Yoho Resources Inc.
TSX VENTURE : YO

Yoho Resources Inc.

February 28, 2011 09:00 ET

Yoho Resources Inc. Announces Ongoing Unconventional Activity, Higher Production and Financial and Operating Results for the First 2011 Fiscal Quarter and Provides Operational Update

CALGARY, ALBERTA--(Marketwire - Feb. 28, 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) filed today the interim unaudited consolidated financial statements for the three months ended December 31, 2010 and related Management's Discussion and Analysis on www.sedar.com.

Highlights

  • Production for the three months ended December 31, 2010 was 2,505 boe per day, an increase of 12% from the 2,236 boe per day for the three months ended December 31, 2009. The increase in production is due to the tie-in of new wells from the successful drilling program.
  • Net exploration and development expenditures for the first three months of fiscal 2011 were $6.8 million with 3 (1.8 net) wells drilled.
  • Generated funds from operations for Q1 2011 of $3.6 million ($0.10 per share diluted).
  • Closed equity issue in December 2010 for total gross proceeds of $10.0 million.
  • Maintained a flexible balance sheet with total net debt of $17.3 million at December 31, 2010 with a bank credit facility of $34 million.

Operations

During fiscal Q1, Yoho drilled three (1.8 net) wells resulting in one (1.0 net) gas well and two (0.8 net) oil wells. These wells were placed on production during fiscal Q2, increasing Yoho's current estimated production to approximately 2,600 boe per day.

At Kaybob, Alberta, Yoho is currently participating in the drilling of two vertical wells and one horizontal well targeting the Duvernay formation. At Mike, British Columbia, Yoho is drilling a horizontal well targeting the Jean Marie formation. Field operations are ongoing on these four wells. 

At Umbach, British Columbia, Yoho has recently completed a 48 section pooling agreement. Yoho now holds a 52% working interest in 50 sections of Montney rights. The Company's first well to test the Montney formation will be a horizontal re-entry well and field operations on this well are expected to begin during fiscal Q2.

Outlook

Yoho is currently planning a capital program for fiscal 2011 of between $28 and $29 million. With the continued volatility in commodity prices, the activity levels for fiscal 2011 will be closely monitored and adjusted based on cash flow levels. Yoho has also closed an equity financing in February 2011 for total gross proceeds of $12 million. The amount currently drawn on the Company's credit facilities is approximately $1 million. Capital expenditures will also be adjusted subject to the results from several of Yoho's larger unconventional projects.

Yoho will continue to move forward with the unconventional resource style projects that the Company has been able to develop over the last 12 to 18 months. Yoho's 2011 winter drilling program is underway, with three wells (one horizontal and two vertical) currently being drilled that target the Duvernay Shale and the drilling of the Jean Marie target at Mike/Pickell, British Columbia. A well targeting the Montney at Umbach, British Columbia is scheduled to begin operations in fiscal Q2. The Company has also been successful in the Kaybob area targeting high-liquids gas in the Cretaceous section, utilizing both horizontal drilling and vertical wells. This program will also continue through fiscal 2011.

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 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.

Yoho Resources Inc. is a Calgary based junior oil and natural gas company with operations focusing in northeast British Columbia, West Central Alberta and the Peace River Arch of Alberta. 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.

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
    www.yohoresources.ca