (Canada NewsWire Group) --
CALGARY, April 19 /CNW/ - Yangarra Resources Ltd. ("Yangarra" or the "Company") (TSXV:YGR) is pleased to announce its financial and operating results for the three and twelve months ended December 31, 2010.
Highlights and accomplishments in 2010 included:
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- Market capitalization increase to $60.6 million from $7.5 million
- Current market capitalization is over $70 million
- Proved plus Probable reserves, net present value discounted at
10% ("NPV 10") at December 31, 2010 was $80.7 million, an
increase of 113% compared from the NPV 10 amount at year-end 2009
of $37.9 million
- Net Asset Value of $79.9 million as at December 31, 2010,
calculated to be $1.00 per basic common share.
- Increase of 268% in oil and natural gas liquids for Proved plus
Probable reserves to 1,805 mbbl
- Purchased a 15% gross sliding scale over-ride on 11 sections in
the Willesden Green area for $1.3 million
- Completed equity raises in March, May, June and October for total
proceeds of $23 million, with each equity raise priced at a
premium to the previous financing.
- Secured a drilling rig for the balance of 2010, through to spring
breakup 2011 and exercised an option to retain the drilling rig
through spring breakup 2012.
- Completed an asset acquisition in the Ferrier/Willesden Green
area of Alberta for $4.0 million
- The asset included 31 sections of land (12.3 net), 10 gross
producing wells (4.25 net) and 9 gross standing wells (4.8
net) and production of approximately 50 boe/d, 90% weighted
to oil.
- Entered into a credit facility agreement with Alberta Treasury
Branches in November 2010, current facility has been increased
$14,500,000.
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Subsequent to the year ended December 31, 2010 the Company completed the following:
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- Established a capital budget for 2011 of $50 million which
includes the drilling of 31 gross (13.7 net wells)
- Significantly increased the Company's future drilling locations
to 123 gross (70.2 net) locations in the Glauconite, Cardium and
multiple other zones
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Year End Disclosure
The Company's financial statements, notes to the financial statements and management's discussion and analysis have been filed on SEDAR (www.sedar.com) and are available on the Company's website (www.yangarra.ca). An Annual Information Form, including the Company's reserves and resource data for the period ended December 31, 2010 as evaluated by AJM Petroleum Consultants and other oil and natural gas information prepared in accordance with National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities, will be filed on SEDAR prior to the end of the month.
The Company's Annual General Meeting of Shareholders is scheduled for 10:00 AM on Thursday May 26, 2011 in the Plaza Room - Metropolitan Centre, 333-4th Avenue SW, Calgary, AB.
Financial and Operations Summary
The following tables summarize the Company's financial and operating statistics for the fourth quarter and the year ended December 31, 2010.
Financial Summary
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Three months ended Years ended
December 31 December 31
2010 2009 2010 2009
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Statement of Operations
and Deficit
Net (loss) income for
the period $(1,195,890) $(1,797,141) $(4,047,125) $(7,268,020)
Net (loss) income per
share - basic $ (0.02) $ (0.02) $ (0.07) $ (0.09)
Net (loss) income per
share - fully
diluted $ (0.01) $ (0.02) $ (0.07) $ (0.09)
Weighted average
number of shares
- basic 73,869,598 83,809,055 57,581,832 78,313,321
Weighted average
number of shares
- fully diluted 80,497,022 83,809,055 57,581,832 78,313,321
Statement of Cash
Flows
Funds flow from
operations $ 1,567,756 $ (640,581) $ 2,959,286 $ 106,856
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December 31 December 31
2010 2009
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Balance Sheet
Property and equipment $61,475,178 $38,830,516
Total assets $65,945,647 $39,641,449
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For the Years ended December 31
2010 2009 2008
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Statement of Operations and
Deficit
Petroleum & natural gas sales $ 6,534,377 $ 3,579,738 $ 8,642,336
Net (loss) income for the period $(4,047,125) $(7,268,020) $(1,825,080)
Net (loss) income per share
- basic $ (0.07) $ (0.46) $ (0.15)
Weighted average number of shares
- basic 57,581,832 15,662,664 13,499,997
Statement of Cash Flows
Funds flow from operations $ 2,959,286 $ 106,856 $ 3,820,278
Balance Sheet
Property and equipment $61,475,178 $38,830,516 $41,922,138
Total assets $65,945,647 $39,641,449 $44,081,309
Preferred shares $ 1,000,000 $ 1,000,000 $ -
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Capital Expenditures
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Three months ended Years ended
December 31 December 31
2010 2009 2010 2009
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Land and lease
rentals $ 3,827,343 $ 102,562 $ 5,449,298 $ 237,407
Drilling and
completion 10,593,594 262,256 16,777,716 854,518
Geological and
geophysical 190,640 42,801 505,583 74,615
Equipment 2,148,426 251,496 4,272,875 448,421
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$16,760,003 $ 659,115 $27,005,472 $ 1,614,961
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Operating / Production Summary
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Three months ended Years ended
December 31 December 31
2010 2009 2010 2009
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Daily production volumes
Natural gas (mcf/d) 2,564 1,362 2,151 1,583
Oil (bbl/d) 260 11 116 12
NGL's (bbl/d) 54 12 28 15
Royalty income (boe/d) 19 - 6 -
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Combined (boe/d 6:1) 761 249 509 291
Product pricing
Oil ($/bbl) $ 80.54 $ 69.07 $ 74.70 $ 65.56
NGL ($/bbl) $ 62.30 $ 50.37 $ 56.04 $ 38.03
Gas ($/mcf) $ 3.93 $ 3.69 $ 3.92 $ 3.88
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Combined ($/boe) $ 40.94 $ 32.91 $ 35.55 $ 33.74
Revenue
Petroleum & natural
gas sales - Gross $ 2,864,802 $ 754,728 $ 6,534,377 $ 3,579,738
Royalty income $ 93,882 $ - $ 123,106 $ -
Royalty expense $ (128,984) $ (87,683) $ (165,309) $ (195,223)
Royalty recovery $ 114,092 $ 289,728
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Petroleum & natural
gas sales - Net $ 2,829,700 $ 781,137 $ 6,492,174 $ 3,674,243
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Netback Summary
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Three months ended Years ended
December 31 December 31
$/boe 2010 2009 2010 2009
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Revenues $ 40.94 $ 32.91 $ 35.55 $ 33.74
Royalty income 1.34 - 0.67 -
Royalty expense (1.84) (3.82) (0.90) (1.84)
Production costs (10.56) (41.63) (9.91) (18.80)
Transportation costs (1.04) (2.39) (1.29) (1.30)
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Netback $ 28.83 $ (14.93) $ 24.12 $ 11.80
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Operations Update
Post spring break-up in the Willesden Green/Ferrier area the Company will continue its 2011 capital program. Seven gross (2.2 net) wells that were drilled during the first quarter will be tied-in and be brought on production. The Company estimates that approximately 900 boe/d of flush production volumes from the first quarter drilling program are behind pipe, with production on these wells expected to commence following spring breakup. The Company has 22 gross (10 net) wells planned for the remainder of the year. Therefore, the Company has an additional 29 gross (12 net) wells that should be added to the production base during 2011, which should allow the Company to meet its previously announced exit rate of 2,500 boe/d.
2011 Guidance
In February 2011, Yangarra provided guidance of an exit rate of 2,500 boe/d for 2011, for which additional metrics and assumptions are summarized below:
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Production (boe/d)
Annual Average 1,500 - 2,000
Exit 2,500
Cash flow from operations ($millions) 20 - 30
Capital expenditures ($millions) 50
Operating netback $35.00 - $40.00/boe
Pricing Assumptions (annual average)
Crude oil - WTI $90.00/bbl
Natural Gas Liquids $67.92/bbl
Natural Gas $4.00/mcf
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Natural gas has been converted to a barrel of oil equivalent (Boe) using 6,000 cubic feet (6 Mcf) of natural gas equal to one barrel of oil (6:1), unless otherwise stated. The Boe conversion ratio of 6 Mcf to 1 Bbl is based on an energy equivalency conversion method and does not represent a value equivalency; therefore Boe's may be misleading if used in isolation. References to natural gas liquids ("NGLs") in this news release include condensate, propane, butane and ethane and one barrel of NGLs is considered to be equivalent to one barrel of crude oil equivalent (Boe). One ("BCF") equals one billion cubic feet of natural gas. One ("Mmcf") equals one million cubic feet of natural gas. Operating netbacks are calculated as revenue from all products less operating costs.
Reserve Definitions:
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(a) "Proved" reserves are those reserves that can be estimated with a
high degree of certainty to be recoverable. It is likely that the
actual remaining quantities recovered will exceed the estimated
proved reserves.
(b) "Probable" reserves are those additional reserves that are less
certain to be recovered than proved reserves. It is equally likely
that the actual remaining quantities recovered will be greater or
less than the sum of the estimated proved plus probable reserves.
(c) "Developed" reserves are those reserves that are expected to be
recovered from existing wells and installed facilities or, if
facilities have not been installed, that would involve a low
expenditure (e.g. when compared to the cost of drilling a well) to
put the reserves on production.
(d) "Developed Producing" reserves are those reserves that are expected
to be recovered from completion intervals open at the time of the
estimate. These reserves may be currently producing or, if shut-in,
they must have previously been on production, and the date of
resumption of production must be known with reasonable certainty.
(e) "Developed Non-Producing" reserves are those reserves that either
have not been on production, or have previously been on production,
but are shut in, and the date of resumption of production is unknown.
(f) "Undeveloped" reserves are those reserves expected to be recovered
from know accumulations where a significant expenditure (for example,
when compared to the cost of drilling a well) is required to render
them capable of production. They must fully meet the requirements of
the reserves classification (proved, probable, possible) to which
they are assigned.
(g) The Net Present Value (NPV) is based on AJM Forecast Pricing and
costs. The estimated NPV does not necessarily represent the fair
market value of our reserves. There is no assurance that forecast
prices and costs assumed in the AJM evaluations will be attained, and
variances could be material.
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Forward looking information
Certain information regarding Yangarra set forth in this news release, including management's assessment of future plans, operations and operational results may constitute forward-looking statements under applicable securities law and necessarily involve risks associated with oil and gas exploration, production, marketing and transportation such as loss of market, volatility of prices, currency fluctuations, imprecision of reserves estimates, environmental risks, competition from other producers and ability to access sufficient capital from internal and external sources. As a consequence, actual results may differ materially from those anticipated in the forward-looking statements.
All reference to $ (funds) are in Canadian dollars.
Neither the TSX Venture Exchange nor its Regulation Service Provider (as that term is defined in the Policies of the TSX Venture Exchange) accepts responsibility for the adequacy and accuracy of this release.
James Glessing, Chief Financial Officer, at (403) 262-9558