CALGARY,
May 13, 2014 /CNW/ - Yangarra
Resources Ltd. ("Yangarra" or the
"Company") (TSXV:YGR) announces its financial and operating
results for the three months ended March 31,
2014.
First Quarter Highlights
- Production was 2,796 boe/d (53% oil and NGL's), a 55% increase
from the same period in 2013.
- Oil and gas sales including royalty income were $16.0 million with funds flow from operations of
$10.5 million ($0.07 per share - basic). This was a 132% and
119% increase from the same period in 2013, respectively.
- Earnings before interest, taxes, depletion & depreciation,
amortization and changes in commodity contracts ("EBITDA") was
$10.7 million, compared with
$5.2 million in the same period of
2013.
- Operating costs, including $1.32
per boe of transportation costs, were $7.82 per boe, a reduction of 13% from the same
period in 2013.
- Operating netback of $45.23 per
boe, a 32% increase from the $34.34
per boe reported in the first quarter of 2013.
- G&A costs of $1.30 per boe,
which is a 49% decrease from the first quarter of 2013.
- Royalties were 6% of oil and gas revenue.
- Total capital expenditures were $22.0
million.
- As at March 31, 2014, the Company
had current bank debt, subordinated debt and working capital
deficit, excluding fair value of commodity contracts and non-cash
flow-through share premium obligations, of $55.8 million compared to $44.6 million at December
31, 2013.
-
- The annualized first quarter debt to cash flow ratio was 1.3 :
1.
Credit Facility Update
Yangarra has entered into an amended and
restated credit facility agreement with Alberta Treasury Branches
("ATB") which increased its total available credit facilities to
$90 million from the previous
$65 million. The ATB facilities
now consist of a $70 million senior
line and a $20 million subordinated
debt line. Currently, the senior line is drawn down in the amount
of $50 million and the subordinated
line is undrawn.
Subsequent to the first quarter the Company announced a bought
deal financing of $25 million which
is expected to close on or about May 15,
2014.
Guidance Update
With the recently announced equity financing and
credit facility increase, the Company is increasing its 2014
capital budget to $75 million with 28
gross (22.7 net) horizontal wells planned for the year plus a
Duvernay strata-graphic vertical
test well.
The revised budget is expected to result in
annual production of 3,500 boe/d which would be a 59% increase from
2013. Funds flow from operations are expected to be
$50 million which is a 95% increase
from 2013. The Company expects year-end 2014 total net debt
of $45 million resulting in an
estimated debt to annual cash flow ratio of 0.9 to 1.0. The
budget assumes an average price of US$95.00/bbl for WTI crude oil (CDN$85.00/bbl Edmonton par) and an average price of
$3.50/GJ for AECO natural gas.
Operations Update
The Company has successfully drilled or
participated in 8 gross (6.2 net) wells during the first quarter of
2014. The Company experienced 11 days of shut-in production
(approximately 1,200 boe/d for the 11 days) due to the TransCanada
pipeline rupture near Rocky Mountain
House and an additional 150 boe/d average for the quarter
due to Keyera curtailments at other facilities. The Company
drilled through break-up and expects to drill a total of 8 gross
(5.1 net) wells in the second quarter.
Financial Summary
| |
|
|
|
| |
2014 |
2013 |
| |
Q1 |
Q4 |
Q1 |
| Statements of
Comprehensive Income (Loss) |
|
|
|
| Petroleum &
natural gas sales and royalty income |
$ 16,008,396 |
$ 11,265,291 |
$ 6,887,719 |
| Net income (loss)
for the period (before tax) |
$ 1,202,068 |
$ 1,576,908 |
$ (393,286) |
| |
|
|
|
| Net income (loss)
for the period |
$ 719,450 |
$ 750,851 |
$ (259,424) |
| Net income (loss)
per share - basic and diluted |
$
0.01 |
$
0.01 |
$
(0.00) |
| |
|
|
|
| Statements of
Cash Flow |
|
|
|
| Funds flow from
(used in) operating activities |
$ 10,459,692 |
$ 7,975,588 |
$ 4,814,183 |
| Funds flow from
(used in) operating activities per share - basic and diluted |
$
0.07 |
$
0.06 |
$
0.04 |
| Cash from (used
in) operating activities |
$ 6,008,779 |
$ 10,757,178 |
$ 4,452,879 |
| |
|
|
|
| Statements of
Financial Position |
|
|
|
| Property and
equipment |
$
171,336,343 |
$
152,971,016 |
$
130,356,002 |
| Total assets |
$
195,777,835 |
$
169,798,021 |
$
148,761,517 |
Working Capital (deficit),
excluding MTM on commodity contracts and
flow-through premium obligation |
$
55,822,090 |
$ 36,794,243 |
$ 42,469,266 |
| Non-Current
Liabilities |
$ 18,246,628 |
$ 23,096,615 |
$ 12,482,223 |
| Shareholders
equity |
$ 97,025,179 |
$ 95,583,587 |
$ 79,430,341 |
| |
|
|
|
| Weighted average
number of shares - basic |
147,410,341 |
127,219,336 |
121,711,723 |
| Weighted average
number of shares diluted |
150,325,177 |
128,322,269 |
121,711,723 |
| |
|
|
|
| |
|
|
|
Company Netbacks ($/boe)
| |
|
|
|
| |
2014 |
2013 |
| |
Q1 |
Q4 |
Q1 |
| |
|
|
|
| Sales Price |
$
62.37 |
$
43.61 |
$
40.03 |
| |
Royalty income |
1.25 |
0.70 |
2.27 |
| |
Royalty expense |
(3.73) |
(2.19) |
(1.60) |
| |
Production costs |
(6.49) |
(6.20) |
(8.04) |
| |
Transportation costs |
(1.32) |
(1.27) |
(0.96) |
| Field operating netback |
52.07 |
34.63 |
31.70 |
| |
Commodity contract settlement |
(6.85) |
1.07 |
2.64 |
| Operating netback |
45.23 |
35.70 |
34.34 |
| |
G&A and other (excludes non-cash items) |
(1.30) |
(2.07) |
(2.54) |
| |
Finance expenses |
(3.33) |
(2.59) |
(2.24) |
| Cash flow netback |
40.60 |
31.04 |
29.57 |
| |
Depletion and depreciation |
(16.53) |
(15.96) |
(18.23) |
| |
Accretion |
(0.16) |
(0.16) |
(0.33) |
| |
Stock-based compensation |
(1.63) |
- |
- |
| |
Unrealized gain (loss) on financial
instruments |
(17.50) |
(8.72) |
(13.42) |
| |
Deferred income tax |
(1.92) |
(3.25) |
0.82 |
| Net Income (loss) netback |
$
2.86 |
$
2.95 |
$
(1.59) |
| |
|
|
|
Operations Summary
Net petroleum and natural gas production,
pricing and revenue are summarized below:
| |
|
|
|
| |
2014 |
2013 |
| |
Q1 |
Q4 |
Q1 |
| |
|
|
|
| Daily production volumes |
|
|
|
| |
Natural gas (mcf/d) |
7,572 |
8,303 |
5,090 |
| |
Oil (bbl/d) |
1,036 |
683 |
502 |
| |
NGL's (bbl/d) |
413 |
605 |
291 |
| |
Royalty income |
|
|
|
| |
|
Natural gas (mcf/d) |
359 |
405 |
709 |
| |
|
Oil (bbl/d) |
0 |
1 |
2 |
| |
|
NGL's (bbl/d) |
25 |
24 |
48 |
| |
Combined (boe/d 6:1) |
2,796 |
2,764 |
1,809 |
| |
|
|
|
| Revenue |
|
|
|
| Petroleum & natural gas sales -
Gross |
$ 15,694,979 |
$ 11,087,956 |
$
6,518,381 |
| Royalty income |
313,417 |
177,335 |
369,338 |
| Commodity contract settlement |
(1,723,339) |
271,387 |
430,418 |
| Total sales |
14,285,057 |
11,536,678 |
7,318,137 |
| Royalty expense |
(937,556) |
(557,278) |
(261,092) |
| Petroleum & natural gas sales -
Net |
13,347,501 |
10,979,400 |
7,057,045 |
| Change in fair value of contracts |
(4,403,102) |
(2,217,286) |
(2,185,484) |
| Total Revenue - Net of royalties |
$ 8,944,399 |
$ 8,762,114 |
$
4,871,561 |
| |
|
|
|
Working Capital Summary
The following table summarizes the change in
working capital during the three months ended March 31, 2014 and year ended December 31, 2013:
| |
|
|
| |
2014 |
2013 |
| |
|
|
| Working capital (deficit) - beginning of period
(1) |
$
(36,794,243) |
$
(36,301,842) |
| |
|
|
| Funds flow from operating activities |
10,459,692 |
25,648,666 |
| Additions to of property and equipment &
E&E Assets |
(21,989,208) |
(47,485,106) |
| Issuance of shares |
297,500 |
13,593,273 |
| Issuance of Subordinated Debt |
3,513 |
7,786,632 |
| Other Debt |
(9,199) |
(35,866) |
| Working capital (deficit) - end of period
(1) |
$
(48,031,945) |
$
(36,794,243) |
| |
|
|
| Subordinated Debt Outstanding |
$
(7,790,145) |
$
(7,786,632) |
| |
|
|
| Total Debt |
$
(55,822,090) |
$
(44,580,875) |
| |
|
|
| Credit facility limit |
$
45,000,000 |
$
45,000,000 |
| Subordinated debt facility limit |
$
20,000,000 |
$
20,000,000 |
| |
|
|
| (1) |
Excludes fair value of commodity contracts and non-cash flow
through premium obligations |
Capital Spending
Capital spending is summarized as follows:
| |
|
|
|
| |
2014 |
2013 |
| Cash Additions |
Q1 |
Q4 |
Q1 |
| |
|
|
|
| Land, acquistions and lease rentals |
$
972,133 |
$ (261,263) |
$ 1,060,280 |
| Drilling and completion |
18,373,738 |
18,958,090 |
8,036,865 |
| Geological and geophysical |
320,228 |
170,565 |
33,678 |
| Equipment |
2,324,948 |
1,490,863 |
1,879,815 |
| Other Asset Additions |
(1,839) |
100,771 |
251,954 |
| |
$ 21,989,208 |
$ 20,459,026 |
$ 11,262,592 |
| |
|
|
|
| |
|
|
|
Annual General Meeting of Shareholders
The Company's Annual General and Special Meeting of Shareholders
is scheduled for 10:00 AM on
Tuesday May 27, 2014 in the Tillyard
Management Conference Centre, Main Floor, 715 5th Avenue SW,
Calgary, AB.
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.
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.