Yoho Resources Inc.

Yoho Resources Inc.

December 09, 2009 16:45 ET

Yoho Resources Inc. Announces 2009 Fiscal Year End Financial and Operating Results; Winter Drilling Plans Will Focus on Evaluating Three Resource Play Concepts

CALGARY, ALBERTA--(Marketwire - Dec. 9, 2009) -


Yoho Resources Inc. ("Yoho" or the "Company") (TSX VENTURE:YO) filed today its audited consolidated financial statements and related Management's Discussion and Analysis for the year ended September 30, 2009. The Company today also filed its Annual Information Form which includes the Corporation's reserves data and other oil and gas information for the year ended September 30, 2009 as mandated by National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities of the Canadian Securities Administrators. Copies of these documents may be found on www.sedar.com.


- Increased production 19% to 2,428 boe per day for year ended September 30, 2009 from 2,040 boe per day for the year ended September 30 2008. Production per share increased 10% in fiscal 2009 as compared to fiscal 2008.

- Generated funds from operations for fiscal 2009 of $11.2 million. On a per share basis, funds from operations for the year ended September 30, 2009 were $0.54 per share diluted.

- Yoho exited fiscal 2009 with total debt (including working capital deficiency) of $24.5 million on a bank credit facility of $32 million.

- Improved overall cash costs (operating, processing, G&A and interest) to $11.78 per boe for the year ended September 30, 2009 compared to $12.72 per boe for the year ended September 30, 2008.

- Net capital expenditures for fiscal 2009 were $15.3 million which include $2.3 million spent on land acquisitions. Capital expenditures for fiscal 2009 were 41% lower than the $26.1 million spent in fiscal 2008.

- Advanced certain resource play concepts, three of which will be drilled in winter 2010.

- Closed a property acquisition in the Howard area of Alberta for $1.8 million. The acquisition added production of approximately 100 boe per day effective April 1, 2009 and included undeveloped land and 2D and 3D seismic.

- Drilled 15 (9.4 net) wells with an overall success rate of 85% on net wells drilled.

- Replaced 127% of proved reserves and 177% of proved plus probable reserves despite substantially reduced capital expenditures.

- For fiscal 2009 Yoho achieved all-in finding, development and acquisition costs of $11.43 per boe (including all technical revisions and changes in future capital). For the past three years, the rolling average finding, development and acquisition costs were $16.49 per boe (including all technical revisions and changes in future capital).

- Yoho's net asset value at September 30, 2009 is calculated at $3.75 per share based on estimated future net revenues discounted at 10%.

Year ended Year ended
September 30, 2009 September 30, 2008
Financial ($)
Petroleum and natural gas sales 25,706,918 40,052,905

Funds from operations 11,196,594 22,004,703
per share - basic 0.54 1.16
per share - diluted 0.54 1.14

Net income (loss) (4,891,956) 5,210,462
per share - basic (0.24) 0.28
per share - diluted (0.24) 0.27

Net capital expenditures 15,312,850 26,107,417

Total assets 89,597,800 93,579,879

Total debt (including working
capital deficiency) 24,470,775 19,362,557

Shareholders' equity 52,557,414 57,735,058

Weighted average common shares
Basic 20,555,861 18,897,523
Diluted 20,555,861 19,379,663

Natural gas (mcf/d) 12,387 10,461
Light oil and NGL (bbls/d) 271 179
Heavy oil (bbls/d) 92 117
Combined (boe/d) 2,428 2,040

Production per million shares (boe/d) 118 108

Realized sales prices
Natural gas ($/mcf) 4.40 8.33
Light oil and NGL ($/bbl) 44.18 82.11
Heavy oil ($/bbl) 42.39 64.80

Funds from operations per boe ($/boe)
Petroleum and natural gas sales 29.01 53.67
Royalties (4.65) (10.24)
Operating expenses (4.65) (5.76)
Processing fees (4.16) (3.23)
Operating netback 15.55 34.44
General and administrative (2.00) (2.08)
Interest (0.97) (1.65)
Realized gain (loss) on financial
derivative contracts 0.06 (1.16)
Capital and other taxes (0.01) (0.06)
Funds from operations 12.63 29.49

Drilling activity
Total wells 15 13
Working interest wells 9.4 9.6
Success rate on working interest wells 85% 74%

Undeveloped land
Net acres 146,106 135,000


In the quarter ended September 30, 2009 Yoho generated funds from operations of $1.7 million despite a realized natural gas price of only $2.89. On a per share basis, funds from operations for the quarter were $0.08 basic and diluted. Improved natural gas pricing and a continued commitment to maintaining top quartile cash costs will result in improved netbacks and an increase in funds from operations for fiscal 2010. With the continued volatility in commodity prices, the activity levels for fiscal 2010 will be monitored to match capital expenditures with expected cash flow. Yoho is currently planning a capital program for fiscal 2010 of between $14 and $15 million.

In November 2009, Yoho issued 625,000 flow-through common shares for total gross proceeds of $1.5 million. Yoho currently has drawn $21.5 million on its bank credit facility of $32 million, with the remaining $10.5 million available to manage its working capital requirements through the winter drilling season.


Yoho's operational focus for early fiscal 2010 activity will be on the following projects in northeastern British Columbia: The winter drilling will evaluate three of the resource play concepts in the Company's inventory.

Mike / Pickell

A three well development program targeting the Notikewin formation is planned for winter 2010. Yoho currently has net production from this formation of 1.4 Mmcf per day.

Yoho also has plans to drill one deeper test in this area in early 2010. Positive results from this deeper well would lead to a horizontal development program utilizing multi-stage acid completion technology within the horizontal section of the wellbore. Yoho has accumulated a total of 26 sections on this unconventional resource play.

Buick Creek

At Buick Creek the Dunlevy formation is the principal producing zone; however, there continues to be large accumulations of undrained resource due to permeability barriers within the massive sandstone deposits. Yoho is currently drilling one horizontal well at Buick Creek targeting the Dunlevy to unlock this resource. The estimated cost to drill case and complete this well is $1.8 million utilizing horizontal underbalanced drilling technology. Reserve targets for the horizontal well are 4 to 5 Bcf. Up to 4 follow up locations are planned on Yoho's existing lands, subject to success of the first well.

Two Rivers

Yoho plans to drill at Belloy / Kiskatinaw test well in 2010. This well will also drill through and evaluate the Triassic Montney formation for potential horizontal development drilling. Unconventional reserve targets from a follow-up horizontal well program targeting the Montney would be in the order of 3 to 5 Bcf per well.

Yoho Resources Inc. is a Calgary based junior oil and natural gas company with operations focusing in the northwest Peace River Arch of Alberta and northeast British Columbia. The common shares of Yoho are listed on the TSX Venture Exchange under the symbol "YO".

This press release shall not constitute an offer to sell or a solicitation of an offer to buy the securities in any jurisdiction. The common shares of Yoho will not be and have not been registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States, or to a U.S. person, absent registration or applicable exemption therefrom.

Cautionary Statements

Forward-looking information and statements

This news release contains certain forward-looking information and statements within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "may", "will", "project", "should", "believe", "plans", "intends" and similar expressions are intended to identify forward-looking information or statements. In particular, but without limiting the forgoing, this news release contains forward-looking information and statements pertaining to the following: the volumes and estimated value of Yoho's oil and gas reserves; the life of Yoho's reserves; resource estimates; the volume and product mix of Yoho's oil and gas production; future oil and natural gas prices and Yoho's commodity risk management programs; future liquidity and financial capacity; future results from operations and operating metrics; future costs, expenses and royalty rates; future interest costs; the exchange rate between the $US and $Cdn; future development, exploration, acquisition and development activities and related capital expenditures; the number of wells to be drilled and completed; the amount and timing of capital projects; operating costs; the total future capital associated with development of reserves and resources; and forecast reductions in operating expenses.

The recovery, reserve and resources estimates of Yoho's reserves and resources provided herein are estimates only and there is no guarantee that the estimated reserves or resources with be recovered. In addition, forward-looking statements or information are based on a number of material factors, expectations or assumptions of Yoho which have been used to develop such statements and information but which may prove to be incorrect. Although Yoho believes that the expectations reflected in such forward-looking statements or information are reasonable, undue reliance should not be placed on forward-looking statements because Yoho can give no assurance that such expectations will prove to be correct. In addition to other factors and assumptions which may be identified herein, assumptions have been made regarding, among other things: the impact of increasing competition; the general stability of the economic and political environment in which Yoho operates; the timely receipt of any required regulatory approvals; the ability of Yoho to obtain qualified staff, equipment and services in a timely and cost efficient manner; drilling results; the ability of the operator of the projects in which Yoho has an interest in to operate the field in a safe, efficient and effective manner; the ability of Yoho to obtain financing on acceptable terms; field production rates and decline rates; the ability to replace and expand oil and natural gas reserves through acquisition, development and exploration; the timing and cost of pipeline, storage and facility construction and expansion and the ability of Yoho to secure adequate product transportation; future commodity prices; currency, exchange and interest rates; regulatory framework regarding royalties, taxes and environmental matters in the jurisdictions in which Yoho operates; and the ability of Yoho to successfully market its oil and natural gas products.

The forward-looking information and statements included in this news release are not guarantees of future performance and should not be unduly relied upon. Such information and statements; including the assumptions made in respect thereof, involve known and unknown risks, uncertainties and other factors that may cause actual results or events to defer materially from those anticipated in such forward-looking information or statements including, without limitation: changes in commodity prices; changes in the demand for or supply of Yoho's products; unanticipated operating results or production declines; changes in tax or environmental laws, royalty rates or other regulatory matters; changes in development plans of Yoho or by third party operators of Yoho's properties, increased debt levels or debt service requirements; inaccurate estimation of Yoho's oil and gas reserve and resource volumes; limited, unfavourable or a lack of access to capital markets; increased costs; a lack of inadequate insurance coverage; the impact of competitors; and certain other risks detailed from time-to-time in Yoho's public disclosure documents, (including, without limitation, those risks identified in this news release and Yoho's Annual Information Form).

The forward-looking information and statements contained in this news release speak only as of the date of this news release, and Yoho does not assume any obligation to publicly update or revise any of the included forward-looking statements or information, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.

BOE Presentation

In conformity with National Instrument 51-101, Standards for Disclosure of Oil and Gas Activities ("NI 51-101"), natural gas volumes have been converted to barrels of oil equivalent ("boe") using a conversion rate of six thousand cubic feet of natural gas to one barrel of oil. This ratio is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Readers are cautioned that the term "boe" may be misleading, particularly if used in isolation.

Non-GAAP Financial Measures

The terms "funds from operations", "funds from operations per share", and "cash costs" do not have any standardized meaning prescribed by Canadian GAAP. Management uses funds from operations and funds from operations per share to analyze operating performance and leverage and considers funds from operations to be a key measure as it demonstrates the Company's ability to generate the cash necessary to fund future capital investments and to repay debt. Funds from operations should not be considered an alternative to, or more meaningful than cash flow from operating activities as determined in accordance with Canadian GAAP as an indicator of the Company's performance. Therefore references to funds from operations or funds from operations per share (basic and diluted) may not be comparable with the calculation of similar measures for other entities. Yoho calculates funds from operations per share using the same method used in the determination of net income per share.

Yoho also uses "operating netbacks", "cash costs" and per boe metrics as key performance indicators. These terms do not have a standardized meaning prescribed by Canadian GAAP and therefore may not be comparable with the calculation of similar measures by other companies. Management considers netbacks an important measure as it demonstrates its profitability relative to current commodity prices. The Company uses this measure to help evaluate its performance.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information

  • Yoho Resources Inc.
    Wendy S. Woolsey, CA
    Vice President, Finance and CFO
    (403) 537-1771