CALGARY,
May 28, 2014 /CNW/ - Yoho Resources
Inc. ("Yoho" or the "Company") has filed today on SEDAR the
financial statements for the six months ended March 31, 2014 and the related managements'
discussion and analysis ("MD&A"). Copies of these
documents may be found on www.sedar.com.
Highlights
- During fiscal Q2 2014, Yoho completed a transaction to sell its
assets (the "Asset Sale") at Nig, British
Columbia to Storm Resources Ltd. ("Storm") for total
consideration of $86.9 million,
consisting of $30 million cash and
13.6 million common shares of Storm (the "Storm Shares"). The
$30 million cash component of the
transaction price was used to eliminate Yoho's outstanding bank
debt. Subsequent to the transaction, the Company's credit
facilities were revised to total $50
million. Following the Asset Sale, Yoho's Duvernay production as a percentage of total
production will increase, with a corresponding increase natural gas
liquids production and higher field netbacks.
- At the annual general and special meeting of the shareholders
of Yoho held on March 20, 2014, Yoho
shareholders approved a plan of arrangement which provided, among
other things, for Yoho shareholders to receive a pro rata
entitlement of the 13.6 million Storm Shares received on the Asset
Sale. Yoho shareholders received 0.2591 of a Storm Share for each common share of Yoho
held.
- Yoho's production during fiscal Q2 2014 averaged 1,790 boe per
day (30% oil and natural gas liquids ("NGLs")). The decrease
in production from fiscal Q1 2014 was due to the sale of the Asset
Sale during fiscal Q2 2014.
- Yoho generated funds from operations for fiscal Q2 2014 of
$3.5 million ($0.07 per share basic and diluted) compared to
$4.1 million for fiscal Q2 2013
($0.08 per share basic and
diluted). Higher liquids and NGL production and improved
commodity prices during fiscal Q2 2014 were offset by lower
production due to the Asset Sale. Operating netbacks for
fiscal Q2 2014 increased 37.7% to $31.18 per boe compared to operating netbacks of
$22.64 per boe for fiscal Q2
2013.
- Total exploration and development expenditures for the first
six months of fiscal 2014 were $16.2
million, including the acquisition of two sections of
Duvernay mineral rights, which
increased Yoho's total Duvernay
rights at Kaybob to 23.5 net sections. Total net debt was
$10.5 million at March 31, 2014.
Fiscal Q2 2014 Capital Expenditures
During the six months ended March 31, 2014, Yoho has participated in drilling
5 (2.8 net) gas wells. A well at Nig, British Columbia (100% working interest
("WI")) was drilled but not completed before it was included in the
disposition of the Company's Nig area assets. At Kaybob,
three wells have been drilled into the Duvernay formation and are all awaiting
completion operations. One additional non-operated Duvernay well at Kaybob encountered
operational issues and will not be completed. Yoho has also
completed construction of a compressor facility at Kaybob which was
placed into service in March
2014.
OPERATIONS UPDATE
Kaybob Duvernay
Yoho as operator (50% WI) has drilled and cased
a 4,740 meter horizontal well in the Duvernay Formation at
16-04-62-21 W5 (rig released April 11,
2014). This well has a horizontal section of approximately
1,300 meters in the Duvernay. Completion operations on this
well are underway with 20 frac stages utilizing the latest plug and
perf technology with tighter stage spacing and diversion. This well
is scheduled to come on stream immediately following completion
operations as the pipeline has already been tied-in to the
gathering system and only requires installation of the surface
facilities before production commences.
Yoho has also participated in the drilling of
three additional non-operated Duvernay wells at Kaybob. At 2-25-62-22 W5,
Yoho participated (50% WI) in a horizontal well that was drilled,
cased and rig released on March 15,
2014. This well has a horizontal section of 1,300
meters and will also be completed following the breakup season.
A third well at Kaybob (33.33% WI) was also
drilled and cased (rig released February 5,
2014) at 16-02-60-19 W5, with a horizontal section of
approximately 1,400 meters in the Duvernay. Completion operations on this well
are scheduled to begin in summer 2014.
A fourth Duvernay horizontal well at 04-31-60-20 W5
(33.33% WI) was spudded immediately before breakup and is the first
well of a planned two well pad and will be followed by the drilling
of a second well at 13-07-61-20 W5 (33.33% WI). Continued
operations on these wells will require winter drilling conditions.
Projected horizontal lengths for both of these wells will be
approximately 2,000 meters.
Inga, British
Columbia
At Inga, British
Columbia, Yoho has licensed two 100% WI horizontal wells
(A1-19-87-23 W6 and B1-19-87-23 W6) which will be drilled from one
pad. The first well at A1-19 is projected to have a 1,500 meter
horizontal leg in the Montney,
with the second well currently planned to have a 1,300 meter
horizontal leg, also in the Montney. Drilling operations for these wells
are expected to commence in late summer 2014 with both wells
expected to be drilled and cased by calendar year end.
OUTLOOK
For fiscal 2014, Yoho is currently planning a
total capital program of between $40.0 and
$42.0 million. Yoho estimates that, due to delays in
anticipated on-stream dates of non-operated Duvernay wells, overall production for fiscal
2014 will average approximately 1,800 boe per day with cash flow
estimated between $13.5 and $14.0
million. With the active drilling programs at both Kaybob in
the Duvernay and at Inga in the
Montney, Yoho expects production
volumes to reach the 2,500 boe per day level by the end of calendar
2014 with further increases into fiscal Q2 2015. As a percentage of
total production Yoho's Duvernay
production is expected to reach approximately 50% by fiscal Q1
2015, which should result in substantially higher field
netbacks.
About Yoho
Yoho Resources Inc. is a Calgary based junior oil and natural gas
company with operations focusing in West Central Alberta and
northeast British Columbia.
The common shares of Yoho are listed on the TSX Venture Exchange
under the symbol "YO".
Neither 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.
Cautionary Statements
Special Note Regarding Forward-Looking Information
Certain information regarding Yoho set forth
in this news release, including (among other things) the Company's
expected drilling depths and expectations for completion operations
for its wells at Kaybob, expected installation of facilities at
Kaybob, percentage of Duvernay
production to total corporate production, expected operating
netbacks, drilling depths and drilling plans at Inga; number of
wells to be drilled at Inga; and those matters set forth under the
heading "Outlook", may constitute forward-looking statements under
applicable securities laws and necessarily involve substantial
known and unknown risks and uncertainties. These
forward-looking statements are subject to numerous risks and
uncertainties, certain of which are beyond Yoho's control,
including without limitation, risks associated with oil and gas
exploration, development, exploitation, production, marketing and
transportation, loss of markets, volatility of commodity prices,
volatility in production rates, environmental risks, inability to
obtain drilling rigs or other services, capital expenditure costs,
including drilling, completion and facility costs, unexpected
decline rates in wells, wells not performing as expected, delays
resulting from or inability to obtain required third party
(including shareholder) and regulatory approvals, ability to access
sufficient capital from internal and external sources, the impact
of general economic conditions in Canada, the United
States and overseas, industry conditions, changes in laws
and regulations (including the adoption of new environmental laws
and regulations) and changes in how they are interpreted and
enforced, increased competition, the lack of availability of
qualified personnel or management, fluctuations in foreign exchange
or interest rates, and the uncertainty of estimates and projections
of production, costs and expenses.
With respect to forward-looking statements
contained in this news release, Yoho has made a number of
assumptions. The key assumptions underlying the aforementioned
forward-looking statements include assumptions regarding (among
other things): the impact of increasing competition; the general
stability of the economic and political environment in which the
Company operates; the timely receipt of any required third party
and regulatory approvals; the ability of the Company to obtain
qualified staff, equipment and services in a timely and cost
efficient manner; the number of issued and outstanding common
shares of the Company, drilling results; the timing of drilling
plans and completion operations; the ability of the operator of the
projects which the Company has an interest in operating the field
in a safe, efficient and effective manner; the ability of the
operator of the Company's drilling projects in Kaybob to realize a
recovery (in whole or in part) of certain expenses incurred; the
ability of the Company 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 of exploration; the timing and costs of pipeline,
storage and facility construction and expansion and the ability of
the Company to secure adequate product transportation; future
commodity prices; currency, exchange and interest rates; the
regulatory framework regarding royalties, taxes and environmental
matters in the jurisdictions in which the Company operates; and the
ability of the Company to successfully market its oil and natural
gas production. Certain or all of the forgoing assumptions
may prove to be untrue.
Yoho's actual results, performance or
achievement could differ materially from those expressed in, or
implied by, these forward-looking statements and, accordingly, no
assurance can be given that any of the events anticipated by the
forward-looking statements will transpire or occur, or if any of
them do so, what benefits that the Company will derive therefrom.
All subsequent forward-looking statements, whether written or oral,
attributable to the Company or persons acting on its behalf are
expressly qualified in their entirety by these cautionary
statements. Additional information on these and other factors
that could affect Yoho's operations and financial results are
included in reports on file with Canadian securities regulatory
authorities and may be accessed through the SEDAR website
(www.sedar.com) or Yoho's website (www.yohoresources.ca).
The forward-looking statements contained in
this document are made as at the date of this news release and Yoho
does not undertake any obligation to update publicly or to revise
any of the included forward-looking statements, whether as a result
of new information, future events or otherwise, except as may be
required by applicable securities laws.
BOE Equivalency
Barrel 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.
Future Oriented Financial
Information
This press release, in particular the
information in respect of anticipated cash flows, may contain
Future Oriented Financial Information ("FOFI") within the meaning
of applicable Canadian securities laws. The FOFI has been prepared
by management of Yoho to provide an outlook of Yoho's activities
and results. The FOFI has been prepared based on a number of
assumptions including the assumptions discussed under the heading
"Special Note Regarding Forward-Looking Statements" and assumptions
with respect to production rates and commodity prices. The actual
results of operations of the Yoho and the resulting financial
results may vary from the amounts set forth herein, and such
variation may be material. Yoho and its management believe that the
FOFI has been prepared on a reasonable basis, reflecting
management's best estimates and judgments.
SOURCE Yoho Resources Inc.