Yoho Resources Inc. Announces Successful Duvernay Drilling at Kaybob, Alberta
Calgary, Alberta – July 9, 2014 -Yoho Resources Inc. (“Yoho” or the “Company”) (TSXV:YO) is pleased to provide an update of Duvernay drilling and completion operations at Kaybob, Alberta.
Yoho operated the drilling and completion of one well, and participated in the drilling and completion of a second well in the Company’s Duvernay program at Kaybob, Alberta.
The first well located at 16-04-62-21 W5 (50% working interest) was drilled to a measured depth of 4,740 meters. The horizontal lateral is approximately 1,300 meters in length within the Duvernay shale formation. The well was drilled and cased at a cost of approximately $5.0 million. The well was subsequently fracture stimulated, the pumpdown bridge plugs were drilled out with a coiled tubing unit, production tubing was snubbed in and a flow test was conducted. The total gross estimated cost of the completion is approximately $7.0 million, bringing the total gross estimated cost to drill, complete and test the well to $12.0 million.
During initial clean-up conducted up casing, the 16-04 well flowed at rates up to 4.6 MMcf (130 e3m3) per day (approximately 1,200 boe per day including condensate and natural gas liquids). The well was also flowing completion fluid at rates of 60 bbls (10 m3) to 120 bbls (20 m3) per hour. At the end of the 117 hour total flow period, the well was producing up tubing at a restricted rate of 2.5 MMcf (71 e3m3) per day (approximately 670 boe per day including condensate and natural gas liquids) at flowing tubing pressures of 8,500 kPa and casing pressure of 19,800 kPa. In addition to the natural gas production at the end of the flow period, the well was producing field condensate at a rate of 230 barrels (37 m3) per day or 92 barrels of field condensate per MMcf of raw gas. Additional natural gas liquids are anticipated to be recovered at the gas processing facility. Total liquids yield from this well, including both stabilized condensate and plant liquids, is estimated to be 120 – 130 barrels per MMcf of raw gas. At the end of the flow period, approximately 23,900 barrels (3800 m3) (23%) of completion load fluid had been recovered. These flow rates were achieved while continuing to flow back 60 bbls per hour (10 m3 per hour) of load fluid.
The second well, located at 16-02-60-19 W5 (33.33% working interest) and operated by a third party, was drilled to a measured depth 4,710 meters. The horizontal lateral was approximately 1,300 meters in length within the Duvernay shale formation. The well was drilled and cased at a cost of approximately $5.0 million. The well was fracture stimulated and the pumpdown bridge plugs were drilled out with a coiled tubing unit and production tubing was snubbed in. The total gross cost to drill, complete and test this well is estimated at less than $12 million.
During initial clean-up, the 16-02 well flowed at rates up tubing of up to 3.6 MMcf (100 e3m3) per day (approximately 900 boe per day including condensate and natural gas liquids). In addition to the natural gas production during the flow period, the well was producing field condensate at rates of up to 300 barrels (48m3) per day or 83 barrels of field condensate per MMcf of raw gas. Additional natural gas liquids are anticipated to be recovered at the gas processing facility. Total liquids yield, including both stabilized condensate and plant liquids, is estimated to be 100 -110 barrels per MMcf of raw gas. At the end of the flow period, approximately 14,000 barrels (2,230 m3) (10%) of completion load fluid had been recovered. The well was producing load fluid at a rate of 55 - 75 bbls per hour (9 - 12 m3 per hour) during the test period.
Both wells are tied into gathering systems and both will be on stream upon the completion of surface facilities which are currently being constructed. Yoho is very pleased with the strong early flow characteristics from these wells and looks forward to the application of technologies used in the completion of these wells to longer laterals in future wells.
Yoho Resources Inc. is a Calgary based junior oil and natural gas company with operations focusing in 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, 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.
Special Note Regarding Forward-Looking Information
In the interest of providing readers with information regarding Yoho, including management's assessment of the future plans and operations of Yoho, certain statements contained in this news release constitute forward-looking statements or information (collectively "forward-looking statements") within the meaning of applicable securities legislation. Forward-looking statements are typically identified by words such as "anticipate", "continue", "estimate", "expect", "forecast", "may", "will", "project", "could", "plan", "intend", "should", "believe", "outlook", “potential", "target" and similar words suggesting future events or future performance. In particular but without limiting the foregoing, this news release contains forward-looking statements pertaining to the following: anticipated additional incremental liquid recoveries from the gas processing facility and the Company's expectation to bring the wells on stream once surface facilities are constructed.
With respect to forward-looking statements contained in this document, Yoho has made a number of assumptions. The key assumptions underlying the aforementioned forward-looking statements include assumptions that: (i) facilities in the area will remain operational and have the capacity and ability to recover additional liquid yields from the Company's production; (ii) past performances and recovery techniques deployed at previous wells in the area will prove beneficial to the wells described herein; (iii) Yoho will be able to obtain equipment in a timely manner to carry out its planned activities; (iv) Yoho will have sufficient financial resources with which to conduct its anticipated operations. Certain or all of the forgoing assumptions may prove to be untrue; and (v) other than completion of certain surface facilities, no other conditions will prevent the Company from bringing production on stream.
Certain information regarding Yoho set forth in this document may constitute forward-looking statements under applicable securities laws and necessarily involve substantial known and unknown risks and uncertainties. These forward-looking statements are subject to numerous risks and uncertainties, certain of which are beyond Yoho's control, including without limitation, risks associated with oil and gas exploration, development, exploitation, production, marketing and transportation, reliance on third parties, loss of markets, volatility of commodity prices, environmental risks, inability to obtain drilling rigs or other services, capital expenditure costs, including drilling, completion and facility costs, unexpected decline rates in wells, wells not performing as expected, delays resulting from or inability to obtain required regulatory approvals and ability to access sufficient capital from internal and external sources, the impact of general economic conditions in Canada, the United States and overseas, industry conditions, changes in laws and regulations (including the adoption of new environmental laws and regulations) and changes in how they are interpreted and enforced, increased competition, the lack of availability of qualified personnel or management and fluctuations in foreign exchange or interest rates. Readers are cautioned that the foregoing list of factors is not exhaustive.
Yoho's actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits that the Company will derive therefrom. All subsequent forward-looking statements, whether written or oral, attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements. Additional information on these and other factors that could affect Yoho’s operations and financial results are included in reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com) or Yoho’s website (www.yohoresources.ca).
The forward-looking statements contained in this document are made as at the date of this news release and Yoho 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.
Initial Production Rates
Any references in this news release to initial, early and/or test or production/performance rates are useful in confirming the presence of hydrocarbons, however, such rates are not determinative of the rates at which such wells will continue production and decline thereafter. Additionally, such rates may also include recovered “load oil” fluids used in well completion stimulation. While encouraging, readers are cautioned not to place reliance on such rates in calculating the aggregate production for Yoho. The initial production rate may be estimated based on other third party estimates or limited data available at this time. In all cases in this news release initial production or test are not necessarily indicative of long-term performance of the relevant well or fields or of ultimate recovery of hydrocarbons.
Barrel of oil equivalents or boes may be misleading, particularly if used in isolation. A boe conversion ratio of 6 Mcf: 1 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. Given the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency of 6 mcf: 1 bbl, utilizing a conversion ratio of 6 Mcf: 1 bbl may be a misleading indication of value.
bbl means barrel
boe means barrel of oil equivalent of natural gas and crude oil on the basis of 1 boe for 6 Mcf of natural gas (this conversion factor is an industry accepted norm and is not based on either energy content or current prices)
boe/d barrel of oil equivalent per day
e3m3 means thousands of cubic metres
kPa means kilopascals
m3 means cubic metres
Mcf means thousand cubic feet
MMcf means million cubic feet