Exploration & Production | Operational Updates

Yangarra ID's 30 Long Lateral HZ Wells for Drilling After Thaw

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Yangarra Resources Ltd. has provided 2013 operations summary, December 2013 exit production, 2014 operations update, and current production.

2013 Operations Summary

The Company has successfully drilled and completed 15 gross (10.6 net) wells during 2013, in addition to completing 2 gross (0.6 net) wells that were drilled in 2012. All of the wells drilled in 2013 were completed by December 31, 2013 , with the last 3 wells (2.75 net) tied in the last week of December 2013 .

In January 2013 Yangarra began construction of an 11 mmcf/d gas processing facility in the Ferrier area (100% working interest) that was put in service April 10, 2013 which provided for the tie-in of 8.0 gross (2.4 net) standing wells, six of which had been drilled in 2011 and 2012.

In September 2013 Yangarra entered into a farm-in agreement with an industry major adding 61 gross (37 net) Cardium locations. Yangarra has drilled 7 gross (5.35 net) wells (4 of which were earning wells) which exceeded its initial drilling obligation under the terms of the farm-in agreement, to drill 2 earning wells by the end of March 31, 2014 .

Late in 2013 Yangarra negotiated a swap with an industry partner to concentrate their respective interests in the Ferrier area. In the swap arrangements Yangarra exchanged its Glauconite interest in 2 wells and 3 sections (average 17% working interest) for Cardium interests in 4 wells and 1.5 sections (average 30.6% working interest).

Yangarra acquired 1,760 acres (1,760 net) of land in Central Alberta during 2013 at crown land sales spending approximately $2.1 million .

The Company's December 2013 production averaged approximately 3,000 boe/d.

2014 Operations Update

Yangarra's contracted drilling rig commenced operations after the Christmas break on a two well pad (1.75 net Cardium wells) in Willesden Green on December 28 th, with the first well now drilled and the second well on the pad expected to be rig released January 23, 2014 . Completion operations will commence on January 24 th with a frac date booked for January 28, 2014 . The Company expects to drill 4 gross (4.0 net) additional wells prior to breakup and with an additional two well pad ready (2.0 net wells) in the event that breakup is later than expected.

Yangarra has identified 30 Cardium and Glauconite locations that could be developed with long reach (1.5 mile & 2 mile) horizontal wells. Yangarra plans to drill its first long-reach horizontal well after spring breakup in 2014.

The Company's current production is approximately 3,300 boe/d.