Yangarra Resources Ltd. · TSX:YGR
Yangarra Resources — Investor Presentation (February 2017)
22 slides from Yangarra Resources's investor presentation, February 2017
Slide 1: Corporate Presentation February 2017
Corporate Presentation February 2017 TSX: TSX:YGR YGR
Slide 2: Corporate Snapshot
Corporate Snapshot Capitalization Reserves and Locations (2) Ticker TSX: YGR NPV10 December 31, 2016 mmboe ($mm) Shares Outstanding (mm) Proved Developed 7.9 $139.1 Basic 79.8 Total Proved 36.5 $489.6 Options (weighted avg. price $1.19) 7.9 2P 60.6 $734.5 Fully Diluted 87.7 Total Cardium Locations (
Slide 3: Corporate Strategy
Corporate Strategy 2016 – Prepare for future growth Acquire land at the low-end of the cycle Consolidate partner interests Secure infrastructure capacity Prepare and drill (one-well) pad-drilling sites; leaving significant torque to add 3 wells on existing pads 2017 – Focus on Growth • Curre
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 • Cash costs totaled $12.71/boe • Operating costs (including transportation) of $8.14/boe • Royalties of $1.14/boe (4% of revenue) • G&A costs of $1.58/boe • Finance and interest costs of $1.85/boe • Low-cos
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 140% 120% 100% 80% IRR 131% 60% 80% 40% 79% 72% 67% 65% 20% 41% 34% 31% 33% 44% 31% 24% 26% 27% 12% 0% 2010 2011 2
Slide 7: Cardium Formation
Cardium Formation 108 (78 net) Sections of Cardium TSX: TSX:YGR YGR 7
Slide 8: Cardium 2016 Initial Production
Cardium 2016 Initial Production # Well Rate (liquids) (Stages, tons) 1 103/04-07-41-5W5 (1.5 mile) IP 90 480 boe/d 82% liquids (71 stages & 1,070 tons of sand) 2 100/01-14-41-6W5 (2.0 mile) IP 60 120 boe/d 94% liquids (74 stages & 1,120 tons of sand) 3 104/14-19-41-5W5 (1.5 mile) IP 60 506 boe/d 82%
Slide 9: Deeper Drill Path
Deeper Drill Path Conglomerate/Upper Cardium Upper Cardium Bioturbated New Well Path Old Well Path Upper Cardium Bioturbated Zone Lower Cardium Old Frac Plane New Frac Plane Upper Cardium (5-15% Porosity) 2.5-4.0m Bioturbated Zone (20-80% Sand) 3.0-7.0m 9
Slide 10: 2017 Capital Plan
2017 Capital Plan CAPEX budget for 2017 $50.0 million Budget focused on Cardium Wells -5 wells in the first quarter and 10 wells in the second half Funded with cash flow and the existing credit facilities 2017 Guidance Production (boe/d) Annual Average 4,500 – 5,000 boe/d Cash flow from operations $
Slide 11: Cardium Drilling Inventory
Cardium Drilling Inventory (1) Drilling Locations (1-mile laterals) Proportionate (gross locations) 800 700 130 North Willesden 600 Green 236 Ferrier Locations Locations 500 Locations 400 300 200 336 Willesden Green 100 Locations 0 2010 2011 2012 2013 2014 2015 2016 Net Gross • 702 gross (472 net) f
Slide 12: 2016 F&D and Recycle Ratios
2016 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 $- 0.0x 2010 2011 2012 2013 2014 2015 2016 2010 2011 2012 2013 2014 2015 2016 Proven F&D P+P F&D Proven Recycle P+P Recycle • Consistent
Slide 13: Impact of Deeper Drill Path
Impact of Deeper Drill Path 600 Drilling into the Bioturbated Zone/Lower Cardium 500 400 Production Rate (boe/d) 300 200 100 0 Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 100/1-26-41-8W5 (90% Liquids) 103/04-07-41-5w5 (82% Liquids) 104/14-19-41-5w5 (82% Liquids) TSX: YGR 13
Slide 14: New Alberta Royalties
New Alberta Royalties For wells with TVD shallower than or equal to 2,000 metres C* ($) = 1,170*(TVD-249) + 800*TLL + 0.6*TVD*TPP For wells with TVD deeper than 2,000 metres C* ($) = 1,170*(TVD-249) + 3,120*(TVD-2,000) + 800*TLL + 0.6*TVD*TPP Cardium 1.0-Mile 1.5 Mile 2.0 Mile Duvernay TVD 2,150 2,1
Slide 15: Production Potential
Production Potential 8,000 7,000 6,000 5,000 Boe/d 4,000 3,000 2,000 1,000 0 2017 2018 1-Rig (15 Wells) 2-Rigs (25 Wells) TSX: YGR 15
Slide 16: Well Economics
Well Economics (with MRF and old type curves) $40/bbl $50/bbl $60/bbl WTI (USD/bbl) WTI (USD/bbl) WTI (USD/bbl) IRR (%) Payout IRR (%) Payout IRR (%) Payout Willesden Green (yrs) (yrs) (yrs) 1-Mile ($2.5 million well cost) 18% 3.2 41% 1.6 70% 1.1 1.5-Mile ($3.0 million well cost) 36% 1.5 74% 1.1 121
Slide 17: Duvernay Formation
Duvernay Formation 15-19-39-6W5 (1.5 Mile) IP 20 - 700 boe/d 52% liquids (81 stages & 1,744 tons of sand) TSX: YGR 17
Slide 18: Risk Management Program
Risk Management Program Oil Hedges 2017 200 bbl/d collar C$65.00 WTI/bbl and a ceiling of C$75.00 WTI/bbl (2017) 100 bbl/d at C$70.00 WTI/bbl (2017) 200 bbl/d at C$64.45 WTI/bbl (Jan – Mar 2017) 200 bbl/d at C$71.00 WTI/bbl (Feb – Jun 2017) 200 bbl/d at C$69.25 WTI/bbl (Mar – Jul 2017) 2018 Sold Cal
Slide 19: Analyst Coverage
Analyst Coverage Acumen Capital Finance Partners Limited Paradigm Capital Inc. Trevor Reynolds Ken Lin, CFA Oil and Gas Research Analyst Oil and Gas Analyst treynolds@acumencapital.com kenl@paradigmcap.com (403) 410-6842 (403) 513-1042 AltaCorp Capital Inc. PI Financial Corp. Thomas Matthews, P.Eng,
Slide 20: 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 21: 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 22: Yangarra Resources Ltd.
Yangarra Resources Ltd. 1530, 715 – 5 Ave. SW Calgary, Alberta T2P 2X6 403-262-9558 TSX: YGR 22
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