Mr. James Evaskevich reports

YANGARRA ANNOUNCES 2023 THIRD QUARTER FINANCIAL AND OPERATING RESULTS

Yangarra Resources Ltd. has released its financial and operating results for the three and nine months ended Sept. 30, 2023.

Operations update

Yangarra grew funds flow from operations by 29 per cent from last quarter while maintaining production, despite a number of unplanned and extended third party turnarounds. The nine wells brought on stream toward the end of Q3 are currently flowing back, recovering frac fluids.

Drilling costs continue to improve, with a reduction of 15 per cent to 30 per cent in drilling spud to rig release times when compared with previous years, which has mitigated most of the cost escalations experienced over the past 18 months.

Completion techniques are evolving as well, and the company is evaluating smart dart completions on six wells, and three perf-and-plug completions for comparison with the standard coil-activated-sleeve completions.

Subsequent to the end of Q3, a small tuck-in of a jointly owned property was closed with 75 boe/d (barrels of oil equivalent per day) of production and three (1.25 net) sections of land at a compelling valuation.

Third-quarter highlights:

• Funds flow from operations of $29-million (29 cents per share -- diluted), a decrease of 36 per cent from the same period in 2022;
• Petroleum and natural gas sales were $45.4-million, a decrease of 28 per cent from the same period in 2022;
• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) was $31.6-million (32 cents per share -- diluted);
• Net income of $11.5-million (11 cents per share -- diluted, $15.2-million before tax), a decrease of 59 per cent from the same period in 2022;
• Average production of 12,109 boe/d (barrels of oil equivalent per day) (39 per cent liquids) during the quarter, a 3-per-cent increase from the same period in 2022;
• Operating costs were $8.21/boe (including $1.68/boe of transportation costs);
• Field operating netbacks were $29.79/boe;
• Operating netbacks, which include the impact of commodity contracts, were $29.86/boe;
• Operating margins were 73 per cent and funds flow from operations margins were 64 per cent;
• G&A (general and administrative) costs of $1.10/boe;
• Royalties were 7 per cent of oil and gas sales;
• All-in cash costs were $14.79/boe;
• Capital expenditures were $25.3-million;
• Adjusted net debt was $116.9-million;
• Adjusted net debt to third quarter annualized funds flow from operations was 1:1;
• $3-million of adjusted net debt was repaid during the third quarter;
• Retained earnings of $299.3-million;
• Decommissioning liabilities of $15.2-million (discounted).

Operations summary

Net petroleum and natural gas production, pricing and revenue are summarized in the associated table.

Net debt summary

The company had a $17.4-million reduction change in adjusted net debt during the nine months ended Sept. 30, 2023, and a $62.4-million reduction during the year ended Dec. 31, 2022.

Quarter-end disclosure

The company's Sept. 30, 2023, unaudited condensed interim consolidated financial statements, and management's discussion and analysis, will be filed on SEDAR+ and are available on the company's website.

We seek Safe Harbor.