HOUSTON, April 2, 2018 /PRNewswire/ -- Yuma Energy, Inc. (NYSE American: YUMA) (the "Company" or "Yuma") today announced its financial results for the year ended December 31, 2017.

Year End 2017 Highlights

  • Yuma spud its first San Andres horizontal well in December 2017 and completed it during the first quarter of 2018.  All of the associated facilities have been installed and the well is currently in the early stages of production, recovering frac fluids and dewatering the near wellbore area.
  • Net average production for the year ended December 31, 2017 was 2,454 Boe/d, or 34.8% higher than the net average production for the prior year of 1,820 Boe/d.
  • Yuma reduced its debt by $11.8 million during 2017, bringing its bank debt down to $27.7 million.
  • Yuma closed its common stock offering of 10,100,000 shares of common stock in October 2017 (including 500,000 shares purchased pursuant to the underwriters' overallotment option) for gross proceeds of $10,100,000 before deducting underwriters' fees and offering expenses.

Management Comments

Sam L. Banks, CEO of Yuma Energy, Inc., commented, "We are looking forward to the results of our first San Andres horizontal well, and continuing to expand our position in the play.  During 2018, we intend to take advantage of the low-risk and low-cost growth opportunities within our existing inventory, continue the development and expansion of our San Andres play, and actively pursue acquisitions and mergers."

Oil and Natural Gas Reserves – SEC Prices

The table below summarizes the Company's estimated proved reserves at December 31, 2017, which were prepared in accordance with Securities and Exchange Commission ("SEC") guidelines by Netherland, Sewell & Associates, Inc. ("NSAI"), an independent petroleum engineering firm. In preparing its report, NSAI evaluated 100% of the Company's properties at December 31, 2017.

Proved reserves were calculated using prices equal to the twelve-month unweighted arithmetic average of the first-day-of-the-month prices for each of the preceding twelve months, which were $51.34 per Bbl West Texas Intermediate and $2.976 per MMBtu Henry Hub, for the year ended December 31, 2017. Adjustments were made for location and grade. The information in the following table does not give any effect to or reflect the Company's commodity derivatives.


Oil (MBbls)


Natural Gas
Liquids
(MBbls)


Natural Gas
(MMcf)


Total
(MBoe)(1)


Present Value
Discounted at 10%
($ in thousands) (2)

Proved developed 

1,763


1,009


21,131


6,295


$                    64,028

Proved undeveloped 

599


285


2,465


1,295


8,875

Total proved 

2,362


1,294


23,596


7,590


$                    72,903











(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).


(2) PV10 is a non-GAAP financial measure. See "Reconciliation of GAAP to Non-GAAP Financial Measures."

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 years ended December 31, 2017 and 2016, and the average sales price per unit sold.



Years Ended December 31,



2017


2016

Production volumes:





  Crude oil and condensate (Bbls)


250,343


172,003

  Natural gas (Mcf)


3,085,613


2,326,400

  Natural gas liquids (Bbls)


131,155


104,689

  Total (Boe) (1)


895,767


664,425

Average prices realized:





  Crude oil and condensate (per Bbl)


$50.32


$42.21

  Natural gas (per Mcf)


$3.05


$2.45

  Natural gas liquids (per Bbl)


$26.08


$17.33


(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 years ended December 31, 2017 and 2016.


Years Ended December 31,


2017


2016

Sales of natural gas and crude oil:




   Crude oil and condensate

$           12,596,983


$             7,260,169

   Natural gas

9,425,676


5,697,879

   Natural gas liquids

3,420,942


1,814,660

      Total revenues

$           25,443,601


$           14,772,708





Expenses

The Company's lease operating expenses ("LOE") and LOE per Boe for the years ended December 31, 2017 and 2016, are set forth below:


Years Ended December 31,


2017


2016

Lease operating expenses

$        6,715,337


$        3,303,789

Severance, ad valorem taxes and marketing

4,321,976


2,259,841

     Total LOE

$      11,037,313


$        5,563,630





LOE per Boe

$12.32


$8.37

LOE per Boe without severance, ad valorem taxes and marketing

$7.50


$4.97

Commodity Derivative Instruments

Commodity derivative instruments open as of December 31, 2017 are provided below.  Natural gas prices are NYMEX Henry Hub prices, and crude oil prices are NYMEX West Texas Intermediate.



2018
Settlement


2019
Settlement (1)

NATURAL GAS (MMBtu):





Swaps





   Volume


1,725,133


373,906

   Price 


$3.00


$3.00






CRUDE OIL (Bbls):





Swaps





   Volume


195,152


156,320

   Price 


$53.17


$53.77







(1) Represents volumes through March 2019.

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 drilling, developing and producing both oil and natural gas assets.  More recently, the Company has begun acquiring acreage in Yoakum County, Texas, with plans to explore and develop oil and natural gas assets in the Permian Basin.  Finally, the Company has operated positions in Kern County, California, and non-operated positions in the East Texas Woodbine and the Bakken Shale in North Dakota.  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 natural 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; 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, 2017, 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.

Yuma Energy, Inc.


CONSOLIDATED BALANCE SHEETS

(Unaudited)






December 31,


December 31,


2017


2016





ASSETS 








CURRENT ASSETS:




Cash and cash equivalents 

$           137,363


$        3,625,686

Accounts receivable, net of allowance for doubtful accounts:




   Trade

4,496,316


4,827,798

   Officer and employees

53,979


68,014

   Other

1,004,479


1,757,337

Prepayments

976,462


1,063,418

Other deferred charges

347,490


284,305





Total current assets

7,016,089


11,626,558





OIL AND GAS PROPERTIES (full cost method):




Proved properties

494,216,531


488,723,905

Unproved properties - not subject to amortization

6,794,372


3,656,989






501,010,903


492,380,894

Less:  accumulated depreciation, depletion and amortization

(421,165,400)


(410,440,433)





Net oil and gas properties

79,845,503


81,940,461





OTHER PROPERTY AND EQUIPMENT:




Land, buildings and improvements

1,600,000


1,600,000

Other property and equipment

2,845,459


7,136,530


4,445,459


8,736,530

Less: accumulated depreciation and amortization

(1,409,535)


(5,349,145)





Net other property and equipment

3,035,924


3,387,385





OTHER ASSETS AND DEFERRED CHARGES:




Deposits

467,592


467,306

Other noncurrent assets

270,842


517,201





Total other assets and deferred charges

738,434


984,507





TOTAL ASSETS 

$      90,635,950


$      97,938,911





 

Yuma Energy, Inc.


CONSOLIDATED BALANCE SHEETS – CONTINUED

(Unaudited)






December 31,


December 31,


2017


2016





LIABILITIES AND EQUITY








CURRENT LIABILITIES:




Current maturities of debt

$          651,124


$          599,341

Accounts payable, principally trade

11,931,218


11,009,631

Commodity derivative instruments

903,003


1,340,451

Asset retirement obligations

277,355


376,735

Other accrued liabilities

2,295,438


2,572,680





Total current liabilities

16,058,138


15,898,838





LONG-TERM DEBT

27,700,000


39,500,000





OTHER NONCURRENT LIABILITIES:




Asset retirement obligations

10,189,058


9,819,648

Commodity derivative instruments

336,406


1,215,551

Deferred rent

290,566


-

Employee stock awards

191,110


-





Total other noncurrent liabilities

11,007,140


11,035,199





COMMITMENTS AND CONTINGENCIES (Note 18)








EQUITY




Series D convertible preferred stock




 ($0.001 par value, 7,000,000 authorized, 1,904,391 issued and outstanding 




  as of December 31, 2017, and 1,776,718 issued and outstanding as of




  December 31, 2016)

1,904


1,777

Common stock




 ($0.001 par value, 100 million shares authorized, 22,661,758 outstanding as of




  December 31, 2017 and 12,201,884 outstanding as of December 31, 2016)

22,662


12,202

Additional paid-in capital

55,064,685


43,877,563

Treasury stock at cost (13,343 shares as of December 31, 2017 and -0- shares as of December 31, 2016)

(25,278)


-

Accumulated earnings (deficit)

(19,193,301)


(12,386,668)





Total equity

35,870,672


31,504,874





TOTAL LIABILITIES AND EQUITY

$      90,635,950


$      97,938,911





 

Yuma Energy, Inc.


CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)




Years Ended December 31,


2017


2016





REVENUES:




Sales of natural gas and crude oil

$      25,443,601


$        14,772,708





EXPENSES:




Lease operating and production costs

11,037,313


5,563,630

General and administrative – stock-based compensation

2,381,365


1,731,969

General and administrative – other

6,934,381


12,727,328

Depreciation, depletion and amortization

10,955,203


8,239,802

Asset retirement obligation accretion expense

557,683


254,573

Impairment of oil and gas properties

-


20,654,848

Bad debt expense

335,567


556,407

   Total expenses

32,201,512


49,728,557





LOSS FROM OPERATIONS

(6,757,911)


(34,955,849)





OTHER INCOME (EXPENSE):




Net gains (losses) from commodity derivatives

2,554,934


(3,775,254)

Interest expense

(1,734,807)


(659,572)

Gain (loss) on other property and equipment

484,768


(838,473)

Other, net

60,248


55,779

   Total other income (expense)

1,365,143


(5,217,520)





LOSS BEFORE INCOME TAXES

(5,392,768)


(40,173,369)





Income tax expense - deferred

-


1,425,964





NET LOSS

(5,392,768)


(41,599,333)





PREFERRED STOCK:




Dividends paid in kind

1,413,865


1,323,641

Loss on retirement of DPAC Series "A" Preferred Stock

-


(271,914)





NET LOSS ATTRIBUTABLE TO




   COMMON STOCKHOLDERS

$      (6,806,633)


$      (42,651,060)





LOSS PER COMMON SHARE:




Basic

($0.46)


($5.13)

Diluted

($0.46)


($5.13)





WEIGHTED AVERAGE NUMBER OF




   COMMON SHARES OUTSTANDING:




Basic

14,815,991


8,317,777

Diluted

14,815,991


8,317,777





 

Yuma Energy, Inc.


CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)




Year Ended December 31,


2017


2016

CASH FLOWS FROM OPERATING ACTIVITIES:




Reconciliation of net income (loss) to net cash provided by (used in) 




   operating activities:




     Net income (loss)

$        (5,392,768)


$      (41,599,333)

     Depreciation, depletion and amortization of property and equipment

10,955,203


8,239,802

     Impairment of oil and gas properties

-


20,654,848

     Amortization of debt issuance costs

363,485


148,970

     Net deferred income tax expense

-


1,425,964

     Deferred rent liability, net

279,795


-

     Stock-based compensation expense

2,381,365


1,731,969

     Settlement of asset retirement obligations

(1,045,257)


(287,902)

     Asset retirement obligation accretion expense

557,683


254,573

     Bad debt expense

335,567


556,406

     Net (gains) losses from commodity derivatives

(2,554,934)


3,775,254

     (Gain) loss on sales of fixed assets

(556,141)


5,316

     Loss on write-off of abandoned facilities

71,373


829,039

     (Gain) loss on write-off of liabilities net of assets

(58,994)


4,118

Changes in assets and liabilities:




     Decrease in accounts receivable

285,051


3,698,004

     Decrease in prepaids, deposits and other assets

86,670


353,889

     Decrease in accounts payable and other current and 




        non-current liabilities

(2,462,040)


(4,090,155)

NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES

3,246,058


(4,299,238)





CASH FLOWS FROM INVESTING ACTIVITIES:




Capital expenditures for oil and gas properties

(10,704,535)


(10,066,999)

Proceeds from sale of oil and gas properties

5,400,563


1,152,958

Merger with Yuma California

-


1,887,426

Proceeds from sale of other fixed assets

645,791


-

Derivative settlements

1,238,341


1,607,365

NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES

(3,419,840)


(5,419,250)





CASH FLOWS FROM FINANCING ACTIVITIES:




Proceeds from borrowings on senior credit facility

13,275,000


18,700,000

Repayment of borrowings on senior credit facility

(25,075,000)


(9,000,000)

Proceeds from borrowings - insurance financing

763,244


247,013

Repayments of borrowings - insurance financing

(711,461)


(49,625)

Debt issuance costs

(353,593)


(208,985)

Proceeds net of costs from common stock offering

8,812,547


-

Treasury stock repurchases

(25,278)


(408,323)

NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES

(3,314,541)


9,280,080





NET DECREASE IN CASH AND CASH EQUIVALENTS

(3,488,323)


(438,408)





CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR

3,625,686


4,064,094





CASH AND CASH EQUIVALENTS AT END OF YEAR

$             137,363


$          3,625,686





Supplemental disclosure of cash flow information:




     Interest payments (net of interest capitalized)

$          1,369,353


$             590,160

     Interest capitalized

$             317,691


$               26,121

     Income tax refund

$               20,699


$                         -

Supplemental disclosure of significant non-cash activity:




   (Increase) decrease in capital expenditures financed by accounts payable

$        (2,608,232)


$             323,910

Yuma Energy, Inc.

Reconciliation of GAAP to Non-GAAP Financial Measures
Unaudited

Non-GAAP Financial Measures

The non-GAAP financial measure of PV10, as calculated by the Company below, is intended to provide readers with meaningful information that supplements our financial statements prepared in accordance with accounting principles generally accepted in the United States ("GAAP"). These disclosures may not be comparable to similarly titled measures used by other companies. Further, this non-GAAP measure should only be considered in conjunction with financial statements and disclosures prepared in accordance with GAAP and should not be considered in isolation or as a substitute for GAAP measures, such as net income or loss, operating income or loss, standardized measure of discounted future net cash flows or any other GAAP measure of financial position or results of operations.

PV10

Present Value Discounted at 10% ("PV10") is a Non-GAAP measure that differs from the GAAP measure "standardized measure of discounted future net cash flows" in that PV10 is calculated without regard to future income taxes. Management believes that the presentation of the PV10 value is relevant and useful to investors because it presents the estimated discounted future net cash flows attributable to the Company's estimated proved reserves independent of its income tax attributes, thereby isolating the intrinsic value of the estimated future cash flows attributable to the Company's reserves. Because many factors that are unique to each individual company impact the amount of future income taxes to be paid, the Company believes the use of a pre-tax measure provides greater comparability of assets when evaluating companies. For these reasons, management uses, and believes the industry generally uses, the PV10 measure in evaluating and comparing acquisition candidates and assessing the potential return on investment related to investments in oil and natural gas properties. PV10 does not necessarily represent the fair market value of oil and natural gas properties.

PV10 is not a measure of financial or operational performance under GAAP, nor should it be considered in isolation or as a substitute for the standardized measure of discounted future net cash flows as defined under GAAP. The table below provides a reconciliation of the Company's PV10 to the standardized measure of discounted future net cash flows ($ in thousands).

Present value of estimated future net revenues (PV10)

$               72,903

Future income taxes discounted at 10%

-

Standardized measure of discounted future net cash flows

$               72,903

 

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SOURCE Yuma Energy, Inc.