CALGARY, March 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).