Yoho Resources Inc.

Yoho Resources Inc.

February 22, 2012 09:00 ET

Yoho Resources Inc. Announces Fiscal Q1 2012 Financial and Operating Results

CALGARY, ALBERTA--(Marketwire - Feb. 22, 2012) -


Yoho Resources Inc. ("Yoho" or the "Company") (TSX VENTURE:YO) has filed today on SEDAR the financial statements for the three months ended December 31, 2011 and the related managements' discussion and analysis. Copies of these documents may be found on www.sedar.com.

  • Yoho's production during fiscal Q1 2012 averaged 2,322 boe per day, a seven percent decrease from Q1 2011 production of 2,505 boe per day. With recent drilling success, Yoho has approximately 1,000 boe per day of production scheduled to come on-stream starting in March 2012.
  • Notwithstanding decreased natural gas prices, Yoho generated funds from operations for fiscal Q1 2012 of $3.7 million ($0.09 per share basic and diluted), an increase of 5% from $3.6 million during Q1 fiscal 2011.
  • Net exploration and development expenditures for Q1 fiscal 2012 were $12.3 million. During the first quarter, Yoho drilled 4 (1.8 net) gas wells with an overall success rate of 100%.
  • The Company maintained a flexible balance sheet with total net debt of $27.2 million at December 31, 2011. The bank credit facility was increased during the quarter to $52 million from $40 million.
  • Yoho closed equity issues in December 2011 for total gross proceeds of $5 million (1,250,000 flow-through shares at $4.00 per share) and closed equity issues in January and February 2012 for total gross proceeds of $17.2 million (5,227,325 shares at $3.30 per share).

Operations Update

Nig, British Columbia

In December, 2011 Yoho operated the drilling and completion of the Company's first horizontal well (50% working interest) at Nig targeting the Lower Montney formation. This formation had not been tested in this area to date. This well at c-29-A/94-H-4 was drilled to a total measured depth of 2,830 metres with a horizontal lateral section of 900 metres in length within the Lower Montney formation. In February 2012 the well was fracture stimulated in 6 stages with approximately 900 tonnes of sand and 33,000 barrels of slick water used. During an abbreviated production test, the well flowed up tubing at rates averaging 1.0 MMcf per day and 75 barrels per day of condensate (75 barrels per MMcf). Although the gas rates are lower that other Montney tests in the area, Yoho is encouraged by the high liquids ratio in C-29-A. Yoho expects to significantly increase productivity on further Lower Montney wells through by optimizing both frac size and frac fluid technology. There have been no reserves booked to date by Yoho for the Lower Montney formation.

Kaybob, Alberta

Yoho is proceeding with its fiscal 2012 operations in the Duvernay at Kaybob with one well currently drilling. The Company is also continuing to exchange data with other operators in the area on a number of recently licensed and drilled Duvernay wells.


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. Production for fiscal 2012 is budgeted to average approximately 3,000 boe per day with exit production of between 3,300 and 3,400 boe per day. The fiscal 2012 capital program is expected to generate funds from operations of $15 to $16 million based on a natural gas price of $2.75 per GJ at AECO and an oil price of $90.00 per barrel at Edmonton. With the continued volatility in commodity prices, the activity levels for fiscal 2012 will be monitored to match capital expenditures with expected cash flow and available credit lines.

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".

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", "schedule", "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 estimated volumes associated with certain of Yoho's wells; Yoho's and its partner's development plans on certain of their properties; estimates of timing for tie-in of certain gas wells; estimated costs associated with completing certain wells; estimated reductions in costs on drilling and completing certain future wells; future capital spending levels and focus areas for fiscal 2012 and 2013; estimated natural gas liquids yields on a go-forward basis on certain wells; and completion and testing operations on certain of its gas wells.

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 information provided to Yoho by the operator is accurate and correct; 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, the ability of Yoho and its partners to realize costs savings under multi-well pad operation scenarios and the ability of Yoho and its partners 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, pressure declines or production declines; changes in the mix of commodity type production associated with Yoho's wells; 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.

Non-IFRS Financial Measures

The MD&A contains the term "funds from operations" and "funds from operations per share" which do not have any standardized meaning prescribed by International Financial Reporting Standards ("IFRS"). 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 IFRS 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 IFRS 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.

Disclosure of Well-Flow Test Results

The Company cautions that the test results described in the press release are not necessarily indicative of long-term performance or ultimate recovery. Additionally, as well test interpretations have not been completed on the wells described in this press release, the results and data described in this press release should be considered preliminary until such interpretations have been completed.

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. Given the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency of 6 mcf: 1 bbl, utilizing a conversion ratio of 6 mcf: 1 bbl may be a misleading indication of value.

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