CALGARY, ALBERTA -- (Marketwired) -- 12/11/14 -- Yoho Resources Inc. ("Yoho" or the "Company") (TSX VENTURE: YO) has filed today on SEDAR the financial statements for the year ended September 30, 2014 and the related managements' discussion and analysis ("MD&A"). Yoho today also filed its Annual Information Form for the year ended September 30, 2014 which includes the Company's reserves data and other oil and gas information for the year ended September 30, 2014 as mandated by National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities of the Canadian Securities Administrators ("NI 51-101"). Yoho's independent reserve evaluation for the year ended September 30, 2014 was prepared by GLJ Petroleum Consultants Ltd. ("GLJ"). Copies of these documents may be found on www.sedar.com. Yoho also announces the results of its independent reserves and resources evaluation of its Kaybob Duvernay assets as prepared by GLJ effective September 30, 2014.
Highlights
-- Yoho's production during fiscal 2014 averaged 1,712 boe per day (29% oil
and natural gas liquids ("NGL")), compared to fiscal 2013 production of
2,337 boe per day (29% oil and NGL). The reduced production is a result
of the disposition of the Nig Creek asset in January 2014 and the
extended facilities outages during the summer of 2014 at Kaybob,
Alberta. Yoho exited the fiscal year with September 2014 production
averaging approximately 1,900 boe per day with an estimated 450 boe per
day behind pipe awaiting tie-in.
-- Yoho generated funds from operations for fiscal 2014 of $11.1 million
($0.22 per share basic).
-- Net exploration and development expenditures for fiscal 2014 were $31.7
million. During the year ended September 30, 2014 Yoho drilled 7 (4.3
net) wells.
-- Yoho maintained a flexible balance sheet with total net debt of $16.2
million at September 30, 2014 on bank credit facilities of $50 million.
-- Yoho continued to build project inventory during 2014 and has now
assembled 37.5 net sections of lands in a new area that is highly
prospective for resource style exploitation.
-- Yoho's proved plus probable reserves (Company interest) as evaluated by
GLJ as at September 30, 2014 were 31.8 MMboe, with reserve additions for
the year of 6.8 MMboe and asset dispositions (primarily at Nig Creek,
British Columbia) during the year of 27.2 MMboe. The Company's proved
reserves (Company interest) as at September 30, 2014 were 11.7 MMboe.
-- The net present value of Yoho's estimated future net revenue before
income taxes from proved plus probable reserves as at September 30, 2014
and utilizing GLJ's October 1, 2014 price forecast and discounted at
10%, is $248.6 million and the net present value of total proved
reserves as at September 30, 2014 is $89.4 million.
-- For fiscal 2014, Yoho achieved estimated all-in finding, development and
acquisition costs of $7.82 per boe (including all technical revisions
and changes in future development capital). For the past three years,
Yoho's rolling average estimated finding, development and acquisition
costs were $16.08 per boe (including all technical revisions and changes
to future development capital). Total future development capital for
Yoho's proved plus probable reserves at September 30, 2014 is $404.5
million scheduled over six years. Total future development capital for
Yoho's total proved reserves at September 30, 2014 is $153.6 million
scheduled over five years.
-- Yoho's net asset value per share as at September 30, 2014 is calculated
at $5.91 per share (basic) including an internal land value of $78.5
million and $4.41 per share (basic) excluding land value.
-- The best estimate for the Company's Contingent Resources for the
evaluated area at Kaybob in the Duvernay formation is 89.2 MMboe as at
September 30, 2014, consisting of 324.4 bcf of natural gas and 35.1
million barrels of natural gas liquids. This estimate excludes all
proved plus probable reserves assigned to Yoho's interests at Kaybob by
GLJ as at September 30, 2014.
-- The best estimate of the Kaybob Duvernay Contingent Resources has a net
present value to Yoho of $546.7 million (after the recovery of all
anticipated capital) using a discount rate of 10% and utilizing the GLJ
price forecast as at October 1, 2014. The net present value of the best
estimate of the Kaybob Duvernay Contingent Resources is $10.38 per share
basic. This value has not been included in the calculation of Yoho's net
asset value.
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Year ended Year ended
September 30, September 30,
2014 2013
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Financial ($)
Petroleum and natural gas sales 26,234,952 29,947,024
Funds from operations (1) 11,135,762 13,774,664
per share - basic 0.22 0.27
per share - diluted 0.21 0.27
Net income (loss) 43,154,230 9,602,087
per share - basic 0.83 0.19
per share - diluted 0.82 0.19
Net exploration and development
expenditures 31,721,969 30,437,985
Net acquisitions and dispositions (30,194,887) (3,525,433)
Total assets 164,812,494 181,222,323
Total debt (including working capital
deficiency) 16,225,061 31,227,793
Shareholders' equity 114,110,071 125,320,647
Weighted average common shares
outstanding
Basic 51,703,235 50,427,189
Diluted 52,708,183 50,473,765
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Year ended Year ended
September 30, September 30,
2014 2012
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Operations
Production
Natural gas (mcf/d) 7,292 9,985
Oil and NGL (bbls/d) 497 673
Combined (boe/d) 1,712 2,337
Realized sales prices
Natural gas ($/mcf) 4.47 3.29
Oil and NGL ($/bbl) 80.06 73.09
Funds from operations per boe ($/boe)
Petroleum and natural gas sales 41.97 35.10
Royalties (4.26) (3.31)
Operating expenses (12.59) (11.25)
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Operating netback (2) 25.12 20.54
General and administrative (4.74) (3.19)
Interest (1.05) (1.57)
Realized gain (loss) on financial
derivative contracts (1.51) 0.36
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Funds from operations (1) 17.82 16.14
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Drilling activity
Total wells 7 2
Working interest wells 4.3 1.5
Undeveloped land (net acres) 89,755 110,300
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Notes:
(1) Funds from operations is calculated as cash provided by operating
activities, adding the change in non-cash working capital, decommissioning
obligation expenditures. Funds from operations is used to analyze the
Company's operating performance and leverage. Funds from operations does
not have a standardized measure prescribed by IFRS and therefore may not
be comparable with the calculations of similar measures for other
companies. Yoho's calculation of funds from operations is detailed in the
MD&A for the years ended September 30, 2014 and 2013.
(2) Operating netback equals petroleum and natural gas sales including
realized hedging gains and losses on commodity contracts less royalties,
operating costs and transportation costs calculated on a boe basis.
Operating netback and funds from operations netback do not have a
standardized measure prescribed by IFRS and therefore may not be
comparable with the calculations of similar measures for other companies.
OPERATIONS UPDATE
Kaybob Duvernay
Yoho is currently participating in the completion of two (0.83 net) horizontal Duvernay wells in the Kaybob area. A 19 stage completion operation is underway for the well at 16-33-60-20 W5 (33.3 %) and a 22 stage completion operation is planned for the well at 14-21-61-20 W5 (50%). The completion operations are scheduled to be finished by calendar year end 2014, with testing of the wells to follow in early 2015. Yoho is also currently participating in the drilling of a Duvernay horizontal well at 04-31-60-20 W5 (33.3%). The well at 02-25-62-22 W5 (50%), previously drilled and completed, is awaiting tie-in which is currently scheduled for early 2015.
LAND HOLDINGS
The Company internally estimated the fair market value of its net undeveloped land holdings as at September 30, 2014 to be $78.5 million. This evaluation was completed principally using industry activity levels, third party transactions and land acquisitions that occurred in proximity to Yoho's undeveloped lands during the previous 12 months.
A summary of the Company's land holdings at September 30, 2014 is outlined below:
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Developed Acres Undeveloped Acres Total Acres
Location Gross (1) Net (2) Gross (1) Net (2) Gross (1) Net (2)
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Alberta 66,520 28,827 68,729 37,732 135,249 66,559
British Columbia 52,030 31,208 63,224 52,022 115,254 83,230
Other 324 117 - - 324 117
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Total 118,874 60,152 131,953 89,755 250,826 149,907
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Notes:
(1) "Gross" means the total area of properties in which the Company has an
interest.
(2) "Net" means the total area in which the Company has an interest
multiplied by the working interest owned by the Company.
CORPORATE RESERVES
The reserves data set forth below is based upon an independent reserve assessment and evaluation prepared by GLJ with an effective date of September 30, 2014 (the "GLJ Report"). The following summarizes the Company's crude oil, natural gas liquids and natural gas reserves and the net present values before income taxes of future net revenue for the Company's reserves using forecast prices and costs based on the GLJ Report. The GLJ Report has been prepared in accordance with the standards contained in the Canadian Oil and Gas Evaluation Handbook (the "COGE Handbook") and the reserve definitions contained in National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities ("NI 51-101").
All evaluations and reviews of future net cash flows are stated prior to any provisions for interest costs or general and administrative costs and after the deduction of estimated future capital expenditures for wells to which reserves have been assigned. It should not be assumed that the estimates of future net revenues presented in the tables below and in the "Highlights" section above represent the fair market value of the reserves. There is no assurance that the forecast prices and cost assumptions will be attained and variances from these assumptions could be material. The recovery and reserve estimates of our crude oil, natural gas liquids and natural gas reserves provided herein are estimates only and there is no guarantee that the estimated reserves will be recovered. Actual crude oil, natural gas and natural gas liquids reserves may be greater than or less than the estimates provided herein.
Reserves Summary
Yoho's proved plus probable reserves (Company interest) as evaluated by GLJ as at September 30, 2014 were 31.8 MMboe, with reserve additions for the year of 6.8 MMboe and asset dispositions during the year of 27.2 MMboe. Total future development capital for Yoho's proved plus probable reserves at September 30, 2014 is $404.5 million scheduled over six years. Total future development capital for Yoho's total proved reserves at September 30, 2014 is $153.6 million scheduled over five years.
The following table provides summary reserve information based upon the GLJ Report and using the published GLJ (October 1, 2014) price forecast.
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Light and Medium
Oil Heavy Oil Natural Gas Liquids
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Company Company Company
Interest Interest Interest
(1) Net (2) (1) Net(2) (1) Net (2)
(Mbbl) (Mbbl) (Mbbl) (Mbbl) (Mbbl) (Mbbl)
Proved
Proved
producing 182 150 88 72 837 616
Non-producing 9 8 6 5 117 92
Undeveloped 138 113 - - 2,884 2,306
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Total proved 329 271 94 77 3,837 3,014
Probable 254 209 30 24 7,335 5,748
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Total proved &
probable (4) 583 480 125 102 11,172 8,762
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Total Barrels of Oil
Natural Gas Equivalent (3)
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Company Company
Interest (1) Net (2) Interest (1) Net (2)
(Mmcf) (Mmcf) (Mboe) (Mboe)
Proved
Proved producing 15,639 14,325 3,714 3,225
Non-producing 1,456 1,329 374 327
Undeveloped 27,703 25,783 7,638 6,716
-------------------------- --------------------------
Total proved 44,798 41,437 11,727 10,268
Probable 74,780 69,256 20,083 17,524
-------------------------- --------------------------
Total proved & probable
(4) 119,578 110,693 31,809 27,792
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Notes:
(1) "Company Interest" reserves means Yoho's working interest (operating
and non-operating) share before deduction of royalties and including any
royalty interest of the Company.
(2) "Net" reserves means Yoho's working interest (operated and non-
operated) share after deduction of royalty obligations, plus Yoho's
royalty interest in reserves.
(3) Barrels of oil equivalent amounts have been calculated using a
conversion rate of six thousand cubic feet of natural gas to one barrel of
oil. BOEs may be misleading, particularly if used in isolation. A BOE
conversion ratio of six thousand cubic feet of natural gas to one barrel
of oil is based on an energy equivalency conversion method primarily
applicable at the burner tip and does not represent a value equivalency at
the wellhead. Given the value ratio based on the current price of crude
oil as compared to natural gas is significantly different from the energy
equivalency of 6 mcf: 1 bbl, utilizing a conversion ratio of 6 mcf: 1 bbl
may be a misleading indication of value.
(4) May not add due to rounding.
Reserves Reconciliation
The following table provides a reconciliation of the Company's total proved and total proved and probable reserves.
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Total Barrels of Oil Equivalent (2)
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Total Proved &
Company Interest (1) Total Proved Probable
(Mboe) (Mboe)
Total at September 30, 3013 11,849 52,742
Drilling Extensions & Technical
Revisions 3,182 6,842
Property Dispositions (2,679) (27,149)
Production (625) (625)
------------------------------------
Total at September 30, 2014 11,727 31,809
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Notes:
(1) "Company Interest" reserves means Yoho's working interest (operating
and non-operating) share before deduction of royalties and including any
royalty interest of the Company.
(2) Barrels of oil equivalent amounts have been calculated using a
conversion rate of six thousand cubic feet of natural gas to one barrel of
oil. BOEs may be misleading, particularly if used in isolation. A BOE
conversion ratio of six thousand cubic feet of natural gas to one barrel
of oil is based on an energy equivalency conversion method primarily
applicable at the burner tip and does not represent a value equivalency at
the wellhead. Given the value ratio based on the current price of crude
oil as compared to natural gas is significantly different from the energy
equivalency of 6 mcf: 1 bbl, utilizing a conversion ratio of 6 mcf: 1 bbl
may be a misleading indication of value.
Reserves Values
The estimated before tax net present value of future net revenues associated with Yoho's reserves effective September 30, 2014 and based on the published GLJ (October 1, 2014) future price forecast are summarized in the following table:
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Discounted at
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Undiscounted 5% 10% 15% 20%
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(M$)
Proved
Proved producing 81,079 63,343 52,537 45,319 40,162
Non-producing 9,621 7,707 6,469 5,604 4,962
Undeveloped 121,755 62,047 30,377 12,130 974
------------ --------- --------- --------- ---------
Total proved 212,454 133,098 89,383 63,053 46,098
Probable 502,901 267,238 159,244 102,179 68,845
------------ --------- --------- --------- ---------
Total proved plus
probable (3) 715,355 400,337 248,628 165,231 114,943
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Notes:
(1) The estimated future net revenues are stated before deducting future
estimated site restoration costs and are reduced for estimated future
abandonment costs and estimated capital for future development associated
with the reserves.
(2) The net present value of future revenues does not represent fair
market value.
(3) May not add due to rounding.
Future Development Costs
The following table sets forth development costs deducted in the estimation of the future net revenue attributable to the reserve categories noted above.
Development Costs
Forecast Prices and Costs
---------------------------------------------
Proved Plus Probable
Proved Reserves Reserves
---------------------- ----------------------
Year (M$) (M$)
------------------------------ ---------------------- ----------------------
Q4 2014 2,195 2,295
2015 25,739 37,697
2016 58,223 89,117
2017 42,532 87,299
2018 23,480 103,796
2019 166 82,349
2020 113 113
2021 115 152
2022 117 117
2023 120 120
Remainder 803 1,464
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Total Undiscounted (all years) 153,601 404,517
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Total discounted 10% 125,109 305,471
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---------------------- ----------------------
Price Forecast
The GLJ October 1, 2014 price forecast is summarized as follows:
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Edmonton Hardisty
$US/$Cdn WTI @ light crude Heavy Natural gas Westcoast
Year Exchange Cushing oil 12 API at AECO-C Station 2
Rate spot
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(US$/bbl) (C$/bbl)($Cdn/bbl) (C$/MMbtu) (C$/MMbtu)
Q4 2014 0.90 92.50 97.22 79.89 3.99 4.12
2015 0.90 92.50 97.22 73.96 4.02 4.10
2016 0.90 95.00 100.00 76.10 4.02 4.10
2017 0.90 95.00 102.78 78.24 4.26 4.35
2018 0.90 97.50 105.56 80.38 4.51 4.60
2019 0.90 97.50 105.56 80.38 4.76 4.85
2020 0.90 98.54 106.37 81.01 5.01 5.10
2021 0.90 100.51 108.49 82.64 5.22 5.31
2022 0.90 102.52 110.66 84.30 5.32 5.42
2023 0.90 104.57 112.87 85.98 5.43 5.52
Thereafter - +2.0%/yr +2.0%/yr +2.0%/yr +2.0%/yr +2.0%/yr
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Note:
(1) Inflation is accounted for at 2.0% per year
Capital Program Efficiency
The efficiency of the Company's capital program for the fiscal year ended September 30, 2014 and other prior periods is summarized below. With the disposition by the Company of its Nig Creek, British Columbia properties, in January 2014, the capital efficiency calculations include a large reduction in related reserves and future development capital.
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Three Year Average
Fiscal 2014 Fiscal 2013 2012 - 2014
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Proved Proved Proved
plus plus plus
Proved Probable Proved Probable Proved Probable
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Exploration and
development
expenditures
($ thousands) 31,722 31,722 30,438 30,438 95,775 95,775
Change in future
development
capital -
exploration and
development
($thousands) 43,294 100,086 30,229 222,505 130,954 520,197
Net acquisitions
(dispositions) ($
thousands) (2) (88,120) (88,120) (3,525) (3,525) (91,052) (91,052)
Change in future
development
capital -
exploration and
development
related to
dispositions
($thousands) (19,431) (202,409) - - (19,431) (202,409)
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Total (32,535) (158,721) 57,142 249,418 116,246 322,511
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Reserves additions
after revisions
(Mboe) (4)
- Exploration and
development 3,023 6,837 2,152 26,222 8,955 47,082
- Revisions 159 5 17 479 286 601
- Net
acquisitions
(dispositions) (2,679) (27,149) (288) (556) (2,942) (27,622)
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- Total reserve
additions after
revisions 503 (20,307) 1,881 26,146 6,299 20,061
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Finding &
Development Costs
($/boe)(1) 23.58 19.27 27.97 9.47 24.54 12.92
Finding,
Development &
Acquisition Costs
($/boe) (4) (64.68) 7.82 30.38 9.54 18.46 16.08
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Notes:
(1) 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.
(2) Acquisition costs related to corporate acquisitions reflects the
consideration paid for the shares acquired plus the net debt assumed, both
valued at closing and does not reflect the fair market value allocated to
the acquired oil and gas assets under IFRS.
(3) This calculation includes reserve revisions and changes in future
development costs. Yoho also calculates finding, development and
acquisition ("FD&A") costs which incorporate both the costs and associated
reserve additions related to acquisitions net of any dispositions during
the year. Since acquisitions can have a significant impact on Yoho's
annual reserve replacement costs, the Company believes that FD&A costs
provide a more meaningful representation of Yoho's cost structure than
finding and development costs alone.
(4) Oil equivalent amounts have been calculated using a conversion rate of
six thousand cubic feet of natural gas to one barrel of oil. BOEs may be
misleading, particularly if used in isolation. A BOE conversion ratio of
six thousand cubic feet of natural gas to one barrel of oil is based on an
energy equivalency conversion method primarily applicable at the burner
tip and does not represent a value equivalency at the wellhead. Given the
value ratio based on the current price of crude oil as compared to natural
gas is significantly different from the energy equivalency of 6 mcf: 1
bbl, utilizing a conversion ratio of 6 mcf: 1 bbl may be a misleading
indication of value.
Net Asset Value
The following table provides a calculation of Yoho's estimated net asset value and net asset value per share as at September 30, 2014 based on the estimated future net revenues associated with Yoho's proved plus probable reserves discounted at 10% as presented in the GLJ Report.
---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Forecast Prices and Costs before tax ($ thousands) ---------------------------------------------------------------------------- Proved plus probable reserves - discounted at 10% 248,628 Undeveloped land (1) 78,500 Bank debt and working capital deficiency as at September 30, 2014 (2) (16,225) ---------------------------------------------------------------------------- Net asset value 310,903 Common shares outstanding at September 30, 2014 (thousands) - Basic 52,643 ---------------------------------------------------------------------------- Net asset value per share - basic $ 5.91 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Net asset value per share - basic (excluding land value) $ 4.41 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Notes: (1) Internally estimated value (see "Land Holdings"). (2) Working capital deficiency includes an estimate of the Company's accounts receivable less accounts payable and accrued liabilities and derivatives as at September 30, 2014.
RESOURCE AND RESERVES EVALUATION FOR KAYBOB DUVERNAY
GLJ was engaged to prepare an independent evaluation report of Yoho's reserves and contingent resources at Kaybob, Alberta effective as at September 30, 2014 (the "GLJ Kaybob Report"). The GLJ Kaybob Report was prepared in accordance with NI 51-101 and the COGE Handbook. The GLJ Kaybob Report evaluated 100% of Yoho's acreage at Kaybob.
Resource Evaluation
Summary of Company Duvernay Contingent Resources (1)(2)(3)(4)
Forecast Prices and Costs
As at September 30, 2014
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Natural Gas Natural Gas Liquids BOE
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(MMcf) (Mbbl) (MBoe)
Low Estimate (5) 262,242 28,385 72,092
Best Estimate (5) 324,361 35,097 89,157
High Estimate (5) 395,970 42,901 108,896
Notes:
(1) Yoho's total working interest contingent resources are before
deducting royalties owned by others.
(2) Oil equivalent amounts have been calculated using a conversion rate of
six thousand cubic feet of natural gas to one barrel of oil. BOEs may be
misleading, particularly if used in isolation. A BOE conversion ratio of
six thousand cubic feet of natural gas to one barrel of oil is based on an
energy equivalency conversion method primarily applicable at the burner
tip and does not represent a value equivalency at the wellhead. Given the
value ratio based on the current price of crude oil as compared to natural
gas is significantly different from the energy equivalency of 6 mcf: 1
bbl, utilizing a conversion ratio of 6 mcf: 1 bbl may be a misleading
indication of value.
(3) The estimates of contingent resources for individual properties may
not reflect the same confidence level as estimates of net present values
for all properties, due to the effects of aggregation.
(4) May not add due to rounding.
(5) See note on probabilities under "Special Note Regarding Disclosure of
Reserves or Resources" below.
Summary of Company Duvernay Contingent Resources Net Present Values of
Future Revenue (1)(2)(3)(4)(5)
Forecast Prices and Costs
Before Income Taxes ($ thousands) as at September 30, 2014
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Discounted at
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Undiscounted 5% 10% 15% 20%
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Low Estimate (6) 1,618,819 696,147 321,849 153,366 71,782
Best Estimate (6) 2,393,935 1,086,158 546,652 294,514 165,738
High Estimate (6) 3,304,048 1,546,150 814,601 464,717 280,318
Notes:
(1) The estimated future net revenues are stated before deducting income
taxes and future estimated site restoration costs, and are reduced for
estimated future abandonment costs and estimated capital for future
development associated with the contingent resource.
(2) It should not be assumed that the undiscounted and discounted net
present values represent the fair market value of the contingent resource.
(3) The estimates of net present values for individual properties may not
reflect the same confidence level as estimates of net present values for
all properties, due to the effects of aggregation.
(4) Based on GLJ's price forecast dated October 1, 2014.
(5) Numbers in this table are subject to rounding error.
(6) See note on probabilities under "Special Note Regarding Disclosure of
Reserves or Resources" below.
Contingent resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations using established technology or technology under development, but which are not currently considered to be commercially recoverable due to one or more contingencies. Contingencies which must be overcome to enable the reclassification of contingent resources as reserves can be categorized as economic, non-technical and technical. The COGE Handbook identifies non-technical contingencies as legal, environmental, political and regulatory matters or a lack of markets. There are several non-technical contingencies that prevent the classification of the contingent resources estimated above as being classified as reserves. The primary contingency which prevents the classification of Yoho's contingent resources as reserves is the current early stage of development. Additional drilling, completion, and testing data is generally required before Yoho can commit to their development. It is also appropriate to classify as contingent resources the estimated discovered recoverable quantities associated with a project in the early evaluation stage. As additional drilling takes place, it is expected that the contingent resources will be booked into the reserves category. Estimates of contingent resources described herein are estimates only; the actual resources may be higher or lower than those calculated in the GLJ Kaybob Report. There is no certainty that it will be commercially viable to produce any portion of the resources described in the evaluation.
The most significant positive and negative factors with respect to the contingent resource estimates relate to the fact that the field is currently at an evaluation/delineation stage. Resource-in-place, productivity and capital costs may be higher or lower than current estimates. Additional drilling and testing are required to confirm volumetric estimates and reservoir productivity for the contingent resources to be reclassified as reserves.
Reserves Evaluation
The Company's working interest of total proved plus probable reserves for the Duvernay at Kaybob as at September 30, 2014 is estimated by GLJ to be 25.1 MMboe. The reserves evaluation incorporates approximately 38% of Yoho's land base at Kaybob, Alberta and is included, and forms part of the corporate reserves summary set forth above.
Summary of Kaybob Duvernay Company Working Interest Reserves (1) (2) (3) (4)
(5)
Forecast Prices and Costs
As at September 30, 2014
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Natural Gas BOE Total Barrels
Natural Gas Liquids of Oil Equivalent
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(MMcf) (Mbbl) (MBoe)
Proved producing 4,532 619 1,374
Total proved 27,355 3,526 8,085
Total probable 60,853 6,861 17,003
Total proved plus
probable 88,208 10,387 25,088
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Notes:
(1) Yoho's total working interest means Yoho's working interest (operated
and non-operated) share before deducting royalties and including any
royalty interests of the Company.
(2) Oil equivalent amounts have been calculated using a conversion rate of
six thousand cubic feet of natural gas to one barrel of oil. BOEs may be
misleading, particularly if used in isolation. A BOE conversion ratio of
six thousand cubic feet of natural gas to one barrel of oil is based on an
energy equivalency conversion method primarily applicable at the burner
tip and does not represent a value equivalency at the wellhead. Given the
value ratio based on the current price of crude oil as compared to natural
gas is significantly different from the energy equivalency of 6 mcf: 1
bbl, utilizing a conversion ratio of 6 mcf: 1 bbl may be a misleading
indication of value.
(3) The estimates of reserves for individual properties may not reflect
the same confidence level as estimates of reserves for all properties, due
to the effects of aggregation.
(4) Includes non-associated gas, associated gas and solution gas.
(5) Numbers in this table are subject to rounding error.
Summary of Kaybob Duvernay Company Net Present Value of Future Revenue from
Reserves (1) (2) (3) (4) (5)
Forecast Prices and Costs
Before Income Taxes ($ thousands)
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As at September 30, 2014
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Discounted at
Undiscounted 5% 10%
----------------- ----------------- -----------------
Total proved 154,797 91,149 56,880
Total probable 426,951 223,796 131,353
----------------- ----------------- -----------------
Total proved plus
probable 581,748 314,945 188,233
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Notes:
(1) The estimated future net revenues are stated before deducting income
taxes and future estimated site restoration costs, and are reduced for
estimated future abandonment costs and estimated capital for future
development associated with the reserves.
(2) It should not be assumed that the undiscounted and discounted net
present values represent the fair market value of the reserves.
(3) The estimates of net present values for individual properties may not
reflect the same confidence level as estimates of net present values for
all properties, due to the effects of aggregation.
(4) Based on GLJ's price forecast dated October 1, 2014.
(5) Numbers in this table are subject to rounding error.
OUTLOOK
Yoho is continuing with its Duvernay program at Kaybob. Yoho is currently participating in the completion of two (0.83 net) horizontal Duvernay wells and in the drilling of a Duvernay horizontal well at a 33.3% working interest. An estimated 450 net boe per day of production from a well recently completed at Kaybob is behind pipe awaiting tie-in. The capital program will be monitored in light of the recent volatility in commodity prices.
About Yoho
Yoho Resources Inc. is a Calgary based junior oil and natural gas company with operations focusing in West Central Alberta and northeast British Columbia. 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.
Cautionary Statements
Special Note Regarding Forward-Looking Information
Certain information regarding Yoho set forth in this document, including estimates of the quantities of the Company's reserves and resources, may constitute forward-looking statements under applicable securities laws and necessarily involve substantial known and unknown risks and uncertainties. These forward-looking statements are subject to numerous risks and uncertainties, certain of which are beyond Yoho's control, including without limitation, risks associated with oil and gas exploration, development, exploitation, production, marketing and transportation, loss of markets, volatility of commodity prices, environmental risks, inability to obtain drilling rigs or other services, capital expenditure costs, including drilling, completion and facility costs, unexpected decline rates in wells, wells not performing as expected, delays resulting from or inability to obtain required regulatory approvals and ability to access sufficient capital from internal and external sources, the impact of general economic conditions in Canada, the United States and overseas, industry conditions, changes in laws and regulations (including the adoption of new environmental laws and regulations) and changes in how they are interpreted and enforced, increased competition, the lack of availability of qualified personnel or management, fluctuations in foreign exchange or interest rates, and the uncertainty of estimates and projections of production, costs and expenses. The recovery and reserve estimates of Yoho's reserves provided herein are estimates only and there is no guarantee that the estimated reserves will be recovered.
With respect to forward-looking statements contained in this document, Yoho has made a number of assumptions. The key assumptions underlying the aforementioned forward-looking statements include assumptions regarding (among other things): the impact of increasing competition; the general stability of the economic and political environment in which the Company operates; the timely receipt of any required regulatory approvals; the ability of the Company to obtain qualified staff, equipment and services in a timely and cost efficient manner; drilling results; the ability of the operator of the projects which the Company has an interest in operating the field in a safe, efficient and effective manner; the ability of the Company 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 of exploration; the timing and costs of pipeline, storage and facility construction and expansion and the ability of the Company to secure adequate product transportation; future commodity prices; currency, exchange and interest rates; the regulatory framework regarding royalties, taxes and environmental matters in the jurisdictions in which the Company operates; and the ability of the Company to successfully market its oil and natural gas production. Certain or all of the forgoing assumptions may prove to be untrue.
Yoho's actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits, that the Company will derive therefrom. All subsequent forward-looking statements, whether written or oral, attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements. Additional information on these and other factors that could affect Yoho's operations and financial results are included in reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com) or Yoho's website (www.yohoresources.ca).
The forward-looking statements contained in this document are made as at the date of this news release and Yoho does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.
Special Note Regarding Disclosure of Reserves and Resources
Contingent resources is defined in the COGE Handbook as those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations using established technology or technology under development, but which are not currently considered to be commercially recoverable due to one or more contingencies. Contingencies may include factors such as economic, legal, environmental, political, and regulatory matters, or a lack of markets. It is also appropriate to classify as contingent resources the estimated discovered recoverable quantities associated with a project in the early evaluation stage. Contingent resources are further classified in accordance with the level of certainty associated with the estimates and may be subclassified based on project maturity and/or characterized by their economic status.
The contingent resources estimates herein, including the corresponding estimates of before tax present value estimates, are estimates only and the actual results may be greater than or less than the estimates provided herein. There is no certainty that it will be commercially viable or technically feasible to produce any portion of the resources.
Probability
"Low Estimate" is a classification of estimated resources described in the COGE Handbook as being considered to be a conservative estimate of the quantity that will actually be recovered. It is likely that the actual remaining quantities recovered will exceed the Low Estimate. If probabilistic methods are used, there should be a 90% probability (P90) that the quantities actually recovered will equal or exceed the Low Estimate. "Best Estimate" is a classification of estimated resources described in the COGE Handbook as being considered to be the best estimate of the quantity that will actually be recovered. It is equally likely that the actual remaining quantities recovered will be greater or less than the Best Estimate. If probabilistic methods are used, there should be a 50% probability (P50) that the quantities actually recovered will equal or exceed the Best Estimate. "High Estimate" is a classification of estimated resources described in the COGE Handbook as being considered to be an optimistic estimate of the quantity that will actually be recovered. It is unlikely that the actual remaining quantities recovered will exceed the High Estimate. If probabilistic methods are used, there should be a 10% probability (P10) that the quantities actually recovered will equal or exceed the High Estimate.
BOE Equivalency
Barrel of oil equivalents or BOEs may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 Mcf: 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency of 6 mcf: 1 bbl, utilizing a conversion ratio of 6 mcf: 1 bbl may be a misleading indication of value.
Internal estimates
Certain information contained herein, such as the estimated fair value of the Company's land holdings, are based on estimated values the Company believes to be reasonable and are subject to the same limitations as discussed under "Special Note Regarding Forward-looking Information" above.
Oil and Gas Advisory
The reserves information contained in this press release has been prepared in accordance with NI 51-101. Complete NI 51-101 reserves disclosure will be included in our Annual Information Form for the year ended September 30, 2014 which is expected to be filed in early December 2014. Listed below are cautionary statements applicable to our reserves information that are specifically required by NI 51-101:
-- Individual properties may not reflect the same confidence level as
estimates of reserves for all properties due to the effects of
aggregation.
-- With respect to finding and development 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.
-- This press release contains estimates of the net present value of our
future net revenue from our reserves. Such amounts do not represent the
fair market value of our reserves.
-- Reserves included herein are stated on a company interest basis (before
royalty burdens and including royalty interests) unless noted otherwise
as well as on a gross and net basis as defined in NI 51-101. "Company
interest" is not a term defined by NI 51-101 and as such the estimates
of Company interest reserves herein may not be comparable to estimates
of "gross" reserves prepared in accordance with NI 51-101 or to other
issuers' estimates of company interest reserves.
Selected Definitions
The following terms used in this press release have the meanings set forth below:
"AECO" refers to a natural gas storage facility located at Suffield, Alberta "API" means American Petroleum Institute "bbl" means barrel "bcf" means one billion cubic feet "boe" means barrel of oil equivalent of natural gas and crude oil on the basis of 1 boe for six thousand cubic feet of natural gas (this conversion factor is and industry accepted norm and is not based on either energy content or current prices) "Mbbl" means thousand barrels "Mboe" means 1,000 barrels of oil equivalent "MMboe" means one million barrels of oil equivalent "Mcf" means one thousand cubic feet "Mmcf" means one million cubic feet "MMbtu" means million British Thermal Units "$M" means thousands of dollars
Contacts:
Yoho Resources Inc.
Wendy S. Woolsey, CA
Vice President, Finance and CFO
(403) 537-1771
www.yohoresources.ca
