Yuma Energy, Inc. Announces 2017 Financial Results

HOUSTON, April 2, 2018 /PRNewswire/ -- Yuma Energy, Inc. (NYSE American: YUMA) (the "Company" or "Yuma") today announced its financial results for the year ended December 31, 2017.

Year End 2017 Highlights

• Yuma spud its first San Andres horizontal well in December 2017 and completed it during the first quarter of 2018.  All of the associated facilities have been installed and the well is currently in the early stages of production, recovering frac fluids and dewatering the near wellbore area.
• Net average production for the year ended December 31, 2017 was 2,454 Boe/d, or 34.8% higher than the net average production for the prior year of 1,820 Boe/d.
• Yuma reduced its debt by $11.8 million during 2017, bringing its bank debt down to $27.7 million.
• Yuma closed its common stock offering of 10,100,000 shares of common stock in October 2017 (including 500,000 shares purchased pursuant to the underwriters' overallotment option) for gross proceeds of $10,100,000 before deducting underwriters' fees and offering expenses.

Management Comments

Sam L. Banks, CEO of Yuma Energy, Inc., commented, "We are looking forward to the results of our first San Andres horizontal well, and continuing to expand our position in the play.  During 2018, we intend to take advantage of the low-risk and low-cost growth opportunities within our existing inventory, continue the development and expansion of our San Andres play, and actively pursue acquisitions and mergers."

Oil and Natural Gas Reserves – SEC Prices

The table below summarizes the Company's estimated proved reserves at December 31, 2017, which were prepared in accordance with Securities and Exchange Commission ("SEC") guidelines by Netherland, Sewell & Associates, Inc. ("NSAI"), an independent petroleum engineering firm. In preparing its report, NSAI evaluated 100% of the Company's properties at December 31, 2017.

Proved reserves were calculated using prices equal to the twelve-month unweighted arithmetic average of the first-day-of-the-month prices for each of the preceding twelve months, which were $51.34 per Bbl West Texas Intermediate and $2.976 per MMBtu Henry Hub, for the year ended December 31, 2017. Adjustments were made for location and grade. The information in the following table does not give any effect to or reflect the Company's commodity derivatives.

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 years ended December 31, 2017 and 2016, and the average sales price per unit sold.

Revenues

The following table presents the Company's revenues for the years ended December 31, 2017 and 2016.

Expenses

The Company's lease operating expenses ("LOE") and LOE per Boe for the years ended December 31, 2017 and 2016, are set forth below:

Commodity Derivative Instruments

Commodity derivative instruments open as of December 31, 2017 are provided below.  Natural gas prices are NYMEX Henry Hub prices, and crude oil prices are NYMEX West Texas Intermediate.

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 natural 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; 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, 2017, and other SEC 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.

Reconciliation of GAAP to Non-GAAP Financial Measures
Unaudited

Non-GAAP Financial Measures

The non-GAAP financial measure of PV10, as calculated by the Company below, is intended to provide readers with meaningful information that supplements our financial statements prepared in accordance with accounting principles generally accepted in the United States ("GAAP"). These disclosures may not be comparable to similarly titled measures used by other companies. Further, this non-GAAP measure should only be considered in conjunction with financial statements and disclosures prepared in accordance with GAAP and should not be considered in isolation or as a substitute for GAAP measures, such as net income or loss, operating income or loss, standardized measure of discounted future net cash flows or any other GAAP measure of financial position or results of operations.

PV10

Present Value Discounted at 10% ("PV10") is a Non-GAAP measure that differs from the GAAP measure "standardized measure of discounted future net cash flows" in that PV10 is calculated without regard to future income taxes. Management believes that the presentation of the PV10 value is relevant and useful to investors because it presents the estimated discounted future net cash flows attributable to the Company's estimated proved reserves independent of its income tax attributes, thereby isolating the intrinsic value of the estimated future cash flows attributable to the Company's reserves. Because many factors that are unique to each individual company impact the amount of future income taxes to be paid, the Company believes the use of a pre-tax measure provides greater comparability of assets when evaluating companies. For these reasons, management uses, and believes the industry generally uses, the PV10 measure in evaluating and comparing acquisition candidates and assessing the potential return on investment related to investments in oil and natural gas properties. PV10 does not necessarily represent the fair market value of oil and natural gas properties.

PV10 is not a measure of financial or operational performance under GAAP, nor should it be considered in isolation or as a substitute for the standardized measure of discounted future net cash flows as defined under GAAP. The table below provides a reconciliation of the Company's PV10 to the standardized measure of discounted future net cash flows ($ in thousands).

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SOURCE Yuma Energy, Inc.