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
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”.
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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.
Wendy S. Woolsey, CA
Vice President, Finance and CFO
Yoho Resources Inc.
Phone: 403-537-1771
www.yohoresources.ca[/expand]