Yangarra Resources Ltd. announces financial and operations update and the results of its 2022 year-end oil and gas reserves evaluation.
2022 Fiscal Year Update Highlights (financial numbers are unaudited and approximate)
Production increased 23% to 11,022 boe/d
Net Debt was reduced by 32% to $134 million
PDP NAV per share increased 158% to $4.15/share
PDP additions replaced 267% of 2022 production
Proved reserves value increased by 38% to $1.4 billion
32% of future drilling locations are booked in the reserve report
Added 2.4 future locations for every location drilled
Operations Update
January 2023 production averaged approximately 12,000 boe/d. Production for the month was negatively impacted by a turnaround at a Yangarra facility. As part of this turnaround, a debottlenecking project was completed which increased facility capacity from 25 mmcf/d to 35 mmcf/d. The Company is also constructing a 15 mmcf/d facility in Chambers to coincide with the future development of the new Chambers acreage.
The Company completed six wells in mid-January that had been drilled in Q4 of 2022. These wells are currently being tested and are expected to be onstream in February. The Q1 2023 program remains on course and Yangarra expects to drill 8 wells and complete 14 wells. Three wells will be drilled in the new Chambers area as part of the Q1 capital program.
ESG Report
From 2019 to 2022
Vent emissions decreased by 64% to 15,212 CO2e tonnes
Methane emissions decreased by 57% to 701 tonnes
Fuel CO2e emissions decreased by 18% to 66,365 CO2e tonnes
Scope 1 CO2e emissions reduced by 30% to 90,848 CO2e tonnes
In 2022
Reduced CO2e intensity per boe produced by 30%
Increased year-over-year water recycling by 24%
Reduced year-over-year freshwater usage by 10%
Spent 0.14% of cash flow on abandonment & reclamation with $1 million of spending remaining to abandon all standing wells
Reserve Report Highlights
Summary
All reserves information contained in this press release are based on the Company's 2022 NI 51-101 oil and gas reserve report as prepared by Deloitte LLP (The "2022 Reserve Report").
Proved Developed Producing ("PDP") Reserves
26.3 million boe (34% increase from 2021)
Net present value before tax discounted at 10% ("NPV10") of $522 million (51% increase from 2021)
Yangarra's PDP F&D is $10.16/boe resulting in a recycle ratio of 4.7 times
PDP net asset value per fully diluted common share ("NAV per FD Share") of $4.15
PDP Reserve Life Index ("RLI") of 6.1 years
PDP additions replaced 267% of 2022 production
Total Proved reserves ("1P")
86.5 million boe (5% increase from 2021)
NPV10 of $1.4 billion (38% increase from 2021)
1P future development costs of $405 million
Yangarra's 1P F&D is $9.12/boe resulting in a recycle ratio of 5.3 times
1P NAV per FD Share of $13.68
RLI of 20.2 years
1P additions replaced 194% of 2022 production
Proved plus probable reserves ("2P")
144.8 million boe (3% increase from 2021)
NPV10 of $2.0 billion (35% increase from 2021)
2P Future development costs of $608 million
Yangarra's F&D is $7.78/boe resulting in a recycle ratio of 6.2 times
2P NAV per FD Share of $19.92
RLI of 33.9 years
2P additions replaced 190% of 2022 production
Oil and Gas Reserves
The following tables summarize certain information contained in the 2022 Reserve Report. The 2022 Reserve Report encompasses 100% of Yangarra's oil and gas properties and was prepared in accordance with definitions, standards and procedures contained in the Canadian Oil and Gas Evaluation Handbook and National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities ("NI 51-101") by Deloitte.
Forecast Prices Used in Estimates
The forecast price and market forecasts prepared by Deloitte are based on information available from numerous government agencies, industry publication, oil refineries, natural gas marketers, and industry trends. The prices are Deloitte's best estimate of how the future will look, based on the many uncertainties that exist in both the domestic Canadian and international petroleum industries. Deloitte considers the current monthly trends, the actual and trends for the year to date, and the prior year actual in determining the forecast. The crude oil and natural gas forecasts are based on yearly variable factors weighted to higher percent in current data and reflecting a higher percent to the prior year historical. These forecasts are Deloitte's interpretation of current available information and while they are considered reasonable, changing market conditions or additional information may require alteration from the indicated effective date.
Inflation forecasts and exchange rates, an integral part of the forecast, have also been considered.
Finding and Development Costs
Yangarra's F&D costs for 2022, 2021 and the five-year average are presented in the tables below. The costs used in the F&D calculation are the capital costs related to: land acquisition and retention; drilling; completions; tangible well site; tie-ins; and facilities, plus the change in estimated future development costs as per the independent reserve report. Acquisition costs are net of any proceeds from dispositions of properties. Due to the timing of capital costs and the subjectivity in the estimation of future costs, the aggregate of the exploration and development costs incurred in the most recent financial year and the change during that year in estimated future development costs generally will not reflect total finding and development costs related to reserve additions for that year. The reserves used in this calculation are Company net reserve additions, including revisions.
Year End Disclosure
The audited financial statements for the year-ended December 31, 2022 are scheduled to be released on March 2, 2023.
Additional reserve information as required under NI 51-101 will be included in the Company's Annual Information Form which will be filed on SEDAR on or before March 31, 2023.
