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Press release from CNW Group

Yangarra Announces First Quarter 2013 Financial and Operating Results

Tuesday, May 21, 2013

Yangarra Announces First Quarter 2013 Financial and Operating Results

21:03 EDT Tuesday, May 21, 2013

CALGARY, May 21, 2013 /CNW/ - Yangarra Resources Ltd. ("Yangarra" or the "Company") (TSXV: YGR) announces its financial and operating results for the three months ended March 31, 2013.

Highlights of the quarter ended March 31, 2013 are as follows:

  • Production was 1,809 boe/d (47% oil and NGL's) with production negatively impacted by 200 boe/d shut-in due to the drilling of new wells on existing pad sites.
  • Oil and gas sales including royalty income was $7.7 million with funds flow from operations of $4.8 million ($0.04 per share - basic).
  • Operating costs for the first quarter, including $0.96/boe of transportation costs, were $9.00/boe
  • The Q1 2013 netback of $34.34 per boe is a 16% increase from the $29.66 per boe reported in the first quarter or 2012.  Realized prices were $42.68/boe up 28% from $33.30/boe in the first quarter of 2012 (realized natural gas prices increased by 63%).
  • Capital expenditures of $11 million focused on drilling and infrastructure  in Central Alberta
  • As at March 31, 2013, the Company had a bank debt and working capital deficit of $42 million compared to $34 million at December 31, 2012.
  • Yangarra constructed a gas processing facility (100% working interest) in the quarter with the facility online April 10, 2013 which brought on eight previously standing wells. 

Financial Summary

             
      2013     2012
      Q1     Q1
Statements of Comprehensive Income (Loss)                
Petroleum & natural gas sales     $      6,518,381     $      6,907,412
Net income (loss) for the period (before tax)     $       (393,286)     $       (983,334)
                 
Net income (loss) for the period     $       (259,424)     $     (1,790,789)
Net income (loss) per share - basic and diluted     $            (0.00)     $             (0.02)
                 
Statements of Cash Flow                
Funds flow from (used in) operating activities     $      4,814,183     $      5,146,554
Funds flow from (used in) operating activities per share -
basic and diluted
    $             0.04     $              0.04
Cash from (used in) operating activities     $      4,452,879     $      1,937,376
                 
Statements of Financial Position                
Property and equipment     $ 130,356,002     $   122,891,333
Total assets     $ 148,761,517     $   147,718,686
Working Capital Deficit     $    42,469,266     $    34,241,989
Non-Current Liabilities     $    12,482,223     $      9,752,766
Shareholders equity     $    79,430,341     $    77,613,288
                 
Weighted average number of shares - basic          121,711,723          117,494,735
Weighted average number of shares diluted           121,711,723          118,962,415
                 
                 

Operations Summary

Net petroleum and natural gas production, pricing and revenue are summarized below:

     
  2013 2012
  Q1 Q1
         
Daily production volumes        
  Natural gas (mcf/d)   5,090   6,018
  Oil (bbl/d)   502   438
  NGL's (bbl/d)   291   347
  Royalty income        
    Natural gas (mcf/d)   709   1,481
    Oil (bbl/d)   2   12
    NGL's (bbl/d)   48   91
  Combined (boe/d 6:1)   1,809   2,139
         
Product pricing (includes royalty income & realized gains/losses
on commodity contracts)
  Oil ($/bbl) $ 86.80 $ 89.86
  NGL  ($/bbl)    52.62   63.87
  Gas ($/mcf)    3.41   2.09
  Combined ($/boe) $ 44.95 $ 37.61
         
Revenue        
Petroleum & natural gas sales - Gross $ 6,518,381 $ 6,907,412
Royalty income   369,338   839,177
Commodity contract settlement    430,418   (425,781)
Total sales   7,318,137   7,320,808
Royalty expense   (261,092)   (446,817)
Petroleum & natural gas sales - Net $ 7,057,045 $ 6,873,991
Change in fair value of contracts   (2,185,484)   (1,819,208)
Total Revenue - Net $ 4,871,561 $ 5,054,783

Operating Netbacks (boe/d)

The Company's operating, cash flow and net income netbacks are summarized below:

               
        2013     2012
        Q1     Q1
                   
Sales Price       $            42.68     $            33.30
  Royalty income                      2.27                 4.31
  Royalty expense                  (1.60)                (2.30)
  Production costs                  (8.04)                   (4.89)
  Transportation costs                   (0.96)               (0.76)
Operating netback       $            34.34     $            29.66
                   
  G&A and other (excludes non-cash items)                (2.54)                  (1.90)
  Finance expenses               (2.24)                     (1.32)
Cash flow netback              29.57                     26.44
  Depletion and depreciation             (18.23)                  (20.84)
  Accretion               (0.33)                 (0.12)
  Stock-based compensation                       -                   (1.19)
  Unrealized gain (loss) on financial instruments                 (13.42)                (9.35)
  Deferred income tax                     0.82                 (4.15)
Net Income (loss) netback       $            (1.59)     $             (9.20)

Working Capital Summary

The following table summarizes the change in working capital during the three months ended March 31, 2013 and year ended December 31, 2012:

               
        2013     2012
               
Working capital (deficit) - beginning of period (1)       $        (36,301,842)     $         (34,028,162)
                   
Funds flow from operating activities                     4,814,183                  14,588,405
Purchase of property and equipment                (11,262,592)             (24,448,531)
Sale of property and equipment                                -                4,650,000
Issuance of shares                               -               2,552,333
Bank Debt                    (8,828)               384,113
                   
Working capital (deficit) - end of period (1)       $          (42,759,079)     $         (36,301,842)
                   
Credit facility limit       $            45,000,000     $           42,000,000
(1)Excludes non-cash change in fair value of commodity contracts

Capital Spending

Capital spending is summarized as follows:

               
        2013     2012
        Q1     Q1
                   
Land and lease rentals       $      1,060,280     $         147,489
Drilling and completion                8,036,865              6,621,898
Geological and geophysical                   33,678                154,180
Equipment             1,879,815                 651,963
Other Asset Additions               251,954                    8,998
        $    11,262,592     $      7,584,528
                   

Disclosure Items

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).

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.

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.

See Management's Discussion and Analysis for the three and nine months ended September 30, 2012 for a special note regarding Non-IRFS measures.

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. 

 

SOURCE: Yangarra Resources Ltd.

For further information:

For further information, please contact Jim Evaskevich, President & CEO.

Suite 1530, 715 - 5 Avenue S.W.
Calgary, Alberta   T2P 2X6
Phone: (403) 262-9558   Fax: (403) 262-8281
Webpage:  www.yangarra.ca   Email:  info@yangarra.ca

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