Yangarra Expands Credit Facility

CALGARY, April 20, 2015 /CNW/ - Yangarra Resources Ltd. ("Yangarra" or the "Company") (TSX:YGR) expands credit facility, provides an update on TransCanada Pipelines' ("TCPL") on-going restrictions and an update on two recently drilled wells using a cemented liner.

Credit Facility Update

Yangarra has entered into amended and restated credit facility agreements with Alberta Treasury Branches ("ATB") which now consists of an $80 million senior line (previously $70 million) and a $10 million subordinated debt facility. The next review is scheduled for May 31, 2016.

TCPL Update

During the first quarter, Yangarra experienced infrastructure constraints due to rolling TCPL sales line shut downs during which TCPL was conducting operations to restore their sales lines to design capacity. Both of Yangarra's Central Alberta processing facilities were impacted by the rolling shut downs as well as two third party facilities. The Company estimates first quarter production was negatively impacted by approximately 10 - 15%, however, cash flow remained strong for the quarter due to realized hedging gains.  Current production is approximately 3,000 boe/d as the majority of production was restored in early April 2015, though additional TCPL maintenance shut downs are expected during the summer which could further impact production volumes.

Cemented Liner Update

The Company drilled and completed two wells (1 mile laterals) in 2015 utilizing a cemented liner and NCS Multistage sleeves. The first well was drilled in January and completed with an 18 stage slick water frack and 340 tonnes of sand at a cost of $3.0 million

The second well was drilled in late February parallel to the first well with a 290 meter inter well spacing. This well was completed with a 30 stage (closable sleeves) slick water frack and 540 tonnes of sand at a cost of $2.3 million. The lower costs were attributable to lower service sector costs and knowledge gained from drilling the first well.

Pressure recorders during the frack on the second well verified there was no communication between frack stages despite the closer sleeve spacing. Both wells were drilled using mono-bore and 4 ½" casing which limits the size of bottom hole pump ("BHP").

Results from the first well indicate that initial production declines are significantly lower when compared with initial declines in previous ball drop systems. The second well had significantly higher free flow rate (pre BHP install) than the first well due to the additional stages. Yangarra will continue to monitor the comparative declines and expects that the reduced costs and lower declines associated with the sleeve system will result in higher NPVs & IRRs across our Cardium inventory.

Natural gas has been converted to a barrel of oil equivalent (Boe) using 6,000 cubic feet (6 Mcf) of natural gas equal to one barrel of oil (6:1), unless otherwise stated.  The Boe conversion ratio of 6 Mcf to 1 Bbl is based on an energy equivalency conversion method and does not represent a value equivalency; therefore Boe's may be misleading if used in isolation. References to natural gas liquids ("NGLs") in this news release include condensate, propane, butane and ethane and one barrel of NGLs is considered to be equivalent to one barrel of crude oil equivalent (Boe).  One ("BCF") equals one billion cubic feet of natural gas.  One ("Mmcf") equals one million cubic feet of natural gas.  Operating netbacks are calculated as revenue from all products less operating costs.

Forward looking information

Certain information regarding Yangarra set forth in this news release, including management's assessment of future plans, operations and operational results may constitute forward-looking statements under applicable securities law and necessarily involve risks associated with oil and gas exploration, production, marketing and transportation such as loss of market, volatility of prices, currency fluctuations, imprecision of reserves estimates, environmental risks, competition from other producers and ability to access sufficient capital from internal and external sources.  As a consequence, actual results may differ materially from those anticipated in the forward-looking statements.

All reference to $ (funds) are in Canadian dollars.

SOURCE Yangarra Resources Ltd.

For further information: Please contact James Evaskevich, President & CEO 403-262-9558.

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