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11.05.2018 22:50
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Yuma Energy, Inc. Announces it is Actively Seeking Strategic Alternatives, Provides an Update to its Liquidity and Operations, and Reports First Quarter 2018 Financial Results
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PR Newswire
HOUSTON, May 11, 2018
HOUSTON, May 11, 2018 /PRNewswire/ -- Yuma Energy, Inc. (NYSE American: YUMA) (the "Company" or "Yuma") today announced that it is actively seeking strategic alternatives and provided information related to its liquidity and operations. The Company also reported its financial results for the quarter ended March 31, 2018.
Strategic Alternatives
Yuma is currently exploring strategic alternatives in order to enhance and maximize shareholder value. These strategic alternatives may include, but are not limited to, a business combination, a merger, sale of assets, and possible capital market transactions. Yuma will thoroughly evaluate all opportunities and third-party proposals, if any, and will aggressively pursue options which are intended to add incremental shareholder value relative to its continued standalone activities.
Liquidity
Due to operating losses the Company sustained during recent quarters, which were partially a result of several events outside the reasonable control of the Company, including the suspension of production from several wells for a period of time and other associated factors, at March 31, 2018, the Company was not in compliance with its total debt to EBITDAX covenant for the trailing four quarter period under its credit facility. In addition, due to this non-compliance and the Company's anticipated non-compliance at June 30, 2018, the Company classified its bank debt as a current liability in its consolidated financial statements as of and for the three months ended March 31, 2018. On May 8, 2018, the Company received a waiver from its lenders to its compliance with the fiscal period total debt to EBITDAX for the trailing four quarter period financial ratio covenant for the period ended March 31, 2018, as long as it does not exceed 3.75 to 1.00.
As of March 31, 2018, the Company had outstanding borrowings of $27.05 million under its credit facility, and its total borrowing base was $40.5 million, leaving $13.45 million of undrawn borrowing base. As of May 8, 2018, the total borrowing base under the credit facility was reduced to $35.0 million. Since March 31, 2018, the Company has borrowed an additional $7.2 million for working capital, leaving $750,000 of undrawn borrowing base as of the date hereof.
A breach in the future of any of the terms and conditions of the credit facility or a breach of the financial covenants thereunder could result in acceleration of the Company's indebtedness, in which case the debt would become immediately due and payable. The Company currently anticipates non-compliance with various financial covenants at June 30, 2018.
The Company has initiated several strategic alternatives to remedy its limited liquidity, its debt covenant compliance issues, and to provide it with additional working capital to develop its existing assets. These may include, but are not limited to, reducing or eliminating capital expenditures previously planned for 2018; entering into commodity derivatives for a significant portion of its anticipated production for 2018; reducing general and administrative expenses; selling non-core assets; seeking merger and acquisition related opportunities; and potentially raising proceeds from capital markets transactions, including the sale of debt or equity securities. There can be no assurance that the exploration of strategic alternatives will result in a transaction.
The significant risks and uncertainties described above raise substantial doubt about the Company's ability to continue as a going concern. The Company has prepared its consolidated financial statements for the three months ended March 31, 2018 on a going concern basis of accounting, which contemplates continuity of operations, realization of assets, and satisfaction of liabilities and commitments in the normal course of business. The Company's consolidated financial statements for the three months ended March 31, 2018 do not include any adjustments that might result from the outcome of the going concern uncertainty.
Operations Update
In 2017, the Company entered the Permian Basin through a joint venture with two privately held energy companies and established an Area of Mutual Interest ("AMI") covering approximately 33,280 acres in Yoakum County, Texas, located in the Northwest Shelf of the Permian Basin. The primary target within the AMI is the San Andres formation, which has been one of the largest producing formations in Texas to date. As of May 1, 2018, the Company held a 62.5% working interest in approximately 4,823 gross acres (3,014 net acres) within the AMI. In November, 2017, the Company spudded a salt water disposal well, the Jameson SWD #1. Upon completion of the salt water disposal well, the drilling rig was moved to the Company's State 320 #1H horizontal San Andres well, which was subsequently drilled and completed. The Company opened the well on March 1, 2018 to begin the dewatering process and establish production. As of May 6, 2018, the well was producing 31 barrels of oil, 89 Mcf of natural gas, and 3,908 barrels of water per day. While significant water production is typical and was expected from the well, early production rates have not met management's pre-drill expectations. The Company will continue to evaluate well performance and the commerciality of the prospect area, but given the well performance to date, the ability to establish commercial production in the prospect area is uncertain at this time. As of March 31, 2018, the salt water disposal well and the State 320 #1H well were classified as unproved properties within the Company's consolidated financial statements.
First Quarter 2018 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 months ended March 31, 2018 and 2017, and the average sales price per unit sold.
| | Three Months Ended March 31, | ||
| | 2018 | | 2017 |
| Production volumes: | | | |
| Crude oil and condensate (Bbls) | 47,157 | | 76,397 |
| Natural gas (Mcf) | 633,440 | | 899,427 |
| Natural gas liquids (Bbls) | 25,243 | | 33,474 |
| Total (Boe) (1) | 177,973 | | 259,776 |
| Average prices realized: | | | |
| Crude oil and condensate (per Bbl) | $65.02 | | $49.95 |
| Natural gas (per Mcf) | $2.83 | | $2.84 |
| Natural gas liquids (per Bbl) | $31.22 | | $23.15 |
| | |
| (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 months ended March 31, 2018 and 2017.
| | Three Months Ended March 31, | ||
| | 2018 | | 2017 |
| Sales of natural gas and crude oil: | | | |
| Crude oil and condensate | $ 3,066,258 | | $ 3,815,932 |
| Natural gas | 1,791,251 | | 2,553,443 |
| Natural gas liquids | 788,027 | | 775,049 |
| Total revenues | $ 5,645,536 | | $ 7,144,424 |
Expenses
The Company's lease operating expenses ("LOE") and LOE per Boe for the three months ended March 31, 2018 and 2017, are set forth below:
| | Three Months Ended March 31, | ||
| | 2018 | | 2017 |
| Lease operating expenses | $ 1,665,320 | | $ 1,697,908 |
| Severance, ad valorem taxes and marketing | 960,448 | | 963,356 |
| Total LOE | $ 2,625,768 | | $ 2,661,264 |
| | | | |
| LOE per Boe | $14.75 | | $10.24 |
| LOE per Boe without severance, ad valorem taxes and marketing | $9.36 | | $6.54 |
Commodity Derivative Instruments
Commodity derivative instruments open as of March 31, 2018 are provided below. Natural gas prices are NYMEX Henry Hub prices, and crude oil prices are NYMEX West Texas Intermediate.
| | | 2018 | | 2019 |
| | | Settlement | | Settlement (1) |
| NATURAL GAS (MMBtu): | | | | |
| Swaps | | | | |
| Volume | | 1,245,893 | | 373,906 |
| Price | | $3.00 | | $3.00 |
| | | | | |
| CRUDE OIL (Bbls): | | | | |
| Swaps | | | | |
| Volume | | 140,818 Werbung Mehr Nachrichten zur Yuma Energy Aktie kostenlos abonnieren
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