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Yangarra Announces 2018 Year End Financial and Operating Results


CALGARYMarch 7, 2019 /CNW/ – Yangarra Resources Ltd. (“Yangarra” or the “Company“) (TSX:YGR) announces its financial and operating results for the year ended December 31, 2018.

2018 Highlights

  • Average Production of 9,425 boe/d an increase of 64% from 2017.
  • Oil and gas sales were $134 million with funds flow from operations of $82 million ($0.97 per share – basic).
  • Adjusted EBITDA (which excludes changes in derivative financial instruments) was $82 million ($0.97 per share – basic).
  • Net income of $34 million ($0.40 per share – basic) or $48 million before tax.
  • Operating costs were $7.13/boe (including $1.31/boe of transportation costs).
  • Operating netbacks, which include the impact of commodity contracts, were $26.04 per boe.
  • Operating margins were 65% and cash flow margins were 61%.
  • G&A costs of $0.72/boe.
  • Royalties were 10% of oil and gas revenue.
  • Total capital expenditures were $151 million.
  • Net debt (which excludes the current derivative financial instruments) was $155 million.
  • Net Debt to funds flow from operations was 1.9 : 1
  • Wells drilled in 2018 resulted in a corporate half cycle IRR of 157% and a full cycle IRR of 107%
  • Proved Developed Producing reserves increased by 96%, F&D costs were $10.15/boe, the recycle ratio was 2.7 and additions replaced 434% of 2018 production.
  • Total Proved reserves increased by 35%, F&D costs were $6.63/boe, the recycle ratio was 4.1 and additions replaced 672% of 2017 production.
  • Proved plus Probable reserves increased by 44%, F&D costs were $4.90/boe, the recycle ratio was 5.6 and additions replaced 1,220% of 2018 production.
  • Return on capital employed (“ROCE“) of 12%
  • Corporate LMR is 12.2 with decommissioning liabilities of $12 million (discounted).
    • The decommissioning liabilities includes 26 inactive wells, all of which are scheduled to be abandoned before the end of 2019.

Fourth Quarter Highlights

  • Average production of 12,238 boe/d (58% liquids) during the quarter an increase of 19% from the third quarter of 2018 and 82% increase from the same period in 2017.
  • Oil and gas sales were $30 million, an increase of 20% from the same period in 2017.
  • Funds flow from operations of $17 million ($0.20 per share – basic), a decrease of 2% from the same period in 2017.
  • Adjusted EBITDA (which excludes changes in derivative financial instruments) was $17 million ($0.20 per share – basic).
  • Net income of $13 million ($0.16 per share – basic) or $19 million net income before tax.
  • Operating costs were $6.88/boe (including $1.31/boe of transportation costs).
  • Field netbacks were $16.58 per boe.
  • Operating netbacks, which include the impact of commodity contracts, were $17.56 per boe.
  • Operating margins were 65% and cash flow margins were 55%.
  • G&A costs of $1.01/boe, which included year-end bonuses.
  • Royalties were 12% of oil and gas revenue.
  • Total capital expenditures were $37 million.
  • Net Debt to annualized fourth quarter funds flow from operations was 2.3 : 1.

Syndicated Facility

Subsequent to December 31, 2018, the borrowing base review was completed and the maximum amount available under the syndicated credit facility was increased to $225 million.

Financial Summary

2018

2017

Year Ended

Q4

Q3

Q4

2018

2017

Statements of Comprehensive Income

Petroleum & natural gas sales

$

30,174

$

45,132

$

25,172

$

134,978

$

77,913

Net income (before tax)

$

18,842

$

18,302

$

6,598

$

47,795

$

27,346

Net income

$

13,315

$

12,947

$

4,682

$

33,566

$

19,485

Net income per share – basic

$

0.16

$

0.15

$

0.06

$

0.40

$

0.24

Net income per share – diluted

$

0.15

$

0.15

$

0.05

$

0.39

$

0.23

Statements of Cash Flow

Funds flow from operations

$

17,167

$

29,524

$

17,564

$

82,335

$

52,903

Funds flow from operations per share – basic

$

0.20

$

0.35

$

0.22

$

0.97

$

0.66

Funds flow from operations per share – diluted

$

0.20

$

0.34

$

0.20

$

0.95

$

0.63

Cash from operating activities

$

25,952

$

26,539

$

20,542

$

83,768

$

51,775

Statements of Financial Position

Property and equipment

$

454,772

$

426,745

$

342,100

$

454,772

$

342,100

Total assets

$

501,974

$

479,397

$

378,231

$

501,974

$

378,231

Working capital deficit

$

20,775

$

23,528

$

11,210

$

20,775

$

11,210

Net Debt (which excludes current derivative financial instruments)

$

155,882

$

135,712

$

93,533

$

155,882

$

93,533

Non-Current Liabilities, excluding bank debt

$

60,204

$

58,467

$

44,367

$

60,204

$

44,367

Shareholders equity

$

255,336

$

239,946

$

207,957

$

255,336

$

207,957

Weighted average number of shares – basic

85,340

85,331

81,302

84,653

80,720

Weighted average number of shares – diluted

86,981

87,614

85,749

86,860

84,157

Company Netbacks ($/boe)

2018

2017

Year Ended

Q4

Q3

Q4

2018

2017

Sales price

$26.80

$

47.52

$

40.71

$

39.24

$

37.19

Royalty expense

(3.34)

(4.38)

(3.80)

(3.90)

(3.06)

Production costs

(5.57)

(5.28)

(6.49)

(5.82)

(6.74)

Transportation costs

(1.31)

(1.07)

(0.97)

(1.31)

(1.03)

Field operating netback

16.58

36.79

29.45

28.21

26.36

Realized gain (loss) on commodity contract settlement

0.98

(3.65)

0.93

(2.17)

1.32

Operating netback

17.56

33.15

30.39

26.04

27.68

G&A

(1.01)

(0.61)

(1.44)

(0.72)

(0.95)

Finance expenses

(1.72)

(1.30)

(0.32)

(1.45)

(1.07)

Funds flow netback

14.83

31.24

28.63

23.87

25.66

Depletion and depreciation

(7.61)

(10.09)

(9.63)

(9.26)

(10.47)

Asset Impairment

(0.00)

(0.85)

(0.23)

Accretion

(0.06)

(0.06)

(0.74)

(0.07)

(0.29)

Stock-based compensation

(1.37)

(1.59)

(0.66)

(1.52)

(0.72)

Unrealized gain (loss) on financial instruments

10.94

0.62

(6.92)

1.10

(1.13)

Deferred income tax

(4.91)

(5.64)

(3.10)

(4.14)

(3.75)

Net Income netback

$

11.83

$

13.63

$

7.57

$

9.76

$

9.30

Commodity Prices

2018

2017

Year Ended

Q4

Q3

Q4

2018

2017

Realized Pricing (Including realized commodity contracts)

Oil ($/bbl)

$

44.46

$

74.84

$

72.70

$

63.42

$

65.61

NGL ($/bbl)

$

30.91

$

40.05

$

40.63

$

35.03

$

35.15

Gas ($/mcf)

$

1.64

$

1.38

$

2.06

$

1.59

$

2.46

Realized Pricing (Excluding commodity contracts)

Oil ($/bbl)

$

42.58

$

82.54

$

72.33

$

67.48

$

64.23

NGL ($/bbl)

$

29.73

$

41.76

$

40.29

$

37.87

$

33.74

Gas ($/mcf)

$

1.64

$

1.30

$

1.77

$

1.57

$

2.25

Oil Price Benchmarks

West Texas Intermediate (“WTI”) (US$/bbl)

$

61.05

$

69.50

$

55.40

$

64.98

$

50.84

Edmonton Par (C$/bbl)

$

42.71

$

81.92

$

69.30

$

69.35

$

63.20

Edmonton Par to WTI differential (US$/bbl)

$

(28.77)

$

(6.83)

$

(0.04)

$

(11.48)

$

(2.18)

Natural Gas Price Benchmarks

AECO gas (Cdn$/mcf)

$

1.59

$

1.19

$

1.70

$

1.51

$

2.15

Foreign Exchange

U.S./Canadian Dollar Exchange

0.76

0.77

0.80

0.77

0.77

Operations Summary

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

2018

2017

Year Ended

Q4

Q3

Q4

2018

2017

Daily production volumes

Natural gas (mcf/d)

30,573

24,378

16,782

22,993

14,901

Oil (bbl/d)

5,111

4,853

2,687

4,120

2,295

NGL’s (bbl/d)

2,032

1,406

1,237

1,473

962

   Combined (boe/d 6:1)

12,238

10,323

6,721

9,425

5,740

Revenue

Petroleum & natural gas sales – Gross

$

30,174

$

45,132

$

25,172

$

134,978

$

77,913

Realized gain (loss) on commodity contract settlement

1,104

(3,462)

578

(7,449)

2,774

Total sales

31,278

41,670

25,750

127,529

80,687

Royalty expense

(3,763)

(4,157)

(2,349)

(13,405)

(6,412)

Total Revenue – Net of royalties

$

27,516

$

37,513

$

23,401

$

114,124

$

74,275

Working Capital Summary

The following table summarizes the change in working capital during the year ended December 31, 2018 and December 31, 2017: 

2018

2017

Net Debt – beginning of period

$

(93,533)

$

(65,006)

Funds flow from operations

82,334

52,903

Additions to property and equipment

(141,060)

(83,472)

Decommissioning costs incurred

(333)

(95)

Additions to E&E Assets

(9,773)

Issuance of shares

6,776

2,180

Other

(293)

(43)

 Net Debt – end of period 

$

(155,882)

$

(93,533)

Credit facility limit

$

175,000

$

120,000

Capital Spending

Capital spending is summarized as follows:

2018

2017

Year Ended

Cash additions

Q4

Q3

Q4

2018

2017

Land, acquisitions and lease rentals

$

340

$

79

$

1,163

$

569

$

7,165

Drilling and completion

22,299

38,265

25,406

106,855

64,309

Geological and geophysical

412

163

263

913

825

Equipment

11,991

9,893

4,312

32,337

10,854

Other asset additions

214

82

20

385

320

$

35,256

$

48,481

$

31,164

$

141,060

$

83,472

Exploration & evaluation assets

$

1,690

$

1,563

$

(730)

$

9,773

$

(730)

Annual General Meeting of Shareholders

The Company’s Annual General Meeting of Shareholders is scheduled for 10:00 AM on Thursday May 9, 2019 in the Tillyard Management Conference Centre, Main Floor, 715 5th Avenue SW, Calgary, AB.

Year End Disclosure

The Company’s financial statements, notes to the financial statements, management’s discussion and analysis and annual information form will be filed on SEDAR (www.sedar.com) and are available on the Company’s website (www.yangarra.ca).



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