Yangarra Resources Ltd.
TSX VENTURE : YAN

Yangarra Resources Ltd.

August 26, 2005 16:34 ET

Yangarra Releases Second Quarter Financials and Appoints New VP Exploration

CALGARY, ALBERTA--(CCNMatthews - Aug. 26, 2005) - YANGARRA RESOURCES INC. ("Yangarra") (TSX VENTURE:AYX) is pleased to announce the appointment of Don Poruchny, P.Geol (Geophysicist) as Vice President, Exploration. Mr. Poruchny has 28 years of experience, most recently with Yangarra since September 2003, and prior thereto held positions at Glacier Ridge Resources Ltd., Husky Oil Operations, and Renaissance Energy. Mr. Poruchny will provide the leadership required for Yangarra's expanded exploration group.

Yangarra also announces the results for the second quarter of 2005 with highlights as follows:

- Average daily production was up 43% to 375 barrels of oil equivalent per day (Boepd), as compared to one year ago. Current production is 450 Boepd.

- Revenue for the second quarter was up 112% at $1.65M as compared to one year ago.

- Yangarra realized gross prices of $65.07 per barrel of oil, $7.37 per mcf of gas and $44.37 per barrel of natural gas liquids in the second quarter. Production expenses averaged $7.43 Boe with field net backs averaging $31.05/Boe for the quarter.

- Company net debt is $9.4 M with the bank debt at $7.2 at June 30, 2005. The credit line with the National Bank consists of a $7.35M operating line of credit and $1.15M development line of credit. Yangarra is in breach of one of its covenants with the National Bank, which the bank has waived at the quarter end.

- Subsequent to the quarter end, all the outstanding warrants totaling 2,375,000 were exercised at $0.30 for proceeds of $712,500.

Should more detail be required, financial statements, and MD&A for the second quarter can be found on Sedar or our website @ www.yangarra.ca



Highlights

Three Months Ended June 30 Six Months Ended June 30
--------------------------------------------------------
% %
2005 2004 Change 2005 2004 Change
------------------------------------------------------------------------
Production
Oil (bbls/d) 77.8 - 76.6 -
Natural gas
(mcf/d) 1,620.7 1,133.5 43% 1,590.9 923.7 72%
Liquids (bbls/d) 26.5 23.1 15% 28.6 11.5 148%

Total boe per
day (6:1) 374.4 212.0 77% 370.3 165.5 124%
Total boe 34,261.4 19,291.7 78% 67,023.7 30,117.7 123%

Boe per day
- Ferrier 201.2 112.1 80% 197.4 56.0 252%
Boe per day
- Medicine Hat 173.2 99.9 73% 172.9 109.4 58%

Prices
Oil ($/bbl) 65.07 - 0% 62.81 - 0%
Natural gas
($/mcf) 7.37 6.75 9% 7.14 6.58 9%
Liquids ($/bbl) 44.37 39.82 11% 42.80 39.82 7%

$ per boe
Petroleum and
natural gas
sales 48.32 40.44 19% 46.86 39.50 19%
Royalties, net
of ARTC 8.99 12.72 -29% 8.32 8.57 -3%
Transportation and
marketing fees 0.85 1.16 -27% 0.84 1.34 -37%
Production
expenses 7.43 6.73 10% 7.79 9.35 -17%
Field net back 31.05 19.83 57% 29.91 20.25 48%

Administration 5.06 6.89 -27% 5.34 12.21 -56%
Interest expense 1.98 0.80 146% 1.92 0.55 251%
Cash flow from
operations 24.01 12.14 98% 22.81 7.49 205%

Financial
Petroleum and
natural gas
sales 1,655,357 780,177 112% 3,140,923 1,189,719 164%
Processing
income - - 11,125 -
Royalties, net
of ARTC 308,001 245,296 26% 557,880 258,205 116%
Cash flow from
operations 822,684 234,126 251% 1,528,928 225,487 578%

Earnings (Loss) (649,962) (219,041) 197% (723,293) (329,443) 120%


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

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