CALGARY, AB, Dec. 1, 2021 /CNW/ - Yangarra Resources
Ltd. ("Yangarra" or the "Company") (TSX:YGR)
outlines Q4 2021 and 2022 guidance and provides an operations
update.
Capital Budget & Guidance
Yangarra's fourth quarter production guidance is 10,000 boe/d
with funds flow from operations of $29
million, assuming an average price of CDN$85.00/bbl for Edmonton par and an average price of
CDN$4.00/GJ for AECO natural gas.
Fourth quarter capital spending is estimated to be
$23 million which will result in
$6 million of debt repayment before
year-end.
The Company's Board of Directors has approved a capital budget
of $105 million for 2022, which
includes the drilling of 30 gross wells. The budget is
expected to increase the Company's annual 2022 average production
to 12,000 boe/d with funds flow from operations estimated at
$130 million. The 2022 budget assumes
an average price of CDN$78.00/bbl for
Edmonton par and an average price
of CDN$3.50/GJ for AECO natural
gas.
Operations Update
Fourth quarter to date, the Company has brought on four wells
and expects to bring on four additional wells in December. In
addition, drilling operations have commenced on a fourteen-well
pad, with initial completions scheduled for early 2022.
Bank Review
The syndicated senior credit facility has been confirmed at
$210 million. All other terms
remain the same.
Corporate Presentation
A revised corporate presentation is available on the Company's
webpage:
https://www.yangarra.ca/financial-reports/presentations/
Forward looking information
This press release contains forward-looking statements and
forward-looking information (collectively "forward-looking
information") within the meaning of applicable securities laws
relating to the Company's plans and other aspects of our
anticipated future operations, management focus, strategies,
financial, operating and production results and business
opportunities. Forward-looking information typically uses words
such as "anticipate", "believe", "continue", "sustain", "project",
"expect", "forecast", "budget", "goal", "guidance", "plan",
"objective", "strategy", "target", "intend" or similar words
suggesting future outcomes, statements that actions, events or
conditions "may", "would", "could" or "will" be taken or occur in
the future, including statements about our strategy, plans,
objectives, priorities and focus, growth plans; our estimations on
future costs; volatility of commodity prices, and currency
fluctuations.
The forward-looking information is based on certain key
expectations and assumptions made by our management, including
expectations and assumptions concerning prevailing commodity
prices, exchange rates, interest rates, applicable royalty rates
and tax laws; future production rates and estimates of operating
costs; performance of existing and future wells; reserve volumes;
anticipated timing and results of capital expenditures; the success
obtained in drilling new wells; the sufficiency of budgeted capital
expenditures in carrying out planned activities; the timing,
location and extent of future drilling operations; the state of the
economy and the exploration and production business; results of
operations; performance; business prospects and opportunities; the
availability and cost of financing, labour and services; the impact
of increasing competition; ability to market light crude oil and
natural gas successfully and our ability to access capital.
Although we believe that the expectations and assumptions on
which such forward-looking information is based are reasonable,
undue reliance should not be placed on the forward-looking
information because Yangarra can give no assurance that they will
prove to be correct. Since forward-looking information addresses
future events and conditions, by its very nature they involve
inherent risks and uncertainties. Our actual results, performance
or achievement could differ materially from those expressed in, or
implied by, the forward-looking information and, accordingly, no
assurance can be given that any of the events anticipated by the
forward-looking information will transpire or occur, or if any of
them do so, what benefits that we will derive therefrom. Management
has included the above summary of assumptions and risks related to
forward-looking information provided in this press release in order
to provide security holders with a more complete perspective on our
future operations and such information may not be appropriate for
other purposes.
Readers are cautioned that the foregoing lists of factors are
not exhaustive. Additional information on these and other factors
that could affect our operations or financial results are included
in reports on file with applicable securities regulatory
authorities and may be accessed through the SEDAR website
(www.sedar.com).
These forward-looking statements are made as of the date of
this press release and we disclaim any intent or obligation to
update publicly any forward-looking information, whether as a
result of new information, future events or results or otherwise,
other than as required by applicable securities laws
Non-GAAP Financial Measures
This press release contains references to measures used in
the light crude oil and natural gas industry such as "funds flow
from operations", "operating netback", "adjusted working capital
deficit", and "net debt". These measures do not have
standardized meanings prescribed by generally accepted accounting
principles ("GAAP") and, therefore should not be considered
in isolation. These reported amounts and their underlying
calculations are not necessarily comparable or calculated in an
identical manner to a similarly titled measure of other companies
where similar terminology is used. Where these measures are
used they should be given careful consideration by the
reader. These measures have been described and presented in
this press release in order to provide shareholders and potential
investors with additional information regarding the Company's
liquidity and its ability to generate funds to finance its
operations.
Funds flow from operations should not be considered an
alternative to, or more meaningful than, cash provided by
operating, investing and financing activities or net income as
determined in accordance with GAAP, as an indicator of Yangarra's
performance or liquidity. Funds flow from operations is used
by Yangarra to evaluate operating results and Yangarra's ability to
generate cash flow to fund capital expenditures and repay
indebtedness. Funds flow from operations denotes cash flow
from operating activities as it appears on the Company's Statement
of Cash Flows before decommissioning expenditures and changes in
non-cash operating working capital. Funds flow from operations is
also derived from net income (loss) plus non-cash items including
deferred income tax expense, depletion and depreciation expense,
impairment expense, stock-based compensation expense, accretion
expense, unrealized gains or losses on financial instruments and
gains or losses on asset divestitures. Funds from operations
netback is calculated on a per BOE basis and funds from operations
per share is calculated as funds from operations divided by the
weighted average number of basic and diluted common shares
outstanding. Operating netback denotes petroleum and natural
gas revenue and realized gains or losses on financial instruments
less royalty expenses, operating expenses and transportation and
marketing expenses calculated on a per BOE basis. Adjusted
working capital deficit includes current assets less current
liabilities excluding the current portion of the amount drawn on
the credit facilities, the current portion of the fair value of
financial instruments and the deferred premium on financial
instruments. Yangarra uses net debt as a measure to assess
its financial position. Net debt includes current assets less
current liabilities excluding the current portion of the fair value
of financial instruments and the deferred premium on financial
instruments, plus the long-term financial obligation.
Barrels of Oil Equivalent
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.
All reference to $ (funds) are in Canadian dollars.
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.