 | Yuma Energy, Inc. | ||
NEWS RELEASE
Yuma Energy, Inc. Announces Second Quarter 2017
Financial Results
HOUSTON, TX – (PR Newswire – August 14, 2017) – Yuma Energy, Inc. (NYSE American: YUMA) (the “Company” or “Yuma”) today announced its financial results for the quarter ended June 30, 2017.
Second Quarter 2017 Highlights
●
Net average production was 2,553 Boe/d for the second quarter of 2017, a 39.1 percent increase over the second quarter of 2016.
●
Cash provided by operations was $2,889,407 for the six months ended June 30, 2017, compared to cash used in operations of $2,442,876 in the same period in 2016.
●
The Company sold non-core properties in Brazos County, Texas for $5.5 million (prior to purchase price adjustments) and reduced its debt by $7.5 million from $39.5 million at the end of the first quarter of 2017 to $32.0 million at the end of the second quarter of 2017.
●
The Company increased its Permian Basin acreage position to 2,491 acres (2,180 net acres) in Yoakum County, Texas to horizontally develop the San Andres Oil Play. This acreage is within the Area of Mutual Interest (“AMI”) covering approximately 33,280 acres that was established as part of a joint development agreement entered into earlier this year with two privately held energy firms. Yuma is the operator of the acreage with an 87.5 percent working interest and intends to spud its first joint venture well in 2017, as well as continue to acquire additional acreage within the AMI.
Recent Developments
●
Yuma spud the Weyerhaeuser 14-1 well in Livingston Parish, which is referred to as the Glacier Prospect, on July 29, 2017. Drilling is currently at 13,058 feet, with total depth projected to be 15,098 feet, which the Company intends to reach before the end of August.
Management Comments
Sam L. Banks, CEO of Yuma Energy, Inc., commented, “During the second quarter we were able to increase our acreage position in the Permian Basin at very attractive prices and look forward to continuing to expand our position in the San Andres horizontal play and spudding our first well there in 2017. In addition, we are excited about our recently spudded well in our Glacier Prospect. We believe our business strategy of generating organic opportunities through the drill bit and increasing our exposure to the Permian Basin will lead to significant shareholder value over time. As can be seen in our first and second quarter results, the merger with Davis has improved our cash flows and financial position and significantly increased our production.”
Financial Results
Production
The following table presents the net quantities of oil, natural gas and natural gas liquids produced and sold by the Company for the three and six month periods ended June 30, 2017 and 2016, and the average sales price per unit sold.
Three Months Ended June 30, | Six Months Ended June 30, | |||
2017 | 2016 | 2017 | 2016 | |
| Production volumes: | ||||
| Crude oil and condensate (Bbls) | 66,242 | 39,297 | 142,640 | 74,015 |
| Natural gas (Mcf) | 786,111 | 646,020 | 1,685,538 | 1,046,385 |
| Natural gas liquids (Bbls) | 35,092 | 20,117 | 68,566 | 50,379 |
Total (Boe) (1) | 232,353 | 167,084 | 492,129 | 298,792 |
| Average prices realized: | ||||
| Crude oil and condensate (per Bbl) | $47.14 | $44.07 | $48.65 | $37.45 |
| Natural gas (per Mcf) | $3.29 | $1.95 | $3.05 | $1.96 |
| Natural gas liquids (per Bbl) | $24.05 | $17.87 | $23.61 | $14.16 |
(1)
Barrels of oil equivalent have been calculated on the basis of six thousand cubic feet (Mcf) of natural gas equal to one barrel of oil equivalent (Boe).
Revenues
The following table presents the Company’s revenues for the three and six month periods ended June 30, 2017 and 2016.
Three Months Ended June 30, | Six Months Ended June 30, | |||
2017 | 2016 | 2017 | 2016 | |
| Sales of natural gas and crude oil: | ||||
| Crude oil and condensate | $3,122,848 | $1,731,952 | $6,938,780 | $2,771,640 |
| Natural gas | 2,587,968 | 1,260,500 | 5,141,410 | 2,046,110 |
| Natural gas liquids | 843,888 | 359,504 | 1,618,938 | 713,138 |
| Total revenues | $6,554,704 | $3,351,956 | $13,699,128 | $5,530,888 |
Expenses
The Company’s lease operating expenses (“LOE”) and LOE per Boe for the three and six month periods ended June 30, 2017 and 2016, are set forth below:
Three Months Ended June 30, | Six Months Ended June 30, | |||
2017 | 2016 | 2017 | 2016 | |
| Lease operating expenses | $1,844,896 | $597,966 | $3,542,804 | $1,227,954 |
| Severance, ad valorem taxes and | ||||
| marketing | 1,214,228 | 493,113 | 2,177,584 | 849,822 |
| Total LOE | $3,059,124 | $1,091,079 | $5,720,388 | $2,077,776 |
| LOE per Boe | $13.17 | $6.53 | $11.62 | $6.95 |
| LOE per Boe without severance, | ||||
| ad valorem taxes and marketing | $7.94 | $3.58 | $7.20 | $4.11 |
Commodity Derivative Instruments
Commodity derivative instruments open as of June 30, 2017 are provided below. Natural gas prices are NYMEX Henry Hub prices, and crude oil prices are NYMEX West Texas Intermediate.
2017 | 2018 | 2019 | |
Settlement | Settlement | Settlement | |
| NATURAL GAS (MMBtu): | |||
| Swaps | |||
| Volume | 1,098,912 | 1,725,133 | 373,906 |
| Price | $3.13 | $3.00 | $3.00 |
| 3-way collars | |||
| Volume | 85,806 | - | - |
| Ceiling sold price (call) | $3.39 | - | - |
| Floor purchased price (put) | $3.03 | - | - |
| Floor sold price (short put) | $2.47 | - | - |
| CRUDE OIL (Bbls): | |||
| Swaps | |||
| Volume | 67,191 | 195,152 | 156,320 |
| Price | $52.24 | $53.17 | $53.77 |
| 3-way collars | |||
| Volume | 54,289 | - | - |
| Ceiling sold price (call) | $77.00 | - | - |
| Floor purchased price (put) | $60.00 | - | - |
| Floor sold price (short put) | $45.00 | - | - |
About Yuma Energy, Inc.
Yuma Energy, Inc., a Delaware corporation, is an independent Houston-based exploration and production company focused on acquiring, developing and exploring for conventional and unconventional oil and natural gas resources. Historically, the Company’s operations have focused on onshore properties located in central and southern Louisiana and southeastern Texas where it has a long history of exploration and development activity, and more recently, the Company has entered the Permian Basin. In addition, the Company has non-operated positions in the East Texas Woodbine and the Bakken Shale in North Dakota, and operated positions in Kern County, California. Its common stock is listed on the NYSE American under the trading symbol “YUMA.”
Forward-Looking Statements
This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Statements that are not strictly historical statements constitute forward-looking statements and may often, but not always, be identified by the use of such words such as “expects,” “believes,” “intends,” “anticipates,” “plans,” “estimates,” “potential,” “possible,” or “probable” or statements that certain actions, events or results “may,” “will,” “should,” or “could” be taken, occur or be achieved. The forward-looking statements include statements about future operations, and estimates of reserve and production volumes. Forward-looking statements are based on current expectations and assumptions and analyses made by the Company in light of experience and perception of historical trends, current conditions and expected future developments, as well as other factors appropriate under the circumstances. However, whether actual results and developments will conform with expectations is subject to a number of risks and uncertainties, including but not limited to: the risks of the oil and gas industry (for example, operational risks in exploring for, developing and producing crude oil and natural gas); risks and uncertainties involving geology of oil and natural gas deposits; the uncertainty of reserve estimates; revisions to reserve estimates as a result of changes in commodity prices; the uncertainty of estimates and projections relating to future production, costs and expenses; potential delays or changes in plans with respect to exploration or development projects or capital expenditures; health, safety and environmental risks and risks related to weather; further declines in oil and natural gas prices; inability of management to execute its plans to meet its goals, shortages of drilling equipment, oil field personnel and services, unavailability of gathering systems, pipelines and processing facilities and the possibility that government policies may change. The Company’s annual report on Form 10-K for the year ended December 31, 2016, recent quarterly reports on Form 10-Q, recent current reports on Form 8-K, and other Securities and Exchange Commission filings discuss some of the important risk factors identified that may affect its business, results of operations, and financial condition. The Company undertakes no obligation to revise or update publicly any forward-looking statements, except as required by law.
For more information, please contact:
James J. Jacobs
Executive Vice President, Treasurer and Chief Financial Officer
Yuma Energy, Inc.
1177 West Loop South, Suite 1825
Houston, TX 77027
Telephone: (713) 968-7000
Yuma Energy, Inc.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
June 30, | December 31, | |
2017 | 2016 | |
| ASSETS | ||
| CURRENT ASSETS: | ||
| Cash and cash equivalents | $543,095 | $3,625,686 |
| Accounts receivable, net of allowance for doubtful accounts: | ||
| Trade | 4,330,227 | 4,827,798 |
| Officers and employees | 42,955 | 68,014 |
| Other | 1,851,776 | 1,757,337 |
| Commodity derivative instruments | 1,506,706 | - |
| Prepayments | 541,965 | 1,063,418 |
| Other deferred charges | 330,022 | 284,305 |
| Total current assets | 9,146,746 | 11,626,558 |
| OIL AND GAS PROPERTIES (full cost method): | ||
| Proved properties | 486,055,239 | 488,723,905 |
| Unproved properties - not subject to amortization | 5,585,387 | 3,656,989 |
491,640,626 | 492,380,894 | |
| Less: accumulated depreciation, depletion and amortization | (416,195,279) | (410,440,433) |
| Net oil and gas properties | 75,445,347 | 81,940,461 |
| OTHER PROPERTY AND EQUIPMENT: | ||
| Land, buildings and improvements | 1,600,000 | 1,600,000 |
| Other property and equipment | 2,842,140 | 7,136,530 |
4,442,140 | 8,736,530 | |
| Less: accumulated depreciation and amortization | (1,329,082) | (5,349,145) |
| Net other property and equipment | 3,113,058 | 3,387,385 |
| OTHER ASSETS AND DEFERRED CHARGES: | ||
| Commodity derivative instruments | 1,081,480 | - |
| Deposits | 467,592 | 467,306 |
| Other noncurrent assets | 435,810 | 517,201 |
| Total other assets and deferred charges | 1,984,882 | 984,507 |
| TOTAL ASSETS | $89,690,033 | $97,938,911 |
Yuma Energy, Inc.
CONSOLIDATED BALANCE SHEETS – CONTINUED
(Unaudited)
June 30, | December 31, | |
2017 | 2016 | |
| LIABILITIES AND EQUITY | ||
| CURRENT LIABILITIES: | ||
| Current maturities of debt | $86,558 | $599,341 |
| Accounts payable, principally trade | 10,782,653 | 11,009,631 |
| Commodity derivative instruments | - | 1,340,451 |
| Asset retirement obligations | 388,643 | 376,735 |
| Other accrued liabilities | 2,449,304 | 2,572,680 |
| Total current liabilities | 13,707,158 | 15,898,838 |
| LONG-TERM DEBT | 32,000,000 | 39,500,000 |
| OTHER NONCURRENT LIABILITIES: | ||
| Asset retirement obligations | 9,639,787 | 9,819,648 |
| Commodity derivative instruments | - | 1,215,551 |
| Employee stock awards | 30,430 | - |
| Total other noncurrent liabilities | 9,670,217 | 11,035,199 |
| COMMITMENTS AND CONTINGENCIES (Note 14) | ||
| EQUITY | ||
| Series D convertible preferred stock | ||
| ($0.001 par value, 7,000,000 authorized, 1,838,927 issued as of June 30, 2017 | ||
| and 1,776,718 issued as of December 31, 2016, $11.07 per share liquidation | ||
| preference) | 1,839 | 1,777 |
| Common stock | ||
| ($0.001 par value, 100 million shares authorized, 12,558,891 issued as of | ||
| June 30, 2017 and 12,201,884 issued as of December 31, 2016) | 12,559 | 12,202 |
| Additional paid-in capital | 44,958,379 | 43,877,563 |
| Treasury stock at cost (11,900 shares as of June 30, 2017 and -0- shares as | ||
| of December 31, 2016) | (23,270) | - |
| Accumulated earnings (deficit) | (10,636,849) | (12,386,668) |
| Total equity | 34,312,658 | 31,504,874 |
| TOTAL LIABILITIES AND EQUITY | $89,690,033 | $97,938,911 |
Yuma Energy, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended June 30, | Six Months Ended June 30, | |||
2017 | 2016 | 2017 | 2016 | |
| REVENUES: | ||||
| Sales of natural gas and crude oil | $6,554,704 | $3,351,956 | $13,699,128 | $5,530,888 |
| EXPENSES: | ||||
| Lease operating and production costs | 3,059,124 | 1,091,079 | 5,720,388 | 2,077,776 |
| General and administrative – stock-based | ||||
| compensation | 385,097 | 1,087,471 | 436,832 | 1,284,395 |
| General and administrative – other | 1,906,629 | 4,270,733 | 4,082,631 | 6,436,247 |
| Depreciation, depletion and amortization | 2,763,444 | 2,044,105 | 5,904,384 | 3,832,330 |
| Asset retirement obligation accretion expense | 141,454 | 55,016 | 280,023 | 107,075 |
| Impairment of oil and gas properties | - | 7,700,296 | - | 17,548,183 |
| Bad debt expense | 73,513 | 12,562 | 73,513 | 15,750 |
| Total expenses | 8,329,261 | 16,261,262 | 16,497,771 | 31,301,756 |
| LOSS FROM OPERATIONS | (1,774,557) | (12,909,306) | (2,798,643) | (25,770,868) |
| OTHER INCOME (EXPENSE): | ||||
| Net gains (losses) from commodity derivatives | 2,138,080 | (745,652) | 5,694,863 | (289,338) |
| Interest expense | (482,285) | (71,130) | (978,376) | (113,838) |
| Gain (loss) on other property and equipment | (70,874) | - | 484,768 | - |
| Other, net | 5,659 | 13,465 | 42,067 | 13,465 |
| Total other income (expense) | 1,590,580 | (803,317) | 5,243,322 | (389,711) |
| INCOME (LOSS) BEFORE INCOME TAXES | (183,977) | (13,712,623) | 2,444,679 | (26,160,579) |
| Income tax expense (benefit) | (20,581) | (29,371) | 5,950 | (26,769) |
| NET INCOME (LOSS) | (163,396) | (13,683,252) | 2,438,729 | (26,133,810) |
| PREFERRED STOCK: | ||||
| Dividends paid in kind | 349,300 | 325,869 | 688,910 | 646,148 |
| NET INCOME (LOSS) ATTRIBUTABLE TO | ||||
| COMMON STOCKHOLDERS | $(512,696) | $(14,009,121) | $1,749,819 | $(26,779,958) |
| INCOME (LOSS) PER COMMON SHARE: | ||||
| Basic | $(0.04) | $(1.88) | $0.14 | $(3.60) |
| Diluted | $(0.04) | $(1.88) | $0.14 | $(3.60) |
| WEIGHTED AVERAGE NUMBER OF | ||||
| COMMON SHARES OUTSTANDING: | ||||
| Basic | 12,235,286 | 7,442,381 | 12,223,337 | 7,448,222 |
| Diluted | 12,235,286 | 7,442,381 | 12,407,996 | 7,448,222 |
Yuma Energy, Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended June 30, | ||
2017 | 2016 | |
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||
| Reconciliation of net income (loss) to net cash provided by (used in) | ||
| operating activities: | ||
| Net income (loss) | $2,438,729 | $(26,133,810) |
| Depreciation, depletion and amortization of property and equipment | 5,904,384 | 3,832,330 |
| Impairment of oil and gas properties | - | 17,548,183 |
| Amortization of debt issuance costs | 172,826 | - |
| Net deferred income tax benefit | - | (26,769) |
| Stock-based compensation expense | 436,832 | 1,284,395 |
| Settlement of asset retirement obligations | (227,346) | (17,890) |
| Accretion of asset retirement obligation | 280,023 | 107,075 |
| Bad debt expense | 73,513 | 15,750 |
| Net (gains) losses from commodity derivatives | (5,694,863) | 289,338 |
| Gain on sales of fixed assets | (556,141) | - |
| Loss on write-off of abandoned facilities | 71,373 | - |
| Gain on write-off of liabilities net of assets | (34,835) | - |
| Changes in assets and liabilities: | ||
| Decrease in accounts receivable | 426,945 | 1,273,576 |
| (Increase) decrease in prepaids, deposits and other assets | 521,167 | 269,522 |
| (Decrease) increase in accounts payable and other current and | ||
| non-current liabilities | (923,200) | (884,576) |
| NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | 2,889,407 | (2,442,876) |
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||
| Capital expenditures for oil and gas properties | (4,526,587) | (8,858,743) |
| Proceeds from sale of oil and gas properties | 5,400,563 | - |
| Proceeds from sale of other fixed assets | 641,556 | - |
| Derivative settlements | 550,675 | 1,059,900 |
| NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES | 2,066,207 | (7,798,843) |
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||
| Proceeds from borrowings | - | 9,000,000 |
| Net repayments on the senior credit facility | (7,500,000) | - |
| Repayments of borrowings - insurance financing | (512,783) | - |
| Debt issuance costs | (2,152) | - |
| Treasury stock repurchases | (23,270) | (389,740) |
| NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES | (8,038,205) | 8,610,260 |
| NET DECREASE IN CASH AND CASH EQUIVALENTS | (3,082,591) | (1,631,459) |
| CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 3,625,686 | 4,064,094 |
| CASH AND CASH EQUIVALENTS AT END OF PERIOD | $543,095 | $2,432,635 |
| Supplemental disclosure of cash flow information: | ||
| Interest payments (net of interest capitalized) | $811,042 | $113,838 |
| Income tax payments | $- | $- |
| Supplemental disclosure of significant non-cash activity: | ||
| (Increase) decrease in capital expenditures financed by accounts payable | $(386,337) | $441,393 |