Yuma Energy, Inc. Announces Third Quarter 2017 Financial Results
HOUSTON, Nov. 13, 2017 /PRNewswire/ -- Yuma Energy, Inc. (NYSE American: YUMA) (the "Company" or "Yuma") today announced its financial results for the quarter ended September 30, 2017.
Third Quarter 2017 Highlights
- Net average production of 2,348 Boe/d for the third quarter of 2017, a 53.5 percent increase over the third quarter of 2016.
- Cash provided by operations of $4,472,028 for the nine months ended September 30, 2017, compared to cash used in operations of $927,802 in the same period in 2016.
- Yuma's Permian Basin acreage position has increased to 3,068 acres (2,685 net acres) in Yoakum County, Texas to horizontally develop the San Andres Oil Play. Yuma is the operator of the acreage with an 87.5 percent working interest, and has spud its salt water disposal well and intends to drill its first joint venture well in 2017, as well as continue to acquire additional acreage within its 33,280 acre Area of Mutual Interest ("AMI").
- Yuma's borrowing base on its credit facility was reaffirmed on September 8, 2017 at $40.5 million, with the next scheduled redetermination set for April 1, 2018.
Recent Developments
- Yuma closed its common stock offering of 9,600,000 shares of common stock on October 3, and subsequently on October 31, 2017, the Underwriters exercised their overallotment option and purchased 500,000 additional shares of common stock to bring the total gross proceeds of the offering to $10,100,000 before deducting underwriters' fees and offering expenses.
Management Comments
Sam L. Banks, CEO of Yuma Energy, Inc., commented, "We have continued to increase our acreage position in the Permian Basin at very attractive prices and are currently preparing to drill our first horizontal well and salt water disposal well in the San Andres horizontal oil play. We intend to finish drilling operations for both wells in 2017 and to establish commercial production during the first quarter of 2018. We continue to believe that increasing our exposure to the Permian Basin, and more specifically the San Andres horizontal oil play, will lead to significant shareholder value over time. As can be seen in the results of our first three quarters, 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 us for the three and nine months ended September 30, 2017 and 2016, and the average sales price per unit sold.
| Three Months Ended September 30, |
Nine Months Ended September 30, |
||||||
| 2017 |
2016 |
2017 |
2016 |
||||
| Production volumes: |
|||||||
| Crude oil and condensate (Bbls) |
57,134 |
32,242 |
199,774 |
106,257 |
|||
| Natural gas (Mcf) |
757,361 |
507,521 |
2,442,899 |
1,553,906 |
|||
| Natural gas liquids (Bbls) |
32,694 |
23,903 |
101,260 |
74,282 |
|||
| Total (Boe) (1) |
216,055 |
140,732 |
708,184 |
439,523 |
|||
| Average prices realized: |
|||||||
| Crude oil and condensate (per Bbl) |
$47.86 |
$43.45 |
$48.42 |
$39.27 |
|||
| Natural gas (per Mcf) |
$3.04 |
$2.46 |
$3.05 |
$2.12 |
|||
| Natural gas liquids (per Bbl) |
$23.81 |
$16.66 |
$23.68 |
$14.96 |
|||
| (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 our revenues for the three and nine months ended September 30, 2017 and 2016.
| Three Months Ended September 30, |
Nine Months Ended September 30, |
||||||
| 2017 |
2016 |
2017 |
2016 |
||||
| Sales of natural gas and crude oil: |
|||||||
| Crude oil and condensate |
$ 2,734,269 |
$ 1,400,837 |
$ 9,673,049 |
$ 4,172,477 |
|||
| Natural gas |
2,304,154 |
1,249,148 |
7,445,564 |
3,295,258 |
|||
| Natural gas liquids |
778,460 |
398,264 |
2,397,398 |
1,111,402 |
|||
| Total revenues |
$ 5,816,883 |
$ 3,048,249 |
$ 19,516,011 |
$ 8,579,137 |
|||
Expenses
The Company's lease operating expenses ("LOE") and LOE per Boe for the three and nine month periods ended September 30, 2017 and 2016, are set forth below:
| Three Months Ended September 30, |
Nine Months Ended September 30, |
||||||
| 2017 |
2016 |
2017 |
2016 |
||||
| Lease operating expenses |
$1,506,747 |
$ 810,115 |
$5,049,551 |
$2,043,298 |
|||
| Severance, ad valorem taxes and marketing |
1,002,605 |
423,511 |
3,180,189 |
1,268,104 |
|||
| Total LOE |
$2,509,352 |
$1,233,626 |
$8,229,740 |
$3,311,402 |
|||
| LOE per Boe |
$11.61 |
$8.77 |
$11.62 |
$7.53 |
|||
| LOE per Boe without severance, ad valorem taxes and marketing |
$6.97 |
$5.76 |
$7.13 |
$4.65 |
|||
Commodity Derivative Instruments
Commodity derivative instruments open as of September 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 |
517,916 |
1,725,133 |
373,906 |
||
| Price |
$3.13 |
$3.00 |
$3.00 |
||
| 3-way collars |
|||||
| Volume |
41,712 |
- |
- |
||
| Ceiling sold price (call) |
$3.39 |
- |
- |
||
| Floor purchased price (put) |
$3.03 |
- |
- |
||
| Floor sold price (short put) |
$2.47 |
- |
- |
||
| CRUDE OIL (Bbls): |
|||||
| Swaps |
|||||
| Volume |
31,927 |
195,152 |
156,320 |
||
| Price |
$52.24 |
$53.17 |
$53.77 |
||
| 3-way collars |
|||||
| Volume |
26,637 |
- |
- |
||
| 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 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 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) |
|||
| September 30, |
December 31, |
||
| 2017 |
2016 |
||
| ASSETS |
|||
| CURRENT ASSETS: |
|||
| Cash and cash equivalents |
$ 270,359 |
$ 3,625,686 |
|
| Accounts receivable, net of allowance for doubtful accounts: |
|||
| Trade |
3,893,803 |
4,827,798 |
|
| Officers and employees |
48,575 |
68,014 |
|
| Common stock subscription receivable |
8,690,400 |
- |
|
| Other |
1,186,320 |
1,757,337 |
|
| Commodity derivative instruments |
359,965 |
- |
|
| Prepayments |
347,529 |
1,063,418 |
|
| Other deferred charges |
437,165 |
284,305 |
|
| Total current assets |
15,234,116 |
11,626,558 |
|
| OIL AND GAS PROPERTIES (full cost method): |
|||
| Proved properties |
490,280,184 |
488,723,905 |
|
| Unproved properties - not subject to amortization |
5,584,644 |
3,656,989 |
|
| 495,864,828 |
492,380,894 |
||
| Less: accumulated depreciation, depletion and amortization |
(418,916,482) |
(410,440,433) |
|
| Net oil and gas properties |
76,948,346 |
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 |
(1,369,302) |
(5,349,145) |
|
| Net other property and equipment |
3,076,157 |
3,387,385 |
|
| OTHER ASSETS AND DEFERRED CHARGES: |
|||
| Commodity derivative instruments |
415,091 |
- |
|
| Deposits |
467,592 |
467,306 |
|
| Other noncurrent assets |
333,587 |
517,201 |
|
| Total other assets and deferred charges |
1,216,270 |
984,507 |
|
| TOTAL ASSETS |
$ 96,474,889 |
$ 97,938,911 |
|
| Yuma Energy, Inc. |
|||
| CONSOLIDATED BALANCE SHEETS – CONTINUED |
|||
| (Unaudited) |
|||
| September 30, |
December 31, |
||
| 2017 |
2016 |
||
| LIABILITIES AND EQUITY |
|||
| CURRENT LIABILITIES: |
|||
| Current maturities of debt |
$ - |
$ 599,341 |
|
| Accounts payable, principally trade |
12,922,251 |
11,009,631 |
|
| Commodity derivative instruments |
- |
1,340,451 |
|
| Asset retirement obligations |
359,659 |
376,735 |
|
| Other accrued liabilities |
1,875,211 |
2,572,680 |
|
| Total current liabilities |
15,157,121 |
15,898,838 |
|
| LONG-TERM DEBT |
31,450,000 |
39,500,000 |
|
| OTHER NONCURRENT LIABILITIES: |
|||
| Asset retirement obligations |
9,717,448 |
9,819,648 |
|
| Commodity derivative instruments |
- |
1,215,551 |
|
| Deferred rent |
286,907 |
- |
|
| Employee stock awards |
93,669 |
- |
|
| Total other noncurrent liabilities |
10,098,024 |
11,035,199 |
|
| COMMITMENTS AND CONTINGENCIES (Note 14) |
|||
| EQUITY |
|||
| Series D convertible preferred stock ($0.001 par value, 7,000,000 authorized, 1,871,373 issued as of September 30, 2017, and 1,776,718 issued as of December 31, 2016, $11.07 per share liquidation preference) |
1,872 |
1,777 |
|
| Common stock ($0.001 par value, 100 million shares authorized, 12,559,608 outstanding as of September 30, 2017 and 12,201,884 outstanding as of December 31, 2016) |
12,560 |
12,202 |
|
| Common stock subscribed (9,600,000 shares, funds received October 3, 2017) |
9,600 |
- |
|
| Additional paid-in capital |
54,035,879 |
43,877,563 |
|
| Treasury stock at cost (12,433 shares as of September 30, 2017 and -0- shares as of December 31, 2016) |
(24,432) |
- |
|
| Accumulated earnings (deficit) |
(14,265,735) |
(12,386,668) |
|
| Total equity |
39,769,744 |
31,504,874 |
|
| TOTAL LIABILITIES AND EQUITY |
$ 96,474,889 |
$ 97,938,911 |
|
| Yuma Energy, Inc. |
|||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS |
|||||||
| (Unaudited) |
|||||||
| Three Months Ended September 30, |
Nine Months Ended September 30, |
||||||
| 2017 |
2016 |
2017 |
2016 |
||||
| REVENUES: |
|||||||
| Sales of natural gas and crude oil |
$ 5,816,883 |
$ 3,048,249 |
$ 19,516,011 |
$ 8,579,137 |
|||
| EXPENSES: |
|||||||
| Lease operating and production costs |
2,509,352 |
1,233,626 |
8,229,740 |
3,311,402 |
|||
| General and administrative – stock-based compensation |
414,660 |
380,460 |
851,492 |
1,664,855 |
|||
| General and administrative – other |
1,622,528 |
1,717,627 |
5,705,159 |
8,153,874 |
|||
| Depreciation, depletion and amortization |
2,761,668 |
1,524,877 |
8,666,052 |
5,357,207 |
|||
| Asset retirement obligation accretion expense |
138,867 |
51,885 |
418,890 |
158,960 |
|||
| Impairment of oil and gas properties |
- |
12,735 |
- |
17,560,918 |
|||
| Bad debt expense net of recoveries |
(38,706) |
16,602 |
34,807 |
32,352 |
|||
| Total expenses |
7,408,369 |
4,937,812 |
23,906,140 |
36,239,568 |
|||
| LOSS FROM OPERATIONS |
(1,591,486) |
(1,889,563) |
(4,390,129) |
(27,660,431) |
|||
| OTHER INCOME (EXPENSE): |
|||||||
| Net gains (losses) from commodity derivatives |
(1,260,280) |
128,177 |
4,434,583 |
(161,161) |
|||
| Interest expense |
(429,313) |
(81,168) |
(1,407,689) |
(195,006) |
|||
| Gain (loss) on other property and equipment |
- |
- |
484,768 |
- |
|||
| Other, net |
14,043 |
1,157 |
56,110 |
14,622 |
|||
| Total other income (expense) |
(1,675,550) |
48,166 |
3,567,772 |
(341,545) |
|||
| INCOME (LOSS) BEFORE INCOME TAXES |
(3,267,036) |
(1,841,397) |
(822,357) |
(28,001,976) |
|||
| Income tax expense |
2,539 |
33,635 |
8,489 |
6,866 |
|||
| NET INCOME (LOSS) |
(3,269,575) |
(1,875,032) |
(830,846) |
(28,008,842) |
|||
| PREFERRED STOCK: |
|||||||
| Dividends paid in kind |
359,311 |
335,199 |
1,048,221 |
981,347 |
|||
| NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS |
$ (3,628,886) |
$ (2,210,231) |
$ (1,879,067) |
$ (28,990,189) |
|||
| INCOME (LOSS) PER COMMON SHARE: |
|||||||
| Basic |
($0.29) |
($0.30) |
($0.15) |
($3.89) |
|||
| Diluted |
($0.29) |
($0.30) |
($0.15) |
($3.89) |
|||
| WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING: |
|||||||
| Basic |
12,483,724 |
7,444,542 |
12,311,087 |
7,446,986 |
|||
| Diluted |
12,483,724 |
7,444,542 |
12,311,087 |
7,446,986 |
|||
| Yuma Energy, Inc. |
|||
| CONSOLIDATED STATEMENTS OF CASH FLOWS |
|||
| (Unaudited) |
|||
| Nine Months Ended September 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) |
$ (830,846) |
$ (28,008,842) |
|
| Depreciation, depletion and amortization of property and equipment |
8,666,052 |
5,357,207 |
|
| Impairment of oil and gas properties |
- |
17,560,918 |
|
| Amortization of debt issuance costs |
277,293 |
- |
|
| Net deferred income tax expense |
- |
6,866 |
|
| Deferred rent liability, net |
163,962 |
- |
|
| Stock-based compensation expense |
851,492 |
1,664,855 |
|
| Settlement of asset retirement obligations |
(430,415) |
(17,890) |
|
| Accretion of asset retirement obligation |
418,890 |
158,960 |
|
| Bad debt expense |
34,807 |
32,352 |
|
| Net (gains) losses from commodity derivatives |
(4,434,583) |
161,161 |
|
| 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 |
736,959 |
2,988,184 |
|
| (Increase) decrease in prepaids, deposits and other assets |
715,603 |
656,948 |
|
| (Decrease) increase in accounts payable and other current and non-current liabilities |
(1,177,583) |
(1,488,521) |
|
| NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES |
4,472,028 |
(927,802) |
|
| CASH FLOWS FROM INVESTING ACTIVITIES: |
|||
| Capital expenditures for oil and gas properties |
(5,964,781) |
(9,878,724) |
|
| Proceeds from sale of oil and gas properties |
5,400,563 |
- |
|
| Proceeds from sale of other fixed assets |
645,791 |
- |
|
| Derivative settlements |
1,103,525 |
1,319,517 |
|
| NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES |
1,185,098 |
(8,559,207) |
|
| CASH FLOWS FROM FINANCING ACTIVITIES: |
|||
| Proceeds from borrowings |
- |
9,000,000 |
|
| Net repayments on the senior credit facility |
(8,050,000) |
- |
|
| Repayments of borrowings - insurance financing |
(599,341) |
- |
|
| Debt issuance costs |
(323,593) |
- |
|
| Costs for common stock offering |
(15,087) |
- |
|
| Treasury stock repurchases |
(24,432) |
(408,323) |
|
| NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES |
(9,012,453) |
8,591,677 |
|
| NET DECREASE IN CASH AND CASH EQUIVALENTS |
(3,355,327) |
(895,332) |
|
| CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD |
3,625,686 |
4,064,094 |
|
| CASH AND CASH EQUIVALENTS AT END OF PERIOD |
$ 270,359 |
$ 3,168,762 |
|
| Supplemental disclosure of cash flow information: |
|||
| Interest payments (net of interest capitalized) |
$ 1,021,249 |
$ 193,985 |
|
| Income tax refund |
$ 20,699 |
$ - |
|
| Supplemental disclosure of significant non-cash activity: |
|||
| (Increase) decrease in capital expenditures financed by accounts payable |
$ (3,291,386) |
$ 498,140 |
|
| Common stock subscription receivable (net of $909,600 offering costs at closing) |
$ 8,690,400 |
$ - |
|
| Other accrued offering expenses |
$ 271,227 |
$ - |
|
SOURCE Yuma Energy, Inc.
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