Yangarra Resources Ltd.

Yangarra Resources Ltd.

January 12, 2006 18:32 ET

Yangarra Announces Operations Update

CALGARY, ALBERTA--(CCNMatthews - Jan. 12, 2006) - YANGARRA RESOURCES LTD. (TSX VENTURE:YAN) ("Yangarra" or "the Company") is pleased to announce as of January 12th, 2006, the Company had total production of 850 Boe/d (6-1) and approximately 150 Boe/d (6-1) of production behind pipe. Construction of the gas pipelines required to produce the behind pipe volumes is currently underway with production scheduled by the end of January 2006. Yangarra also reports two recently drilled gas wells are being completed this month and will be tied into production facilities once their productivity is established.

Yangarra reports that in the 4th Quarter of 2005, the Company drilled one (1) oil well (0.33 net), ten (10) gas wells (7.22 net) and two (2) D&A (0.78 net) wells for a success rate of 90%. All of the drilling in the 4th Quarter was for "E" status (Exploration) wells, which enabled the Company to satisfy outstanding flow through liabilities. The drilling strategy of the 4th Quarter also established the parameters for Yangarra to focus on drilling predominantly development wells in 2006, which will expose significantly less exploration risk to the Company. Fourth quarter production averaged approximately 615 Boe/d. Yangarra exited 2005 with combined debt and working capital of less than $10 million and annualized cash flow of greater than $11 million.

The Exploration Budget for 2006 is currently $12-15 million. The budget funds will be primarily focused on development drilling and will be synchronized with the cash flow of the Company for 2006. Current plans call for 50-60 new drills in 2006 primarily in the Company's core areas. 1st Quarter plans include 3 deep gas tests at Medicine Hat, 2 gas wells at Mundare, 2 gas tests at Mega, 2 gas wells at Jaslan, and 2 wells in Ferrier.

This press release may contain forward-looking statements based on management's current projections, beliefs and opinions at the date of this press release. Actual results could differ materially from those anticipated in these statements.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

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