CALGARY, Oct. 22, 2015 /CNW/ - Yangarra Resources Ltd. ("Yangarra" or the "Company") (TSX:YGR) provides an operations update.

Yangarra's 3^rd quarter capital program had significant cost reductions in both drilling and completion operations, as well as earning new lands.  One of the Company's 1.5 mile horizontal ("HZ") wells drilled in the 2^nd quarter, at a cost of $1.3 million, was fracked with 45 stages and 675 tonnes of sand and completed at a cost of $1.2 million. Initial Production over 30 days ("IP-30") was 478 boe/d (including 378 bbls/d of oil).

Two additional wells drilled during the 2^nd quarter (one 1 mile and one 1.5 mile) are scheduled to be completed in the 4^th quarter when crown pipeline right of ways are secured, which are currently delayed by Aboriginal Consultation Office ("ACO") approvals. 

A 2 mile HZ well drilled in the 3^rd quarter was completed early in the 4^th quarter and is currently on flow-back after a 61 stage completion with 915 tonnes of sand. The well cost $1.8 million to drill and $1.5 million to complete.  

Two 1 mile HZ wells have been drilled in the 4^th quarter and will be completed and tied into the Company's Ferrier compression facility in early November.

In late August the Company diverted shut in production from the TCPL James River system to the TCPL mainline. Shortly thereafter a portion of that production was unexpectedly shut in due to maintenance work by TCPL on the main line. In addition, the Company experienced several other interruptions at various facilities throughout the 3rd quarter as a result of rolling shutdowns by TCPL. As a result of the various outages, Yangarra's average daily production was approximately 2,100 boe/d (50% oil & NGL's) for the third quarter of 2015.

The Company expects fourth quarter 2015 production to average between 2,300 – 2,600 boe/d with continued TCPL interruptions.

Cardium Update

Upon review of full cycle returns, Yangarra will focus on Cardium development.  Well cost reduction initiatives and other technological advances are having significant positive impact to the risk adjusted returns.  The Company's experience in the Cardium also minimizes the risk profile. 

Duvernay Update

Yangarra completed drilling its first Duvernay strata-graphic vertical test well on the 54 section North block, after analyzing the results and in the context of the current commodity environment, Yangarra has decided that the risk adjusted returns no longer justify further drilling in the North block and will let the block expire. 

Yangarra intends to complete the standing horizontal well in the South Block in the summer of 2016 when processing capacity is expected to be available.

Corporate Strategy

Yangarra`s corporate strategy for 2016 in the current commodity environment is to target and maintain 2,500 – 2,750 boe/d while spending within cash-flow at US$45/bbl WTI.  Yangarra is preparing for future growth by acquiring significant Cardium acreage at very attractive prices, consolidating partner interests and securing infrastructure.  The Company's current inventory supports an ability to increase the pace of development to 2-3 drilling rigs when justified by full cycle returns.

Corporate Presentation

An updated corporate presentation is available on the Company's webpage at

http://www.yangarra.ca/Financial-Reports/Presentations/.

Corporate Secretary

Yangarra has appointed Frank Sur of Gowlings as corporate secretary, Frank replaces Jeff Dyck of Gowlings, and the Company thanks Jeff for his contribution and guidance over the past 5 years. 

Forward looking information

This press release contains forward-looking statements.  More particularly, this press release contains statements concerning planned exploration and development activities, anticipated timing of crown pipeline right of ways being approved by the Aboriginal Consultation Office, anticipated timing of the cessation of production outage as a result of completion of the maintenance work by TCPL at the James River sales line, the anticipated daily production average in the fourth quarter of 2015 and the planned corporate strategy during the current commodity environment.

The forward-looking statements in this press release are based on certain key expectations and assumptions made by Yangarra, including expectations and assumptions concerning the success of future drilling and development activities, the performance of existing wells, the performance of new wells, the successful application of technology, prevailing weather conditions, commodity prices, royalty regimes and exchange rates and the availability of capital, labour and services.

Although Yangarra believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because Yangarra can give no assurance that they will prove to be correct.  Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties.  Actual results could differ materially from those currently anticipated due to a number of factors and risks.  These include, but are not limited to, risks associated with the oil and gas industry in general (e.g., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserves estimates; the uncertainty of estimates and projections relating to production, costs and expenses; and health, safety and environmental risks), uncertainty as to the availability of labour and services, commodity price and exchange rate fluctuations, unexpected adverse weather conditions, general business, economic, competitive, political and social uncertainties, capital market conditions and market prices for securities and changes to existing laws and regulations.  Certain of these risks are set out in more detail in Yangarra's current Annual Information Form, which is available on Yangarra's SEDAR profile at www.sedar.com.    

Forward-looking statements are based on estimates and opinions of management of Yangarra at the time the statements are presented.  Yangarra may, as considered necessary in the circumstances, update or revise such forward-looking statements, whether as a result of new information, future events or otherwise, but Yangarra undertakes no obligation to update or revise any forward-looking statements, except as required by applicable securities laws.

Any references in this press release to initial and/or final raw test or production rates and/or "flush" production rates are useful in confirming the presence of hydrocarbons, however, such rates are not necessarily determinative of the rates at which such wells will commence production and decline thereafter. Additionally, such rates may also include recovered "load oil" fluids used in well completion stimulation. While encouraging, readers are cautioned not to place reliance on such rates in calculating the aggregate production for the Corporation. The initial production rate may be estimated based on other third party estimates or limited data available at this time. In all cases in this press release, initial production or test are not necessarily indicative of long-term performance of the relevant well or fields or of ultimate recovery of hydrocarbons.

Barrels of Oil Equivalent

The term barrels of oil equivalent ("boe") may be misleading, particularly if used in isolation. Per boe amounts have been calculated using a conversion ratio of six thousand cubic feet (6 mcf) of natural gas to one barrel (1 Bbl) of crude oil.  The boe conversion ratio of 6 mcf to 1 Bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.  Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency of 6:1, utilizing a conversion on a 6:1 basis may be misleading as an indication of value. 

All reference to $ (funds) are in Canadian dollars.

SOURCE Yangarra Resources Ltd.