Yangarra Resources Ltd.
TSX VENTURE : YAN

Yangarra Resources Ltd.

May 30, 2006 16:15 ET

Yangarra Releases First Quarter 2006 Financials

CALGARY, ALBERTA--(CCNMatthews - May 30, 2006) - Yangarra Resources Ltd. ("Yangarra") (TSX VENTURE:YAN) announces the release of its financial results and operating results for the first three months ended March 31, 2006.



Selected Financial Information ($ Cdn)

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For the three months ended March 31
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2006 2005
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Petroleum and Natural Gas Revenue 3,086,261 1,496,691
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Net Loss (295,158) (73,331)
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Net Loss Per Share (0.01) -
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Funds Flow from Operations 1,620,312 706,244
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March 31, 2006 December 31, 2005
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Properties and Equipment 43,808,998 42,150,409
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Working Capital Deficiency 13,829,140 12,182,618
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Net petroleum and natural gas revenue for the three months ended March 31, 2006 was $2,035,418 ($31.46/boe) compared to $951,744 ($28.92/boe) for the 2005 comparative period. Capital expenditures for the first quarter i n 2006 totaled $3,383,412 compared to $1,968,184 for the same 2005 period. At March 31, 2006, Yangarra was in breach of the financial covenant on its bank debt and has obtained a letter from the lender providing a waiver of this breach.

Operations Update

Production for the period averaged 719 boe/day. During the first quarter of 2006, the Company continued exploration and development programs in the Ferrier, Medicine Hat, Mega, Inland/Mundare and Jaslan areas of Alberta and in Bayhurst, Saskatchewan. The Company drilled and cased one successful gas well in Mega area of northwest Alberta with completion of the well postponed due to winter only access. One successful gas well was drilled and cased in Bayhurst, Saskatchewan. The first quarter 2006 drilling program also consisted of one re-entry completed in Jaslan and two dry and abandoned wells drilled in Mundare.

Yangarra has packaged six properties and retained Kobayashi Partners Limited to conduct a sale of these properties, including Inland/Mundare, Bigstone, Viking South, Provost and Brazeau from Alberta and Bayhurst Saskatchewan. Bids on the property close June 2, 2006 with the completion of the sale expected by mid July 2006. Proceeds realized from the sale of these non-core properties will be utilized for debt reduction.

Presentation of barrels of oil equivalent ("boe") information - Petroleum and natural gas reserves and volumes are converted to a common unit of measure on a basis of six thousand cubic feet (mcf) of gas to one barrel (bbl) of oil. 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.

Additional information regarding financial statements and management's discussion and analysis of operations results may be obtained at www.sedar.com as well as on the Company's website at www.yangarra.ca.

The TSX Venture Exchange Inc. has not reviewed and does not accept responsibility for the adequacy and accuracy of this release.

Contact Information

  • Yangarra Resources Ltd.
    James Evaskevich
    President
    (403) 262-9558
    Website: www.yangarra.ca