CALGARY, March 16, 2016 /CNW/ – Yangarra Resources Ltd. (“Yangarra” or the “Company“) (TSX:YGR) announces its financial and operating results for the year ended December 31, 2015.
2015 Highlights
- Adjusted EBITDA (which excludes changes in derivative financial instruments) was $22.9 million ($0.36 per share – basic).
- Oil and gas sales were $25.1 million with funds flow from operations of $21.4 million ($0.34 per share – basic).
- Net loss of $4.8 million ($0.07 per share – basic) or $3.0 million before tax including a $5.4 million impairment of exploration & evaluation assets in the North Duvernay block.
- Production of 2,392 boe/d.
- Operating costs were $8.98/boe (including $1.59/boe of transportation costs).
- Operating netbacks, which include the impact of commodity contracts, were $29.02 per boe. Field net backs, which do not include the impact of commodity contracts were $18.43.
- G&A costs of $1.91/boe.
- Royalties were 6% of oil and gas revenue excluding commodity contracts and 4% of oil and gas revenue including commodity contracts.
- Total capital expenditures were $40.7 million.
- Raised $20 million of capital in May of 2015
- Net debt (which excludes the current derivative financial instruments) was $60.9 million up from $59.8 million at 2014 year end.
- Cemented liners and extended reach wells resulted in a corporate full cycle internal rate of return (“IRR”) of 31% for 2015.
- Proved plus probable finding and development costs were $2.83/boe and 462% of the 2015 production was replaced.
Fourth Quarter Highlights
- Adjusted EBITDA (which excludes changes in derivative financial instruments) was $4.5 million, funds flow from operations was $4.2 million with a net loss of $0.2 million.
- Fourth quarter 2015 production of 2,624 boe/d is a decrease of 14% compared to the 3,035 boe/d in the comparable period in 2014. Field netbacks were $15.07/boe, operating netbacks, which includes commodity contracts were $21.80/boe.
- Capital expenditures were $11.4 million in the fourth quarter of 2015. During the fourth quarter, the Company drilled and completed two wells and completed three additional wells that were drilled earlier in the year.
Hedging Program Update
The Company’s hedge position for 2016 consists of:
- 400 bbl/d costless collar with a floor of C$73.45 WTI/bbl and a ceiling of C$85.00 WTI/bbl
- 400 bbl/d Edmonton par to WTI differential at US$3.95/bbl
- 200 bbl/d at C$54.00 WTI/bbl April – June
2016 Capital Budget and Guidance
The Company’s Board of Directors has approved an initial capital budget of $24 million in 2016.
The capital budget includes drilling of eight Cardium wells in the second half of 2016 and the completion of the standing Duvernay well.
The budget is expected to increase the Company’s annual production to 2,750 – 3,000 boe/d with cash flow from operations estimated at $22 million.
The Company expects year-end 2016 debt of $63 million resulting in a debt to annual cash flow ratio of 2.9 to 1 with debt to cash flow improving to less than 2 to 1 on fourth quarter annualized cash flow. The budget assumes an average price of US$42.00/bbl for WTI crude oil (CDN$51.55 bbl Edmonton par) and an average price of $2.00/GJ for AECO natural gas.
The annual review of senior debt is scheduled for May 2016.
Financial Summary
Year Ended |
||||
2015 |
2014 |
|||
Statements of Comprehensive Income |
||||
Petroleum & natural gas sales |
$ |
25,138,007 |
$ |
54,582,213 |
Net income (loss) (before tax) |
$ |
(3,024,696) |
$ |
33,413,237 |
Net income (loss) |
$ |
(4,781,170) |
$ |
24,371,606 |
Net income (loss) per share – basic and diluted |
$ |
(0.07) |
$ |
0.45 |
Statements of Cash Flow |
||||
Funds flow from operations |
$ |
21,413,401 |
$ |
38,325,988 |
Funds flow from operating activities per share – basic and diluted |
$ |
0.34 |
$ |
0.70 |
Cash from operating activities |
$ |
21,449,863 |
$ |
31,663,428 |
Statements of Financial Position |
||||
Property and equipment |
$ |
243,709,385 |
$ |
218,154,343 |
Total assets |
$ |
266,545,156 |
$ |
250,491,053 |
Working capital deficit |
$ |
58,848,094 |
$ |
51,399,838 |
Adjusted working capital deficit (which excludes current derivative financial instruments) |
$ |
60,886,556 |
$ |
59,766,933 |
Non-Current Liabilities |
$ |
30,490,615 |
$ |
26,382,773 |
Shareholders equity |
$ |
161,133,141 |
$ |
147,838,197 |
Weighted average number of shares – basic |
63,847,376 |
54,581,750 |
||
Weighted average number of shares – diluted |
63,847,376 |
55,793,173 |
||
Company Netbacks ($/boe)
Year Ended |
|||||
2015 |
2014 |
||||
Sales price |
$ |
28.77 |
$ |
52.10 |
|
Royalty income |
0.30 |
0.81 |
|||
Royalty expense |
(1.66) |
(3.35) |
|||
Production costs |
(7.39) |
(6.89) |
|||
Transportation costs |
(1.59) |
(1.58) |
|||
Field operating netback |
18.43 |
41.10 |
|||
Commodity contract settlement (1) |
10.60 |
(0.49) |
|||
Operating netback |
29.02 |
40.62 |
|||
G&A and other (excludes non-cash items) |
(1.91) |
(2.05) |
|||
Finance expenses |
(2.87) |
(2.36) |
|||
Funds flow netback |
24.24 |
36.21 |
|||
Depletion and depreciation |
(13.29) |
(15.88) |
|||
E&E Impairment |
(6.19) |
– |
|||
Accretion |
(0.20) |
(0.16) |
|||
Stock-based compensation |
(0.94) |
(0.70) |
|||
Unrealized gain (loss) on financial instruments |
(7.07) |
12.43 |
|||
Deferred income tax |
(2.01) |
(8.63) |
|||
Net Income (loss) netback |
$ |
(5.47) |
$ |
23.26 |
|
(1) Includes $4 million relating to the monetization of certain commodity contracts in January 2015. |
Operations Summary
Net petroleum and natural gas production, pricing and revenue are summarized below:
Year Ended |
||||||
2015 |
2014 |
|||||
Daily production volumes |
||||||
Natural gas (mcf/d) |
7,722 |
8,514 |
||||
Oil (bbl/d) |
726 |
1,022 |
||||
NGL’s (bbl/d) |
333 |
364 |
||||
Royalty income |
||||||
Natural gas (mcf/d) |
196 |
271 |
||||
Oil (bbl/d) |
0 |
1 |
||||
NGL’s (bbl/d) |
13 |
20 |
||||
Combined (boe/d 6:1) |
2,392 |
2,870 |
||||
Revenue |
||||||
Petroleum & natural gas sales – Gross |
$ |
25,138,007 |
$ |
54,582,213 |
||
Royalty income |
263,004 |
853,203 |
||||
Commodity contract settlement (1) |
9,258,286 |
(510,369) |
||||
Total sales |
34,659,297 |
54,925,047 |
||||
Royalty expense |
(1,452,385) |
(3,505,935) |
||||
Total Revenue – Net of royalties |
$ |
33,206,912 |
$ |
51,419,112 |
||
(1) Includes $4 million relating to the monetization of certain commodity contracts in January 2015. |
Working Capital Summary
The following table summarizes the change in working capital during the year ended December 31, 2015 and December 31, 2014:
2015 |
2014 |
|||
Adjusted Working capital (deficit) – beginning of period |
$ |
(59,766,933) |
$ |
(36,794,243) |
Funds flow from operations |
21,413,401 |
38,325,988 |
||
Additions to property and equipment |
(36,025,121) |
(78,125,708) |
||
Additions to E&E Assets |
(4,706,547) |
(1,680,941) |
||
Issuance of shares |
18,731,470 |
26,408,338 |
||
Issuance (repayment) of Subordinated Debt |
– |
(7,786,632) |
||
Decommissioning costs incurred |
(64,178) |
(76,361) |
||
Other Debt |
(468,648) |
(37,374) |
||
Adjusted Working capital (deficit) – end of period |
$ |
(60,886,556) |
$ |
(59,766,933) |
Credit facility limit |
$ |
80,000,000 |
$ |
70,000,000 |
Capital Spending
Capital spending is summarized as follows:
Year Ended |
||||
Cash additions |
2015 |
2014 |
||
Land, acquisitions and lease rentals |
$ |
1,095,270 |
$ |
1,188,777 |
Property acquisitions (Farm-in drilling) |
1,760,152 |
2,627,312 |
||
Drilling and completion |
23,492,434 |
65,125,540 |
||
Geological and geophysical |
1,164,679 |
1,612,737 |
||
Equipment |
8,307,293 |
7,569,877 |
||
Other asset additions |
205,295 |
1,465 |
||
$ |
36,025,123 |
$ |
78,125,708 |
|
Exploration & evaluation assets additions |
$ |
4,706,547 |
$ |
– |
Annual General Meeting of Shareholders
The Company’s Annual General Meeting of Shareholders is scheduled for 10:00 AM on Thursday May 26, 2016 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).