AGM Documents 3

Yoho Resources Inc. Announces Record 2008 Fiscal Year End Results

Not for distribution to u.s. news wire services or for dissemination in the united states

Yoho Resources Inc. Announces Record 2008 Fiscal Year End Results; Funds from Operations Increase 127% to $22.0 million ($1.14 per share diluted) during Fiscal 2008 from Fiscal 2007; Debt Reduced 25% over the Same Period; Net Asset Value Increases to $4.91 per share basic

Calgary, Alberta – December 11, 2008 - Yoho Resources Inc. (“Yoho” or the “Company”) today filed its audited annual consolidated financial statements for the year ended September 30, 2008 and related Management’s Discussion and Analysis on www.sedar.com.

Highlights

  • Yoho’s fiscal 2008 production averaged 2,040 boe per day (85% natural gas), a 50% increase from 1,364 boe per day for fiscal 2007.  The Company exited fiscal 2008 with production of approximately 2,500 boe per day.
  • Funds from operations for fiscal 2008 increased 127% to $22.0 million from $9.7 million last year, as a result of increased production and commodity prices.  On a per share basis, funds from operations for fiscal 2008 increased 107% to $1.14 per share diluted from $0.55 per share diluted last year.
  • Fiscal 2008 net income was $5.2 million ($0.27 per share diluted) compared to a net loss of $6.2 million ($0.38 per share) during fiscal 2007.
  • Yoho’s fiscal 2008 exploration and acquisition activities resulted in a 24% increase in proved plus probable reserves, representing a production replacement ratio of 226%.  At September 30, 2008 proved plus probable reserves totaled 4.9 MMboe.  The finding, development and acquisition costs for fiscal 2008 were $15.64 per boe.
  • Yoho’s net asset value per share (before tax) at September 30, 2008 is calculated to be $4.91 per share basic using reserves at forecast prices discounted at 10% and which incorporate the impact of Alberta new crown royalties.
  • Yoho exited fiscal 2008 with total debt (including working capital deficiency) of $19.3 million, with a bank credit line of $30 million.  Yoho’s total debt to cash flow ratio at fiscal year end 2008 was 0.87 to 1 based on full 2008 cash flow, and 0.7 to 1 based on trailing quarter annualized cash flow. This allows the Company a great deal of financial flexibility to continue its growth going into fiscal 2009.

Financial ($)

Year ended September 30, 2008

 

Year ended September 30, 2007

Petroleum and natural gas sales

40,052,905

 

20,371,069

Funds from operations

22,004,703

 

9,707,848

  per share - basic

1.16

 

0.59

  per share - diluted

1.14

 

0.55

Net income (loss)

5,210,462

 

(6,192,139)

  per share - basic

0.28

 

(0.38)

  per share - diluted

0.27

 

(0.38)

Capital expenditures

26,814,681

 

45,595,280

       
       
 

Year ended September 30, 2008

 

Year ended September 30, 2007

Production

     

Natural gas (mcf/d)

10,461

 

6,524

Light oil and NGL (bbls/d)

179

 

151

Heavy oil (bbls/d)

117

 

126

BOE (boe/d)

2,040

 

1,364

Reference prices

     

AECO gas ($/GJ)

7.60

 

6.31

Edmonton par oil ($/bbl)

107.96

 

70.87

LLB heavy oil ($/bbl)

84.54

 

48.72

       

Yoho average wellhead prices

     

Natural gas ($/mcf)

8.33

 

6.65

Light oil and NGL ($/bbl)

82.11

 

52.42

Heavy oil ($/bbl)

64.80

 

35.69

       

Operating netbacks

     

Natural gas ($/mcf)

5.05

 

3.81

Light oil and NGL ($/bbl)

70.82

 

37.98

Heavy oil ($/bbl)

40.12

 

18.63

Combined ($/boe)

34.43

 

24.16

       

Number of shares outstanding

     

Weighted average

     

  Basic

18,897,523

 

16,509,680

  Diluted

19,379,663

 

16,509,680

End of year

     

  Basic

20,995,586

 

17,379,654

  Diluted

23,907,812

 

19,896,880

Drilling

During fiscal 2008, the Company participated in a total of 13 (9.6 net) wells of which five (4.8 net) wells were located in British Columbia, with the balance drilled in Alberta in the Peace River Arch and in west-central Alberta.  Yoho will increase its drilling operations in British Columbia in fiscal 2009, includingdevelopment programs at Buick Creek and Mike.

 

Year Ended September 30, 2008

Wells Drilled

Gross

Net

Oil

-

-

Gas

10

7.1

D&A

3

2.5

Total

13

9.6

Production

Yoho increased production during fiscal 2008 by 50%, averaging 2,040 boe per day as compared to fiscal 2007 average production of 1,364 boe per day.  The increase in production resulted primarily from a successful drilling program and a corporate acquisition in June, 2008.

Land and Seismic

The Company has continued to add to both land and seismic inventories during fiscal 2008.  Undeveloped land increased 21% to 135,000 net acres at September 30, 2008.  Undeveloped land in British Columbia grew to 42,500 net acres.  The Company’s seismic inventory stands at 3,400 km of 2D seismic data and 300 km2 of 3D seismic data.  Seismic and land are key components to the future growth of the Company in 2009 and beyond.

Reserves

An evaluation of Yoho’s petroleum and natural gas reserves at September 30, 2008 was prepared by the independent engineering firm of GLJ Petroleum Consultants Ltd. (“GLJ”) and utilizes GLJ’s October 1, 2008 price forecast.  Reserves included herein are stated on a total Company interest basis (before royalty burdens and including royalty interests paid to Yoho).  All reserves information has been prepared in accordance with National Instrument 51-101.

Summary of Reserves and Value

Oil & NGL

mbbls

Natural Gas

MMcf

Combined

Mboe

NPV 10% BIT

$ thousands

Proved developed producing

556

15,209

3,090

70,310

Total proved

586

16,905

3,403

75,718

Total proved plus probable

843

24,324

4,896

101,430

The fiscal 2008 capital program resulted in total reserve additions (including acquisitions and technical revisions) of 1,720 Mboe on a proved and probable basis.  The finding, development and acquisition costs for proved and probable reserves, including technical reserve revisions and changes in future capital, were $15.64 per boe for 2008 and $17.62 per boe on a 3-year rolling average.

Net Asset Value

The Company’s net asset value per share (before tax) at September 30, 2008 is calculated to be $5.11 per basic share using GLJ forecast prices at October 1, 2008 discounted at 10%.  Based upon their current understanding of the Alberta New Royalty Framework, GLJ has rerun our corporate total economic forecasts to examine the impact of the forth coming changes, which results in a calculated net asset value of $4.91 per basic share. 

Net Asset Value (000s) September 30, 2008

 

Yoho Total Company Reserves

 

New Alberta Royalty Framework Reserves

Reserve value (P+P 10%)

 

101,430

 

97,221

Land(1) -135,388 net acres @ $125 per acre

16,924

 

16,924

Seismic(1)

   

8,378

 

8,378

Debt:

         

  Bank debt

(15,931)

     

  Accounts receivable

6,722

     

  Accounts payable

(10,154)

(19,363)

 

(19,363)

Total

 

107,369

 

103,160

           

Basic shares outstanding - September 30, 2008

20,996

 

20,996

(1) Company estimates

Outlook

Yoho’s operational focus for 2009 will be on the following projects:

  • Initial field work will begin this winter on two “unconventional” prospects in British Columbia that Yoho’s technical team has been working on over the last year.
  • Yoho will continue the development program at Buick Creek and Mike, B.C., including projects delayed last year due to low natural gas prices.  Mike is a winter access only area, which limits activity to 3-4 months per year.
  • Yoho will continue to evaluate projects in the Peace River Arch area that the Company has developed over the last 3 years.  Certain of these projects will not be drilled as a result of the Government of Alberta’s New Royalty Framework, resulting in the allocation of additional capital to projects in British Columbia.
  • The growth of the Company will also allow Yoho to pursue several new exploration projects in British Columbia with increased target size during fiscal 2009.  Despite the increased scale of the plays and prospects and corresponding increases to capital costs the Company will not commit to any single project that has the potential to adversely affect Yoho’s financial viability.

Yoho is currently planning a capital program of between $20 and $24 million for fiscal 2009 that includes plans to drill between 18 (16.0 net) and 21 (18.7 net) wells for the period from October 1, 2008 to September 30, 2009.  The budget has been allocated as follows:  $15.7 to $19.7 million for drilling, completion and equipment and $4.3 million for land and seismic.

At September 30, 2008, Yoho had drawn $15.9 million on bank credit facilities of $30 million.  The capital budget is flexible and will change subject to natural gas prices and industry conditions.

Yoho Resources Inc. is a Calgary based junior oil and natural gas company with operations focusing in the northwest Peace River Arch of Alberta, west-central Alberta and northeast British Columbia.  The common shares of Yoho are listed on the TSX Venture Exchange under the symbol “YO”.

This press release shall not constitute an offer to sell or a solicitation of an offer to buy the securities in any jurisdiction.  The common shares of Yoho will not be and have not been registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States, or to a U.S. person, absent registration or applicable exemption therefrom.

For more information please contact:

Wendy S. Woolsey

Vice President, Finance and CFO

Yoho Resources Inc.    

Phone:  403.537.1771

www.yohoresources.ca

The TSX Venture Exchange has neither approved nor disapproved the contents of this press release.

CAUTIONARY STATEMENTS

Forward Looking Statements

Statements throughout this release that are not historical facts may be considered to be "forward looking statements". These forward looking statements sometimes include words to the effect that management believes or expects a stated condition or result. All estimates and statements that describe the Company's objectives, goals, or future plans, including management's assessment of future plans and operations, drilling plans and timing thereof, expected production rates and additions and the expected levels of activities may constitute forward-looking statements under applicable securities laws and necessarily involve risks including, without limitation, risks associated with oil and gas exploration, development, exploitation, production, marketing and transportation, volatility of commodity prices, imprecision of reserve estimates, environmental risks, competition from other producers, incorrect assessment of the value of acquisitions, failure to complete and/or realize the anticipated benefits of acquisitions, delays resulting from or inability to obtain required regulatory approvals and ability to access sufficient capital from internal and external sources and changes in the regulatory and taxation environment. As a consequence, the Company's actual results may differ materially from those expressed in, or implied by, the forward-looking statements. Forward-looking statements or information are based on a number of factors and assumptions which have been used to develop such statements and information but which may prove to be incorrect. Although the Company believes that the expectations reflected in such forward-looking statements or information are reasonable, undue reliance should not be placed on forward-looking statements because the Company can give no assurance that such expectations will prove to be correct. In addition to other factors and assumptions which may be identified in this document, assumptions have been made regarding, among other things: the ability of the Company to obtain equipment and services in a timely and cost efficient manner; drilling results; the ability of the operator of the projects which the Company has an interest in to operate the field in a safe, efficient and effective manor; and field production rates and decline rates. Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on these and other factors that could affect the Company's operations and financial results are included elsewhere herein and in reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com), or at the Company's website (www.yohoresources.ca). Furthermore, the forward-looking statements contained in this release are made as at the date of this release and the Company does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.

Barrel of Oil Equivalency

Natural gas volumes are converted to barrels of oil equivalent (BOE) on the basis of six thousand cubic feet (mcf) of gas to one barrel (bbl) of oil. The term "barrels of oil equivalent" may be misleading, particularly if used in isolation. A BOE conversion ratio of six mcf to one bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.