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Yuma Energy, Inc.
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NEWS
RELEASE
Yuma Energy, Inc. Announces First Quarter 2017
Financial Results
HOUSTON, TX – (PR Newswire – May 11, 2017) – Yuma
Energy, Inc. (NYSE MKT: YUMA) (the
“Company” or “Yuma”) today announced its financial results for the
quarter ended March 31, 2017.
First Quarter 2017 Highlights
●
Net average
production was 2,886 Boe/d for the first quarter of 2017, a 99.4
percent increase over the first quarter of 2016, and a 15.5 percent
increase over the fourth quarter of 2016.
●
Net income was
$2,602,125 for the first quarter of 2017, compared to a net loss of
$12,450,558 in the first quarter of 2016.
●
Cash provided by
operating activities was $951,526 for the first quarter of 2017,
compared to cash used in operations of $892,311 in the first
quarter of 2016.
●
Lac Blanc Field,
Vermillion Parish, Louisiana – During March 2017, the Company
performed workover operations on the SL 18090 #2 well
re-establishing production from the Miocene Siphonina D-1 sand
(18,700 feet sand). Before the workover the well had been shut-in.
Currently, the well is producing approximately 2.1 MMcf/d of
natural gas and 40 Bbl/d of oil (1.3 MMcf/d and 28 Bbl/d
net).
●
The Company
recently entered into a joint development agreement covering 33,280
acres in an area of mutual interest (“AMI”) with two
private companies and it acquired an 87.5% working interest in
approximately 2,269 acres (1,985 net acres) in Yoakum County to
horizontally develop the San Andres Play in the Permian Basin of
west Texas. Yuma is the operator of the joint venture and intends
to spud its first joint venture well in 2017, as well as acquire
additional acreage within the AMI.
Management Comments
Sam L.
Banks, CEO of Yuma Energy, Inc., commented, “We are excited
about our Permian Basin acquisition and look forward to expanding
our position in the San Andres horizontal play. We are well
positioned to execute our business strategy of investing in
relatively low-risk and low capital opportunities within our
existing inventory and grow shareholder value by organically
increasing our inventory in the San Andres play. As can be seen in
the first quarter results, the merger with Davis has improved our
liquidity and financial position, and nearly doubled 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
month periods ended March 31, 2017 and 2016, and the average sales
price per unit sold.
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Three Months Ended March 31,
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2017
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2016
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Production
volumes:
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Crude
oil and condensate (Bbls)
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76,397
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34,718
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Natural
gas (Mcf)
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899,427
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400,365
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Natural
gas liquids (Bbls)
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33,474
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30,262
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Total (Boe) (1)
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259,776
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131,708
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Average
prices realized:
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Crude oil and condensate (per Bbl)
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$49.95
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$29.95
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Natural gas (per Mcf)
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$2.84
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$1.96
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Natural gas liquids (per Bbl)
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$23.15
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$11.69
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(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
month periods ended March 31, 2017 and 2016.
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Three Months Ended March 31,
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2017
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2016
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Sales
of natural gas and crude oil:
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Crude
oil and condensate
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$3,815,932
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$1,039,687
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Natural
gas
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2,553,443
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785,610
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Natural
gas liquids
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775,049
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353,635
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Total
revenues
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$7,144,424
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$2,178,932
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Expenses
The
Company’s lease operating expenses (“LOE”) and
LOE per Boe for the three month periods ended March 31, 2017 and
2016, are set forth below:
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Three Months Ended March 31,
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2017
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2016
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Lease
operating expenses
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$1,697,908
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$629,988
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Severance,
ad valorem taxes and marketing
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963,356
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356,709
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Total LOE
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$2,661,264
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$986,697
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LOE
per Boe
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$10.24
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$7.49
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LOE
per Boe without severance, ad valorem taxes and
marketing
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$6.54
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$4.78
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Commodity
Derivative
Instruments
Commodity
derivative instruments open as of March 31, 2017 are provided
below. Natural gas prices are NYMEX Henry Hub prices, and crude oil
prices are NYMEX West Texas Intermediate.
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2017
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2018
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2019
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Settlement
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Settlement
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Settlement
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NATURAL
GAS (MMBtu):
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Swaps
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Volume
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1,748,574
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1,451,734
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-
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Price
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$3.13
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$3.00
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-
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3-way
collars
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Volume
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132,587
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-
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-
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Ceiling
sold price (call)
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$3.38
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-
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-
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Floor
purchased price (put)
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$3.02
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-
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-
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Floor
sold price (short put)
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$2.47
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-
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-
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CRUDE
OIL (Bbls):
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Swaps
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Volume
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105,214
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195,152
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156,320
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Price
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$52.24
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$53.17
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$53.77
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3-way
collars
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Volume
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83,023
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-
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-
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Ceiling
sold price (call)
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$77.00
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-
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-
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Floor
purchased price (put)
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$60.00
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-
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-
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Floor
sold price (short put)
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$45.00
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-
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-
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About Yuma Energy, Inc.
Yuma
Energy, Inc., a Delaware corporation, is an independent
Houston-based exploration and production company focused on
delivering competitive returns to stockholders by acquiring,
developing and exploring for conventional and unconventional oil
and natural gas resources. We are committed to conducting our
business in a manner that protects the environment and public
health while upholding our values of integrity, trust, and open
communications in all business activities. Our operations are
currently focused on onshore properties located in southern
Louisiana, southeastern Texas, the Permian Basin of west Texas, and
Kern and Santa Barbara Counties in California. In addition, we have
non-operated positions in the East Texas Eagle Ford and Woodbine
and the Bakken Shale in North Dakota. Our common stock is traded on
the NYSE MKT under the trading symbol
“YUMA.”
Reincorporation Merger and Davis Merger
On
October 26, 2016, Yuma Energy, Inc., a California corporation
(“Yuma California”), merged with and into the Company
resulting in the reincorporation from California to Delaware (the
“Reincorporation Merger”). In connection with the
Reincorporation Merger, Yuma California converted each outstanding
share of its 9.25% Series A Cumulative Redeemable Preferred Stock
(the “Yuma California Series A Preferred Stock”), into
35 shares of its common stock (the “Yuma California Common
Stock”), and then each share of Yuma California Common Stock
was exchanged for one-twentieth of one share of common stock of the
Company (the “common stock”). Immediately after
the Reincorporation Merger on October 26, 2016, a wholly owned
subsidiary of the Company merged (the “Davis Merger”)
with and into Davis, in exchange for approximately 7,455,000 shares
of common stock and 1,754,179 shares of Series D Convertible
preferred stock (the “Series D preferred stock”). The
Series D preferred stock had an aggregate liquidation preference of
approximately $19.4 million and a conversion rate of $11.0741176
per share at the closing of the Davis Merger, and will be paid
dividends in the form of additional shares of Series D preferred
stock at a rate of 7% per annum. As a result of the Davis Merger,
the former holders of Davis common stock received approximately
61.1% of the then outstanding common stock of the Company and thus
acquired voting control. Although the Company was the legal
acquirer, for financial reporting purposes the Davis Merger was
accounted for as a reverse acquisition of the Company by
Davis.
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 SEC 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
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)
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March 31,
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December 31,
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2017
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2016
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ASSETS
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CURRENT
ASSETS:
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Cash
and cash equivalents
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$2,927,494
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$3,625,686
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Accounts
receivable, net of allowance for doubtful accounts:
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Trade
|
5,485,155
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4,827,798
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Officers
and employees
|
60,461
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68,014
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Other
|
1,903,274
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1,757,337
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Commodity
derivative instruments
|
478,242
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-
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Prepayments
|
757,111
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1,063,418
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Other
deferred charges
|
309,789
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284,305
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Total
current assets
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11,921,526
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11,626,558
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OIL
AND GAS PROPERTIES (full cost method):
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Proved
properties
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490,389,144
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488,723,905
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Unproved
properties - not subject to amortization
|
5,473,755
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3,656,989
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495,862,899
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492,380,894
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Less:
accumulated depreciation, depletion and amortization
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(413,471,472)
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(410,440,433)
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Net
oil and gas properties
|
82,391,427
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81,940,461
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OTHER
PROPERTY AND EQUIPMENT:
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Land,
buildings and improvements
|
1,600,000
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1,600,000
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Other
property and equipment
|
7,034,591
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7,136,530
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8,634,591
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8,736,530
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Less:
accumulated depreciation and amortization
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(5,436,568)
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(5,349,145)
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Net
other property and equipment
|
3,198,023
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3,387,385
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OTHER
ASSETS AND DEFERRED CHARGES:
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|
Commodity
derivative instruments
|
674,431
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-
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Deposits
|
467,592
|
467,306
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|
Other
noncurrent assets
|
486,326
|
517,201
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Total
other assets and deferred charges
|
1,628,349
|
984,507
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TOTAL
ASSETS
|
$99,139,325
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$97,938,911
|
Yuma Energy, Inc.
CONSOLIDATED
BALANCE SHEETS – CONTINUED
(Unaudited)
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March 31,
|
December 31,
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2017
|
2016
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LIABILITIES
AND EQUITY
|
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CURRENT
LIABILITIES:
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Current
maturities of debt
|
$344,315
|
$599,341
|
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Accounts
payable, principally trade
|
11,375,720
|
11,009,631
|
|
Commodity
derivative instruments
|
250,592
|
1,340,451
|
|
Asset
retirement obligations
|
383,830
|
376,735
|
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Other
accrued liabilities
|
3,179,182
|
2,572,680
|
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|
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Total
current liabilities
|
15,533,639
|
15,898,838
|
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LONG-TERM
DEBT
|
39,500,000
|
39,500,000
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OTHER
NONCURRENT LIABILITIES:
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Asset
retirement obligations
|
9,951,122
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9,819,648
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Commodity
derivative instruments
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-
|
1,215,551
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Total
other noncurrent liabilities
|
9,951,122
|
11,035,199
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COMMITMENTS
AND CONTINGENCIES (Note 13)
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EQUITY
|
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Preferred
stock
|
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Series
D Convertible ($.001 par value, 7,000,000 authorized,
1,807,385
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|
issued
as of March 31, 2017 and 1,776,718 issued as of December 31,
2016)
|
1,808
|
1,777
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|
Common
stock
|
|
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|
($.001
par value, 100 million shares authorized, 12,211,256 issued as
of
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March
31, 2017 and 12,201,884 issued as of December 31,
2016)
|
12,211
|
12,202
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Paid-in
capital
|
44,268,868
|
43,877,563
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Treasury
stock at cost (1,109 shares as of March 31, 2017 and -0- shares
as
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|
of
December 31, 2016)
|
(4,170)
|
-
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Accumulated
earnings (deficit)
|
(10,124,153)
|
(12,386,668)
|
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|
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|
Total
equity
|
34,154,564
|
31,504,874
|
|
|
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TOTAL
LIABILITIES AND EQUITY
|
$99,139,325
|
$97,938,911
|
Yuma Energy, Inc.
CONSOLIDATED
STATEMENTS OF OPERATIONS
(Unaudited)
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Three Months Ended March 31,
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2017
|
2016
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REVENUES:
|
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|
Sales
of natural gas and crude oil
|
$7,144,424
|
$2,178,932
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EXPENSES:
|
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|
Lease
operating and production costs
|
2,661,264
|
986,697
|
|
General
and administrative – stock-based compensation
|
51,735
|
196,924
|
|
General
and administrative – other
|
2,176,002
|
2,165,514
|
|
Depreciation,
depletion and amortization
|
3,140,940
|
1,788,225
|
|
Asset
retirement obligation accretion expense
|
138,569
|
52,059
|
|
Impairment
of oil and gas properties
|
-
|
9,847,887
|
|
Gain
on asset sales
|
(555,642)
|
-
|
|
Other
|
-
|
3,188
|
|
Total
expenses
|
7,612,868
|
15,040,494
|
|
|
|
|
|
LOSS
FROM OPERATIONS
|
(468,444)
|
(12,861,562)
|
|
|
|
|
|
OTHER
INCOME (EXPENSE):
|
|
|
|
Net
gains from commodity derivatives
|
3,556,783
|
456,314
|
|
Interest
expense
|
(496,091)
|
(42,708)
|
|
Other,
net
|
36,408
|
-
|
|
Total
other income (expense)
|
3,097,100
|
413,606
|
|
|
|
|
|
INCOME
(LOSS) BEFORE INCOME TAXES
|
2,628,656
|
(12,447,956)
|
|
|
|
|
|
Income
tax expense
|
26,531
|
2,602
|
|
|
|
|
|
NET
INCOME (LOSS)
|
2,602,125
|
(12,450,558)
|
|
|
|
|
|
PREFERRED
STOCK:
|
|
|
|
Dividends
paid in kind
|
339,610
|
320,279
|
|
|
|
|
|
NET
INCOME (LOSS) ATTRIBUTABLE TO
|
|
|
|
COMMON
STOCKHOLDERS
|
$2,262,515
|
$(12,770,837)
|
|
|
|
|
|
INCOME
(LOSS) PER COMMON SHARE:
|
|
|
|
Basic
|
$0.19
|
$(1.71)
|
|
Diluted
|
$0.16
|
$(1.71)
|
|
|
|
|
|
WEIGHTED
AVERAGE NUMBER OF
|
|
|
|
COMMON
SHARES OUTSTANDING:
|
|
|
|
Basic
|
12,211,256
|
7,454,062
|
|
Diluted
|
14,056,170
|
7,454,062
|
Yuma Energy, Inc.
CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Unaudited)
|
|
Three Months Ended March 31,
|
|
|
|
2017
|
2016
|
|
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
Reconciliation
of net loss to net cash provided by (used in) operating
activities:
|
|
|
|
Net
loss
|
$2,602,125
|
$(12,450,558)
|
|
Depreciation,
depletion and amortization of property and equipment
|
3,140,940
|
1,788,225
|
|
Impairment
of oil and gas properties
|
-
|
9,847,887
|
|
Amortization
of debt issuance costs
|
81,843
|
-
|
|
Net
deferred income tax benefit
|
-
|
2,602
|
|
Stock-based
compensation expense
|
51,735
|
196,924
|
|
Settlement
of asset retirement obligations
|
-
|
(12,324)
|
|
Accretion
of asset retirement obligation
|
138,569
|
52,059
|
|
Bad
debt expense
|
-
|
3,188
|
|
Net
gains from commodity derivatives
|
(3,556,783)
|
(456,314)
|
|
Gain
on sales of fixed assets
|
(555,642)
|
-
|
|
Changes
in assets and liabilities:
|
|
|
|
(Increase)
decrease in accounts receivable
|
(795,740)
|
1,445,512
|
|
Decrease
in prepaids, deposits and other assets
|
306,021
|
232,729
|
|
Decrease
in accounts payable and other current and
|
|
|
|
non-current
liabilities
|
(461,542)
|
(1,542,241)
|
|
|
|
|
|
NET
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
|
951,526
|
(892,311)
|
|
|
|
|
|
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
Capital
expenditures for oil and gas properties
|
(2,053,826)
|
(4,663,114)
|
|
Proceeds
from sale of oil and gas properties and other fixed
assets
|
641,056
|
-
|
|
Derivative
settlements
|
98,700
|
535,488
|
|
|
|
|
|
NET
CASH USED IN INVESTING ACTIVITIES
|
(1,314,070)
|
(4,127,626)
|
|
|
|
|
|
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
Proceeds
from borrowings
|
-
|
4,000,000
|
|
Repayments
of borrowings
|
(255,026)
|
-
|
|
Debt
issuance costs
|
(76,452)
|
-
|
|
Treasury
stock repurchases
|
(4,170)
|
-
|
|
|
|
|
|
NET
CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
|
(335,648)
|
4,000,000
|
|
|
|
|
|
NET
DECREASE IN CASH AND CASH EQUIVALENTS
|
(698,192)
|
(1,019,937)
|
|
|
|
|
|
CASH
AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
|
3,625,686
|
4,064,094
|
|
|
|
|
|
CASH
AND CASH EQUIVALENTS AT END OF PERIOD
|
$2,927,494
|
$3,044,157
|
|
|
|
|
|
Supplemental
disclosure of cash flow information:
|
|
|
|
Interest
payments (net of interest capitalized)
|
$264,542
|
$42,709
|
|
Income
tax payments
|
$-
|
$-
|
|
|
|
|
|
Supplemental
disclosure of significant non-cash activity:
|
|
|
|
(Increase)
decrease in capital expenditures financed by accounts
payable
|
$(1,434,132)
|
$(1,613,607)
|