Yoho Resources Inc. Provides Exploration Update on Kaybob Duvernay
Calgary, Alberta - September 14, 2010 - Yoho Resources Inc. (“Yoho” or the “Company”)is pleased to provide an exploration activity update with respect to recent drilling and completion results at Kaybob (Devonian Duvernay formation).
Kaybob Devonian Duvernay
Yoho has participated in the drilling and completion of its first exploration horizontal well at Kaybob South targeting the Devonian Duvernay shale formation. The Company pooled eight sections of 100% interest lands with two other industry partners, ultimately taking a one third interest in 28 gross sections.
The well, operated by Celtic Exploration Ltd., located at 00/15-33-060-20W5 was drilled and cased over a 42 day period at an estimated cost of $4.0 million. The horizontal lateral was 1,787 metres, which was 500 metres longer than originally planned and allowed the addition of two frac stages making a total 13 planned frac stages and leaving a 175 metre interval which could be fractured by perforating.
During the completion of the well, six stages were fractured over a time interval of 10 days. Each stage was fractured with approximately 100 tonnes of sand and 1,500 cubic metres of slick water. While attempting to fracture the seventh stage, it is believed that a rupture in the casing occurred at the heel portion of the horizontal leg preventing the fracture of the remaining stages. It was decided to flow test the well with the six stimulated stages while determining the feasibility of fracturing the remaining stages. Tubing and recorders were run and the well has flowed on test starting September 11, 2010. Prior to the flow test, the well flowed on clean-up for a total of 140 hours.
After three days on test, the well is currently producing natural gas at a rate of 2.1 MMCF per day and 56° API condensate. The natural gas is liquids rich and is expected to yield total liquids of approximately 75 barrels per MMCF of raw gas including free condensate.
After completing the flow test, the well will be shut-in for build-up. The formation bottom hole pressure is expected to be approximately 50 MPa. Although the completion operations were suspended part way through the process, it is estimated that, without any operational difficulties, the well could have been completed with a 13-stage multi frac for approximately $3.0 million. As a result, total drilling and completion costs would be approximately $7.0 million.
The Company is encouraged with the results from the first horizontal well. The high liquids content provides enhanced economics in the current environment in which crude oil and condensate enjoy premium pricing as compared to natural gas. Yoho anticipates additional attractive economics from a well with a fully stimulated 13 stage completion.
Forward-looking information and statements
This news release contains certain forward–looking information and statements within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "may", "will", "project", "should", "believe", "plans", "intends" and similar expressions are intended to identify forward-looking information or statements. In particular, but without limiting the forgoing, this news release contains forward-looking information and statements pertaining to the following: the initial production volumes associated with the Kaybob Duvernay well; the volume and product mix associated with the Kaybob Duvernay well; future results from operations and operating metrics; future costs, expenses associated with future completion activities associated with the Kaybob Duvernay well and anticipated pressure build ups in the Kaybob Duvernay well. In addition, forward-looking statements or information are based on a number of material factors, expectations or assumptions of Yoho which have been used to develop such statements and information but which may prove to be incorrect. Although Yoho 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 Yoho can give no assurance that such expectations will prove to be correct. In addition to other factors and assumptions which may be identified herein, assumptions have been made regarding, among other things: the impact of increasing competition; the general stability of the economic and political environment in which Yoho operates; the timely receipt of any required regulatory approvals; the ability of Yoho to obtain qualified staff, equipment and services in a timely and cost efficient manner; drilling results; the ability of the operator of the Duvernay well and associated field to operate the field in a safe, efficient and effective manner; the ability of Yoho to obtain financing on acceptable terms; field production rates and decline rates and the ability of Yoho to secure adequate product transportation; future commodity prices; currency, exchange and interest rates; regulatory framework regarding royalties, taxes and environmental matters in the jurisdictions in which Yoho operates; and the ability of Yoho to successfully market its oil and natural gas products.
The forward-looking information and statements included in this news release are not guarantees of future performance and should not be unduly relied upon. Such information and statements; including the assumptions made in respect thereof, involve known and unknown risks, uncertainties and other factors that may cause actual results or events to defer materially from those anticipated in such forward-looking information or statements including, without limitation: inaccuracies in the interpretation of the initial production volumes associated with the Kaybob Duvernay well; changes in commodity prices; changes in the demand for or supply of Yoho's products; unanticipated operating results or production declines; changes in tax or environmental laws, royalty rates or other regulatory matters; changes in development plans of Yoho or by third party operators of Yoho's properties, increased debt levels or debt service requirements; limited, unfavorable or a lack of access to capital markets; increased costs; a lack of inadequate insurance coverage; the impact of competitors; and certain other risks detailed from time-to-time in Yoho's public disclosure documents, (including, without limitation, those risks identified in this news release and Yoho's Annual Information Form).
The forward-looking information and statements contained in this news release speak only as of the date of this news release, and Yoho does not assume any obligation to publicly update or revise any of the included forward-looking statements or information, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.
In conformity with National Instrument 51-101, Standards for Disclosure of Oil and Gas Activities (“NI 51-101”), natural gas volumes have been converted to barrels of oil equivalent (“boe”) using a conversion rate of six thousand cubic feet of natural gas to one barrel of oil. This ratio is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Readers are cautioned that the term “boe” may be misleading, particularly if used in isolation.
Yoho Resources Inc. is a Calgary based junior oil and natural gas company with operations focusing in northeast British Columbia, West Central Alberta and the Peace River Arch of Alberta. 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, CA
Vice President, Finance and CFO
Yoho Resources Inc.
Phone: (403) 537-1771
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.