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Yuma Energy to Drill First Cat Canyon Well in 2015

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Yuma Energy, Inc. has announced its financial results for the quarter ended June 30, 2015 and provided an operational overview relating to its properties.

Operational Overview

• Cat Canyon Field - Santa Barbara County, California. We plan to drill our first operated well on this property in 2015. We are currently in the process of permitting the well.
• Amazon 3-D Project - Calcasieu and Jefferson Parishes, Louisiana. During the second quarter of 2015, we completed our Anaconda prospect, the Talbot 23-1 well, where we hold approximately a 45.0% working interest after casing point. The well was perforated in a lower portion of the main Hackberry sand from 11,744 feet to 11,748 feet (MD) and tested at an initial gross production (IP) rate of approximately 7.0 MMcf/d and 180 Bbl/d of 55 degree API condensate on a 13/64th choke with flowing tubing pressures of approximately 9,000 pounds. Subsequent production from the well was held at approximately the same producing rates until July 23rd when the well stopped flowing. Workover operations are underway and we anticipate having the well back on production in August 2015. The Talbot 23-1 has additional up-hole Hackberry sands in the main Hackberry section as well as four additional Marg-Tex sands with calculated pay behind pipe.
• La Posada, Bayou Hebert Field - Vermilion Parish, Louisiana. The field is currently producing approximately 53.4 MMcf/d of natural gas and 1,063 Bbl/d of oil gross (4.8 MMcf/d and 95 Bbl/d net). During the second quarter of 2015, the field averaged approximately 55.2 MMcf/d of natural gas and 1,044 Bbl/d of oil gross (5.0 MMcf/d and 94 Bbl/d net). We have an average net working interest in the project of approximately 12.5%.
• Livingston Prospects - Livingston Parish, Louisiana. In January of 2015, we drilled the Blackwell 39-1 (35% working interest) to a total depth of 10,100 feet measured depth (10,042 feet TVD) and completed the well in the first Wilcox sand from 9,466 feet to 9,476 feet. During the third week in June of 2015, we installed artificial lift on the well using an electrical submersible pump (ESP) and tested the well at an initial gross production rate of 191 Bbl/d (50 Bbl/d net) of 42 degree API crude oil. The Blackwell 39-1 averaged approximately 146 Bbl/d (38 Bbl/d net) over the first 30 days of production with the ESP. Also during the second quarter of 2015, we converted the Roberts 57-1 (33% working interest) to ESP lift which resulted in a significant increase in production. Gross production from the Roberts 57-1 is currently averaging 110 Bbl/d (26 Bbl/d net) of 40 degree API crude oil.
• We are currently in the process of evaluating further artificial lift enhancements in the remaining wells on the Livingston project. We currently have four wells producing from the lower Tuscaloosa sands, one of which is the Roberts 57-1, and three wells producing from the Wilcox sands, one of which is the Blackwell 39-1. During the second quarter of 2015, the field averaged approximately 515 Bbl/d gross (124 Bbl/d net). We have an average net working interest in the project of approximately 33%.
• Lake Fortuna Field (Raccoon Island) - St. Bernard Parish, Louisiana. We are continuing to evaluate additional production enhancements and facility upgrades and plan to perform additional operations during the third quarter of 2015 to improve production from the field. During the second quarter of 2015, the field averaged approximately 132 Bbl/d gross (86 Bbl/d net). We have an average net working interest in the project of approximately 91%.
• Gardner Island and Branville Bay - St. Bernard Parish, Louisiana. During the second quarter of 2015, we completed repair work on the salt water disposal well servicing the two fields and performed upgrades to the production facilities. Production from the two fields was restored in April 2015 and averaged approximately 359 Bbl/d gross (84 Bbl/d net) during the second quarter of 2015 inclusive of the downtime in April.

Liquidity and Capital Resources

• At June 30, 2015, we had a $33.0 million conforming borrowing base, with an additional $3.0 million non-conforming piece, and an undrawn amount of $6.1 million under our credit facility.
• In addition, we had a cash and cash equivalents balance of $8.3 million at June 30, 2015. This resulted in Liquidity (1) of approximately $14.4 million as of June 30, 2015.
• On July 27, 2015 the Company entered into its Eighth Amendment to the credit agreement, which changed the Company's borrowing base to $33.5 million, with an additional $1.5 million non-conforming borrowing base that expires on October 1, 2015. The effects of this amendment would have reduced the Company's liquidity position to approximately $13.4 million at June 30, 2015.