CALGARY, ALBERTA–(Marketwired – Dec. 11, 2014) – Yoho Resources Inc. (“Yoho” or the “Company”) (TSX VENTURE:YO) has filed today on SEDAR the financial statements for the year ended September 30, 2014 and the related managements’ discussion and analysis (“MD&A”). Yoho today also filed its Annual Information Form for the year ended September 30, 2014 which includes the Company’s reserves data and other oil and gas information for the year ended September 30, 2014 as mandated by National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities of the Canadian Securities Administrators (“NI 51-101”). Yoho’s independent reserve evaluation for the year ended September 30, 2014 was prepared by GLJ Petroleum Consultants Ltd. (“GLJ”). Copies of these documents may be found on www.sedar.com. Yoho also announces the results of its independent reserves and resources evaluation of its Kaybob Duvernay assets as prepared by GLJ effective September 30, 2014. Highlights
- Yoho’s production during fiscal 2014 averaged 1,712 boe per day (29% oil and natural gas liquids (“NGL”)), compared to fiscal 2013 production of 2,337 boe per day (29% oil and NGL). The reduced production is a result of the disposition of the Nig Creek asset in January 2014 and the extended facilities outages during the summer of 2014 at Kaybob, Alberta. Yoho exited the fiscal year with September 2014 production averaging approximately 1,900 boe per day with an estimated 450 boe per day behind pipe awaiting tie-in.
- Yoho generated funds from operations for fiscal 2014 of $11.1 million ($0.22 per share basic).
- Net exploration and development expenditures for fiscal 2014 were $31.7 million. During the year ended September 30, 2014 Yoho drilled 7 (4.3 net) wells.
- Yoho maintained a flexible balance sheet with total net debt of $16.2 million at September 30, 2014 on bank credit facilities of $50 million.
- Yoho continued to build project inventory during 2014 and has now assembled 37.5 net sections of lands in a new area that is highly prospective for resource style exploitation.
- Yoho’s proved plus probable reserves (Company interest) as evaluated by GLJ as at September 30, 2014 were 31.8 MMboe, with reserve additions for the year of 6.8 MMboe and asset dispositions (primarily at Nig Creek, British Columbia) during the year of 27.2 MMboe. The Company’s proved reserves (Company interest) as at September 30, 2014 were 11.7 MMboe.
- The net present value of Yoho’s estimated future net revenue before income taxes from proved plus probable reserves as at September 30, 2014 and utilizing GLJ’s October 1, 2014 price forecast and discounted at 10%, is $248.6 million and the net present value of total proved reserves as at September 30, 2014 is $89.4 million.
- For fiscal 2014, Yoho achieved estimated all-in finding, development and acquisition costs of $7.82 per boe (including all technical revisions and changes in future development capital). For the past three years, Yoho’s rolling average estimated finding, development and acquisition costs were $16.08 per boe (including all technical revisions and changes to future development capital). Total future development capital for Yoho’s proved plus probable reserves at September 30, 2014 is $404.5 million scheduled over six years. Total future development capital for Yoho’s total proved reserves at September 30, 2014 is $153.6 million scheduled over five years.
- Yoho’s net asset value per share as at September 30, 2014 is calculated at $5.91 per share (basic) including an internal land value of $78.5 million and $4.41 per share (basic) excluding land value.
- The best estimate for the Company’s Contingent Resources for the evaluated area at Kaybob in the Duvernay formation is 89.2 MMboe as at September 30, 2014, consisting of 324.4 bcf of natural gas and 35.1 million barrels of natural gas liquids. This estimate excludes all proved plus probable reserves assigned to Yoho’s interests at Kaybob by GLJ as at September 30, 2014.
- The best estimate of the Kaybob Duvernay Contingent Resources has a net present value to Yoho of $546.7 million (after the recovery of all anticipated capital) using a discount rate of 10% and utilizing the GLJ price forecast as at October 1, 2014. The net present value of the best estimate of the Kaybob Duvernay Contingent Resources is $10.38 per share basic. This value has not been included in the calculation of Yoho’s net asset value.
Year ended September 30, 2014 | Year ended September 30, 2013 | ||||
Financial ($) | |||||
Petroleum and natural gas sales | 26,234,952 | 29,947,024 | |||
Funds from operations (1) | 11,135,762 | 13,774,664 | |||
per share – basic | 0.22 | 0.27 | |||
per share – diluted | 0.21 | 0.27 | |||
Net income (loss) | 43,154,230 | 9,602,087 | |||
per share – basic | 0.83 | 0.19 | |||
per share – diluted | 0.82 | 0.19 | |||
Net exploration and development expenditures | 31,721,969 | 30,437,985 | |||
Net acquisitions and dispositions | (30,194,887 | ) | (3,525,433 | ) | |
Total assets | 164,812,494 | 181,222,323 | |||
Total debt (including working capital deficiency) | 16,225,061 | 31,227,793 | |||
Shareholders’ equity | 114,110,071 | 125,320,647 | |||
Weighted average common shares outstanding | |||||
Basic | 51,703,235 | 50,427,189 | |||
Diluted | 52,708,183 | 50,473,765 |
Year ended September 30, 2014 | Year ended September 30, 2012 | |||||
Operations | ||||||
Production | ||||||
Natural gas (mcf/d) | 7,292 | 9,985 | ||||
Oil and NGL (bbls/d) | 497 | 673 | ||||
Combined (boe/d) | 1,712 | 2,337 | ||||
Realized sales prices | ||||||
Natural gas ($/mcf) | 4.47 | 3.29 | ||||
Oil and NGL ($/bbl) | 80.06 | 73.09 | ||||
Funds from operations per boe ($/boe) | ||||||
Petroleum and natural gas sales | 41.97 | 35.10 | ||||
Royalties | (4.26 | ) | (3.31 | ) | ||
Operating expenses | (12.59 | ) | (11.25 | ) | ||
Operating netback (2) | 25.12 | 20.54 | ||||
General and administrative | (4.74 | ) | (3.19 | ) | ||
Interest | (1.05 | ) | (1.57 | ) | ||
Realized gain (loss) on financial derivative contracts | (1.51 | ) | 0.36 | |||
Funds from operations (1) | 17.82 | 16.14 | ||||
Drilling activity | ||||||
Total wells | 7 | 2 | ||||
Working interest wells | 4.3 | 1.5 | ||||
Undeveloped land (net acres) | 89,755 | 110,300 |
Notes: | |
(1) Funds from operations is calculated as cash provided by operating activities, adding the change in non-cash working capital, decommissioning obligation expenditures. Funds from operations is used to analyze the Company’s operating performance and leverage. Funds from operations does not have a standardized measure prescribed by IFRS and therefore may not be comparable with the calculations of similar measures for other companies. Yoho’s calculation of funds from operations is detailed in the MD&A for the years ended September 30, 2014 and 2013. | |
(2) Operating netback equals petroleum and natural gas sales including realized hedging gains and losses on commodity contracts less royalties, operating costs and transportation costs calculated on a boe basis. Operating netback and funds from operations netback do not have a standardized measure prescribed by IFRS and therefore may not be comparable with the calculations of similar measures for other companies. |
OPERATIONS UPDATE Kaybob Duvernay Yoho is currently participating in the completion of two (0.83 net) horizontal Duvernay wells in the Kaybob area. A 19 stage completion operation is underway for the well at 16-33-60-20 W5 (33.3 %) and a 22 stage completion operation is planned for the well at 14-21-61-20 W5 (50%). The completion operations are scheduled to be finished by calendar year end 2014, with testing of the wells to follow in early 2015. Yoho is also currently participating in the drilling of a Duvernay horizontal well at 04-31-60-20 W5 (33.3%). The well at 02-25-62-22 W5 (50%), previously drilled and completed, is awaiting tie-in which is currently scheduled for early 2015. LAND HOLDINGS The Company internally estimated the fair market value of its net undeveloped land holdings as at September 30, 2014 to be $78.5 million. This evaluation was completed principally using industry activity levels, third party transactions and land acquisitions that occurred in proximity to Yoho’s undeveloped lands during the previous 12 months. A summary of the Company’s land holdings at September 30, 2014 is outlined below:
Developed Acres | Undeveloped Acres | Total Acres | ||||
Location | Gross (1) | Net (2) | Gross (1) | Net (2) | Gross (1) | Net (2) |
Alberta | 66,520 | 28,827 | 68,729 | 37,732 | 135,249 | 66,559 |
British Columbia | 52,030 | 31,208 | 63,224 | 52,022 | 115,254 | 83,230 |
Other | 324 | 117 | – | – | 324 | 117 |
Total | 118,874 | 60,152 | 131,953 | 89,755 | 250,826 | 149,907 |
Notes: | |
(1) “Gross” means the total area of properties in which the Company has an interest. | |
(2) “Net” means the total area in which the Company has an interest multiplied by the working interest owned by the Company. |
CORPORATE RESERVES The reserves data set forth below is based upon an independent reserve assessment and evaluation prepared by GLJ with an effective date of September 30, 2014 (the “GLJ Report”). The following summarizes the Company’s crude oil, natural gas liquids and natural gas reserves and the net present values before income taxes of future net revenue for the Company’s reserves using forecast prices and costs based on the GLJ Report. The GLJ Report has been prepared in accordance with the standards contained in the Canadian Oil and Gas Evaluation Handbook (the “COGE Handbook”) and the reserve definitions contained in National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities (“NI 51-101”). All evaluations and reviews of future net cash flows are stated prior to any provisions for interest costs or general and administrative costs and after the deduction of estimated future capital expenditures for wells to which reserves have been assigned. It should not be assumed that the estimates of future net revenues presented in the tables below and in the “Highlights” section above represent the fair market value of the reserves. There is no assurance that the forecast prices and cost assumptions will be attained and variances from these assumptions could be material. The recovery and reserve estimates of our crude oil, natural gas liquids and natural gas reserves provided herein are estimates only and there is no guarantee that the estimated reserves will be recovered. Actual crude oil, natural gas and natural gas liquids reserves may be greater than or less than the estimates provided herein. Reserves Summary Yoho’s proved plus probable reserves (Company interest) as evaluated by GLJ as at September 30, 2014 were 31.8 MMboe, with reserve additions for the year of 6.8 MMboe and asset dispositions during the year of 27.2 MMboe. Total future development capital for Yoho’s proved plus probable reserves at September 30, 2014 is $404.5 million scheduled over six years. Total future development capital for Yoho’s total proved reserves at September 30, 2014 is $153.6 million scheduled over five years. The following table provides summary reserve information based upon the GLJ Report and using the published GLJ (October 1, 2014) price forecast.
Light and Medium Oil | Heavy Oil | Natural Gas Liquids | |||||||
Company Interest (1) | Net (2) | Company Interest (1) | Net(2) | Company Interest (1) | Net (2) | ||||
(Mbbl) | (Mbbl) | (Mbbl) | (Mbbl) | (Mbbl) | (Mbbl) | ||||
Proved | |||||||||
Proved producing | 182 | 150 | 88 | 72 | 837 | 616 | |||
Non-producing | 9 | 8 | 6 | 5 | 117 | 92 | |||
Undeveloped | 138 | 113 | – | – | 2,884 | 2,306 | |||
Total proved | 329 | 271 | 94 | 77 | 3,837 | 3,014 | |||
Probable | 254 | 209 | 30 | 24 | 7,335 | 5,748 | |||
Total proved & probable (4) | 583 | 480 | 125 | 102 | 11,172 | 8,762 | |||
Natural Gas | Total Barrels of Oil Equivalent (3) | |||||
Company Interest (1) | Net (2) | Company Interest (1) | Net (2) | |||
(Mmcf) | (Mmcf) | (Mboe) | (Mboe) | |||
Proved | ||||||
Proved producing | 15,639 | 14,325 | 3,714 | 3,225 | ||
Non-producing | 1,456 | 1,329 | 374 | 327 | ||
Undeveloped | 27,703 | 25,783 | 7,638 | 6,716 | ||
Total proved | 44,798 | 41,437 | 11,727 | 10,268 | ||
Probable | 74,780 | 69,256 | 20,083 | 17,524 | ||
Total proved & probable (4) | 119,578 | 110,693 | 31,809 | 27,792 |
Notes: | |
(1) “Company Interest” reserves means Yoho’s working interest (operating and non-operating) share before deduction of royalties and including any royalty interest of the Company. | |
(2) “Net” reserves means Yoho’s working interest (operated and non-operated) share after deduction of royalty obligations, plus Yoho’s royalty interest in reserves. | |
(3) Barrels of oil equivalent amounts have been calculated using a conversion rate of six thousand cubic feet of natural gas to one barrel of oil. BOEs may be misleading, particularly if used in isolation. A BOE conversion ratio of six thousand cubic feet of natural gas to one barrel of oil 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. | |
(4) May not add due to rounding. |
Reserves Reconciliation The following table provides a reconciliation of the Company’s total proved and total proved and probable reserves.
Total Barrels of Oil Equivalent (2) | ||||
Company Interest (1) | Total Proved | Total Proved & Probable | ||
(Mboe) | (Mboe) | |||
Total at September 30, 3013 | 11,849 | 52,742 | ||
Drilling Extensions & Technical Revisions | 3,182 | 6,842 | ||
Property Dispositions | (2,679 | ) | (27,149 | ) |
Production | (625 | ) | (625 | ) |
Total at September 30, 2014 | 11,727 | 31,809 |
Notes: | |
(1) “Company Interest” reserves means Yoho’s working interest (operating and non-operating) share before deduction of royalties and including any royalty interest of the Company. | |
(2) Barrels of oil equivalent amounts have been calculated using a conversion rate of six thousand cubic feet of natural gas to one barrel of oil. BOEs may be misleading, particularly if used in isolation. A BOE conversion ratio of six thousand cubic feet of natural gas to one barrel of oil 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. |
Reserves Values The estimated before tax net present value of future net revenues associated with Yoho’s reserves effective September 30, 2014 and based on the published GLJ (October 1, 2014) future price forecast are summarized in the following table:
Discounted at | ||||||||||
Undiscounted | 5% | 10% | 15% | 20% | ||||||
(M$) | ||||||||||
Proved | ||||||||||
Proved producing | 81,079 | 63,343 | 52,537 | 45,319 | 40,162 | |||||
Non-producing | 9,621 | 7,707 | 6,469 | 5,604 | 4,962 | |||||
Undeveloped | 121,755 | 62,047 | 30,377 | 12,130 | 974 | |||||
Total proved | 212,454 | 133,098 | 89,383 | 63,053 | 46,098 | |||||
Probable | 502,901 | 267,238 | 159,244 | 102,179 | 68,845 | |||||
Total proved plus probable (3) | 715,355 | 400,337 | 248,628 | 165,231 | 114,943 |
Notes: | |
(1) The estimated future net revenues are stated before deducting future estimated site restoration costs and are reduced for estimated future abandonment costs and estimated capital for future development associated with the reserves. | |
(2) The net present value of future revenues does not represent fair market value. | |
(3) May not add due to rounding. |
Future Development Costs The following table sets forth development costs deducted in the estimation of the future net revenue attributable to the reserve categories noted above.
Development Costs Forecast Prices and Costs | ||||
Proved Reserves | Proved Plus Probable Reserves | |||
Year | (M$) | (M$) | ||
Q4 2014 | 2,195 | 2,295 | ||
2015 | 25,739 | 37,697 | ||
2016 | 58,223 | 89,117 | ||
2017 | 42,532 | 87,299 | ||
2018 | 23,480 | 103,796 | ||
2019 | 166 | 82,349 | ||
2020 | 113 | 113 | ||
2021 | 115 | 152 | ||
2022 | 117 | 117 | ||
2023 | 120 | 120 | ||
Remainder | 803 | 1,464 | ||
Total Undiscounted (all years) | 153,601 | 404,517 | ||
Total discounted 10% | 125,109 | 305,471 |
Price Forecast The GLJ October 1, 2014 price forecast is summarized as follows:
Year | $US/$Cdn Exchange | WTI @ Cushing | Edmonton light crude oil | Hardisty Heavy 12 API | Natural gas at AECO-C | Westcoast Station 2 |
Rate | spot | |||||
(US$/bbl) | (C$/bbl) | ($Cdn/bbl) | (C$/MMbtu) | (C$/MMbtu) | ||
Q4 2014 | 0.90 | 92.50 | 97.22 | 79.89 | 3.99 | 4.12 |
2015 | 0.90 | 92.50 | 97.22 | 73.96 | 4.02 | 4.10 |
2016 | 0.90 | 95.00 | 100.00 | 76.10 | 4.02 | 4.10 |
2017 | 0.90 | 95.00 | 102.78 | 78.24 | 4.26 | 4.35 |
2018 | 0.90 | 97.50 | 105.56 | 80.38 | 4.51 | 4.60 |
2019 | 0.90 | 97.50 | 105.56 | 80.38 | 4.76 | 4.85 |
2020 | 0.90 | 98.54 | 106.37 | 81.01 | 5.01 | 5.10 |
2021 | 0.90 | 100.51 | 108.49 | 82.64 | 5.22 | 5.31 |
2022 | 0.90 | 102.52 | 110.66 | 84.30 | 5.32 | 5.42 |
2023 | 0.90 | 104.57 | 112.87 | 85.98 | 5.43 | 5.52 |
Thereafter | – | +2.0%/yr | +2.0%/yr | +2.0%/yr | +2.0%/yr | +2.0%/yr |
Note: | |
(1) Inflation is accounted for at 2.0% per year |
Capital Program Efficiency The efficiency of the Company’s capital program for the fiscal year ended September 30, 2014 and other prior periods is summarized below. With the disposition by the Company of its Nig Creek, British Columbia properties, in January 2014, the capital efficiency calculations include a large reduction in related reserves and future development capital.
Fiscal 2014 | Fiscal 2013 | Three Year Average 2012 – 2014 | |||||||||||
Proved | Proved | Proved | |||||||||||
plus | plus | plus | |||||||||||
Proved | Probable | Proved | Probable | Proved | Probable | ||||||||
Exploration and development expenditures | |||||||||||||
($ thousands) | 31,722 | 31,722 | 30,438 | 30,438 | 95,775 | 95,775 | |||||||
Change in future development capital – exploration and development ($thousands) | 43,294 | 100,086 | 30,229 | 222,505 | 130,954 | 520,197 | |||||||
Net acquisitions (dispositions) ($ thousands) (2) | (88,120 | ) | (88,120 | ) | (3,525 | ) | (3,525 | ) | (91,052 | ) | (91,052 | ) | |
Change in future development capital – exploration and development related to dispositions ($thousands) | (19,431 | ) | (202,409 | ) | – | – | (19,431 | ) | (202,409 | ) | |||
Total | (32,535 | ) | (158,721 | ) | 57,142 | 249,418 | 116,246 | 322,511 | |||||
Reserves additions after revisions (Mboe) (4) | |||||||||||||
– Exploration and development | 3,023 | 6,837 | 2,152 | 26,222 | 8,955 | 47,082 | |||||||
– Revisions | 159 | 5 | 17 | 479 | 286 | 601 | |||||||
– Net acquisitions (dispositions) | (2,679 | ) | (27,149 | ) | (288 | ) | (556 | ) | (2,942 | ) | (27,622 | ) | |
– Total reserve additions after revisions | 503 | (20,307 | ) | 1,881 | 26,146 | 6,299 | 20,061 | ||||||
Finding & Development Costs ($/boe)(1) | 23.58 | 19.27 | 27.97 | 9.47 | 24.54 | 12.92 | |||||||
Finding, Development & Acquisition Costs ($/boe) (4) | (64.68 | ) | 7.82 | 30.38 | 9.54 | 18.46 | 16.08 | ||||||
Notes: | |
(1) The aggregate of the exploration and development costs incurred in the most recent financial year and the change during that year in estimated future development costs generally will not reflect total finding and development costs related to reserve additions for that year. | |
(2) Acquisition costs related to corporate acquisitions reflects the consideration paid for the shares acquired plus the net debt assumed, both valued at closing and does not reflect the fair market value allocated to the acquired oil and gas assets under IFRS. | |
(3) This calculation includes reserve revisions and changes in future development costs. Yoho also calculates finding, development and acquisition (“FD&A”) costs which incorporate both the costs and associated reserve additions related to acquisitions net of any dispositions during the year. Since acquisitions can have a significant impact on Yoho’s annual reserve replacement costs, the Company believes that FD&A costs provide a more meaningful representation of Yoho’s cost structure than finding and development costs alone. | |
(4) Oil equivalent amounts have been calculated using a conversion rate of six thousand cubic feet of natural gas to one barrel of oil. BOEs may be misleading, particularly if used in isolation. A BOE conversion ratio of six thousand cubic feet of natural gas to one barrel of oil 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. |
Net Asset Value The following table provides a calculation of Yoho’s estimated net asset value and net asset value per share as at September 30, 2014 based on the estimated future net revenues associated with Yoho’s proved plus probable reserves discounted at 10% as presented in the GLJ Report.
Forecast Prices and Costs before tax | ($ thousands) | ||
Proved plus probable reserves – discounted at 10% | 248,628 | ||
Undeveloped land (1) | 78,500 | ||
Bank debt and working capital deficiency as at September 30, 2014 (2) | (16,225 | ) | |
Net asset value | 310,903 | ||
Common shares outstanding at September 30, 2014 (thousands) – Basic | 52,643 | ||
Net asset value per share – basic | $ | 5.91 | |
Net asset value per share – basic (excluding land value) | $ | 4.41 |
Notes: | |
(1) Internally estimated value (see “Land Holdings”). | |
(2) Working capital deficiency includes an estimate of the Company’s accounts receivable less accounts payable and accrued liabilities and derivatives as at September 30, 2014. |
RESOURCE AND RESERVES EVALUATION FOR KAYBOB DUVERNAY GLJ was engaged to prepare an independent evaluation report of Yoho’s reserves and contingent resources at Kaybob, Alberta effective as at September 30, 2014 (the “GLJ Kaybob Report”). The GLJ Kaybob Report was prepared in accordance with NI 51-101 and the COGE Handbook. The GLJ Kaybob Report evaluated 100% of Yoho’s acreage at Kaybob. Resource Evaluation
Summary of Company Duvernay Contingent Resources (1)(2)(3)(4) | |||
Forecast Prices and Costs | |||
As at September 30, 2014 | |||
Natural Gas | Natural Gas Liquids | BOE | |
(MMcf) | (Mbbl) | (MBoe) | |
Low Estimate (5) | 262,242 | 28,385 | 72,092 |
Best Estimate (5) | 324,361 | 35,097 | 89,157 |
High Estimate (5) | 395,970 | 42,901 | 108,896 |
Notes: | |
(1) Yoho’s total working interest contingent resources are before deducting royalties owned by others. | |
(2) Oil equivalent amounts have been calculated using a conversion rate of six thousand cubic feet of natural gas to one barrel of oil. BOEs may be misleading, particularly if used in isolation. A BOE conversion ratio of six thousand cubic feet of natural gas to one barrel of oil 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. | |
(3) The estimates of contingent resources for individual properties may not reflect the same confidence level as estimates of net present values for all properties, due to the effects of aggregation. | |
(4) May not add due to rounding. | |
(5) See note on probabilities under “Special Note Regarding Disclosure of Reserves or Resources” below. |
Summary of Company Duvernay Contingent Resources Net Present Values of Future Revenue (1)(2)(3)(4)(5) | |||||
Forecast Prices and Costs | |||||
Before Income Taxes ($ thousands) as at September 30, 2014 | |||||
Discounted at | |||||
Undiscounted | 5% | 10% | 15% | 20% | |
Low Estimate (6) | 1,618,819 | 696,147 | 321,849 | 153,366 | 71,782 |
Best Estimate (6) | 2,393,935 | 1,086,158 | 546,652 | 294,514 | 165,738 |
High Estimate (6) | 3,304,048 | 1,546,150 | 814,601 | 464,717 | 280,318 |
Notes: | |
(1) The estimated future net revenues are stated before deducting income taxes and future estimated site restoration costs, and are reduced for estimated future abandonment costs and estimated capital for future development associated with the contingent resource. | |
(2) It should not be assumed that the undiscounted and discounted net present values represent the fair market value of the contingent resource. | |
(3) The estimates of net present values for individual properties may not reflect the same confidence level as estimates of net present values for all properties, due to the effects of aggregation. | |
(4) Based on GLJ’s price forecast dated October 1, 2014. | |
(5) Numbers in this table are subject to rounding error. | |
(6) See note on probabilities under “Special Note Regarding Disclosure of Reserves or Resources” below. |
Contingent resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations using established technology or technology under development, but which are not currently considered to be commercially recoverable due to one or more contingencies. Contingencies which must be overcome to enable the reclassification of contingent resources as reserves can be categorized as economic, non-technical and technical. The COGE Handbook identifies non-technical contingencies as legal, environmental, political and regulatory matters or a lack of markets. There are several non-technical contingencies that prevent the classification of the contingent resources estimated above as being classified as reserves. The primary contingency which prevents the classification of Yoho’s contingent resources as reserves is the current early stage of development. Additional drilling, completion, and testing data is generally required before Yoho can commit to their development. It is also appropriate to classify as contingent resources the estimated discovered recoverable quantities associated with a project in the early evaluation stage. As additional drilling takes place, it is expected that the contingent resources will be booked into the reserves category. Estimates of contingent resources described herein are estimates only; the actual resources may be higher or lower than those calculated in the GLJ Kaybob Report. There is no certainty that it will be commercially viable to produce any portion of the resources described in the evaluation. The most significant positive and negative factors with respect to the contingent resource estimates relate to the fact that the field is currently at an evaluation/delineation stage. Resource-in-place, productivity and capital costs may be higher or lower than current estimates. Additional drilling and testing are required to confirm volumetric estimates and reservoir productivity for the contingent resources to be reclassified as reserves. Reserves Evaluation The Company’s working interest of total proved plus probable reserves for the Duvernay at Kaybob as at September 30, 2014 is estimated by GLJ to be 25.1 MMboe. The reserves evaluation incorporates approximately 38% of Yoho’s land base at Kaybob, Alberta and is included, and forms part of the corporate reserves summary set forth above.
Summary of Kaybob Duvernay Company Working Interest Reserves (1) (2) (3) (4) (5) | ||||
Forecast Prices and Costs | ||||
As at September 30, 2014 | ||||
Natural Gas | Natural Gas Liquids | BOE Total Barrels of Oil Equivalent | ||
(MMcf) | (Mbbl) | (MBoe) | ||
Proved producing | 4,532 | 619 | 1,374 | |
Total proved | 27,355 | 3,526 | 8,085 | |
Total probable | 60,853 | 6,861 | 17,003 | |
Total proved plus probable | 88,208 | 10,387 | 25,088 |
Notes: | |
(1) Yoho’s total working interest means Yoho’s working interest (operated and non-operated) share before deducting royalties and including any royalty interests of the Company. | |
(2) Oil equivalent amounts have been calculated using a conversion rate of six thousand cubic feet of natural gas to one barrel of oil. BOEs may be misleading, particularly if used in isolation. A BOE conversion ratio of six thousand cubic feet of natural gas to one barrel of oil 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. | |
(3) The estimates of reserves for individual properties may not reflect the same confidence level as estimates of reserves for all properties, due to the effects of aggregation. | |
(4) Includes non-associated gas, associated gas and solution gas. | |
(5) Numbers in this table are subject to rounding error. |
Summary of Kaybob Duvernay Company Net Present Value of Future Revenue from Reserves (1) (2) (3) (4) (5) | |||||
Forecast Prices and Costs | |||||
Before Income Taxes ($ thousands) | |||||
As at September 30, 2014 | |||||
Discounted at | |||||
Undiscounted | 5% | 10% | |||
Total proved | 154,797 | 91,149 | 56,880 | ||
Total probable | 426,951 | 223,796 | 131,353 | ||
Total proved plus probable | 581,748 | 314,945 | 188,233 |
Notes: | |
(1) The estimated future net revenues are stated before deducting income taxes and future estimated site restoration costs, and are reduced for estimated future abandonment costs and estimated capital for future development associated with the reserves. | |
(2) It should not be assumed that the undiscounted and discounted net present values represent the fair market value of the reserves. | |
(3) The estimates of net present values for individual properties may not reflect the same confidence level as estimates of net present values for all properties, due to the effects of aggregation. | |
(4) Based on GLJ’s price forecast dated October 1, 2014. | |
(5) Numbers in this table are subject to rounding error. |
OUTLOOK Yoho is continuing with its Duvernay program at Kaybob. Yoho is currently participating in the completion of two (0.83 net) horizontal Duvernay wells and in the drilling of a Duvernay horizontal well at a 33.3% working interest. An estimated 450 net boe per day of production from a well recently completed at Kaybob is behind pipe awaiting tie-in. The capital program will be monitored in light of the recent volatility in commodity prices. 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”.
- Individual properties may not reflect the same confidence level as estimates of reserves for all properties due to the effects of aggregation.
- With respect to finding and development costs, the aggregate of the exploration and development costs incurred in the most recent financial year and the change during that year in estimated future development costs generally will not reflect total finding and development costs related to reserve additions for that year.
- This press release contains estimates of the net present value of our future net revenue from our reserves. Such amounts do not represent the fair market value of our reserves.
- Reserves included herein are stated on a company interest basis (before royalty burdens and including royalty interests) unless noted otherwise as well as on a gross and net basis as defined in NI 51-101. “Company interest” is not a term defined by NI 51-101 and as such the estimates of Company interest reserves herein may not be comparable to estimates of “gross” reserves prepared in accordance with NI 51-101 or to other issuers’ estimates of company interest reserves.
Selected Definitions The following terms used in this press release have the meanings set forth below:
“AECO” refers to a natural gas storage facility located at Suffield, Alberta |
“API” means American Petroleum Institute |
“bbl” means barrel |
“bcf” means one billion cubic feet |
“boe” means barrel of oil equivalent of natural gas and crude oil on the basis of 1 boe for six thousand cubic feet of natural gas (this conversion factor is and industry accepted norm and is not based on either energy content or current prices) |
“Mbbl” means thousand barrels |
“Mboe” means 1,000 barrels of oil equivalent |
“MMboe” means one million barrels of oil equivalent |
“Mcf” means one thousand cubic feet |
“Mmcf” means one million cubic feet |
“MMbtu” means million British Thermal Units |
“$M” means thousands of dollars |
Yoho Resources Inc. Wendy S. Woolsey, CA Vice President, Finance and CFO (403) 537-1771 www.yohoresources.ca