Press release from Marketwire
Yoho Resources Inc. Announces Fiscal Q2 2012 Financial and Operating Results
Wednesday, May 23, 2012
Yoho Resources Inc. Announces Fiscal Q2 2012 Financial and Operating Results09:00 EDT Wednesday, May 23, 2012CALGARY, ALBERTA--(Marketwire - May 23, 2012) -NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATESYoho Resources Inc. ("Yoho" or the "Company") (TSX VENTURE:YO) has filed today on SEDAR the financial statements for the six months ended March 31, 2012 and the related managements' discussion and analysis. Copies of these documents may be found on www.sedar.com.HighlightsYoho's production during fiscal Q2 2012 averaged 2,209 boe per day (75% natural gas). The Q2 production was impacted by approximately 400 boe per day due to: disruptions at third party processing facilities at Kaybob; voluntarily restrictions of dry gas production from several areas, including the Mike/Pickell and Basset Lake areas; and the delay in placing wells at Nig Creek in B.C. on stream due to low gas prices. Yoho will proceed to tie-in the Nig production before fiscal year end in order to gather critical production information from the initial wells in this area. Current production is estimated at 2,500 boe per day. With recent drilling success, Yoho has approximately 700 boe per day of production scheduled to come on-stream starting in August 2012. Notwithstanding substantially decreased natural gas prices, Yoho generated funds from operations for fiscal Q2 2012 of $1.9 million ($0.04 per share basic and diluted). Net exploration and development expenditures for the six months ended March 31, 2012 were $23.8 million with Yoho participating in drilling 5 (2.1 net) gas wells with an overall success rate of 100%. The Company maintained a flexible balance sheet with total net debt of $20.3 million at March 31, 2012 with a bank credit facility of $52 million. At March 31, 2012, Yoho had spent approximately 70% of the estimated capital expenditures for the year and plans on spending an additional $9 to $11 million for the balance of fiscal 2012.Operations Update Kaybob, AlbertaAt Kaybob, where the Company has participated in four successful horizontal Duvernay wells to date with 100% success, Yoho is proceeding with the construction of an 11.6 kilometer Yoho operated pipeline (50% working interest) at Kaybob to tie-in a liquids-rich gas well at the northern portion of the land base. Although this well, which is currently behind pipe, could be brought on-stream through a different facility, this pipeline will be strategic to Yoho's development plan in Kaybob for fiscal 2013 and beyond. There is currently in excess of 400 boe per day (net) of fully tested Duvernay production behind pipe at Kaybob. In addition, a horizontal Duvernay well drilled in fiscal Q2 and operated by Celtic (Yoho 33.33% working interest) is scheduled to be completed immediately after break-up. Yoho will also participate in the drilling and completion of one additional Duvernay horizontal well at Kaybob this summer (15% working interest). Yoho has in excess of 120 net horizontal development locations in the Kaybob area.Nig, British ColumbiaYoho is proceeding to build a 7.2 kilometer Yoho operated pipeline at Nig (50% working interest) which will enable gas/liquids wells from the northern portion of the Company's land block, currently shut in, to be brought on-stream through unrestricted facilities. There is currently in excess of 300 boe per day (net) behind pipe at Nig. This pipeline is part of Yoho's detailed development plan in the Nig area and will facilitate timely tie-in of development wells to be drilled during fiscal 2013 and beyond. Yoho has in excess of 100 net horizontal development locations in the Nig Creek area of British Columbia.OutlookYoho continues to delineate the two unconventional liquids rich plays at Kaybob, Alberta and Nig Creek, British Columbia in fiscal 2012. Full development programs for both of these plays are anticipated to commence in fiscal 2013. With the continued volatility in commodity prices, Yoho is currently planning a total capital program for fiscal 2012 of between $33 and $35 million, of which approximately 70% has been expended to date. Construction of strategic pipelines at both Kaybob and Nig has caused changes to estimated on-stream dates of currently shut-in wells. With these changes, and with the Company's voluntary restrictions on dry gas production, Yoho is budgeting overall production for fiscal 2012 to average approximately 2,400 to 2,500 boe per day with exit production estimated at 2,800 to 2,900 boe per day. Activity levels for fiscal 2012 will continue to be monitored to align capital expenditures with expected cash flow and available credit lines.Yoho Resources Inc. is a Calgary based junior oil and natural gas company with operations focusing in west central Alberta, northeast British Columbia and the Peace River Arch of Alberta. 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; completion and testing operations on certain of its gas wells; and estimated average and exit production rates for fiscal 2012.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.Non-IFRS Financial MeasuresThe MD&A contains the term "funds from operations" and "funds from operations per share" which do not have any standardized meaning prescribed by International Financial Reporting Standards ("IFRS"). Management uses funds from operations and funds from operations per share to analyze operating performance and leverage and considers funds from operations to be a key measure as it demonstrates the Company's ability to generate the cash necessary to fund future capital investments and to repay debt. Funds from operations should not be considered an alternative to, or more meaningful than cash flow from operating activities as determined in accordance with IFRS as an indicator of the Company's performance. Therefore references to funds from operations or funds from operations per share (basic and diluted) may not be comparable with the calculation of similar measures for other entities. Yoho calculates funds from operations per share using the same method used in the determination of net income per share.Yoho also uses "operating netbacks" and per boe metrics as key performance indicators. These terms do not have a standardized meaning prescribed by IFRS and therefore may not be comparable with the calculation of similar measures by other companies. Management considers netbacks an important measure as it demonstrates its profitability relative to current commodity prices. The Company uses this measure to help evaluate its performance.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.