Yangarra Provides Operations Update

Press Release

January 7, 2016 – Yangarra Resources Ltd. (“Yangarra” or the “Company”) (TSX:YGR) provides an operations update.

Fourth quarter 2015 production is estimated to be 2,600 boe/d, with two new wells (one 1.0 mile and one 1.5 mile) expected to be on-stream in January once mandatory static gradients are performed.

Yangarra’s strong gross profit (“GP”) margins from operations (77% GP, Q3 2015) continue despite the low commodity prices. Cash flow netbacks for Q3 were $20.89/boe. The combination of low cost structure and product mix of light sweet oil and liquids rich natural gas, position the Company to remain profitable even if commodity prices decline further from current levels.

During the fourth quarter, the Company drilled and completed two wells and completed three additional wells that were drilled earlier in the year. All wells drilled in 2015 used cemented liners and sliding sleeves for completions. The Company has progressively reduced stage intervals on each successive well through 2015 and production results have improved with the tighter spacing.

Initial Production (“IP”) rates on recent wells are as follows:

02/1-26-41-8 W5 (1.5 mile) IP 120     341 boe/d 68% oil

02/13-9-41-7W5 (2.0 mile) IP 75        153 boe/d 91% oil

1-36-37-8W5 (1.0 mile) IP 60             403 boe/d 61% oil

3-26-37-8W5 (1.0 mile) IP 55             245 boe/d 54% oil

Sub-Debt Facility

Effective December 31, 2015 the $10 million subordinated term facility with Alberta Treasury Branch (“ATB”) was not utilized and therefore was terminated as per the agreement. The $80 million revolving operating demand loan remains in place and unchanged, with the next review scheduled for May 2016. Net debt as at December 31, 2015 is estimated to be $60 million.

Corporate Strategy

Yangarra`s corporate strategy for 2016 in the current commodity environment is to maintain 2,500 – 2,750 boe/d while spending within cash-flow. The future growth focus continues to be on Cardium land accumulation and concentrating ownership in existing properties while commodity prices are low.

The 2016 drilling program will be weighted toward the second half with first half expenditures primarily weighted to inventory accumulation.

Hedging

Yangarra has 35% – 40% of its oil production hedged for 2016 in a costless collar with a $73.45 CDN/bbl floor and an $85.00 CDN/bbl ceiling.

For further information, please contact James Evaskevich, President and Chief Executive Officer at (403) 262-9558.

AB2