Yoho Resources Inc.
TSX VENTURE : YO

Yoho Resources Inc.

May 25, 2011 09:00 ET

Yoho Resources Inc. Updates Unconventional Activity and Announces Financial and Operating Results for the Second 2011 Fiscal Quarter

CALGARY, ALBERTA--(Marketwire - May 25, 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 six months ended March 31, 2011 and related Management's Discussion and Analysis on www.sedar.com.

Highlights

  • Production for the three months ended March 31, 2011 was 2,472 boe per day. Production for the quarter was impacted by disruptions at third-party processing facilities. Yoho's current estimated production is approximately 2,850 boe per day with the alleviation of recent production interruptions caused by the recent forest fires in the Kaybob area.
  • Net exploration and development expenditures for the first six months of fiscal 2011 were $23.4 million.
  • Generated funds from operations for fiscal Q2 2011 of $3.4 million ($0.09 per share diluted).
  • Closed an equity issue in February 2011 for total gross proceeds of $12.0 million.
  • Maintained a flexible balance sheet with total net debt of $18.5 million at March 31, 2011 with a bank credit facility of $34 million.

Operations

During fiscal Q2, Yoho continued to move forward with the three unconventional resource style projects that the Company has been able to develop over the last 12 to 18 months.

Kaybob, Alberta

During fiscal Q2, Yoho participated at a one-third working interest in the drilling and completion operations for the second horizontal well targeting the Devonian Duvernay shale formation. The well (the "3-13 well") was drilled to a bottom hole location at 03-13-060-20W5 and completed using a 12 stage "plug and perf" horizontal completion technique, incorporating perforation clusters (2 and 3 per stage) to stimulate the well. The 3-13 well was placed on production during April 2011 at several restricted rates to determine a variety of reservoir parameters at different flowing conditions. Also during April 2011, the first horizontal Duvernay well (the "15-33 well"), which was drilled in fall 2010, was placed on production at initial rates exceeding 500 boe per day with very high associated liquids production. The natural gas liquids content of the 15-33 well is similar to the 3-13 well and both exceed original expectations for liquid-to-gas ratios.

The Company also participated in two vertical wells targeting the Duvernay shale as part of farm-in agreements to earn working interests in additional land. The first vertical well (26.0%) was drilled, cored, logged and cased with 7 inch casing which would allow the drilling of a horizontal section at a later date. The second vertical well (50%) was drilled, cored, logged and completed to determine both the liquids content of the gas and the reservoir pressure in that geographic location.

Yoho is extremely encouraged by the production results from both of the horizontal Duvernay shale wells, particularly the high liquids content associated with the natural gas given the current premium in pricing for natural gas liquids. Production from the two Duvernay horizontal wells will be monitored and Yoho will review additional drilling locations with its partners. Yoho currently has working interests in 50.5 gross (17.7 net) sections of land with Duvernay rights in the Kaybob area along this liquids rich trend.

Mike, British Columbia

During fiscal Q2, Yoho drilled the a-B21-I/94-H-3 well targeting the Jean Marie formation. It was completed in the open hole section with a nitrified acid stimulation. The well is was tied-in and place on production during April 2011 at an initial stable rate of 3.0 Mmcf per day. Yoho has accumulated 22,000 net acres of land adjacent to this well. The successful application of horizontal technology in this tight gas formation will now allow Yoho to establish a comprehensive development plan for the Jean Marie on the Company's extensive land base in the area.

Umbach, British Columbia

Yoho's first well to test the Montney formation at Umbach was a horizontal re-entry well. A 1,050 metre horizontal section was drilled during Q2 with excellent penetration rates and substantial mud gas shows through the entire horizontal section. The well will be completed using a multi-stage "plug and perf" horizontal completion technique. Completion operations are expected to begin before the end of May 2011. Yoho currently holds a 50% working interest in 52 sections of land at Umbach.

Outlook

Yoho is extremely pleased with the results to date of the unconventional resource style projects that were tested during fiscal Q2. The Company will continue to monitor production from both the Mike Jean Marie well and from both horizontal Duvernay wells and will await the results of the completion of the Umbach well to determine capital expenditures for the balance of fiscal 2011. These results will also build the basis for the Company's fiscal 2012 business plan.

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