Yangarra Resources Ltd. · TSX:YGR
Yangarra Resources — Investor Presentation (February 2020)
23 slides from Yangarra Resources's investor presentation, February 2020
Slide 1: Corporate Presentation
CORPORATE PRESENTATION TSX: YGR FEBRUARY 2020
Slide 2: Yangarra Highlights
YANGARRA HIGHLIGHTS TRANSFORMATIVE 2019 SETS THE STAGE FOR 2020 ONWARDS Environmentally & socially responsible allocator of capital that focuses on full-cycle returns 20+ years for shareholders by generating positive net-income earnings in the energy sector Inventory • Sept 30 YTD 2019 EPS of $0.4
Slide 3: Corporate Snapshot
CORPORATE SNAPSHOT WELL CAPITALIZED, STRONG INSIDER OWNERSHIP & A DEFINED RESOURCE BASE CAPITALIZATION SUMMARY CARDIUM LAND POSITION Additional Information Basic Shares mm 85.4 15% Insider Ownership Options mm 8.5 $4.34 Weighted Average Ex. Price Fully Diluted mm 93.9 22% Total Insider Ownership Mar
Slide 4: Guiding Principles
GUIDING PRINCIPLES EMPHASIS ON LONG-TERM RETURNS, MITIGATE SHORT-TERM VOLATILITY Be experts in core area of operations OPERATIONAL Meticulously concentrate on cost structure FOCUS Leverage off capital spent to date; go-forward focus on low-risk step-out drilling Addressing short-term market
Slide 5: Per Share Net Asset Values Significantly Lag Share Price
PER SHARE NET-ASSET-VALUES SIGNIFICANTLY LAG SHARE PRICE DESPITE 2019 CHALLENGES, NAVPS VALUES RELATIVELY UNCHANGED YEARLY RESERVES GROWTH & SHARE PRICE PERFORMANCE Market disconnect between NAVPS and share price belies underlying value of sustainable business plan $18.00 $18.00 • Trading at 0.36x
Slide 6: Reserves Volume Growth Per Share
RESERVES VOLUME GROWTH PER SHARE ONE-TIME SPEND ON INFRASTRUCTURE IMPACTED 2019 F&D COSTS YEARLY RESERVES GROWTH (MMBOE & PER SHARE) F&D COSTS 150 2.00 $30 $45 2P Proved Operating Netback Reserves per share (mmboe/share) 135 1.80 $40 120 1.60 $25 F&D Costs ($/boe) $35 Reserves (mmboe) 105 1.40 90 1.
Slide 7: Prudent Leverage Balanced Against Long-Term Return on Capital
PRUDENT LEVERAGE BALANCED AGAINST LONG-TERM RETURN ON CAPITAL IMPROVING BUSINESS MODEL DRIVING LONG-TERM RETURN ON CAPITAL EMPLOYED BALANCE SHEET EFFICIENCY1,2,3 RETURN ON CAPITAL EMPLOYED VS. FDC 14.0% 25,000 4.5x 23,000 20.0x 12.0% 4.0x 21,000 3.5x 10.0% 19,000 2019E ROCE is trailing twelve 15.0x
Slide 8: Leadership
LEADERSHIP EXPERIENCED & GEARED FOR DEVELOPMENT MANAGEMENT TEAM BOARD OF DIRECTORS Jim Evaskevich - 30+ years of extensive executive experience Gordon Bowerman - President of Cove Resources Ltd. President & CEO - Strong field & drilling operational background Chairman - 50+ years of oil & gas experi
Slide 9: Cardium Evolution
CARDIUM EVOLUTION CARDIUM PAYOUTS COMPETE WELL WITH OTHER NORTH AMERICAN PLAYS; CHEDDERVILLE STACKS UP EVEN BETTER CONVENTIONAL CARDIUM HALO CARDIUM CARDIUM RELATIVE TO NORTH AMERICA North American Oil and Natural Gas Plays Half-Cycle Payout Period Clearwater Marten Hills/Nipisi Mississippian Conven
Slide 10: Cardium Revolution
CARDIUM REVOLUTION BIOTURBATED ZONE CONTRIBUTES MATERIALLY TO HALO CARDIUM POTENTIAL ORIGINAL LOG & BIOTURBATED CORE EXAMPLE NEW FRAC PLANE Willesden Green T41-R6W/5 Net Pay Old Well Path Upper 2.5-4.0m Upper Sand TECHNOLOGY PROGRESSION Core analysis Porosity 10-15% Yangarra approach: Bioturb. • C
Slide 11: 2020 Plans in Focus
2020 PLANS IN FOCUS EXPAND ON SUCCESS AT COW LAKE & CHEDDERVILLE PRE-2018 LANDS In sub US$60 WTI environment, pursue high-GOR areas, like Cow Lake & Chedderville • High-rate wells drive excellent IRRs despite higher gas rates As WTI approaches US$65, deploy capital in low-GOR areas that have low
Slide 12: Cardium Inventory
CARDIUM INVENTORY DISCIPLINED APPROACH DRIVES LAND ACQUISITION STRATEGY LAND & INVENTORY SUMMARY ILLUSTRATIVE SECTION EXPLOITATION STRATEGY EXPLOITATION STRATEGY Gross Net WI 4 WELLS / 8 WELLS / Total Sections 165.5 147.8 ONE WELL SECTION SECTION Sub US$60 WTI, high-rate, high GOR Total Acres 105,
Slide 13: Risked Economics
RISKED ECONOMICS APPLYING 20% RISK FACTOR TO PREVIOUS UN-RISKED TYPE CURVES RISKED WEIGHTED-AVERAGE TYPE CURVE PRODUCTION PROFILE RISKED WEIGHTED-AVERAGE TYPE CURVE ASSUMPTIONS 1.5 Mile 450 Total (boe/d) DCET $mm $3.75 % Oil EURs & IPs will 400 IP30 - Oil bbl/d 241 62% vary across land Oil (bbl/d) b
Slide 14: Production Logistics
PRODUCTION LOGISTICS INSTRUMENTAL IN CREATING SUSTAINABLE LOW-OP COST STRUCTURE YANGARRA INFRASTRUCTURE CONVENTIONAL THINKING Build massive contiguous land base Drive down costs by overcapitalizing infrastructure (oil pipelines & gas-processing) YANGARRA: LOOK FORWARD NOT BACKWARDS Create flex
Slide 15: Environment Social Governance Strategy
ENVIRONMENT SOCIAL GOVERNANCE STRATEGY PRAGMATIC APPROACH ADDRESSES INVESTOR CONCERNS WHILE DRIVING RETURNS Yangarra focuses on creating long-term shareholder value through financial discipline while minimizing Yangarra’s environmental footprint and by operating in a safe & diverse culture Environme
Slide 16: Appendix
APPENDIX RISK MANAGEMENT, ANALYST COVERAGE, PRESENTATION FOOTNOTES & FORWARD LOOKING STATEMENTS yangarra resources ltd. FEBRUARY 2020| PG 16 (Refer to end of presentation for slide notes & advisories)
Slide 17: Analyst Coverage
ANALYST COVERAGE BROADLY COVERED BY THE STREET Acumen Capital Finance Partners Ltd. Industrial Alliance Securities Inc. Peters & Co Trevor Reynolds Michael Charlton Dan Grager treynolds@acumencapital.com mcharlton@mgisecurities.com dgrager@petersco.com (403) 410-6842 (403) 705-4978 (403) 261-2215 Al
Slide 18: Presentation Footnotes
PRESENTATION FOOTNOTES FEBRUARY 2020 Slide 2: ROCE: Trailing 12-month EBIT as at September 30, 2019 divided by (Total Assets less Current Liabilities); ROE: Trailing 12-month net income as at September 30, 2019 divided by Shareholders Equity; 2020E CFPS: Consensus FFO estimate as at February 4, 20
Slide 19: Presentation Footnotes
PRESENTATION FOOTNOTES FEBRUARY 2020 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 gene
Slide 20: 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, 2018, as filed on the SEDAR profile of Y
Slide 21: 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 22: Forward Looking Statements: Non-GAAP Measures
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 23: Forward Looking Statements: 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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