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Yangarra announces 2020 second quarter financial and operating results


CALGARY, AB – Yangarra Resources Ltd. (“Yangarra” or the “Company“) (TSX: YGR) announces its financial and operating results for the three and six months ended June 30, 2020.

Second Quarter Highlights

  • Average production of 9,875 boe/d (44% liquids) during the quarter, a 24% decrease from the same period in 2019
  • Oil and gas sales were $16.2 million, a decrease of 56% from the same period in 2019
  • Funds flow from operations of $7.7 million ($0.09 per share – basic), a decrease of 68% from the same period in 2019
  • Adjusted EBITDA (which excludes changes in derivative financial instruments) was $8.1 million ($0.09 per share – basic)
  • Net loss of $2.8 million ($0.03 per share – basic, $2.9 million before tax), a decrease of 115% from the same period in 2019
  • Operating costs were $6.33/boe (including $0.96/boe of transportation costs)
  • Field operating netbacks were $11.45/boe
  • Operating netbacks, which include the impact of commodity contracts, were $11.37/boe
  • Operating margins were 63% and funds flow from operations margins were 47%
  • G&A costs of $0.66/boe
  • Royalties were 2% of oil and gas revenue
  • All in cash costs were $9.52/boe
  • Capital expenditures were $1.1 million
  • Net Debt of $192 million, a $6 million decrease from the first quarter
  • Completed its annual borrowing base review and the syndicated senior credit facility was been confirmed at $210 million
  • Net Debt to second quarter annualized funds flow from operations was 6.2 : 1
  • Retained earnings of $104 million
  • Corporate LMR is 10.1 with decommissioning liabilities of $16.5 million (discounted)

Financial Summary

2020

2019

Six Months Ended

Q2

Q1

Q2

2020

2019

Statements of Comprehensive Income

Petroleum & natural gas sales

$

16,290

$

27,435

$

36,473

$

43,725

$

76,380

Net (loss) income (before tax)

$

(2,933)

$

3,877

$

13,433

$

944

$

29,819

Net (loss) income

$

(2,801)

$

2,835

$

18,219

$

34

$

29,733

Net (loss) income per share – basic

$

(0.03)

$

0.03

$

0.21

$

0.00

$

0.35

Net (loss) income per share – diluted

$

(0.03)

$

0.03

$

0.21

$

0.00

$

0.34

Statements of Cash Flow

Funds flow from operations

$

7,733

$

15,293

$

24,445

$

23,026

$

52,176

Funds flow from operations per share – basic

$

0.09

$

0.18

$

0.29

$

0.27

$

0.61

Funds flow from operations per share – diluted

$

0.09

$

0.18

$

0.28

$

0.27

$

0.60

Cash from operating activities

$

1,544

$

15,725

$

22,005

$

17,269

$

44,968

Statements of Financial Position

Property and equipment

$

554,470

$

558,956

$

515,730

$

554,470

$

515,730

Total assets

$

604,096

$

608,468

$

561,986

$

604,096

$

561,986

Working capital deficit (surplus)

$

(2,181)

$

9,278

$

6,672

$

(2,181)

$

6,672

Adjusted Net Debt

$

192,067

$

198,253

$

177,821

$

192,067

$

177,821

Shareholders equity

$

306,629

$

307,265

$

288,027

$

306,629

$

288,027

Weighted average number of shares – basic

85,380

85,380

85,363

85,380

85,361

Weighted average number of shares – diluted

85,380

85,524

86,680

85,640

86,728

Company Netbacks ($/boe)

2020

2019

Six Months Ended

Q2

Q1

Q2

2020

2019

Sales price

$

18.13

$

24.87

$

30.76

$

21.83

$

33.77

Royalty expense

(0.35)

(1.49)

(2.35)

(0.98)

(2.56)

Production costs

(5.37)

(5.67)

(5.50)

(5.53)

(5.68)

Transportation costs

(0.96)

(1.00)

(0.79)

(0.98)

(0.87)

Field operating netback

11.45

16.71

22.12

14.34

24.66

Realized gain (loss) on commodity contract settlement

(0.08)

0.05

0.22

0.00

0.19

Operating netback

11.37

16.76

22.34

14.33

24.85

G&A

(0.66)

(0.72)

(0.50)

(0.69)

(0.41)

Cash Finance expenses

(2.11)

(2.17)

(1.49)

(3.96)

(1.72)

Depletion and depreciation

(8.46)

(8.36)

(8.53)

(8.41)

(8.51)

Non Cash – Finance expenses

(1.71)

(2.11)

(0.05)

(0.05)

(0.05)

Stock-based compensation

(1.68)

(0.51)

(0.75)

(1.04)

(0.96)

Unrealized gain (loss) on financial instruments

(0.07)

0.57

0.32

0.28

(0.02)

Deferred income tax

0.15

(0.94)

4.04

(0.45)

(0.04)

Net Income netback

$

(3.18)

$

2.51

$

15.38

$

0.01

$

13.14

Business Environment

2020

2019

Six Months Ended

Q2

Q1

Q2

2020

2019

Realized Pricing (Including realized commodity contracts)

Oil ($/bbl)

$

31.31

$

52.19

$

73.77

$

44.36

$

69.81

NGL ($/bbl)

$

13.82

$

16.64

$

24.20

$

15.33

$

30.80

Gas ($/mcf)

$

2.24

$

2.11

$

1.24

$

2.10

$

1.84

Realized Pricing (Excluding commodity contracts)

Oil ($/bbl)

$

31.31

$

52.05

$

73.77

$

44.28

$

69.81

NGL ($/bbl)

$

13.98

$

16.59

$

22.80

$

15.38

$

29.57

Gas ($/mcf)

$

2.25

$

2.11

$

1.24

$

2.11

$

1.84

Oil Price Benchmarks

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

$

28.00

$

46.17

$

59.56

$

36.82

$

57.05

Edmonton Par (C$/bbl)

$

28.67

$

51.44

$

73.73

$

40.06

$

70.13

Edmonton Par to WTI differential (US$/bbl)

$

(7.31)

$

(7.85)

$

(4.44)

$

(7.47)

$

(4.42)

Natural Gas Price Benchmarks

AECO gas (Cdn$/mcf)

$

1.89

$

2.03

$

1.04

$

1.91

$

1.83

Foreign Exchange

U.S./Canadian Dollar Exchange

0.72

0.75

0.75

0.73

0.75

Operations Summary

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

2020

2019

Six Months Ended

Q2

Q1

Q2

2020

2019

Daily production volumes

Natural gas (mcf/d)

33,214

38,712

41,304

35,962

38,024

Oil (bbl/d)

2,513

3,550

4,116

3,029

4,223

NGL’s (bbl/d)

1,827

2,120

2,032

1,976

1,937

Combined (boe/d 6:1)

9,875

12,122

13,032

10,999

12,497

Revenue

Petroleum & natural gas sales – Gross

$

16,290

$

27,435

$

36,473

$

43,725

$

76,380

Realized gain (loss) on commodity contract settlement

(69)

53

260

(16)

430

Total sales

16,221

27,488

36,733

43,709

76,810

Royalty expense

(314)

(1,640)

(2,785)

(1,954)

(5,788)

Total Revenue – Net of royalties

$

15,907

$

25,848

$

33,948

$

41,755

$

71,022

Working Capital Summary

The following table summarizes the change in working capital during the six months ended June 30, 2020 and December 31, 2019: 

Six months ended

Year ended

June 30, 2020

December 31, 2019

Adjusted Net Debt – beginning of period

$

(187,711)

$

(155,882)

 Funds flow from operations

23,026

92,236

 Additions to property and equipment

(26,092)

(115,276)

 Decommissioning costs incurred

(966)

 Additions to E&E Assets

(426)

(5,723)

 Issuance of shares

41

 Other

(864)

(2,141)

 Adjusted Net Debt – end of period

$

(192,067)

$

(187,711)

Credit facility limit

$

210,000

$

225,000

Capital Spending

Capital spending is summarized as follows:

2020

2019

Six Months Ended

Cash additions

Q2

Q1

Q2

2020

2019

Land, acquisitions and lease rentals

$

36

$

104

$

98

$

140

$

136

Drilling and completion

372

22,563

8,960

22,935

47,870

Geological and geophysical

145

171

209

316

446

Equipment

273

1,968

3,346

2,241

21,667

Other asset additions

258

201

182

459

682

$

1,084

$

25,008

$

12,794

$

26,092

$

70,800

Exploration & evaluation assets

$

$

426

$

1,019

$

426

$

2,063

Quarter End Disclosure

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



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