Yangarra Resources Ltd.

Yangarra Resources Ltd.

November 20, 2006 10:38 ET

Yangarra Reports Third Quarter Results

CALGARY, ALBERTA--(CCNMatthews - Nov. 20, 2006) -

Not for distribution in the United States of America

Yangarra Resources Ltd. ("Yangarra") (TSX VENTURE:YAN) releases its financial and operating results for the nine months ended September 30, 2006. Operational highlights for the first nine months of 2006 include 38% higher revenue, 63% higher production and 14% higher cash flow from operations, compared to the same period in 2005.

Selected Financial Highlights

Net petroleum and natural gas revenue for the nine months ended September 30, 2006 totaled $4.33 million compared with $3.32 million for the same period in 2005.

Cash flow from operations for the nine month period increased from $2.88 million compared to $2.54 million in the same period of 2005. Net loss increased to $1.08 million from $0.40 million in 2005.

The working capital deficiency was $15,634,233 at September 30, 2006 compared to $12,182,618 at December 31, 2005.

Selected Operating Highlights

Natural gas production for the nine months ended September 30, 2006 increased to 3.1 MMcf/d from 1.6 MMcf/d for the same period in 2005. Oil and NGL production declined to 78 bbls/d for the period from 101 bbls/d for the same period in 2005. On a boe basis, production increased from 360 boe/d to 600 boe/d (based on 6:1 conversion).

Daily natural gas production for the three months ended September 30, 2006 was 2.78 MMcf/d comparative to 1.61 MMcf/d for the same period in 2005. Daily oil and NGL production averaged 63 bbl/d in the third quarter of 2006 compared to 95 bbl/d in the same quarter 2005.

Production and transportation costs were $1,640,950 ($10.02/boe) for the nine months ended September 30, 2006 compared to $921,936 ($9.17/boe) for the same 2005 period.

Royalties, net of the Alberta Royalty Tax Credit, for the 2006 nine period were $6.62 per boe or 15% of sales compared to $8.74 per boe or 17% of sales for the 2005 period.

With the improvement of natural gas prices in the fourth quarter, Yangarra has increased it drilling and development activity. Production commenced from the Jaslan gas gathering system in early November adding an additional 1.0 MMcf/d (1.0 million cubic feet per day) net to Yangarra.

Yangarra has planned a six well program in the fourth quarter consisting of five wells in Medicine Hat (100% working interest) and one well in Ferrier (50% working interest). Five wells in Medicine Hat have been drilled and will be tied-in by year end. In Ferrier, one well remains to be drilled. In addition, Yangarra has two standing Ferrier wells which will be tied-in by year end. Approximately 200 boe/d of the 300 boe/d currently behind pipe is scheduled to be tied in by year end. Current production is 3.9 Mmcf/d and 55 bbls/d of oil and natural gas liquids for a total of 700 boe/d (based on 6:1 conversion).

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

Selected Historical Financial Information

2006 First Second Third
Quarter Quarter Quarter
Petroleum and natural gas
revenue 3,086,261 2,035,958 1,935,781
Net petroleum and natural gas
revenue 2,035,418 1,304,724 992,616
Net income (loss) (295,158) (109,182) (673,887)
Net income (loss) per share (0.01) - (0.01)
Funds flow from operations 1,620,312 861,194 398,461
Net capital expenditures 3,383,412 772,234 2,362,227

2005 First Second Third Fourth
Quarter Quarter Quarter Quarter
Petroleum and natural gas
revenue 1,496,691 1,655,357 1,970,839 3,231,966
Net petroleum and natural gas
revenue 951,744 1,063,878 1,306,573 2,211,174
Net income (loss) (73,331) (649,962) 322,810 134,136
Net income (loss) per share - (0.02) 0.01 -
Funds flow from operations 706,244 822,684 1,006,796 1,472,621
Net capital expenditures 1,968,184 2,931,602 1,180,142 4,494,023

BOE Presentation - The term barrels of oil equivalent (BOE) may be misleading, particularly if used in isolation. 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. All BOE conversions in this report are derived by converting gas to oil in the ratio of six mcf of gas to one bbl of oil.

Financial Reporting - All numbers are reported in Canadian dollars.

Certain information regarding Yangarra set forth in this release, including management's assessment of the Company's future plans, operations and operational results may constitute forward-looking statements under applicable securities law and necessarily involve risks associated with oil and gas exploration, production, marketing, and transportation such as loss of market, volatility of prices, currency fluctuations, imprecision of reserves estimates, environmental risks, competition from other producers and ability to access sufficient capital from internal and external sources. As a consequence, actual results may differ materially from those anticipated in the forward-looking statements.

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
    (403) 262-9558