Yuma Energy, Inc.
 
 
 
 
NEWS RELEASE
 
Yuma Energy, Inc. Announces Second Quarter 2017
Financial Results
 
HOUSTON, TX – (PR Newswire – August 14, 2017) – 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.
 
For more information, please contact:
 
James J. Jacobs
Executive Vice President, Treasurer and Chief Financial Officer
Yuma Energy, Inc.
1177 West Loop South, Suite 1825
Houston, TX 77027
Telephone: (713) 968-7000
 
 
 

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 
 
 
 


The following information was filed by Yuma Energy, Inc. (YUMA) on Monday, August 14, 2017 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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