Yangarra Resources Ltd. · TSX:YGR
Yangarra Resources — Investor Presentation (January 2019)
25 slides from Yangarra Resources's investor presentation, January 2019
Slide 1: Corporate Presentation January 2019
TSX: YGR YGR 1-26 PAD CORPORATE PRESENTATION JANUARY 2019
Slide 2: Corporate Snapshot
CORPORATE SNAPSHOT WELL CAPITALIZED, STRONG INSIDER OWNERSHIP & A DEFINED RESOURCE BASE CAPITALIZATION SUMMARY CARDIUM LAND POSITION Additional Information Basic Shares mm 85.3 14% Insider Ownership Options mm 8.3 $3.77 Weighted Average Ex. Price Fully Diluted mm 93.6 21% Total Insider Ownership Mar
Slide 3: Reserves Growth Momentum
RESERVES GROWTH MOMENTUM RESERVES CONTINUE TO GROW AT REASONABLE F&D METRICS YEARLY RESERVES GROWTH (MMBOE & PER SHARE) F&D COSTS VS. RECYCLE RATIOS 150 2.00 $30.00 Reserves per share (mmboe/share) 135 1.80 2P Proved 120 1.60 $25.00 F&D Costs ($/boe) Reserves (mmboe) 105 1.40 90 1.20 $20.00 75 1.00
Slide 4: NAV Growth Outstripping Share Performance
NAV GROWTH OUTSTRIPPING SHARE PERFORMANCE PDP NAV GROWTH WHILE SOLIDIFYING 2P NAV YEARLY RESERVES GROWTH & SHARE PERFORMANCE ➢ Sustainable NAV per share growth in volatile macro environment highlights Yangarra’s prudent approach $18.00 on focusing on the best play with the best full-cycle economics
Slide 5: Core Principles
CORE PRINCIPLES DISCIPLINED GROWTH THROUGHOUT ENTIRE DEVELOPMENT CYCLE ➢ Focus on halo, bioturbated Cardium provides Yangarra with a proprietary knowledge OPERATIONAL base AND operational synergies FOCUS ➢ Continuous improvement approach to drilling & completions ➢ Yangarra’s investment in infrastru
Slide 6: Strategic Outlook
STRATEGIC OUTLOOK SUSTAINABLE GROWTH & INTERNALLY FUNDED REMAIN CONCENTRATED PRODUCTION POTENTIAL WITH 2 RIGS (YEAR-ROUND) (1) ➢ Geographically & geologically concentrated in the 35,000 Assumes 30 locations/year prolific Cardium sands (45-one mile) & ~500 net 30,000 ➢ Concentration drives multiple s
Slide 7: 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 8: Full Cycle Focus
FULL CYCLE FOCUS NOT JUST A SAYING, KEY DRIVER IN ALL DECISION MAKING ➢ Competitive advantage of operational and geological knowledge, combined with 2018+ TBD owned infrastructure allowing Yangarra to compete in acquiring additional lands ➢ Go-forward focus on operations (2 rigs); established infras
Slide 9: Cardium Evolution
CARDIUM EVOLUTION CONVENTIONAL CARDIUM TO TIGHTER HALO CARDIUM CONVENTIONAL CARDIUM HALO CARDIUM ➢ Cardium potential expands dramatically with the introduction of new technology initiatives to the INITIAL TECHNOLOGICAL SHIFT Halo Cardium ➢ Early approaches include: • Horizontal wells • Multi-stage f
Slide 10: Cardium Revolution
CARDIUM REVOLUTION CONGLOMERATE TO BIOTURBATED ORIGINAL LOG & BIOTURBATED CORE EXAMPLE NEW FRAC PLANE Willesden Green T41-R6W/5 Net Pay Old Well Path Upper 2.5-4.0m TECHNOLOGY PROGRESSION Upper Sand Core analysis Porosity 10-15% ➢ Shift by Yangarra to: Bioturb. • Cemented liners 3.0-7.0m • Sliding s
Slide 11: Operations Overview
OPERATIONS OVERVIEW ENTIRETY OF YANGARRA’S FOCUS ON OPERATIONS IN THE CARDIUM ➢ Since 2016, Halo Cardium has been the focus ➢ Land acquisition strategy has been driven by OOIP at reasonable prices ➢ A major portion of the drill program has been to earn farm-ins and push the boundaries of the Cardium
Slide 12: Economics
ECONOMICS EXCELLENT IRRS WILL CONTINUE TO DRIVE FUTURE PER SHARE GROWTH UNRISKED WEIGHTED-AVERAGE TYPE CURVE PRODUCTION PROFILE UNRISKED WEIGHTED-AVERAGE TYPE CURVE ASSUMPTIONS 600 Avg. Type Total (boe/d) Year 1 BOE Decline: 39% DCET $mm $3.75 500 Oil (bbl/d) EURs will range across Production Per Da
Slide 13: Cardium Inventory
CARDIUM INVENTORY DISCIPLINED APPROACH DRIVES LAND ACQUISITION STRATEGY LAND & INVENTORY SUMMARY SAMPLE ONE-SECTION EXPLOITATION STRATEGY INVENTORY STRATEGY Gross Net WI 4 WELLS / 10 WELLS / Total Sections 136.3 106.6 ONE WELL SECTION SECTION ➢ Yangarra divides Cardium Total Acres 87,200 68,224 78%
Slide 14: Production Logistics
PRODUCTION LOGISTICS MOVE FORWARDS NOT BACKWARDS ON PRODUCTION PRACTICES 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 flexible pr
Slide 15: Operational Focus Drives Costs and Netbacks
OPERATIONAL FOCUS DRIVES COSTS AND NETBACKS STRATEGY ALLOWS YANGARRA TO EXCEL IN HALO SANDBOX LOW OP COST PRODUCER HIGH NETBACKS (CONSENSUS) ERF VET 100,000 $35.00 TOG 90,000 POU WCP $30.00 VET 80,000 TVE WCP YGR 70,000 $25.00 BNE LQA Produciton (boe/d) ERF 2018E Netback 60,000 NVAKEL VII SGY $20.00
Slide 16: Peer-Leading Sustainable Growth
PEER-LEADING SUSTAINABLE GROWTH INTERNALLY FINANCED AND DELEVERAGING SCENARIO PROVIDES GREAT PROTECTION FOR INVESTORS (>$50 ED. PAR) ONGOING GROWTH EXPECTATIONS (CONSENSUS) INTERNALLY FINANCED (CONSENSUS) 100% 50% PPR YGR POU 90% 2018E / 2017 Production Growth 2019E / 2018E Production Growth 40% 80%
Slide 17: Compelling Valuation
COMPELLING VALUATION LACK OF REQUIREMENT FOR EXTERNAL FINANCING ALLOWS INVESTORS TO FOCUS ON SHARE UPSIDE ROBUST BALANCE SHEET (CONSENSUS) 2019 CONSENSUS VALUATION 140% 10.0x $60,000 130% POU 8.0x $48,000 2019E Sustainability 120% EV / 2019E DACF EV / 2019E Production KEL DEE 110% 6.0x $36,000 NVA I
Slide 18: Conclusion – Translating IRR into Exceptional Growth
CONCLUSION – TRANSLATING IRR INTO EXCEPTIONAL GROWTH COMPETITIVE ADVANTAGE IN HALO CARDIUM KEY TO YANGARRA INVESTORS Yangarra is a prolific, organic growth producer with an excellent, focused runway of inventory 15+ years Inventory ➢ During the past two years, Yangarra unlocked the previously unexpl
Slide 19: Appendix
APPENDIX RISK MANAGEMENT, ANALYST COVERAGE, PRESENTATION FOOTNOTES & FORWARD LOOKING STATEMENTS yangarra resources ltd. JANUARY 2019| PG 19 (Refer to end of presentation for slide notes & advisories)
Slide 20: Analyst Coverage
ANALYST COVERAGE STREET COVERAGE CONTINUES TO GAIN MOMENTUM Acumen Capital Finance Partners Ltd. Industrial Alliance Securities Inc. Recently Added Coverage: Trevor Reynolds Michael Charlton treynolds@acumencapital.com mcharlton@mgisecurities.com TD Securities Ltd. (403) 410-6842 (403) 705-4978 Sean
Slide 21: Presentation Footnotes
PRESENTATION FOOTNOTES JANUARY 2019 ➢ Slide 2: 2019E: 24 locations; 2018E WTI US$55.00 Ed. Par C$63.75, AECO C$2.00/GJ; 2019E C$65 Ed. Par, AECO C$1.75/GJ; Reserves effective as at December 31, 2018 based on the reserve report prepared by Deloitte LLP, independent petroleum engineers (the “Reserves
Slide 22: 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 quarter ended September 30, 2018, as filed on the SEDAR profile
Slide 23: 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 24: 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 25: 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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