CALGARY, Jan. 25, 2012 /CNW/ - Yangarra Resources Ltd. ("Yangarra" or the "Company") (TSX-V:YGR) is pleased to provide an
operations update and outline revisions to the 2012 capital budget.
The Company continues to advance its Central Alberta focused capital
plan and drilled or participated in 6 gross (2.3 net) horizontal wells
in the fourth quarter with two operated and one non-operated drilling
Operational highlights include:
Average production, based on field estimates, for the fourth quarter was
approximately 1,600 boe/d (40% Oil & NGL's) a 28% increase from the
third quarter and 110% increase over the fourth quarter of 2010. On a
per share basis, the production increased by 44% over the fourth
quarter of 2010.
Production averaged 1,900 boe/d for the month of December. Two wells
that were flowing at a combined rate of 600 boe/d net to Yangarra were
shut-in by the operator for the months of December 2011 and January
2012 to allow for drilling on multi-well pads and for the installation
of incremental compression.
In response to the weakness in natural gas prices the Company has made
the following changes for 2012:
All dry gas production of approximately 1.2 mmcf/d (200 boe/d) was shut
The planned 2012 capital expenditures have been reduced from $50 million
to $35 million. With the revised capital budget the Company will drill
16 gross (8.5 net) horizontal wells with an increased focus on wells
with high oil and natural gas liquid ("NGL") volumes.
The company will operate the drilling program with one drilling rig
instead of two drilling rigs as originally planned.
The previously provided 2012 guidance has been revised for shut-in
production, reduced capital and a lower natural gas price. The $35
million of capital spending in 2012 results in a mid-range average
production growth of 88% from 2011.
The revised metrics and assumptions for 2012 are summarized below:
2,000 - 2,500
Cash flow from operations ($millions)
$25 - $30
Capital expenditures ($millions)
Crude oil - WTI
Natural Gas Liquids
Current production is approximately 1,700 boe/d with 6 gross (2.05 net)
wells (including the two shut in wells) expected on-stream by March 1,
2012 and 2 gross (1.24 net) currently drilling. The Company is
forecasting that first quarter production will average between 1,900
boe/d and 2,100 boe/d.
Reserves Information and Year-end Results
The Company's year-end reserve report summary will be released in early
March and the year-end financial results will be released in early
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
All reference to $ (funds) are in Canadian dollars.
Neither the TSX Venture Exchange nor its Regulation Service Provider (as
that term is defined in the Policies of the TSX Venture Exchange)
accepts responsibility for the adequacy and accuracy of this release.
SOURCE Yangarra Resources Ltd.
For further information:
James Evaskevich, President and CEO at (403) 262-9558