CALGARY, AB, Dec. 10, 2020 /CNW/ - Yangarra Resources Ltd.
("Yangarra" or the "Company") (TSX: YGR) completes its semi-annual
borrowing base review and sets 2021 Capital Budget.
Bank Review
The syndicated senior credit facility has been confirmed at
$210 million. All other terms remain
the same.
The Company's banking syndicate is led by Alberta Treasury
Branches and includes Canadian Imperial Bank of Commerce and
National Bank of Canada.
Capital Budget
As a result of improving macro conditions, Yangarra's Board of
Directors has approved a capital program of $60 million for 2021. The Company's 2020
cost-cutting program has generated significant structural and
sustainable per well savings on drilling and completions.
Yangarra's most recent drilling and completions costs have averaged
$3.25 million per two-mile well, down
24% from an average of $4.25 million
over the last two years. As a result, the Company expects to drill
& complete 17 wells for 2021.
With improved capital efficiencies, the Company requires
$40 million of capital to hold
production flat at 10,000 boe/d. The Company expects to fund the
growth wedge of $20 million in
capital spending through cash flow with the remaining free cash
flow to be used toward debt repayment. Yangarra's long-term goal of
reaching an absolute debt target of $150
million remains unchanged.
All reference to $ (funds) are in Canadian dollars unless
otherwise noted.
Forward Looking Information.
Certain information regarding Yangarra set forth in this news
release, 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. In particular, this release contains forward-looking
information relating to its expectations regarding the effect of
streamlining drilling and completion operations and the benefits of
real time invoicing, as well as expectations about its abilities to
generate free cash flow and pay down debt. Accordingly,
actual results may differ materially from those anticipated in the
forward-looking statements. Certain of these risks are set
out in more detail in Yangarra's current Annual Information Form,
which is available on Yangarra's SEDAR profile at
www.sedar.com.
Forward-looking statements are based on estimates and
opinions of management of Yangarra at the time the statements are
presented. Yangarra may, as considered necessary in the
circumstances, update or revise such forward-looking statements,
whether as a result of new information, future events or
otherwise. Yangarra undertakes no obligation to update or
revise any forward-looking statements, except as required by
applicable securities laws.
Neither the TSX nor its Regulation Service Provider (as that
term is defined in the Policies of the TSX) accepts responsibility
for the adequacy and accuracy of this release.
SOURCE Yangarra Resources Ltd.