Yoho Resources Inc.
TSX VENTURE : YO

Yoho Resources Inc.

December 08, 2011 09:00 ET

Yoho Resources Inc. Announces Fiscal 2011 Financial and Operating Results

CALGARY, ALBERTA--(Marketwire - Dec. 8, 2011) -

NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

Yoho Resources Inc. ("Yoho" or the "Company") (TSX VENTURE:YO) has filed today on SEDAR the financial statements for the year ended September 30, 2011 and the related managements' discussion and analysis. Yoho 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, 2011 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.

Highlights

  • Yoho's proved plus probable reserves as at September 30, 2011 increased 54% from September 30, 2010 to 14,034 Mboe.

  • Yoho's production during fiscal 2011 averaged 2,475 boe per day, a nine percent increase from fiscal 2010 production of 2,269 boe per day.

  • Notwithstanding a year of low natural gas prices, Yoho generated funds from operations for fiscal 2011 of $14.8 million ($0.39 per share basic and diluted), an increase of 17.8% from $12.6 million during fiscal 2010.

  • Net exploration and development expenditures for fiscal 2011 were $34.4 million. During the year ended September 30, 2011, Yoho drilled 9 (4.7 net) wells resulting in 7 (3.9 net) gas wells and two (0.8 net) oil wells with an overall success rate of 100%.

  • Maintained a flexible balance sheet with total net debt of $22.6 million at September 30, 2011 on a bank credit facility of $40 million.

Operations Update

Fiscal 2011 was a year of substantial exploration success for Yoho. The Company successfully drilled horizontal wells in each of the following three resource plays:

  • a high liquids content Duvernay shale gas play at Kaybob in west central Alberta;
  • a liquids rich Montney gas play at Nig Creek in north-east British Columbia; and
  • a Jean Marie gas play at Mike in north-eastern British Columbia.

Currently Yoho has ongoing drilling and completion operations on the third and fourth horizontal wells at Nig Creek and two horizontal wells at Kaybob in the Duvernay shale.

Financial

Year ended Year ended
September 30, 2011 September 30, 2010
Financial ($)
Petroleum and natural gas sales 29,523,389 25,522,835
Funds from operations (1) 14,816,967 12,576,571
per share - basic 0.39 0.49
per share - diluted 0.39 0.49
Net loss (4,470,486 ) (2,718,337 )
per share - basic (0.12 ) (0.11 )
per share - diluted (0.12 ) (0.11 )
Net exploration and development expenditures 35,228,302 22,599,839
Net acquisitions and dispositions (810,000 ) 22,689,218
Total assets 140,060,713 124,119,031
Total debt (including working capital deficiency) 22,605,443 22,878,414
Shareholders' equity 97,413,860 81,706,595
Weighted average common shares outstanding
Basic 38,183,816 25,689,520
Diluted 38,442,474 25,689,520
Operations
Production
Natural gas (mcf/d) 11,435 11,224
Oil and NGL (bbls/d) 569 398
Combined (boe/d) 2,475 2,269
Realized sales prices
Natural gas ($/mcf) 3.62 4.14
Oil and NGL ($/bbl) 69.46 57.77
Funds from operations per boe ($/boe)
Petroleum and natural gas sales 32.68 30.82
Royalties (3.88 ) (3.89 )
Operating expenses (6.20 ) (5.40 )
Processing fees (4.19 ) (4.25 )
Operating netback (2) 18.41 17.28
General and administrative (2.64 ) (2.36 )
Interest (0.71 ) (0.75 )
Realized gain on financial derivative contracts 1.35 1.04
Capital and other taxes (0.01 ) (0.02 )
Funds from operations (1) 16.40 15.19
Drilling activity
Total wells 9 17
Working interest wells 4.7 9.5
Success rate on working interest wells 100 % 90 %
Undeveloped land (net acres) 151,812 165,458

Notes:

  1. Funds from operations and funds from operations per share are not measurements based on generally accepted accounting principles ("GAAP"), but are financial terms commonly used in the oil and gas industry. The Company's funds from operations may not be comparable to that reported by other companies. Yoho's calculation of funds from operations is detailed in the MD&A for the years ended September 30, 2011 and 2010.
  2. Operating netbacks 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. Yoho determines operating netbacks by deducting royalties, operating and processing expenses from petroleum and natural gas sales.

For the year ended September 30, 2011 Yoho generated funds from operations of $14.8 million despite a realized natural gas price of only $3.62 per mcf. Despite continued low natural gas pricing in fiscal 2011, the increased prices for crude oil and natural gas liquids, combined with increased natural gas liquids production and continued operational efficiencies, resulted in a 17.8% increase in funds from operations for fiscal 2011 as compared to the prior year.

Drilling

During the year ended September 30, 2011, Yoho drilled 9 (4.7 net) wells resulting in 7 (3.9 net) gas wells and two (0.8 net) oil wells with an overall success rate of 100%.

Outlook

Fiscal 2012 will be a year of delineation of the two unconventional plays at Kaybob and Nig. Yoho is currently planning a capital program for fiscal 2012 of between $35 and $40 million. With the continued volatility in commodity prices, the activity levels for fiscal 2012 will be monitored closely, particularly in light of current low natural gas pricing. The drilling program for fiscal 2012 is expected to set up fiscal 2013 as the first year of full development at Kaybob and Nig.

Yoho Resources Inc. is a Calgary based junior oil and natural gas company with operations focusing in west central Alberta, the 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

Internal estimates

Certain information contained herein, such as the estimated fair value of the Company's land holdings, are based in estimated values the Company believes to be reasonable and are subject to the same limitations as discussed under "Forward-looking Information and Statements" below.

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: future drilling plans; future production levels; land holdings based on fulfilling drilling obligations under certain contractual commitments; 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; and the total future capital associated with development of reserves and resources.

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 differ 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.

Oil and Gas Advisory

The reserves information contained in this press release has been prepared in accordance with National Instrument 51-101 "Standards of Disclosure for Oil and Gas Activities" of the Canadian Securities Administrators ("NI 51-101"). Complete NI 51- 101 reserves disclosure has been included in our Annual Information Form for the year ended September 30, 2010. Listed below are cautionary statements that are specifically required by NI 51-101:

Where applicable, oil equivalent amounts have been calculated using a conversion rate of six thousand cubic feet of natural gas to one barrel of oil. BOEs may be misleading, particularly if used in isolation. A boe conversion ratio of six thousand cubic feet of natural gas to one barrel of oil is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

Individual properties may not reflect the same confidence level as estimates of reserves for all properties due to the effects of aggregation.

With respect to finding and development costs, the aggregate of the exploration and development costs incurred in the most recent financial year and the change during that year in estimated future development costs generally will not reflect total finding and development costs related to reserve additions for that year.

This press release contains estimates of the net present value of our future net revenue from our reserves. Such amounts do not represent the fair market value of our reserves.

Non-GAAP Financial Measures

The press release contains the term "funds from operations" and "funds from operations per share" which 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" 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.

BOE equivalent

Barrel of oil equivalents or BOEs 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.

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
    Vice President, Finance and CFO
    (403) 537-1771
    www.yohoresources.ca