CALGARY, Oct. 22, 2015 /CNW/ - Yangarra Resources
Ltd. ("Yangarra" or the "Company") (TSX:YGR) provides an
operations update.
Yangarra's 3rd quarter capital program had
significant cost reductions in both drilling and completion
operations, as well as earning new lands. One of the
Company's 1.5 mile horizontal ("HZ") wells drilled in the
2nd quarter, at a cost of $1.3
million, was fracked with 45 stages and 675 tonnes of sand
and completed at a cost of $1.2
million. Initial Production over 30 days ("IP-30") was 478
boe/d (including 378 bbls/d of oil).
Two additional wells drilled during the 2nd quarter
(one 1 mile and one 1.5 mile) are scheduled to be completed in the
4th quarter when crown pipeline right of ways are
secured, which are currently delayed by Aboriginal Consultation
Office ("ACO") approvals.
A 2 mile HZ well drilled in the 3rd quarter was
completed early in the 4th quarter and is currently on
flow-back after a 61 stage completion with 915 tonnes of sand. The
well cost $1.8 million to drill and
$1.5 million to complete.
Two 1 mile HZ wells have been drilled in the 4th
quarter and will be completed and tied into the Company's Ferrier
compression facility in early November.
In late August the Company diverted shut in production from the
TCPL James River system to the TCPL mainline. Shortly thereafter a
portion of that production was unexpectedly shut in due to
maintenance work by TCPL on the main line. In addition, the Company
experienced several other interruptions at various facilities
throughout the 3rd quarter as a result of rolling shutdowns by
TCPL. As a result of the various outages, Yangarra's average daily
production was approximately 2,100 boe/d (50% oil & NGL's) for
the third quarter of 2015.
The Company expects fourth quarter 2015 production to average
between 2,300 – 2,600 boe/d with continued TCPL interruptions.
Cardium Update
Upon review of full cycle returns, Yangarra will focus on
Cardium development. Well cost reduction initiatives and
other technological advances are having significant positive impact
to the risk adjusted returns. The Company's experience in the
Cardium also minimizes the risk profile.
Duvernay Update
Yangarra completed drilling its first Duvernay strata-graphic vertical test well on
the 54 section North block, after analyzing the results and in the
context of the current commodity environment, Yangarra has decided
that the risk adjusted returns no longer justify further drilling
in the North block and will let the block expire.
Yangarra intends to complete the standing horizontal well in the
South Block in the summer of 2016 when processing capacity is
expected to be available.
Corporate Strategy
Yangarra`s corporate strategy for 2016 in the current commodity
environment is to target and maintain 2,500 – 2,750 boe/d while
spending within cash-flow at US$45/bbl WTI. Yangarra is preparing for
future growth by acquiring significant Cardium acreage at very
attractive prices, consolidating partner interests and securing
infrastructure. The Company's current inventory supports an
ability to increase the pace of development to 2-3 drilling rigs
when justified by full cycle returns.
Corporate Presentation
An updated corporate presentation is available on the Company's
webpage at
http://www.yangarra.ca/Financial-Reports/Presentations/.
Corporate Secretary
Yangarra has appointed Frank Sur
of Gowlings as corporate secretary, Frank replaces Jeff Dyck of Gowlings, and the Company thanks
Jeff for his contribution and guidance over the past 5
years.
Forward looking information
This press release contains forward-looking statements.
More particularly, this press release contains statements
concerning planned exploration and development activities,
anticipated timing of crown pipeline right of ways being approved
by the Aboriginal Consultation Office, anticipated timing of the
cessation of production outage as a result of completion of the
maintenance work by TCPL at the James River sales line, the
anticipated daily production average in the fourth quarter of 2015
and the planned corporate strategy during the current commodity
environment.
The forward-looking statements in this press release are
based on certain key expectations and assumptions made by Yangarra,
including expectations and assumptions concerning the success of
future drilling and development activities, the performance of
existing wells, the performance of new wells, the successful
application of technology, prevailing weather conditions, commodity
prices, royalty regimes and exchange rates and the availability of
capital, labour and services.
Although Yangarra believes that the expectations and
assumptions on which the forward-looking statements are based are
reasonable, undue reliance should not be placed on the
forward-looking statements because Yangarra can give no assurance
that they will prove to be correct. Since forward-looking
statements address future events and conditions, by their very
nature they involve inherent risks and uncertainties. Actual
results could differ materially from those currently anticipated
due to a number of factors and risks. These include, but are
not limited to, risks associated with the oil and gas industry in
general (e.g., operational risks in development, exploration and
production; delays or changes in plans with respect to exploration
or development projects or capital expenditures; the uncertainty of
reserves estimates; the uncertainty of estimates and projections
relating to production, costs and expenses; and health, safety and
environmental risks), uncertainty as to the availability of labour
and services, commodity price and exchange rate fluctuations,
unexpected adverse weather conditions, general business, economic,
competitive, political and social uncertainties, capital market
conditions and market prices for securities and changes to existing
laws and regulations. Certain of these risks are set out in
more detail in Yangarra's current Annual Information Form, which is
available on Yangarra's SEDAR profile at www.sedar.com.
Forward-looking statements are based on estimates and
opinions of management of Yangarra at the time the statements are
presented. Yangarra may, as considered necessary in the
circumstances, update or revise such forward-looking statements,
whether as a result of new information, future events or otherwise,
but Yangarra undertakes no obligation to update or revise any
forward-looking statements, except as required by applicable
securities laws.
Any references in this press release to initial and/or final
raw test or production rates and/or "flush" production rates are
useful in confirming the presence of hydrocarbons, however, such
rates are not necessarily determinative of the rates at which such
wells will commence production and decline thereafter.
Additionally, such rates may also include recovered "load oil"
fluids used in well completion stimulation. While encouraging,
readers are cautioned not to place reliance on such rates in
calculating the aggregate production for the Corporation. The
initial production rate may be estimated based on other third party
estimates or limited data available at this time. In all cases in
this press release, initial production or test are not necessarily
indicative of long-term performance of the relevant well or fields
or of ultimate recovery of hydrocarbons.
Barrels of Oil Equivalent
The term barrels of oil equivalent ("boe") may be misleading,
particularly if used in isolation. Per boe amounts have been
calculated using a conversion ratio of six thousand cubic feet (6
mcf) of natural gas to one barrel (1 Bbl) of crude oil. The
boe conversion ratio of 6 mcf to 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 that the value ratio based on the current
price of crude oil as compared to natural gas is significantly
different from the energy equivalency of 6:1, utilizing a
conversion on a 6:1 basis may be misleading as an indication of
value.
All reference to $ (funds) are in Canadian dollars.
SOURCE Yangarra Resources Ltd.