Press release from Marketwire
Yoho Resources Inc. Announces Successful Drilling at Kaybob, Alberta and at Nig, British Columbia
Tuesday, February 14, 2012
Yoho Resources Inc. Announces Successful Drilling at Kaybob, Alberta and at Nig, British Columbia09:00 EST Tuesday, February 14, 2012CALGARY, ALBERTA--(Marketwire - Feb. 14, 2012) - Yoho Resources Inc. ("Yoho" or the "Company") (TSX VENTURE:YO) is pleased to provide an update of drilling and completion operations at Kaybob, Alberta and at Nig, British Columbia.Kaybob, AlbertaAt Kaybob, Yoho operated the drilling and completion of the Company's fourth horizontal well (50% working interest) targeting the Devonian Duvernay shale formation under an existing joint venture with Celtic Exploration Ltd. ("Celtic"). The well located at 13-22-62-21 W5 was drilled to a measured depth of 4,861 metres. The horizontal lateral was 1,460 metres in length within the Duvernay shale formation. The well was drilled and cased over 39 days at a cost of approximately $4.9 million. Well completion operations commenced in January 2012 using a "perf and plug" completion method. The well was fracture stimulated in 10 stages with 40 perf clusters using 1,630 tonnes of sand and 105,150 barrels (16,717 m3) of slick water. The total estimated cost of the completion is approximately $8.6 million. As a result, the total cost to drill, complete and test the well is estimated to be approximately $13.5 million. Future well costs are anticipated to be reduced substantially under full development and multi-well pad operations.During clean-up, the well flowed at rates of up to 6.8 MMcf per day up 7" casing after which the well was shut-in to run production tubing. The well was then tested up tubing at various gas rates between 6.0 to 7.7 MMcf per day at flowing tubing pressures of 10 to 15 MPa (1,450 to 2,174 psig). At the end of the 11 day flow period, in addition to the natural gas production, the well was producing field condensate at a rate of 658 barrels per day (109 barrels per MMcf of raw gas). The well will be shut-in for approximately two months to obtain pressure information and to allow the completion water to absorb into the formation. At the end of the flow period, approximately 24,230 barrels (3,852 m3) (23%) of load water had been recovered. As part of Yoho's fiscal 2012 resource delineation plans, the 13-22 well was drilled over 10 miles to the north-west of the Company's existing producing Duvernay horizontal wells. The results from this well significantly extend the tested areal extent of Duvernay potential over Yoho's lands.Also in the Kaybob area, Yoho is participating in the drilling of a fifth horizontal well targeting the Devonian Duvernay shale formation at a one-third working interest. The well, located at 13-02-60-20 W5, is currently drilling and is expected to reach total depth by the end of February 2012. Well completion operations are anticipated to commence during March 2012 with a production test to follow completion of the well.Nig, British Columbia In November 2011, Yoho, with partner Progress Energy Resources Corp. (each with a 50% working interest), drilled the b-16-H/94-H-4 horizontal gas well targeting the Upper Montney formation. The well was drilled in the middle part of Yoho's land block. In December 2011, the well was completed in the horizontal section with a 6 stage energized slickwater fracture stimulation using a perf and plug completion method. The well was tested up tubing over 4 days at a rate of 3.5 MMcf per day with free condensate yields of approximately 42 barrels per day. The well is currently shut-in for pressure build-up. At the end of the production test, approximately 4,760 barrels (757 m3) (17.6%) of completion water had been recovered. The Company estimates that liquids production with the natural gas is expected to be in excess of 25 barrels per MMcf, with approximately 50% of the liquids being condensate. Yoho plans to tie-in the well and anticipates having it on production during March 2012.In December, 2011 Yoho operated the drilling and completion of the Company's fourth horizontal well (50% working interest) at Nig. This well at c-29-A/94-H-4 was drilled to a total measured depth of 2,830 metres with a horizontal lateral section of 940 metres in length within the Lower Montney formation. Completion operations on this well are currently ongoing.OutlookTo date, Yoho has completed approximately 60% of the Company's planned fiscal 2012 capital program of $35 to $40 million. This capital program has been specifically designed to delineate the reserve potential and values on both of the Company's liquids rich resource plays at Nig in the Montney and at Kaybob in the Duvernay. With the continued volatility in commodity prices, the activity levels for fiscal 2012 will be monitored closely, particularly in light of current low natural gas pricing. The drilling program for fiscal 2012 is expected to set up fiscal 2013 as the first year of full development at both Kaybob and Nig.Yoho Resources Inc. is a Calgary based junior oil and natural gas company with operations focusing in west central Alberta, the Peace River Arch of Alberta and northeast British Columbia. The common shares of Yoho are listed on the TSX Venture Exchange under the symbol "YO". Cautionary Statements Forward-looking information and statementsThis news release contains certain forward-looking information and statements within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "may", "will", "project", "should", "believe", "schedule", "plans", "intends" and similar expressions are intended to identify forward-looking information or statements. In particular, but without limiting the forgoing, this news release contains forward-looking information and statements pertaining to the following: the estimated volumes associated with certain of Yoho's wells; Yoho's and its partner's development plans on certain of their properties; estimates of timing for tie-in of certain gas wells; estimated costs associated with completing certain wells; estimated reductions in costs on drilling and completing certain future wells; future capital spending levels and focus areas for fiscal 2012 and 2013; estimated natural gas liquids yields on a go-forward basis on certain wells; and completion and testing operations on certain of its gas wells.In addition, forward-looking statements or information are based on a number of material factors, expectations or assumptions of Yoho which have been used to develop such statements and information but which may prove to be incorrect. Although Yoho believes that the expectations reflected in such forward-looking statements or information are reasonable, undue reliance should not be placed on forward-looking statements because Yoho can give no assurance that such expectations will prove to be correct. In addition to other factors and assumptions which may be identified herein, assumptions have been made regarding, among other things: the information provided to Yoho by the operator is accurate and correct; the impact of increasing competition; the general stability of the economic and political environment in which Yoho operates; the timely receipt of any required regulatory approvals; the ability of Yoho to obtain qualified staff, equipment and services in a timely and cost efficient manner; drilling results; the ability of the operator of the projects in which Yoho has an interest in to operate the field in a safe, efficient and effective manner; the ability of Yoho to obtain financing on acceptable terms; field production rates and decline rates; the ability to replace and expand oil and natural gas reserves through acquisition, development and exploration; the timing and cost of pipeline, storage and facility construction and expansion, the ability of Yoho and its partners to realize costs savings under multi-well pad operation scenarios and the ability of Yoho and its partners to secure adequate product transportation; future commodity prices; currency, exchange and interest rates; regulatory framework regarding royalties, taxes and environmental matters in the jurisdictions in which Yoho operates; and the ability of Yoho to successfully market its oil and natural gas products.The forward-looking information and statements included in this news release are not guarantees of future performance and should not be unduly relied upon. Such information and statements; including the assumptions made in respect thereof, involve known and unknown risks, uncertainties and other factors that may cause actual results or events to defer materially from those anticipated in such forward-looking information or statements including, without limitation: changes in commodity prices; changes in the demand for or supply of Yoho's products; unanticipated operating results, pressure declines or production declines; changes in the mix of commodity type production associated with Yoho's wells; changes in tax or environmental laws, royalty rates or other regulatory matters; changes in development plans of Yoho or by third party operators of Yoho's properties, increased debt levels or debt service requirements; inaccurate estimation of Yoho's oil and gas reserve and resource volumes; limited, unfavourable or a lack of access to capital markets; increased costs; a lack of inadequate insurance coverage; the impact of competitors; and certain other risks detailed from time-to-time in Yoho's public disclosure documents, (including, without limitation, those risks identified in this news release and Yoho's Annual Information Form).The forward-looking information and statements contained in this news release speak only as of the date of this news release, and Yoho does not assume any obligation to publicly update or revise any of the included forward-looking statements or information, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.Disclosure of Well-Flow Test ResultsThe Company cautions that the test results described in the press release are not necessarily indicative of long-term performance or ultimate recovery. Additionally, as well test interpretations have not been completed on the wells described in this press release, the results and data described in this press release should be considered preliminary until such interpretations have been completed.BOE equivalentBarrel of oil equivalents or BOEs may be misleading, particularly if used in isolation. A BOE conversion ratio of 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. Given the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency of 6 mcf: 1 bbl, utilizing a conversion ratio of 6 mcf: 1 bbl may be a misleading indication of value.FOR FURTHER INFORMATION PLEASE CONTACT: Wendy S. Woolsey, CAYoho Resources Inc.Vice President, Finance and CFO(403) 537-1771www.yohoresources.caNeither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.