Yoho Resources Inc.

Yoho Resources Inc.

December 10, 2007 09:00 ET

Yoho Resources Inc. Announces Year End Operational and Financial Results; Doubles Production During Fiscal 2007 From Fiscal 2006

CALGARY, ALBERTA--(Marketwire - Dec. 10, 2007) -


Yoho Resources Inc. ("Yoho" or the "Company")(TSX VENTURE:YO) filed today audited annual consolidated financial statements for the year ended September 30, 2007 and related Management's Discussion and Analysis on www.sedar.com.


- Yoho's fiscal 2007 production averaged 1,364 boe per day (80% natural gas), a 93% increase from 706 boe per day for fiscal 2006. The Company exited fiscal 2007 with production of 1,850 boe per day, exceeding the previously announced estimate of 1,800 boe per day.

- As a result of increased production, funds from operations for fiscal 2007 increased 50% to $9.7 million from $6.5 million last year. On a per share basis, funds from operations for fiscal 2007 increased 25% to $0.55 per share diluted from $0.44 per share diluted last year.

- Yoho's fiscal 2007 exploration and acquisition activities resulted in a 79% increase in proved plus probable reserves, representing a replacement rate of 450% over 2007 production. At September 30, 2007 proved plus probable reserves totaled 3,937 Mboe.

- Yoho's current production (December 2007) is approximately 1,900 boe per day. Yoho has an additional 200 boe per day estimated production from two wells awaiting tie-in.

-------------------- ------------------
Year ended Year ended
September 30, 2007 September 30, 2006
-------------------- ------------------
Financial ($)
Petroleum and natural gas sales 20,370,428 10,739,566
Funds from operations 9,707,848 6,457,539
per share - basic 0.59 0.48
per share - diluted 0.55 0.44
Net income (loss) (6,192,139) 1,834,991
per share - basic (0.38) 0.14
per share - diluted (0.38) 0.12
Capital expenditures 45,982,406 25,100,115

Natural gas (mcf/d) 6,524 2,422
Light oil and NGL (bbls/d) 151 106
Heavy oil (bbls/d) 126 196
BOE (boe/d) 1,364 706

-------------------- ------------------
Year ended Year ended
September 30, 2007 September 30, 2006
-------------------- ------------------
Reference prices
AECO gas ($/GJ) 6.31 7.22
Edmonton par oil ($/bbl) 70.87 74.15
LLB heavy oil ($/bbl) 48.72 34.07

Yoho average prices
Natural gas ($/mcf) 6.65 6.96
Light oil and NGL ($/bbl) 52.42 55.37
Heavy oil ($/bbl) 35.69 34.07

Operating netbacks
Natural gas ($/mcf) 3.94 5.13
Light oil and NGL ($/bbl) 30.77 33.55
Heavy oil ($/bbl) 18.75 19.49
Combined ($/boe) 24.16 28.03

Number of shares outstanding
Weighted average
Basic 16,509,680 13,500,219
Diluted 17,642,344 14,829,409
End of year
Basic 17,379,654 14,306,104
Diluted 19,896,880 16,713,330


Yoho's funds from operations for fiscal 2007 increase 50% to $9.7 million from $6.5 million in fiscal 2006, due to the 93% increase in production. At September 30, 2007, the Company reviewed the valuation of the goodwill balance and determined that based upon Yoho's current quoted market share price an impairment of goodwill had occurred. Based upon this review, an impairment of the goodwill of $4.9 million recorded in December 2006 from the acquisition of the B.C. properties has been recorded as a non-cash charge to income as of September 30, 2007. It is this charge for goodwill impairment, and increased charges for depletion, depreciation and amortization, that contribute to the net loss for the 2007 fiscal year. Yoho's petroleum and natural gas properties were subject to a ceiling test at September 30, 2007 and no write-down was required under this calculation.


Yoho's drilling program continued primarily in the Peace River Arch area of Alberta. During fiscal 2007, the Company participated in a total of 20 (10.2 net) wells of which 16 (8.4 net) wells were located in the Arch with the balance located in a new area of Alberta. Drilling operations commenced in British Columbia very late in calendar 2007 and will accelerate in 2008. In the period from the end of fiscal 2007 to December 6, 2007 the Company has drilled an additional 3 (2.8 net) wells, resulting in 2 (1.8 net) gas wells and one well which was abandoned.

Fiscal 2007
Gross Net
Oil 1 0.5
Gas 10 5.7
D&A 9 4.0
Total 20 10.2


Yoho substantially increased production during fiscal 2007, averaging 1,364 boe per day as compared to fiscal 2006 average production of 706 boe per day, a 93% increase. The Company exited the 2007 fiscal year (September, 2007) in excess of 1,800 boe per day, doubling from the fiscal 2006 exit rate of 900 boe per day. The increase in production levels resulted from a successful drilling program in Alberta and the acquisition of 500 boe per day from the B.C. Assets in December 2006. Yoho's current production is approximately 1,900 boe per day with an additional 200 boe per day behind pipe awaiting tie in.

Land and Seismic

The Company has continued to add to both land and seismic inventories during fiscal 2007. Undeveloped land increased from 56,000 net acres and the end of fiscal 2006 to 115,000 net acres currently. The Company's seismic inventory currently stands at 2,370 km of 2D seismic data and 290 km2 of 3D seismic data. Seismic and land are key components to future growth for the Company in 2008 and beyond.


The following table outlines a summary of the Company's reserves at
September 30, 2007:

Oil & NGL Natural Gas Combined NPV 10% BIT
mbbls mmcf Mboe $ thousands
Proved developed producing 495 11,756 2,455 43,673
Total proved 534 13,720 2,821 47,512
Total proved plus probable 750 19,120 3,937 61,895

During fiscal 2007, the Company's exploration and capital expenditures of $20.2 million resulted in proved plus probably reserve additions of 1,290 Mboe, for a finding and development cost of $18.77 per boe. The British Columbia assets were acquired in December, 2006 for $25.8 million and added 1,144 Mboe of proved and probable reserves at a finding and development cost of $22.52 per boe. Overall, the total capital program for fiscal 2007, including technical reserve revisions and change in future capital, resulted in finding and development cost for proved and probable reserves of $20.68 per boe.

2008 Capital Budget

Due to reduced expectations for natural gas prices and in light of the recent announcement by the Alberta government on changes to crown royalties, Yoho has reviewed its fiscal 2008 capital program. Yoho is now planning a capital program of between $13 and $15 million for fiscal 2008. The Company plans to drill between 13 (9.8 net) and 15 (11.6 net) wells for the period from October 1, 2007 to September 30, 2008. The budget has been allocated as follows: $9 to $11 million for drilling, completion and equipment and $4 million for land and seismic. At September 30, 2007, Yoho had drawn $15.7 million on bank credit facilities of $27 million. The Company has flexibility in the current budget to accelerate or reduce capital programs accordingly with changes in natural gas pricing and related cash flows.


Yoho is currently forecasting a reduced capital program in fiscal 2008. The budget will remain flexible and will change subject to natural gas prices and industry conditions. The reduction in proposed capital spending from the budget previously announced will come entirely in Alberta and is a direct result of the Alberta governments' changes to the royalty program effective January 1, 2009. After careful review of the impact of the proposed royalty program, the Company has allocated a higher percentage of capital to British Columbia where the economics of drilling higher deliverability wells with potential upside on natural gas prices is better than in Alberta.

Natural gas prices remain a large variable in our outlook for fiscal 2008. Recent increases in AECO prices are encouraging, but we will remain cautiously optimistic and will allocate capital accordingly. Yoho continues to build a substantial inventory of plays, prospects and ideas that will be brought forward when the economic conditions for each project dictates. In the current economic climate, we do see some signs of the service costs in our business moderating and we will monitor the cost side of the equation very carefully.

Reduced availability of capital, lower natural gas prices, the higher Canadian dollar and the new Alberta royalty regime has created a challenging environment for junior oil and gas companies in Western Canada. We expect further consolidation in the junior oil and gas sector during 2008. Yoho is actively evaluating potential corporate and property acquisitions to add to Yoho's production, reserve base and upside potential during this time of opportunity.

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.


Certain statements regarding Yoho Resources Inc. including management's assessments of future plans and operations, may constitute forward-looking statements under applicable securities laws and necessarily involve known and unknown risks and uncertainties, most of which are beyond Yoho's control. These risks may cause actual financial and operating results, performance, levels of activity and achievements to differ materially from those expressed in, or implied by, such forward-looking statements.

Such factors include, but are not limited to: the impact of general economic conditions in Canada and the United States; industry conditions including changes in laws and regulations including adoption of new environmental laws and regulations, and changes in how they are interpreted and enforced; competition; the lack of availability of qualified personnel; fluctuations in commodity prices; the results of exploration and development drilling and related activities; imprecision in reserve estimates; the production and growth potential of Yoho's various assets; fluctuations in foreign exchange or interest rates; the ability to access sufficient capital from internal and external sources; and obtaining required approvals of regulatory authorities.

Accordingly, Yoho gives no assurance nor makes any representations or warranty that the expectations conveyed by the forward-looking statements will prove to be correct and actual results may differ materially from those anticipated in the forward looking statements. Yoho undertakes no obligation to publicly update or revise any forward-looking statements.

Disclosure provided herein in respect of barrels of oil equivalent (boe) may be misleading, particularly if used in isolation. A boe conversion ratio of 6 mcf to 1 bbl is based on an energy equivalency conversion method primarily at the burner tip and does not represent a value equivalency at the wellhead.

The TSX Venture Exchange has neither approved nor disapproved the contents of this press release.

Contact Information

  • Yoho Resources Inc.
    Wendy S. Woolsey
    Vice President, Finance and CFO
    (403) 537-1771
    Website: www.yohoresources.ca