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Yangarra Improves Drill Costs with Sliding Sleeve Completions

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   |    Wednesday,August 12,2015

Yangarra Resources Ltd. has announced its financial and operating results for the three and six months ended June 30, 2015.

Operations Update

• Yangarra drilled three farm-in wells during the second quarter (one 1-mile lateral and two 1.5-mile laterals) and expects to complete and tie-in the first 1.5 mile well in August with the two remaining wells scheduled to be completed once pipeline right of ways are acquired. Upon completion of these wells Yangarra has satisfied the earn-in terms of the farm-in, additional wells on the farm-in property will be drilled at Yangarra's sole discretion.
• With low commodity pricing and the uncertainty created by the outcome of the recent Alberta provincial election, Cardium land prices have dropped significantly. Yangarra has added approximately 2 years of drilling inventory in 2015.
• Drilling and completion costs continue to improve with all wells completed with cemented liner and sliding sleeve technology. The Company also acquired a 5.5% interest in a third party gas processing plant with 50.0 mmcf/d of capacity during the quarter which alleviates shut-in production in north Willesden Green.
• Second quarter production averaged 2,155 boe/d (18% decline from Q1) with approximately 650 boe/d shut in over the quarter primarily at the 2-4 Willesden Green gas processing facility. Production from the 2-4 facility is predominantly oil with relatively low rates of gas; however, with the gas shut in the oil is curtailed as well.
• The reduced rig count over the past 6 months has helped create spare firm transportation and processing capacity. Arrangements have been made to divert the currently shut-in 650 boe/d to an alternate plant outside the James River gas infrastructure system. The production is expected to be online by mid-August with the costs to tie-in to the new plant low, as the pipeline access to the alternate plant crosses the 2-4 facility sales line. The alternate plant is a shallow cut facility which is currently advantageous to deep cut facilities as produced propane is left in the gas stream which will generate positive cash flow for the propane.
• Subsequent to quarter end, Yangarra spud its first Duvernay strata-graphic vertical test well on the 54 section North block.