inancial and Operations Update & Year End Corporate Reserves CALGARY, AB, Feb. 1, 2022 /CNW/ - Yangarra Resources Ltd. ("Yangarra" or the "Company") (TSX: YGR) announces financial and operations update and the results of its 2021 year-end oil and gas reserves evaluation.
Financial Update (all numbers are unaudited and approximate)
Fourth quarter production averaged 10,060 boe/d (44% liquids) generating funds flow from operations of $32 million ($0.38 per share). Capital spending for the fourth quarter of $27 million was higher than previously forecast primarily due to drilling through the Christmas break and additional reclamation and abandonment activities. The fourth quarter operating netback was $39.62/boe and net debt at December 31, 2021 was $197 million, resulting in an annualized debt to funds flow ratio of 1.5:1 vs 2.1:1 for the quarter ended September 31, 2021.
Operations Update
The Company brought on four wells in late December 2021 and has drilled an additional eight wells (completed six) on the fourteen-well pad in West Ferrier in late January.
Since pioneering the economic development of bioturbated Cardium wells five years ago, the strategic progression of the Company has been as follows:
- 2016 & 2017 were used to determine where drilling bioturbated wells was economic and to accumulate potential acreage.
- 2018 & 2019 was spent building out the gathering and compression infrastructure as well as expanding the fluid hauling group to handle planned production growth.
- During 2020 & 2021 work commenced on ESG initiatives including; identifying baseline carbon intensity, implementing numerous methane and CO2 reduction initiatives, reducing the non producing well ARO to less than $2 million and diversifying the Board of Directors and staff. Also, during this period, the internal Oilfield Servicing Group ("OFS") (working exclusively for Yangarra) was expanded with the addition of earth moving, road maintenance and rig hauling equipment.
- With these important building blocks in place, the Company will focus on debt reduction for 2022, while maintaining a 30-well capital program. 2022 production guidance remains at 12,000 boe/d with funds flow from operations estimated at $130 million assuming CDN$78.00/bbl for Edmonton par and CDN$3.50/GJ for AECO natural gas.