Mr. James Evaskevich reports

YANGARRA ANNOUNCES 2020 SECOND QUARTER FINANCIAL AND OPERATING RESULTS

Yangarra Resources Ltd. has released its financial and operating results for the three and six months ended June 30, 2020.

Second quarter highlights:

• Average production of 9,875 barrels of oil equivalent per day (44 per cent liquids) during the quarter, a 24-per-cent decrease from the same period in 2019;
• Oil and gas sales were $16.2-million, a decrease of 56 per cent from the same period in 2019;
• Funds flow from operations of $7.7-million (nine cents per share, basic), a decrease of 68 per cent from the same period in 2019;
• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) (which excludes changes in derivative financial instruments) was $8.1-million (nine cents per share, basic);
• Net loss of $2.8-million (three cents per share, basic, and $2.9-million before tax), a decrease of 115 per cent from the same period in 2019;
• Operating costs were $6.33 per boe (including 96 cents per boe of transportation costs);
• Field operating netbacks were $11.45 per boe;
• Operating netbacks, which include the impact of commodity contracts, were $11.37 per boe;
• Operating margins were 63 per cent, and funds flow from operations margins was 47 per cent;
• General and administrative costs of 66 cents per boe;
• Royalties were 2 per cent of oil and gas revenue;
• All-in cash costs were $9.52 per boe;
• Capital expenditures were $1.1-million;
• Net debt of $192-million, a $6-million decrease from the first quarter;
• Completed its annual borrowing base review, and the syndicated senior credit facility was been confirmed at $210-million;
• Net debt to second quarter annualized funds flow from operations was 6.2 to 1;
• Retained earnings of $104-million;
• Corporate LMR (liability management rating) is 10.1 with decommissioning liabilities of $16.5-million (discounted).

 
                                             FINANCIAL SUMMARY
                                    (in $000s except per-share amounts)
  
                                                          Q2           Q1           Q2          Six months ended
                                                        2020         2020         2019         2020         2019
Statements of comprehensive income
Petroleum and natural gas sales                      $16,290      $27,435      $36,473      $43,725      $76,380
Net (loss) income (before tax)                       ($2,933)      $3,877      $13,433         $944      $29,819
Net (loss) income                                    ($2,801)      $2,835      $18,219          $34      $29,733
Net (loss) income per share, basic                    ($0.03)       $0.03        $0.21        $0.00        $0.35
Net (loss) income per share, diluted                  ($0.03)       $0.03        $0.21        $0.00        $0.34
Statements of cash flow
Funds flow from operations                            $7,733      $15,293      $24,445      $23,026      $52,176
Funds flow from operations per share, basic            $0.09        $0.18        $0.29        $0.27        $0.61
Funds flow from operations per share, diluted          $0.09        $0.18        $0.28        $0.27        $0.60
Cash from operating activities                        $1,544      $15,725      $22,005      $17,269      $44,968
Statements of financial position
Property and equipment                              $554,470     $558,956     $515,730     $554,470     $515,730

Operations summary

Net petroleum and natural gas production, pricing and revenue are summarized herein.

                                           OPERATIONS SUMMARY

                                                                Q2          Q1          Q2        Six months ended
                                                              2020        2020        2019        2020        2019
Daily production volumes
Natural gas (Mcf/d)                                         33,214      38,712      41,304      35,962      38,024
Oil (bbl/d)                                                  2,513       3,550       4,116       3,029       4,223
NGLs (bbl/d)                                                 1,827       2,120       2,032       1,976       1,937
                                                          --------    --------    --------    --------    --------
Combined (boe/d 6:1)                                         9,875      12,122      13,032      10,999      12,497
Revenue
Petroleum and natural gas sales, gross                     $16,290     $27,435     $36,473     $43,725     $76,380
Realized gain (loss) on commodity contract settlement          (69)         53         260         (16)        430
                                                          --------    --------    --------    --------    --------
Total sales                                                 16,221      27,488      36,733      43,709      76,810
Royalty expense                                               (314)     (1,640)     (2,785)     (1,954)     (5,788)
                                                          --------    --------    --------    --------    --------
Total revenue -- net of royalties                          $15,907     $25,848     $33,948     $41,755     $71,022
                                                          --------    --------    --------    --------    --------

Quarter-end disclosure

The company's financial statements, notes to the 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.