Exhibit 99.1
 |
Yuma Energy, Inc.
|
NEWS
RELEASE
Yuma Energy, Inc. Reports Updated Corporate
Developments
HOUSTON, TX – (PR Newswire – May 21, 2019) – Yuma
Energy, Inc. (NYSE American: YUMA) (“Yuma”
or the “Company,” “we” or
“our”) announced today
that on May 20, 2019, it filed its quarterly report on Form 10-Q
for the three months ended March 31, 2019 with the Securities and
Exchange Commission (“SEC”). Investors and
stockholders may obtain our Form 10-Q, Form 10-K and other
documents filed with the SEC free of charge at the SEC’s
website, www.sec.gov. In addition,
copies of our filings are available on our website at
www.yumaenergyinc.com.
Recent Developments
On April 26, 2018, the Company closed the previously announced sale
of our California assets for $2.1 million, resulting in net
proceeds of $1.8 million. Approximately $1.2 million was applied
against the principal of our outstanding debt, and the balance
($0.6 million) provided working capital to the
Company.
On March 1, 2019, Mr. Anthony C. Schnur was appointed Chief
Restructuring Officer, and on March 28, 2019, he was appointed
Interim Chief Executive Officer of the Company following the
departure of Mr. Sam L. Banks. On April 5, 2019, Mr. Schnur was
further appointed Interim Chief Financial Officer in addition to
his other duties. As reported, Mr. Schnur will not receive any
additional compensation for the incremental duties.
The Company believes that with the leadership and management of Mr.
Schnur, it has the requisite experience and expertise in place to
affect a restructuring of its business operations and its balance
sheet; however, significant uncertainty exists as to the viability
of a restructuring and the Company’s ability to continue as a
going concern.
During the first quarter and continuing to date, the Company has
taken significant steps to reduce corporate overhead. These
reductions will be reflected in the Company’s second quarter
results. Additional cost cutting measures are being considered and
will be implemented when determined that those reductions will not
impair the Company’s ability to reasonably manage the
business.
In addition, the Company is conducting a comprehensive review of
its operations, particularly regarding those wells and facilities
with high operating costs. Funds allocated to field work will be
directed toward those activities that provide short payback
periods, maintain production levels, or provide additional
production from higher margin operations. We do not anticipate our
activities will include expensive workovers or the drilling of new
wells through the restructuring process.
Multiple options to restructure the Company are being investigated
and pursued. These include, but are not limited to, restructuring
the Company’s credit facility, which may involve the sale of
our existing commercial bank loan to a third party, sales of
additional properties, or acquisitions from or with a financial
sponsor to create a larger company with greater operating
activities. The Company is engaged in various discussions on these
fronts and continues to work with Seaport Global Securities LLC, an
investment banking firm, to advise the Company on its
strategic alternatives.
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Please refer to our recently filed Quarterly Report on Form 10-Q
for the three months ended March 31, 2019 and our Annual report on
Form 10-K for the year ended December 31, 2018, and all our filings
with the SEC for further information.
Management Comments
Mr. Anthony C. Schnur, Interim Chief Executive Officer and Chief
Restructuring Officer stated, “We are acting swiftly and diligently to
identify an actionable restructuring solution to better position
the Company for the future benefit of all stakeholders. We are
committed to this process and pursuing a strategy and resulting
transaction which may include additional asset sales, one or more
acquisitions, restructured debt facilities, equity financings
and/or a corporate merger. We believe that a successful resolution
to Yuma’s financial circumstances will require not only
improving cash flow margins, but a likely blend of debt refinancing
and asset combinations.”
Continuing Uncertainty
The
Company’s audited consolidated financial statements for the
year ended December 31, 2018, included a going concern
qualification. The risk factors and uncertainties described in our
SEC filings for the year ended December 31, 2018 and the quarter
ended March 31, 2019, as well as continuing events of default under
our credit agreement, and our substantial working capital deficit
of approximately $40.0 million as of March 31, 2019, including
approximately $34.0 million of bank debt, continue to raise
substantial doubt about the Company's ability to continue as a
going concern.
Other Matters
Finally,
as previously reported, the
Company received a deficiency letter from the NYSE American stock exchange (“NYSE
American”) indicating the Company’s common stock has
been selling for a low price per share for a substantial period of
time, and the Company must demonstrate an improved share price or
effect a reverse stock split of its common stock by no later than
July 4, 2019, in order to maintain the listing of the
Company’s common stock on the NYSE American. The Company
could be subject to immediate de-listing should the stock price
decline to $0.06. The NYSE American notification of
continued listing deficiency does not affect the Company’s
business operations or its SEC reporting obligations. At present,
the Company intends to affect a reverse stock split to maintain its
listing, pending the approval of our shareholders at our annual
meeting scheduled for June 12, 2019.
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 activities have focused on inland and onshore
properties, primarily located in central and southern Louisiana and
southeastern Texas. Its common stock is listed on the NYSE American
under the trading symbol “YUMA.”
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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”).
Any and all 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 Company’s annual report on Form 10-K for the
year ended December 31, 2018, 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. The
Company undertakes no obligation to revise or update publicly any
forward-looking statements, except as required by law.
For more information, please contact
Anthony
(“Tony”) Schnur
Interim
Chief Executive Officer, Chief Restructuring Officer
Yuma
Energy, Inc.
1177
West Loop South, Suite 1825
Houston,
TX 77027
Telephone:
(713) 968-7000
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