Yangarra Resources Ltd. · TSX:YGR
Yangarra Resources — Investor Presentation (March 2016)
20 slides from Yangarra Resources's investor presentation, March 2016
Slide 1: Corporate Presentation March 2016
Corporate Presentation March 2016 TSX: TSX:YGR YGR
Slide 2: Corporate Snapshot
Corporate Snapshot Capitalization Reserves and Locations (2) Ticker TSX: YGR mmboe NPV10 ($mm) Shares Outstanding (mm) Proved Developed 5.6 $97.9 Basic 67.7 Total Proved 24.7 $315.9 Options (weighted avg. price $1.83) 6.1 2P 40.6 $499.5 Fully Diluted 74.0 Total Cardium Locations 462 Gross (270 Net)
Slide 3: Corporate Strategy
Corporate Strategy • Establish Sustainability • Target and maintain 2,750 – 3,000 boe/d and continue building deep inventory for when commodity prices turn • Prepare for future growth • Acquire Cardium land at the low-end of the cycle • Consolidate partner interests • Secure infrastructure capacity
Slide 4: People
People Management Team Jim Evaskevich, President & CEO Randall Faminow, VP, Land • 30+ years extensive executive experience with strong • 30+ years of experience in all aspects of oil and gas land work, operations background including negotiation, acquisitions and divestments, contracts and mergers
Slide 5: Why Own Yangarra?
Why Own Yangarra? • Top Decile Full Cycle rates of return • Low-cost operator, high netbacks • Low-cost philosophy, not just a result of current low commodity prices • Central Alberta Cardium formation focus • Large future drilling inventory • Consistent, low risk Cardium economics TSX: YGR 5
Slide 6: Full Cycle Returns
Full Cycle Returns • Capital allocation is determined based on narrowing the gap between half cycle and full cycle returns Half Cycle IRR ⁽¹⁾ Full Cycle IRR ⁽²⁾ Full Cycle with Duvernay 90% 80% 70% 60% 50% IRR 40% 79% 67% 65% 30% 20% 41% 44% 34% 31% 33% 31% 24% 26% 27% 10% 12% 0% 2010 2011 2012 2013
Slide 7: F&D and Recycle Ratios
F&D and Recycle Ratios Finding and Development Recycle Ratios $40.00 7.0x $35.00 6.0x $30.00 5.0x $25.00 4.0x $/boe $20.00 3.0x $15.00 2.0x $10.00 $5.00 1.0x $- 0.0x 2010 2011 2012 2013 2014 2015 2010 2011 2012 2013 2014 2015 Proven F&D P+P F&D Proven Recycle P+P Recycle • Consistent improvement in,
Slide 8: Low-Cost Producer, Low-Cost Driller
Low-Cost Producer • Company founded on a low cost operations Netback Analysis ($/boe) philosophy $60.00 • Consistent low cost mentality in high and low $50.00 commodity price environments $40.00 • We own and operate our facilities resulting Realized Price⁽¹⁾ in lower operating costs (no hidden fees
Slide 9: Updated Completion Technology
Updated Completion Technology • Cemented liners and sliding sleeve • Tighter well frac spacing Completion Stages and Costs 30 $250,000 • Increased ability to target fracs • Better frac isolation, 25 • No longer losing energy to packers $200,000 • Improved initial rates Number Of Stages 20 Cost per S
Slide 10: Average 1-mile Well Costs ($M)
Average 1-mile Well Costs ($M) $6,000 $5,000 473 $4,000 1,807 373 Equip $3,000 298 Complete 1,376 273 173 Drill 1,187 $2,000 1,134 970 2,832 $1,000 2,134 1,563 1,808 1,578 $0 2011 2012 2013 2014 2015 Monobore Drilling Cemented Completions Service Costs Reductions Extended Reach TSX: YGR 10
Slide 11: Cardium Formation
Cardium Formation • Interest in 100+ sections • 85+ horizontal wells drilled • Secured firm capacity on gas systems • Increased firm capacity from 0 in 2014 to 6.0 Yangarra mmcf/d currently Field Office Red Deer 80 km Rocky Mountain House TSX: TSX:YGR YGR 11
Slide 12: Cardium Drilling Inventory
Cardium Drilling Inventory (1) Drilling Locations (1-mile laterals) Proportionate (gross locations) 500 450 115 North 78 Ferrier 400 Locations Willesden 350 Green 84 2-mile Locations Locations 212 1-mile Locations 300 Locations 250 200 269 150 Willesden Green 100 Locations 38 1.5-mile 50 Locations 0
Slide 13: Risk Management Program
Risk Management Program Oil Hedges 2016: 400 bbl/d costless collar C$73.45 WTI/bbl and a ceiling of C$85.00 WTI/bbl 2016: 400 bbl/d Edmonton par to WTI differential at US$3.95/bbl 2016: 200 bbl/d at C$54.00 WTI/bbl April – June 2016 Interest Rate Swaps 4.70% Fixed rate on $10 million (June 2014-June
Slide 14: Analyst Coverage
Analyst Coverage Acumen Capital Finance Partners Limited FirstEnergy Capital Corp. Trevor Reynolds Michael Hearn, CA Oil and Gas Research Analyst Research Analyst - Exploration & Production treynolds@acumencapital.com mjhearn@firstenergy.com (403) 410-6842 (403) 444-8273 AltaCorp Capital Inc. Indust
Slide 15: Appendix
on Itd. Appendix TSX: YGR 15
Slide 16: Glauconite Formation
Glauconite Formation TSX: YGR 16
Slide 17: Duvernay South Block
Duvernay South Block TSX: YGR 17
Slide 18: Forward-looking Statements
Forward-looking Statements Statements in this presentation may contain forward-looking information including expectations of future production and components of cash flow and earnings. Forward looking statements or information are based on current expectations, estimates and projections that involve
Slide 19: Reserve Definitions
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 conversion method and does not
Slide 20: Yangarra Resources Ltd.
Yangarra Resources Ltd. 1530, 715 – 5 Ave. SW Calgary, Alberta T2P 2X6 403-262-9558 TSX: YGR 20
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