Yuma Energy, Inc. Announces Second Quarter 2017 Financial Results

News provided by

Yuma Energy, Inc.

Aug 14, 2017, 16:11 ET

HOUSTON, Aug. 14, 2017 /PRNewswire/ -- Yuma Energy, Inc. (NYSE American: YUMA) (the "Company" or "Yuma") today announced its financial results for the quarter ended June 30, 2017.

Second Quarter 2017 Highlights

  • Net average production was 2,553 Boe/d for the second quarter of 2017, a 39.1 percent increase over the second quarter of 2016.
  • Cash provided by operations was $2,889,407 for the six months ended June 30, 2017, compared to cash used in operations of $2,442,876 in the same period in 2016.
  • The Company sold non-core properties in Brazos County, Texas for $5.5 million (prior to purchase price adjustments) and reduced its debt by $7.5 million from $39.5 million at the end of the first quarter of 2017 to $32.0 million at the end of the second quarter of 2017.
  • The Company increased its Permian Basin acreage position to 2,491 acres (2,180 net acres) in Yoakum County, Texas to horizontally develop the San Andres Oil Play. This acreage is within the Area of Mutual Interest ("AMI") covering approximately 33,280 acres that was established as part of a joint development agreement entered into earlier this year with two privately held energy firms. Yuma is the operator of the acreage with an 87.5 percent working interest and intends to spud its first joint venture well in 2017, as well as continue to acquire additional acreage within the AMI.

Recent Developments

  • Yuma spud the Weyerhaeuser 14-1 well in Livingston Parish, which is referred to as the Glacier Prospect, on July 29, 2017. Drilling is currently at 13,058 feet, with total depth projected to be 15,098 feet, which the Company intends to reach before the end of August.

Management Comments

Sam L. Banks, CEO of Yuma Energy, Inc., commented, "During the second quarter we were able to increase our acreage position in the Permian Basin at very attractive prices and look forward to continuing to expand our position in the San Andres horizontal play and spudding our first well there in 2017.  In addition, we are excited about our recently spudded well in our Glacier Prospect. We believe our business strategy of generating organic opportunities through the drill bit and increasing our exposure to the Permian Basin will lead to significant shareholder value over time.  As can be seen in our first and second quarter results, the merger with Davis has improved our cash flows and financial position and significantly increased 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 and six month periods ended June 30, 2017 and 2016, and the average sales price per unit sold.


Three Months Ended June 30,

Six Months Ended June 30,

2017

2016

2017

2016

Production volumes:






 Crude oil and condensate (Bbls)

66,242

39,297

142,640

74,015

 Natural gas (Mcf)

786,111

646,020

1,685,538

1,046,385

 Natural gas liquids (Bbls)

35,092

20,117

68,566

50,379

    Total (Boe) (1)

232,353

167,084

492,129

298,792

Average prices realized:






   Crude oil and condensate (per Bbl)

$47.14

$44.07

$48.65

$37.45

   Natural gas (per Mcf)

$3.29

$1.95

$3.05

$1.96

   Natural gas liquids (per Bbl)

$24.05

$17.87

$23.61

$14.16

(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 and six month periods ended June 30, 2017 and 2016.


Three Months Ended June 30,

Six Months Ended June 30,

2017

2016

2017

2016

Sales of natural gas and crude oil:






Crude oil and condensate

$ 3,122,848

$ 1,731,952

$   6,938,780

$2,771,640

Natural gas

2,587,968

1,260,500

5,141,410

2,046,110

Natural gas liquids

843,888

359,504

1,618,938

713,138

    Total revenues

$ 6,554,704

$ 3,351,956

$ 13,699,128

$5,530,888

Expenses

The Company's lease operating expenses ("LOE") and LOE per Boe for the three and six month periods ended June 30, 2017 and 2016, are set forth below:


Three Months Ended June 30,

Six Months Ended June 30,

2017

2016

2017

2016

Lease operating expenses

$    1,844,896

$       597,966

$    3,542,804

$    1,227,954

Severance, ad valorem taxes and






marketing

1,214,228

493,113

2,177,584

849,822

     Total LOE

$    3,059,124

$    1,091,079

$    5,720,388

$    2,077,776








LOE per Boe

$13.17

$6.53

$11.62

$6.95

LOE per Boe without severance,






ad valorem taxes and marketing

$7.94

$3.58

$7.20

$4.11

Commodity Derivative Instruments

Commodity derivative instruments open as of June 30, 2017 are provided below.  Natural gas prices are NYMEX Henry Hub prices, and crude oil prices are NYMEX West Texas Intermediate.

2017

2018

2019

Settlement

Settlement

Settlement

NATURAL GAS (MMBtu):




Swaps




  Volume

1,098,912

1,725,133

373,906

  Price 

$3.13

$3.00

$3.00






3-way collars




  Volume

85,806

-

-

  Ceiling sold price (call) 

$3.39

-

-

  Floor purchased price (put) 

$3.03

-

-

  Floor sold price (short put) 

$2.47

-

-






CRUDE OIL (Bbls):




Swaps




  Volume

67,191

195,152

156,320

  Price 

$52.24

$53.17

$53.77






3-way collars




  Volume

54,289

-

-

  Ceiling sold price (call) 

$77.00

-

-

  Floor purchased price (put) 

$60.00

-

-

  Floor sold price (short put) 

$45.00

-

-

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 exploration and development activity, and more recently, the Company has entered the Permian Basin.  In addition, the Company has non-operated positions in the East Texas Woodbine and the Bakken Shale in North Dakota, and operated positions in Kern County, California.  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 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 Securities and Exchange Commission 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)



June 30,

December 31,

2017

2016




ASSETS 






CURRENT ASSETS:


Cash and cash equivalents 

$           543,095

$        3,625,686

Accounts receivable, net of allowance for doubtful accounts:


  Trade

4,330,227

4,827,798

  Officers and employees

42,955

68,014

  Other

1,851,776

1,757,337

Commodity derivative instruments

1,506,706

-

Prepayments

541,965

1,063,418

Other deferred charges

330,022

284,305




Total current assets

9,146,746

11,626,558




OIL AND GAS PROPERTIES (full cost method):


Proved properties

486,055,239

488,723,905

Unproved properties - not subject to amortization

5,585,387

3,656,989





491,640,626

492,380,894

Less:  accumulated depreciation, depletion and amortization

(416,195,279)

(410,440,433)




Net oil and gas properties

75,445,347

81,940,461




OTHER PROPERTY AND EQUIPMENT:


Land, buildings and improvements

1,600,000

1,600,000

Other property and equipment

2,842,140

7,136,530

4,442,140

8,736,530

Less: accumulated depreciation and amortization

(1,329,082)

(5,349,145)




Net other property and equipment

3,113,058

3,387,385




OTHER ASSETS AND DEFERRED CHARGES:


Commodity derivative instruments

1,081,480

-

Deposits

467,592

467,306

Other noncurrent assets

435,810

517,201




Total other assets and deferred charges

1,984,882

984,507




TOTAL ASSETS 

$      89,690,033

$      97,938,911


 

Yuma Energy, Inc.

CONSOLIDATED BALANCE SHEETS – CONTINUED
(Unaudited)


June 30,

December 31,

2017

2016




LIABILITIES AND EQUITY






CURRENT LIABILITIES:


Current maturities of debt

$             86,558

$           599,341

Accounts payable, principally trade

10,782,653

11,009,631

Commodity derivative instruments

-

1,340,451

Asset retirement obligations

388,643

376,735

Other accrued liabilities

2,449,304

2,572,680




Total current liabilities

13,707,158

15,898,838




LONG-TERM DEBT

32,000,000

39,500,000




OTHER NONCURRENT LIABILITIES:


Asset retirement obligations

9,639,787

9,819,648

Commodity derivative instruments

-

1,215,551

Employee stock awards

30,430

-




Total other noncurrent liabilities

9,670,217

11,035,199




COMMITMENTS AND CONTINGENCIES (Note 14)






EQUITY


Series D convertible preferred stock


($0.001 par value, 7,000,000 authorized, 1,838,927 issued as of June 30, 2017


and 1,776,718 issued as of December 31, 2016, $11.07 per share liquidation


preference)

1,839

1,777

Common stock


($0.001 par value, 100 million shares authorized, 12,558,891 issued as of


June 30, 2017 and 12,201,884 issued as of December 31, 2016)

12,559

12,202

Additional paid-in capital

44,958,379

43,877,563

Treasury stock at cost (11,900 shares as of June 30, 2017 and -0- shares as


 of December 31, 2016)

(23,270)

-

Accumulated earnings (deficit)

(10,636,849)

(12,386,668)




Total equity

34,312,658

31,504,874




TOTAL LIABILITIES AND EQUITY

$      89,690,033

$      97,938,911




Yuma Energy, Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)


Three Months Ended June 30,

Six Months Ended June 30,

2017

2016

2017

2016








REVENUES:






Sales of natural gas and crude oil

$      6,554,704

$        3,351,956

$   13,699,128

$      5,530,888








EXPENSES:






Lease operating and production costs

3,059,124

1,091,079

5,720,388

2,077,776

General and administrative – stock-based






compensation

385,097

1,087,471

436,832

1,284,395

General and administrative – other

1,906,629

4,270,733

4,082,631

6,436,247

Depreciation, depletion and amortization

2,763,444

2,044,105

5,904,384

3,832,330

Asset retirement obligation accretion expense

141,454

55,016

280,023

107,075

Impairment of oil and gas properties

-

7,700,296

-

17,548,183

Bad debt expense

73,513

12,562

73,513

15,750

  Total expenses

8,329,261

16,261,262

16,497,771

31,301,756








LOSS FROM OPERATIONS

(1,774,557)

(12,909,306)

(2,798,643)

(25,770,868)








OTHER INCOME (EXPENSE):






Net gains (losses) from commodity derivatives

2,138,080

(745,652)

5,694,863

(289,338)

Interest expense

(482,285)

(71,130)

(978,376)

(113,838)

Gain (loss) on other property and equipment

(70,874)

-

484,768

-

Other, net

5,659

13,465

42,067

13,465

  Total other income (expense)

1,590,580

(803,317)

5,243,322

(389,711)








INCOME (LOSS) BEFORE INCOME TAXES

(183,977)

(13,712,623)

2,444,679

(26,160,579)








Income tax expense (benefit)

(20,581)

(29,371)

5,950

(26,769)








NET INCOME (LOSS)

(163,396)

(13,683,252)

2,438,729

(26,133,810)








PREFERRED STOCK:






Dividends paid in kind

349,300

325,869

688,910

646,148








NET INCOME (LOSS) ATTRIBUTABLE TO






COMMON STOCKHOLDERS

$        (512,696)

$     (14,009,121)

$     1,749,819

$  (26,779,958)








INCOME (LOSS) PER COMMON SHARE:






Basic

($0.04)

($1.88)

$0.14

($3.60)

Diluted

($0.04)

($1.88)

$0.14

($3.60)








WEIGHTED AVERAGE NUMBER OF






COMMON SHARES OUTSTANDING:






Basic

12,235,286

7,442,381

12,223,337

7,448,222

Diluted

12,235,286

7,442,381

12,407,996

7,448,222

Yuma Energy, Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)



Six Months Ended June 30,

2017

2016

CASH FLOWS FROM OPERATING ACTIVITIES:


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


 operating activities:


  Net income (loss)

$          2,438,729

$      (26,133,810)

  Depreciation, depletion and amortization of property and equipment

5,904,384

3,832,330

  Impairment of oil and gas properties

-

17,548,183

  Amortization of debt issuance costs

172,826

-

  Net deferred income tax benefit

-

(26,769)

  Stock-based compensation expense

436,832

1,284,395

  Settlement of asset retirement obligations

(227,346)

(17,890)

  Accretion of asset retirement obligation

280,023

107,075

  Bad debt expense

73,513

15,750

  Net (gains) losses from commodity derivatives

(5,694,863)

289,338

  Gain on sales of fixed assets

(556,141)

-

  Loss on write-off of abandoned facilities

71,373

-

  Gain on write-off of liabilities net of assets

(34,835)

-

Changes in assets and liabilities:


  Decrease in accounts receivable

426,945

1,273,576

  (Increase) decrease in prepaids, deposits and other assets

521,167

269,522

  (Decrease) increase in accounts payable and other current and 


    non-current liabilities

(923,200)

(884,576)




NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES

2,889,407

(2,442,876)




CASH FLOWS FROM INVESTING ACTIVITIES:


Capital expenditures for oil and gas properties

(4,526,587)

(8,858,743)

Proceeds from sale of oil and gas properties

5,400,563

-

Proceeds from sale of other fixed assets

641,556

-

Derivative settlements

550,675

1,059,900




NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES

2,066,207

(7,798,843)




CASH FLOWS FROM FINANCING ACTIVITIES:


Proceeds from borrowings

-

9,000,000

Net repayments on the senior credit facility

(7,500,000)

-

Repayments of borrowings - insurance financing

(512,783)

-

Debt issuance costs

(2,152)

-

Treasury stock repurchases

(23,270)

(389,740)




NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES

(8,038,205)

8,610,260




NET DECREASE IN CASH AND CASH EQUIVALENTS

(3,082,591)

(1,631,459)




CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD

3,625,686

4,064,094




CASH AND CASH EQUIVALENTS AT END OF PERIOD

$             543,095

$          2,432,635




Supplemental disclosure of cash flow information:


Interest payments (net of interest capitalized)

$             811,042

$             113,838

Income tax payments

$                         -

$                         -

Supplemental disclosure of significant non-cash activity:


(Increase) decrease in capital expenditures financed by accounts payable

$            (386,337)

$             441,393

SOURCE Yuma Energy, Inc.