EX-99.1 2 yuma_ex991.htm PRESS RELEASE Blueprint
Exhibit 99.1
 
 
 Yuma Energy, Inc.
 
 
 
 
NEWS RELEASE
 
Yuma Energy, Inc. Announces Third Quarter 2016
Financial Results
HOUSTON, TX – (Marketwired – November 14, 2016) – Yuma Energy, Inc. (NYSE MKT: YUMA) (the “Company” or “Yuma”) today announced its financial results for the quarter ended September 30, 2016. These financial results only reflect Yuma Energy, Inc. as a stand-alone entity prior to the merger with Davis Petroleum Acquisition Corp., and do not reflect the combination of the two companies.
 
Financial Results
 
Sales and Other Operating Revenues
 
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, 2016 and 2015, and the average sales price per unit sold.
 
 
 
Three Months Ended September 30,
 
 
Nine Months Ended September 30,
 
 
 
2016
 
 
2015
 
 
2016
 
 
2015
 
Production volumes:
 
 
 
 
 
 
 
 
 
 
 
 
Crude oil and condensate (Bbl)
  47,079 
  61,938 
  155,986 
  186,531 
Natural gas (Mcf)
  340,189 
  497,868 
  1,148,587 
  1,488,408 
Natural gas liquids (Bbl)
  12,613 
  20,899 
  41,771 
  54,838 
   Total (Boe) (1)
  116,390 
  165,815 
  389,188 
  489,437 
 
    
    
    
    
Average prices realized:
    
    
    
    
Excluding commodity derivatives:
    
    
    
    
Crude oil and condensate (per Bbl)
 $42.49 
 $46.10 
 $37.51 
 $50.52 
Natural gas (per Mcf)
 $2.72 
 $2.72 
 $2.28 
 $2.77 
Natural gas liquids (per Bbl)
 $17.94 
 $18.61 
 $17.71 
 $19.20 
Including commodity derivatives:
    
    
    
    
Crude oil and condensate (per Bbl)
 $53.46 
 $51.41 
 $49.24 
 $66.25 
Natural gas (per Mcf)
 $2.64 
 $2.93 
 $2.61 
 $4.24 
Natural gas liquids (per Bbl)
 $17.94 
 $18.61 
 $17.71 
 $19.20 
 
(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).
 
 
1
 
 
The following table presents our revenues for the three and six months ended September 30, 2016 and 2015.
 
 
 
Three Months Ended September 30,
 
 
Nine Months Ended September 30, 
 
 
 
2016
 
 
2015
 
 
2016
 
 
2015
 
Sales of natural gas and crude oil:
 
 
 
 
 
 
 
 
 
 
 
 
Crude oil and condensate
 $2,000,373 
 $2,855,530 
 $5,851,235 
 $9,423,519 
Natural gas
  924,994 
  1,340,877 
  2,616,440 
  4,112,065 
Natural gas liquids
  226,259 
  388,966 
  739,961 
  1,053,076 
Realized gain (loss) on commodity derivatives
  488,409 
  432,824 
  2,205,216 
  5,114,609 
Unrealized loss on commodity derivatives
  (40,473)
  3,460,825 
  (2,613,044)
  (1,847,371)
Gas marketing sales
  - 
  63,637 
  - 
  167,923 
 
    
    
    
    
Total revenues
 $3,599,562 
 $8,542,659 
 $8,799,808 
 $18,023,821 
 
NON-GAAP FINANCIAL MEASURES
 
Adjusted EBITDA
 
The following table reconciles reported net income to Adjusted EBITDA for the periods indicated:
 
 
 
Three Months Ended September 30,
 
 
Nine Months Ended September 30, 
 
 
 
 2016
 
 
2015
 
 
2016 
 
 
2015 
 
Net Loss
 $(2,115,444)
 $(90,410)
 $(20,863,218)
 $(13,323,076)
Depreciation, depletion & amortization of property and equipment
  1,711,043 
  3,123,812 
  6,178,248 
  11,020,278 
Interest expense, net of interest income and amounts capitalized
  245,343 
  131,114 
  974,248 
  319,561 
Income tax benefit
  (47,429)
  329,653 
  (1,272,664)
  (3,605,839)
Impairment of oil and gas properties
  - 
  - 
  11,015,589 
  - 
Impairment of goodwill
  - 
  - 
  - 
  4,927,508 
Merger costs
  229,647 
  - 
  1,061,324 
  - 
Stock-based compensation net of capitalized cost
  189,211 
  338,619 
  909,309 
  2,210,950 
Unrealized (gains) losses on commodity derivatives
  40,473 
  (3,460,825)
  2,613,044 
  1,847,371 
Accretion of asset retirement obligation
  107,760 
  170,209 
  318,016 
  499,766 
Adjusted EBITDA
 $360,604 
 $542,172 
 $933,896 
 $3,896,519 
 
 
Adjusted EBITDA is used as a supplemental financial measure by our management and by external users of our financial statements, such as investors, commercial banks and others, to assess our operating performance compared to that of other companies in our industry, without regard to financing methods, capital structure or historical costs basis. It is also used to assess our ability to incur and service debt and fund capital expenditures. Our Adjusted EBITDA should not be considered an alternative to net income (loss), operating income (loss), cash flow provided by (used in) operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP. Our Adjusted EBITDA may not be comparable to similarly titled measures of another company because all companies may not calculate Adjusted EBITDA in the same manner.
 
 
2
 
 
Yuma Energy, Inc.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
 
 
 
September 30,
 
 
December 31,
 
 
 
2016
 
 
2015
 
 
 
(Unaudited)
 
 
(As Restated)
 
ASSETS
 
 
 
 
 
 
CURRENT ASSETS:
 
 
 
 
 
 
Cash and cash equivalents
 $1,831,928 
 $5,355,191 
Accounts receivable, net of allowance for doubtful accounts:
    
    
Trade
  2,942,948 
  2,829,266 
Officers and employees
  65,153 
  75,404 
Other
  338,461 
  633,573 
Commodity derivative instruments
  1,016,583 
  2,658,047 
Prepayments
  321,237 
  704,523 
Other deferred charges
  29,921 
  415,740 
 
    
    
Total current assets
  6,546,231 
  12,671,744 
 
    
    
OIL AND GAS PROPERTIES (full cost method):
    
    
Not subject to amortization
  15,336,916 
  14,288,716 
Subject to amortization
  205,331,835 
  204,512,038 
 
    
    
 
  220,668,751 
  218,800,754 
Less: accumulated depreciation, depletion and amortization
  (134,312,088)
  (117,304,945)
 
    
    
Net oil and gas properties
  86,356,663 
  101,495,809 
 
    
    
OTHER PROPERTY AND EQUIPMENT:
    
    
Land, buildings and improvements
  2,795,000 
  2,795,000 
Other property and equipment
  3,497,948 
  3,460,507 
 
  6,292,948 
  6,255,507 
Less: accumulated depreciation and amortization
  (2,361,010)
  (2,174,316)
 
    
    
Net other property and equipment
  3,931,938 
  4,081,191 
 
    
    
OTHER ASSETS AND DEFERRED CHARGES:
    
    
Commodity derivative instruments
  177,724 
  1,070,541 
Deposits
  414,064 
  264,064 
Other noncurrent assets
  - 
  38,104 
 
    
    
Total other assets and deferred charges
  591,788 
  1,372,709 
 
    
    
TOTAL ASSETS
 $97,426,620 
 $119,621,453 
 
 
3
 
 
Yuma Energy, Inc.
CONSOLIDATED BALANCE SHEETS – CONTINUED
(Unaudited)
 
 
 
September 30,
 
 
December 31,
 
 
 
2016
 
 
2015
 
 
 
(Unaudited)
 
 
(As Restated)
 
LIABILITIES AND EQUITY
 
 
 
 
 
 
 
 
 
 
 
 
 
CURRENT LIABILITIES:
 
 
 
 
 
 
Current maturities of debt
 $29,800,000 
 $30,063,635 
Accounts payable, principally trade
  6,378,942 
  7,933,664 
Commodity derivative instruments
  74,331 
  - 
Asset retirement obligations
  243,711 
  70,000 
Other accrued liabilities
  2,593,813 
  1,781,484 
 
    
    
Total current liabilities
  39,090,797 
  39,848,783 
 
    
    
OTHER NONCURRENT LIABILITIES:
    
    
Asset retirement obligations
  8,571,895 
  8,720,498 
Commodity derivative instruments
  4,432 
  - 
Deferred taxes
  144,700 
  1,417,364 
Other liabilities
  7,467 
  30,090 
 
    
    
Total other noncurrent liabilities
  8,728,494 
  10,167,952 
 
    
    
EQUITY:
    
    
Preferred stock
  10,828,603 
  10,828,603 
Common stock, no par value (300 million shares authorized, 3,628,991 and 3,591,731 issued)
  142,724,775 
  141,858,946 
Accumulated earnings (deficit)
  (103,946,049)
  (83,082,831)
 
    
    
Total equity
  49,607,329 
  69,604,718 
 
    
    
TOTAL LIABILITIES AND EQUITY
 $97,426,620 
 $119,621,453 
 
 
4
 
 
Yuma Energy, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
 
 
 
Three Months Ended September 30,
 
 
Nine Months Ended September 30,
 
 
 
 2016
 
 
 2015
 
 
 2016
 
 
 2015
 
 
 
 
 
 
(As Restated)
 
 
 
 
 
(As Restated)
 
REVENUES:
 
 
 
 
 
 
 
 
 
 
 
 
Sales of natural gas and crude oil
 $3,151,626 
 $4,649,009 
 $9,207,636 
 $14,756,582 
Net gains (losses) from commodity derivatives
  447,936 
  3,893,650 
  (407,828)
  3,267,239 
     Total revenues
  3,599,562 
  8,542,659 
  8,799,808 
  18,023,821 
 
    
    
    
    
EXPENSES:
    
    
    
    
Lease operating
  1,798,868 
  2,718,919 
  5,692,077 
  9,168,260 
Re-engineering and workovers
  132,708 
  1,136 
  132,708 
  555,628 
Marketing cost of sales
  - 
  234,507 
  - 
  434,189 
General and administrative – stock-based compensation
  189,211 
  338,619 
  909,309 
  2,210,950 
General and administrative – other
  1,581,619 
  1,873,484 
  5,742,824 
  5,389,859 
Depreciation, depletion and amortization
  1,711,043 
  3,123,812 
  6,178,248 
  11,020,278 
Asset retirement obligation accretion expense
  107,760 
  170,209 
  318,016 
  499,766 
Impairments
  - 
  - 
  11,015,589 
  4,927,508 
Other
  6,612 
  (274,329)
  (10,173)
  444,320 
     Total expenses
  5,527,821 
  8,186,357 
  29,978,598 
  34,650,758 
 
    
    
    
    
INCOME (LOSS) FROM OPERATIONS
  (1,928,259)
  356,302 
  (21,178,790)
  (16,626,937)
 
    
    
    
    
OTHER INCOME (EXPENSE):
    
    
    
    
Interest expense
  (245,359)
  (131,114)
  (974,403)
  (337,499)
Other, net
  10,745 
  14,055 
  17,311 
  35,521 
     Total other income (expense)
  (234,614)
  (117,059)
  (957,092)
  (301,978)
 
    
    
    
    
NET INCOME (LOSS) BEFORE INCOME TAXES
  (2,162,873)
  239,243 
  (22,135,882)
  (16,928,915)
 
    
    
    
    
Income tax expense (benefit)
  (47,429)
  329,653 
  (1,272,664)
  (3,605,839)
 
    
    
    
    
NET INCOME (LOSS)
  (2,115,444)
  (90,410)
  (20,863,218)
  (13,323,076)
 
    
    
    
    
PREFERRED STOCK, PERPETUAL PREFERRED SERIES A:
    
    
    
    
Dividends paid in cash
  - 
  320,626 
  - 
  940,315 
Dividends in arrears
  320,625 
  - 
  961,877 
  - 
 
    
    
    
    
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS
 $(2,436,069)
 $(411,036)
 $(21,825,095)
 $(14,263,391)
 
    
    
    
    
EARNINGS (LOSS) PER COMMON SHARE ADJUSTED FOR OCTOBER 26,2016 1-FOR-20 REVERSE STOCK SPLIT:
    
    
    
    
Basic
 $(0.67)
 $(0.11)
 $(6.04)
 $(4.03)
Diluted
 $(0.67)
 $(0.11)
 $(6.04)
 $(4.03)

    
    
    
    
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING ADJUSTED FOR OCTOBER 26, 2016 1-FOR-20 REVERSE STOCK SPLIT:
    
    
    
    
Basic
  3,628,683 
  3,580,163 
  3,611,241 
  3,539,755 
Diluted
  3,628,683 
  3,580,163 
  3,611,241 
  3,539,755 
 
 
5
 
 
Yuma Energy, Inc.
 
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 
 
 
Nine Months Ended September 30,
 
 
 
 2016
 
 
2015
 
 
 
 
 
 
(As Restated)
 
CASH FLOWS FROM OPERATING ACTIVITIES:
 
 
 
 
 
 
Reconciliation of net loss to net cash provided by (used in) operating activities
 
 
 
 
 
 
Net loss
 $(20,863,218)
 $(13,323,076)
Impairment of oil and gas properties
  11,015,589 
  - 
Impairment of goodwill
  - 
  4,927,508 
Depreciation, depletion and amortization of property and equipment
  6,178,248 
  11,020,278 
Accretion of asset retirement obligation
  318,016 
  499,766 
Stock-based compensation net of capitalized cost
  909,309 
  2,210,950 
Amortization of other assets and liabilities
  518,478 
  209,904 
Deferred tax expense (benefit)
  (1,272,664)
  (3,608,239)
Bad debt expense increase (decrease)
  (10,173)
  787,264 
Unrealized losses on commodity derivatives
  2,613,044 
  1,847,371 
Other
  - 
  (342,944)
Changes in current operating assets and liabilities:
    
    
   Accounts receivable
  201,854 
  4,411,640 
   Other current assets
  383,286 
  (77,453)
   Accounts payable
  (1,471,397)
  (13,938,649)
   Other current liabilities
  783,551 
  1,095,356 
Other noncurrent assets and liabilities
  (108,618)
  - 
NET CASH USED IN OPERATING ACTIVITIES
  (804,695)
  (4,280,324)
 
    
    
CASH FLOWS FROM INVESTING ACTIVITIES:
    
    
Capital expenditures on property and equipment
  (2,588,455)
  (11,211,634)
Proceeds from sale of property
  340,603 
  30,442 
Decrease in short-term investments
  - 
  1,170,868 
NET CASH USED IN INVESTING ACTIVITIES
  (2,247,852)
  (10,010,324)
 
    
    
CASH FLOWS FROM FINANCING ACTIVITIES:
    
    
Change in borrowing on line of credit
  - 
 $6,800,000 
Proceeds from insurance note
  - 
  813,562 
Payments on insurance note
  (263,635)
  (579,005)
Line of credit financing costs
  (132,659)
  (215,141)
Net proceeds from sale of common stock
  - 
  1,363,160 
Net proceeds from sale of perpetual preferred stock
  - 
  870,386 
Cash dividends to preferred shareholders
  - 
  (940,315)
Common stock purchased from employees
  (74,422)
  (300,732)
Other
  - 
  (31,485)
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
  (470,716)
  7,780,430 
 
    
    
NET DECREASE IN CASH AND CASH EQUIVALENTS
  (3,523,263)
  (6,510,218)
 
    
    
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
  5,355,191 
  11,558,322 
 
    
    
CASH AND CASH EQUIVALENTS AT END OF PERIOD
 $1,831,928 
 $5,048,104 
 
    
    
Supplemental disclosure of cash flow information:
    
    
Interest payments (net of interest capitalized)
 $354,344 
 $73,342 
Interest capitalized
 $395,244 
 $750,107 
Supplemental disclosure of significant non-cash activity:
    
    
(Increase) decrease in capital expenditures financed by accounts payable
 $83,325 
 $2,979,301 
 
 
6
 
 
About Yuma Energy, Inc.
 
Yuma Energy, Inc. is an independent Houston-based exploration and production company. We are focused on the acquisition, development, and exploration for conventional and unconventional oil and natural gas resources, primarily in the U.S. Gulf Coast and California. We have employed a 3-D seismic-based strategy to build a multi-year inventory of development and exploration prospects. Our current operations are focused on onshore assets located in central and southern Louisiana, where we are targeting the Austin Chalk, Tuscaloosa, Wilcox, Frio, Marg Tex and Hackberry formations.  We also have company-operated conventional fields located onshore in south Louisiana and the upper Texas Gulf Coast, and non-operated properties include Eagle Ford and Eaglebine properties in east Texas. In addition, we have a non-operated position in the Bakken Shale in North Dakota and operated positions in Kern and Santa Barbara Counties in California. Our common stock is traded on the NYSE MKT under the trading symbol “YUMA.” For more information about Yuma Energy, Inc., please visit our website at www.yumaenergyinc.com.
 
Agreement and Plan of Merger and Reorganization
 
On February 10, 2016, Yuma Energy, Inc., a California corporation (“Yuma California”), Yuma Energy, Inc., a Delaware corporation and wholly-owned subsidiary of Yuma California (the “Company”), Delaware Merger Subsidiary, Inc., a Delaware corporation and wholly-owned subsidiary of the Company (“Merger Subsidiary”), and Davis Petroleum Acquisition Corp. (“Davis”) entered into an agreement and plan of merger and reorganization, as subsequently amended on September 2, 2016 (the “Merger Agreement”), providing for the merger of Yuma California with and into the Company (the “Reincorporation Merger”) and the merger of Merger Subsidiary with and into Davis (the “Merger”). The Reincorporation Merger and the Merger were consummated on October 26, 2016. In connection with the Reincorporation Merger, Yuma California converted each outstanding share of its 9.25% Series A Cumulative Redeemable Preferred Stock, no par value per share (the “Series A Preferred Stock”), into 35 shares of its common stock, no par value per share (the “Yuma California Common Stock”), and then each share of Yuma California Common Stock was exchanged for one-twentieth of one share of common stock, $0.001 par value per share, of the Company (the “Common Stock”). In connection with the Merger, the Company issued approximately 7,455,000 shares of Common Stock to former holders of common stock of Davis and approximately 1,754,000 shares of Series D Convertible Preferred Stock, $0.001 par value per share (the “Series D Preferred Stock”), of the Company, to former holders of Davis preferred stock. After the Reincorporation Merger and the Merger, the Company had approximately 12,201,000 shares of Common Stock issued and outstanding.
 
In connection with the Davis merger, on October 26, 2016, we entered into a Credit Agreement providing for a $75.0 million 3-year revolving credit facility (the “Credit Agreement”) with SG Americas Securities, LLC (“SG Americas”) as Lead Arranger and Bookrunner, Société Générale S.A. as Administrative Agent and the lenders party thereto. The Credit Agreement replaces our existing credit agreement. The initial borrowing base of the Credit Agreement is $44.0 million, and is subject to redetermination as of January 1, 2017 as well as April 1st and October 1st of each year. As of October 26, 2016, we had approximately $39.5 million outstanding under the Credit Agreement. All of the obligations under the Credit Agreement, and the guarantee of those obligations, are secured by substantially all of our assets and customary financial covenants have been made.
 
Please refer to our annual report on Form 10-K/A for the year ended December 31, 2015, our Form 10-Q for the quarterly periods ended March 31, 2016, June 30, 2016, and September 30, 2016 and all our filings with the SEC for further information.
 
 
7
 
 
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, estimates of reserve and production volumes, the anticipated timing for closing the proposed merger and the ability of the Company to enter into an amendment to its credit agreement. Forward-looking statements are based on current expectations and assumptions and analyses made by Yuma and Davis 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 possibility that the companies may be unable to obtain stockholder approval or satisfy the other conditions to closing; the possibility that the combined company may be unable to obtain an acceptable reserve-based credit facility; that problems may arise in the integration of the businesses of the two companies; that the acquisition may involve unexpected costs; 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 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 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.  Yuma’s annual report on Form 10-K/A for the year ended December 31, 2015, quarterly reports on Form 10-Q, recent current reports on Form 8-K, and other SEC filings discuss some of the important risk factors identified that may affect its business, results of operations, and financial condition. Yuma and Davis undertake no obligation to revise or update publicly any forward-looking statements, except as required by law.
 
For more information, please contact:
 
James J. Jacobs
Treasurer and Chief Financial Officer
Yuma Energy, Inc.
1177 West Loop South, Suite 1825
Houston, TX 77027
Telephone: (713) 968-7000
 
 
 
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