Yangarra Resources Ltd. · TSX:YGR
Yangarra Resources — Investor Presentation (April 2023)
24 slides from Yangarra Resources's investor presentation, April 2023
Slide 1: Corporate Presentation
CORPORATE PRESENTATION TSX: YGR APRIL 2023
Slide 2: Introduction
INTRODUCTION ➢ Yangarra focuses on organic growth by developing unexploited halo Cardium sands in West Central Alberta ➢ Unique Cardium position analogous to plays such as the Montney resource play • Deep inventory of undeveloped land with ~70% of land base unbooked in 2022 reserves • Lack of legacy
Slide 3: Investment Thesis
INVESTMENT THESIS Peer Implied Group Yangarra ➢ Compelling valuation on trailing & current year metrics Averages Price* • Q1 2023 D/FFO on forecasted guidance of <0.9X 2022 EV/BOED: $36,400 $45,600 $4.97 2022 EV/DACF 2.1X 3.1X $3.62 ➢ Sustainable organic growth model • In 2022, grew production 23% &
Slide 4: Widening Valuation Gap
WIDENING VALUATION GAP ➢ Yangarra EV/NTM DACF (consensus) • Long-term avg: 4.0X • Current: 2.1X ➢ Peer Avg EV/NTM DACF (consensus) • Long-term avg: 4.6X • Current avg: 3.1X ➢ P/PDP NAV disconnect from 2022 despite stellar results from 2022 reserve report P/PDP NAV FOR 2022 RESERVES P/PDP NAV FOR 202
Slide 5: Corporate Snapshot
CORPORATE SNAPSHOT CAPITALIZATION SUMMARY 2023E GUIDANCE Share Price (Apr 24) $1.86 2021 2022 2023E Basic Shares 94.8 Options/RSUs 9.4 Avg. BOE/D 8,931 11,022 13,000 Fully Diluted 104.1 Basic Mkt. Cap. $176.3 CAPEX $89 $109 $113 Q1 2023 Net Debt $121.5 FFO $91 $177 $140 Enterprise Value $297.8 Free
Slide 6: Core Principles
CORE PRINCIPLES OWNER MODEL EARNINGS DRIVEN RETURN FOCUSED ➢ Insiders own 16% of basic shares & ➢ Focus on profitability ➢ Economic returns drive capital 23% on a fully diluted basis decisions ➢ 2022 EPS of $1.16 ➢ ~60% of new RSUs allocated to non- ➢ Infrastructure & integrated services executives
Slide 7: Expanding Halo Cardium
EXPANDING HALO CARDIUM ➢ Halo Cardium initially unlocked with the development of multi-stage fracked horizontal wells ➢ Recent developments show that the halo Cardium is much larger in aerial extent than just a thin edge around conventional Cardium pools ➢ Virgin halo Cardium can be developed optima
Slide 8: West Ferrier & New Chambers Area
WEST FERRIER & NEW CHAMBERS AREA Pre 2020 West Ferrier 05-16 & 08-16 Pads ➢ Pace of industry activity increased since Chambers 2020, active large producers in the area include: • Peyto, TAQA, Westbrick ➢ Yangarra built Chambers position and recently drilled 3 wells to test acreage ➢ Both West Ferrie
Slide 9: Cow Lake & Chedder
COW LAKE & CHEDDER Chedder ➢ Lower rate wells but sustained by shallower liquids decline profile Chedder ➢ Yangarra recently hired a 3rd party to Cow Lake conduct study on ideal well-spacing & frack stage count Cow Lake ➢ Significant runway of inventory development ➢ Recent results with completions
Slide 10: Willesden Green
WILLESDEN GREEN West Willesden Green East Willesden Green ➢ Typically higher IP rates than West Willesden Green ➢ Plenty of infill opportunities East Willesden Green ➢ Limited ability to grow land base West Willesden Green ➢ Lower gas drive but higher oil cuts, resulting in lower IPs ➢ Yangarra expe
Slide 11: Reserves & Inventory
RESERVES & INVENTORY ➢ As at YE 2022, the Company had • $522 million in PDP NPV10 reserves, PDP RLI 6.1 years • $1.4 billion in total proved NPV10 reserves, total proved RLI 20.2 years • $2.0 billion in 2P NPV10 reserves, 2P RLI 33.9 years ➢ Reserve bookings for total proved and 2P reserves a result
Slide 12: Environment
ENVIRONMENT Scope 1 Emissions & Production Methane & Vent Reductions 14,000 140,000 45,000 1,900 12,000 130,000 40,000 Scope 1 (CO2e tonnes) 1,700 Vent (CO2e tonnes) Methane (Tonnes) 10,000 35,000 120,000 1,500 8,000 30,000 BOE/D 110,000 1,300 6,000 1,100 25,000 100,000 4,000 900 20,000 2,000 90,000
Slide 13: Social
SOCIAL Employee Safety Employee Statistics ➢ Total full-time staff of 71 increased by 6 from 2021 80 180,000 • Corporate staff at 13 in 2022; 15 currently in 2023 Exposure hours (direct employees) 70 160,000 60 140,000 • Increased field staff by 6 employees 120,000 50 100,000 40 80,000 ➢ 31% of corp
Slide 14: Governance
GOVERNANCE Net Income (millions) Return on Capital Employed $120 25.0% $100 20.0% $80 15.0% $60 10.0% $40 5.0% $20 Report Card – 2022 Governance Principles $- ➢ Full 2022 data will be available post year-end results ➢ 0.0%Ownership model focused on profitability 2016 2017 2018 2019 2020 2021 2022 20
Slide 15: Oil Field Services (OFS) Group
OIL FIELD SERVICES (“OFS”) GROUP ➢ Yangarra’s internally owned & operated OFS group works exclusively on Yangarra projects • Yangarra took advantage of low-pricing during 2020 to buy equipment • OFS group will help offset inflationary pressures ➢ Reduced costs by • 50% for pipeline costs compared to
Slide 16: Leadership
LEADERSHIP MANAGEMENT TEAM BOARD OF DIRECTORS Jim Evaskevich* - 30+ years of extensive executive experience Gordon Bowerman - President of Cove Resources Ltd. CEO - Strong field & drilling operational background Chairman - 50+ years of oil & gas experience Gurdeep Gill, CFA* - 20+ years of experienc
Slide 17: Appendix
APPENDIX RISK MANAGEMENT, ANALYST COVERAGE, PRESENTATION FOOTNOTES & FORWARD LOOKING STATEMENTS yangarra resources ltd. APRIL 2023| PG 17 (Refer to end of presentation for slide notes & advisories)
Slide 18: Analyst Coverage
ANALYST COVERAGE Acumen Capital Finance Partners Ltd. Cormark Securities Inc. Peters & Co Trevor Reynolds Garett Ursu, CFA Conrad Bereznicki treynolds@acumencapital.com gursu@cormark.com cbereznicki@petersco.com (403) 410-6842 (403) 750-7221 (403) 261-2291 ATB Capital Markets National Bank Financial
Slide 19: Presentation Footnotes
PRESENTATION FOOTNOTES APRIL 2023 ➢ Slide 3: For FFO see definition on presentation footnotes; Sensitivities and upside scenario assumes US$2.00 differential, USD/CAD F/X of 1.35, and production composition of 24% oil, 55% natural gas and balance NGLs. FCF calculation is based on using mid-point of
Slide 20: Presentation Footnotes
PRESENTATION FOOTNOTES APRIL 2023 Non–IFRS and Additional IFRS Measures This document contains “funds flow from (used in) operations”, which is an additional IFRS measure. The Company uses funds flow generated from (used in) operations as a key measure to demonstrate the Company’s ability to generat
Slide 21: Forward Looking Statements
FORWARD LOOKING STATEMENTS This presentation contains a summary of management's assessment of results and should be read in conjunction with the Consolidated Financial Statements and related Management's Discussion and Analysis for the year ended December 31, 2022, as filed on the SEDAR profile of Y
Slide 22: Forward Looking Statements (Cont.)
FORWARD LOOKING STATEMENTS (CONT.) The forward-looking statements contained in this presentation are made as of the date on the front page and the Company assumes no obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, fut
Slide 23: Non-GAAP Measures & Analogous Information
FORWARD LOOKING STATEMENTS NON-GAAP MEASURES & ANALOGOUS INFORMATION This presentation contains references to measures used in the oil and natural gas industry such as “netback”, “net debt” and “cash flow”. These measures do not have standardized meanings prescribed by International Financial Report
Slide 24: Reserve Definitions
FORWARD LOOKING STATEMENTS RESERVE DEFINITIONS 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 conv
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