Yangarra Announces 2025 Year End Financial and Operating Results and Reserves

Yangarra Resources Ltd. ("Yangarra" or the "Company") (TSX: YGR) announces its financial and operating results and reserves for the year ended December 31, 2025.

2025 Operations Review

• Yangarra drilled 14 wells during 2025, spending $43.6 million on drilling & completions. Three of the 14 wells in the program were not on-stream at of year-end
• During 2025, Yangarra dedicated $8.5 million of strategic capital designed to create long-term value by allowing the Company to access new areas and/or tie-in drilling opportunities that would have required third-party infrastructure, including upgrades to existing facilities and one-time expenditures to reduce long-term operating costs. This included major pipeline work connecting new core areas with existing infrastructure and capital invested in a lower-risk exploration play.
• Land purchases and acquisitions totaled $6.1 million, adding potential locations targeting both the Cardium and the emerging Belly River play. Yangarra focused on multi-zonal prospects that will allow the Company to leverage existing infrastructure, including surface access.
• Yangarra spent $1.2 million on abandonment and reclamation activities in 2025, versus the mandatory minimum spend from the AER of $0.6 million.
• The Company's Board of Directors has approved a capital budget of $60 million for 2026, which is intended to hold production at 10,000 boe/d.
• In 2025, only 60% of the Company's total capital budget resulted in production additions during the year, with a five-month pause in drilling & completions due to weaker commodity prices. The outlook for 2026 is more positive than 2025, especially for natural gas prices as a result of increasing LNG egress, especially when combined with Yangarra's healthy hedge program.
• As a result of the 2025 strategic spend, the majority of the 2026 capital program will now be geared towards drilling and completions spread throughout the year with no unexpected pauses in activity other than potentially during spring-break. This program should result in a smoother growth profile of production for the year.

2025 Highlights

• Average production of 10,003 boe/d (42% liquids), a decrease of 5% from 2024
• Oil and gas sales of $115.3 million, a decrease of 14% from 2024
• Funds flow from operations of $62.8 million ($0.57 per share - fully diluted) a decrease of 17% from 2024
• Adjusted EBITDA of $67.6 million ($0.62 per share - fully diluted)
• Net income of $15.0 million ($0.14 per share - fully diluted), resulting in an income margin of 13%
• Return on capital employed of 4%
• Operating costs of $8.64/boe (including $3.39/boe of transportation costs)
• Operating netback of $21.27/boe
• Operating margin of 67% and funds flow from operations margin of 54%
• G&A costs of $1.55/boe
• Royalties at 6% of oil and gas revenue
• Capital expenditures of $64.1 million (including $6.1 of raw land purchases)
• Adjusted net debt of $106.7 million
• Retained earnings of $353.0 million
• Decommissioning liabilities of $17.2 million (discounted)

Fourth Quarter Highlights

• Average production of 9,577 boe/d (44% liquids), a 6% decrease from the same period in 2024
• Oil and gas sales of $27.2 million, a decrease of 12% from the same period in 2024
• Funds flow from operations of $14.1 million ($0.13 per share - fully diluted), a decrease of 13% from the same period in 2024.
• Adjusted EBITDA of $15.2 million ($0.14 per share - fully diluted), a decrease of 17% from the same period in 2024
• Net income of $0.5 million ($0.01 per share - fully diluted)
• Operating costs of $8.68/boe (including $3.70/boe of transportation costs)
• Operating netback of $20.61/boe
• Operating margin of 67% and funds flow from operations margin of 52%
• G&A costs of $2.06/boe
• Royalties at 7% of oil and gas revenue
• All in cash costs of $14.72/boe
• Capital expenditures of $19.2 million
• Adjusted net debt to fourth quarter annualized funds flow from operations of 1.89 : 1

Operations Update

Reserve Report Highlights

All reserves information contained in this press release are based on the Company's 2025 NI 51-101 oil and gas reserve report as prepared by Deloitte LLP (The "2025 Reserve Report").

Summary

• Yangarra has now been developing the halo Cardium play for a number of years which provides more actual well performance data along with more confidence in spacing units for well placement. As a result, the type curves in the reserve report were adjusted to match actual performance by area and by spacing unit.
• This long-term lookback on well performance has had no impact on PDP reserves but has resulted in a moderation on proved undeveloped & probable bookings to match actual performance.
• Oil pricing in the report is down 15% and natural gas pricing is up 10% compared to last year.

Proved Developed Producing ("PDP") Reserves

• 41 million boe (5% increase from 2024)
• Net present value before tax discounted at 10% ("NPV10") of $454 million (9% decrease from 2024)
• Yangarra's PDP finding and development ("F&D") cost is $11.95/boe resulting in a recycle ratio of 1.78 times
• PDP net asset value per fully diluted common share less Asset Retirement Obligations ("NAV per FD Share") of $3.00
• PDP Reserve Life Index ("RLI") of 11.80 years
• PDP additions replaced 149% of 2025 production

Total Proved reserves ("1P")

• 81 million boe (4% decrease from 2024)
• NPV10 of $825 million (22% decrease from 2024)
• 1P future development costs of $311 million, a $19 million reduction from 2024
• Yangarra's 1P F&D cost over the last three years averaged $6.33/boe resulting in a recycle ratio of 3.78 times
• 1P NAV (less ARO) per FD Share of $6.35
• RLI of 23.05 years

Proved plus probable reserves ("2P")

• 119 million boe (11% decrease from 2024)
• NPV10 of $1.1 billion (22% decrease from 2024)
• 2P future development costs of $461 million, a $34 million reduction from 2024
• Yangarra's 2P F&D cost over the last three years averaged $5.91/boe resulting in a recycle ratio of 4.05 times
• 2P NAV (less ARO) per FD Share of $8.95
• RLI of 33.93 years

Net Asset Value ("NAV")

Financial Summary

Company Netbacks ($/boe)

Business Environment

Operations Summary

Net petroleum and natural gas production, pricing and revenue are summarized below:

Adjusted Net Debt Summary

The following table summarizes the change in adjusted net debt for the years ended December 31, 2025 and 2024:

Capital Spending

Capital spending is summarized as follows:

Oil and Gas Reserves

The following tables summarize certain information contained in the 2025 Reserve Report. The 2025 Reserve Report encompasses 100% of Yangarra's oil and gas properties and was prepared in accordance with definitions, standards and procedures contained in the Canadian Oil and Gas Evaluation Handbook and National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities ("NI 51-101") by Deloitte.

Summary of Oil and Gas Reserves ⁽¹⁾⁽²⁾
(Company Share Gross volumes based on forecast price and costs)

Summary of Net Present Values of Future Net Revenue (Before Tax) ⁽¹⁾⁽⁴⁾
(Based on forecast price and costs)

Reconciliations of Changes in Reserves

The following table sets out a reconciliation of the changes in the Corporation's reserves as at December 31, 2025 against such reserves at December 31, 2024 based on forecast prices and cost assumptions:

Forecast Prices Used in Estimates

The forecast price and market forecasts prepared by Deloitte are based on information available from numerous government agencies, industry publication, oil refineries, natural gas marketers, and industry trends. The prices are Deloitte's best estimate of how the future will look, based on the many uncertainties that exist in both the domestic Canadian and international petroleum industries. Deloitte considers the current monthly trends, the actual and trends for the year to date, and the prior year actual in determining the forecast. The crude oil and natural gas forecasts are based on yearly variable factors weighted to higher percent in current data and reflecting a higher percent to the prior year historical. These forecasts are Deloitte's interpretation of current available information and while they are considered reasonable, changing market conditions or additional information may require alteration from the indicated effective date.

Inflation forecasts and exchange rates, an integral part of the forecast, have also been considered.

Oil, NGL, and natural gas base case prices, utilized by Deloitte in the Deloitte Reserve Report were as follows:

Finding and Development Costs

Yangarra's F&D costs for 2025, 2024 are presented in the tables below. The costs used in the F&D calculation are the capital costs related to land acquisition and retention; drilling; completions; tangible well site; tie-ins; and facilities, plus the change in estimated future development costs as per the independent reserve report. Acquisition costs are net of any proceeds from dispositions of properties. Due to the timing of capital costs and the subjectivity in the estimation of future costs, the aggregate of the exploration and development costs incurred in the most recent financial year and the change during that year in estimated future development costs generally will not reflect total finding and development costs related to reserve additions for that year. The reserves used in this calculation are Company net reserve additions, including revisions.

Proved Developed Producing Finding & Development Costs ($ millions)

Proved Finding & Development Costs ($ millions)

Proved plus Probable Finding & Development Costs ($ millions)

Annual General Meeting of Shareholders

The Company's Annual General Meeting of Shareholders is scheduled for 10:00 AM on Friday May 1, 2026 in the Tillyard Management Conference Centre, Main Floor, 715 5th Avenue SW, Calgary, AB.

Year End Disclosure

The Company's December 31, 2025 audited consolidated financial statements, management's discussion and analysis and annual information form have been filed on SEDAR+ (www.sedarplus.ca) and are available on the Company's website (www.yangarra.ca).

Oil and Gas Advisories

Natural gas has been converted to a barrel of oil equivalent (boe) using 6,000 cubic feet (6 Mcf) of natural gas equal to one barrel of oil (6:1), unless otherwise stated. The boe conversion ratio of 6 Mcf to 1 Bbl is based on an energy equivalency conversion method and does not represent a value equivalency; therefore boes may be misleading if used in isolation. Figures that are presented on a boe basis herein are calculated as the total aggregate amount for the period divided by boe production volumes for the period. References to natural gas liquids ("NGLs") in this news release include condensate, propane, butane and ethane and one barrel of NGLs is considered to be equivalent to one barrel of crude oil equivalent (boe). One ("BCF") equals one billion cubic feet of natural gas. One ("Mmcf") equals one million cubic feet of natural gas.

This press release contains metrics commonly used in the oil and natural gas industry which have been prepared by management, such as "operating netback" and "operating margins". These terms do not have a standardized meaning and may not be comparable to similar measures presented by other companies and, therefore, should not be used to make such comparisons. For additional information regarding netbacks and operating margins, see "Non-IFRS Financial Measures".

Management uses these oil and gas metrics for its own performance measurements and to provide shareholders with measures to compare Yangarra's operations over time. Readers are cautioned that the information provided by these metrics, or that can be derived from metrics presented in this press release, should not be relied upon for investment or other purposes.

Non-IFRS Financial Measures

This press release contains various specified financial measures that do not have standardized meanings as prescribed by International Financial Reporting Standards ("IFRS"). These reported amounts and their underlying calculations are not necessarily comparable or calculated in an identical manner to a similarly titled measure of other companies where similar terminology is used. Readers are cautioned that such financial measures should not be construed as alternatives to or more meaningful than the most directly comparable IFRS measures as indicators of the Company's performance. These measures have been described and presented in this press release in order to provide shareholders and potential investors with additional information regarding the Company's liquidity and its ability to generate funds to finance its operations and should not be considered in isolation.

Please refer to the management discussion and analysis for the year ended December 31, 2025, for further discussion on the Non-IFRS financial measures presented in this press release.

Funds flow from operations

Funds flow from operations ("FFO") should not be considered an alternative to, or more meaningful than, cash provided by operating, investing and financing activities or net income as determined in accordance with IFRS, as an indicator of Yangarra's performance or liquidity. Management uses FFO to analyze operating performance and leverage and considers FFO to be a key measure as it demonstrates the Company's ability to generate cash flow necessary to fund future capital investments and to repay debt, if applicable. FFO is calculated using cash flow from operating activities before changes in non-cash working capital and decommissioning costs incurred.

The following table reconciles FFO to cash flow from operating activities, which is the most directly comparable measure calculated in accordance with IFRS:

Yangarra presents FFO per share whereby per share amounts are calculated using weighted average shares outstanding consistent with the calculation of net income per share.

Funds from operations netback is calculated on a per boe basis.

Adjusted EBITDA

Yangarra defines Adjusted EBITDA as earnings before interest, taxes, depletion and depreciation, which represents EBITDA, excluding changes in the fair value of commodity contracts. Management believes that Adjusted EBITDA is a useful measure, which provides an indication of the results generated by the Yangarra's primary business activities prior to consideration of how those activities are financed, amortized or taxed. The most directly comparable IFRS financial measure to Adjusted EBITDA is net income (loss). The following table provides a reconciliation of Adjusted EBITDA to net income (loss).

Adjusted Net Debt

Yangarra defines Adjusted net debt as the sum of our existing credit facilities, trade and other payables, and trade receivables and prepaids. Yangarra uses Adjusted net debt to assess efficiency, liquidity and the general financial strength of the Company. The most directly comparable IFRS financial measure to Adjusted net debt is Bank Debt. The following table provides a calculation of adjusted net debt.

Adjusted net debt to fourth quarter annualized FFO

Adjusted net debt to fourth quarter annualized FFO is a non-GAAP financial ratio calculated as adjusted net debt divided by fourth quarter annualized FFO.

Netbacks

The Company considers corporate netbacks to be a key measure that demonstrates Yangarra's profitability relative to current commodity prices. Corporate netbacks are comprised of operating, field operating, FFO and net income (loss) netbacks.

Yangarra calculates Field Operating netback as the average sales price of its commodities (including realized gains (losses) on financial instruments) less royalties, operating costs and transportation expenses. Operating netback starts with Field Operating netback and subtracts realized gains (losses) on financial instruments. FFO netback starts with the Operating netback and further deducts general and administrative costs, finance expense and adds finance income. To calculate the net income (loss) netback, Yangarra takes the Operating netback and deducts share-based compensation expense as well as depletion and depreciation charges, accretion expense, unrealized gains (losses) on financial instruments, any impairment or exploration and evaluation expense and deferred income taxes.

FFO margins and operating margins

FFO margins and operating margins are calculated as the ratio of FFO netbacks to sales price and operating netback to sales price, respectively.

Forward Looking Information

This press release contains forward-looking statements and forward-looking information (collectively "forward-looking information") within the meaning of applicable securities laws relating to the Company's plans and other aspects of our anticipated future operations, management focus, strategies, financial, operating and production results and business opportunities. Forward-looking information typically uses words such as "anticipate", "believe", "continue", "sustain", "project", "expect", "forecast", "budget", "goal", "guidance", "plan", "objective", "strategy", "target", "intend" or similar words suggesting future outcomes, statements that actions, events or conditions "may", "would", "could" or "will" be taken or occur in the future, including, but not limited to, statements on potential completion techniques being considered. Statements relating to "reserves" are also deemed to be forward-looking statements, as they involve the implied assessment, based on certain estimates and assumptions, that the reserves described exist in the quantities predicted or estimated and that the reserves can be profitably produced in the future.

The forward-looking information is based on certain key expectations and assumptions made by our management, including expectations and assumptions concerning prevailing commodity prices, exchange rates, interest rates, applicable royalty rates and tax laws; future production rates and estimates of operating costs; performance of existing and future wells; reserve volumes; anticipated timing and results of capital expenditures; the success obtained in drilling new wells; the sufficiency of budgeted capital expenditures in carrying out planned activities; benefits to shareholders of our programs and initiatives, the timing, location and extent of future drilling operations; the state of the economy and the exploration and production business; results of operations; performance; business prospects and opportunities; the availability and cost of financing, labour and services; the impact of increasing competition; ability to efficiently integrate assets and employees acquired through acquisitions, ability to market oil and natural gas successfully and our ability to access capital.

Although we believe that the expectations and assumptions on which such forward-looking information is based are reasonable, undue reliance should not be placed on the forward-looking information because Yangarra can give no assurance that they will prove to be correct. Since forward-looking information addresses future events and conditions, by its very nature they involve inherent risks and uncertainties. Our actual results, performance or achievement could differ materially from those expressed in, or implied by, the forward-looking information and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking information will transpire or occur, or if any of them do so, what benefits that we will derive therefrom. Management has included the above summary of assumptions and risks related to forward-looking information provided in this press release in order to provide security holders with a more complete perspective on our future operations and such information may not be appropriate for other purposes.

Readers are cautioned that the foregoing lists of factors are not exhaustive. Additional information on these and other factors that could affect our operations or financial results are included in reports on file with applicable securities regulatory authorities and may be accessed through the SEDAR website (www.sedarplus.com).

These forward-looking statements are made as of the date of this press release and we disclaim any intent or obligation to update publicly any forward-looking information, whether as a result of new information, future events or results or otherwise, other than as required by applicable securities laws.

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

Neither the TSX nor its Regulation Service Provider (as that term is defined in the Policies of the TSX) accepts responsibility for the adequacy and accuracy of this release.

SOURCE Yangarra Resources Ltd.