Yangarra Resources Ltd. · TSX:YGR
Yangarra Resources — Investor Presentation (February 2015)
31 slides from Yangarra Resources's investor presentation, February 2015
Slide 1: Corporate Presentation February 2015
Corporate Presentation February 2015 TSX: TSX:YGR YGR
Slide 2: Our job is to create shareholder value
• Our job is to create shareholder value • Integrity and ethical behavior are essential to success • Sound ethics and shareholders interests are compatible • It is okay to be wrong: own it, accept it, learn from it • Embrace adversity, it is a difficult business • Diversity of skill-sets within the
Slide 3: Publicly listed junior oil and gas company
Publicly listed junior oil and gas company TSX: YGR Shares Outstanding Basic 57.7 million Options/Warrants (weighted average $1.90) 4.1 million Fully Diluted 61.8 million Insider Ownership Basic 15% Fully Diluted 21% Market Capitalization (at $1.20/share) $69 million Q4 Net Debt ($90 million in ATB
Slide 4: Management Team and Board of Directors
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 Lorne S
Slide 5: Half Cycle and Full Cycle IRR
Half Cycle IRR (1) Full Cycle IRR (2) 80% 70% 60% 50% IRR 40% 67% 65% 30% 20% 41% 34% 31% 10% 24% 26% 12% 0% 2010 2011 2012 2013 1. Half cycle IRR is based on actual drilling and completion costs, production to date and P+P reserves. 2. Full cycle IRR allocates all other capital costs to the wells (
Slide 6: Drilling and completion costs; operating costs and G&A versus peers
Drilling cost per meter Completion cost per stage $800 $250,000 $700 $200,000 $600 $500 $150,000 $400 $300 $100,000 $200 $50,000 $100 $0 $0 2010 2011 2012 2013 2010 2011 2012 2013 Q3 2014 Operating costs/boe versus peers Q3 2014 G&A/boe versus peers 25.00 8.00 7.00 20.00 6.00 Average $15.39 15.00 5.
Slide 7: TSX: YGR
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Slide 8: TSX: YGR
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Slide 9: Cashflow and Production Growth
50,000,000 4,000 40,000,000 (Cashflow) 3,000 (mboe) 30,000,000 2,000 20,000,000 10,000,000 1,000 Cashflow Production 0 0 2010 2011 2012 2013 2014 (est) 0.00006 Production per share 0.80 0.70 Cash Flow per Share 0.00005 0.60 0.00004 0.50 0.00003 0.40 0.30 0.00002 0.20 0.00001 0.10 - - 2010 2011 2012
Slide 10: P+P Reserves and Reserve Value PV10
P+P Reserves (mboe) Reserve Value PV10 ($ millions) 40,000 500 30,000 400 Oil 300 20,000 NGL's 200 10,000 Natural gas 100 0 0 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 P+P Reserves (mboe) Reserve Value PV10 ($ millions) 40,000 500 400 30,000 PROB 300 20,000 PUD 200 10,000 PDNP 100 PDP 0 0 20
Slide 11: Central Alberta
Central Alberta • Interest in 140 sections of land • 85 + horizontal wells drilled since 2010 • Focus Pembina • Cardium and Glauc plays Edmonton Willesden Green • Light oil Ferrier Rocky Mountain House Red Deer • High netback • Quick payouts Calgary TSX: TSX:YGR YGR 11
Slide 12: Cardium Show Map
T45 T45 T45 T44 T44 T44 LO WE UPP T43 R GA CA ER RD SS IU OIL Y M CAR T43 T43 DIU M T42 W IL LO LE W E SD R T42 EN T42 G R EE C A N R D C IU A M R T41 D IU PROSPECT M IVE UPPER FI EL C D A R H T41 T41 D IU Z M O PROSPECTIVE IL LOWER CARDIUM HZ OIL T40 GAS T40 T40 FE PR OS R RI HZ PE CT IV ER OI T39
Slide 13: Glauconite Show Map
T42 T42 T43 T43 T43 T41 T41 D N LA T42 IS T42 T42 IER R R T40 T40 A B Y LE D T41 A O D CHANNEL any cut amount H N T41 T41 LA T39 T39 IS IE R D R N R LA T40 A B IS Y R LE IE D R A R T38 T38 T40 T40 O CHANNEL A H any cut amount B Y LE T39 D A O T37 CHANNEL any cut amount T37 H T39 T39 T38 R9 R8 R7 R6
Slide 14: The Duvernay represents option value not reflected in the share price
• Let industry de-risk the play • Continue land-base to 2020 with strat test wells • Larger players are migrating to the Duvernay which may provide opportunities in plays like the Cardium and Glauc in Central Alberta • Continue to collect data and further de-risk Yangarra’s acreage The Duvernay repr
Slide 15: Duvernay early production and liquids fairway
• Early production rates show initial liquids yields up to 200 bbl/MMcf • Duvernay operators are still establishing Best Practices for Drilling and Completion • Production data supports the emergence of an economically attractive liquids fairway • Geological parameters (mineralogy, thickness, HC pot
Slide 16: Very active areas with high capital investment
• Very Active Areas with high capital investment currently by majors and large independents • North Block primarily in liquids window with new YGR horizontal drilling by NORTH BLOCK Vermillion/Black Swan immediately offsetting (2 miles) YGR land • South Block surrounded by drilling activity (Shell,
Slide 17: Significant amounts of oil produced over past 30 years
• Significant amounts of oil have been produced over the past 30 years from vertical wells • 10 to 20 million barrels of Original Oil in Place (OOIP) per section • Accumulated 45 gross (35 net) sections • Yangarra has 3 horizontal wells and 2 vertical wells in the SWS formation Yangarra Land TSX: YG
Slide 18: Appendix
Appendix TSX: YGR 18
Slide 19: Vertical production exists in all zones
Colorado Group Cardium 650m thick 5m Second White Specks • Vertical production 30m exists in all zones Viking 5m • All zones meet the criteria for horizontal drilling Glauconitic 20m Ellerslie 10m Rock Creek 15m Duvernay TSX: TSX:YGR YGR 19
Slide 20: 41% reduction in average drilling costs since 2011
$6,000 41% reduction in Drilling Represents 70% average drilling costs of Corporate Costs $5,000 since 2011 473 Staff count is down and performance is up $4,000 498 1,807 373 Equip $3,000 1,792 Complete 1,376 273 Drill $2,000 1,134 2,832 $1,000 2,088 2,134 1,563 $0 2010 2011 2012 2013 TSX: YGR 20
Slide 21: Duvernay acreage within the liquids/volatile oil fairway
• Acreage within the liquids/volatile oil fairway • South Block (Willesden Green) YGR • 7 Net Sections NORTH • Net Pay ~ 36 m BLOCK • OGIP ranges from 70 to 100 BCF/sec • North Block (Pembina) • 54 Net Sections YGR • Net Pay ~ 20 to 24 m SOUTH BLOCK • OGIP ranges from 40 to 50 BCF/sec* *OGIP estimat
Slide 22: YGR acreage is optimal with high average porosity
YGR acreage is optimal with high average porosity > 6% YGR Acreage TSX: YGR 22
Slide 23: Very active Duvernay area
R9 R8 R7 R6 R5 R4W5 T43 ECA 102 WILLGR 6-3-43-6 ECA 102 HZ WILLGR 8-5-43-6 T43 MOSAIC WILSONCK 13-35-42-5 • Very active Duvernay area ECA WILLGR 16-33-42-6 ECA HZ WILLGR 3-6-43-7 ECA HZ WILLGR 11-33-42-6 within proven liquids T42 T42 window • Majors and Independents ECA HZ WILLGR 12-10-42-7 ECA HZ W
Slide 24: Southern Block is de-risked by adjacent wells
R7 R6 R5W5 Talisman 3-28-38-6W5 M SCL HZ 102 FERRIER 4-21-40-7 SCL HZ FERRIER 3-21-40-7 • Net Pay (YGR South T40 T40 Block) ~36 m • Southern Block is de- PARA WILLGR 9-25-39-6 risked by adjacent wells T39 T39 • Continuous Duvernay formation NUTECH WELL TALISMAN HZ FERRIER 3-28-38-6 T38 T38 HAN 14-9-
Slide 25: Vermillion/Black Swan and Sinopec/Daylight test wells adjacent to YGR lands
• Vermillion/Black Swan and Sinopec/Daylight have drilled vertical and horizontal test wells adjacent to YGR lands TSX: YGR 25
Slide 26: Duvernay cross section de-risking
15-18-49-13W5 7-4 - 49-12W5 7-3-47-11W5 7-1-48-10W5 8-32-46-9W5 100/15-18-049-13W5/00 <=13639.6m=> 100/07-04-049-12W5/00 <=22487.4m=> 100/07-03-047-11W5/00 <=16426.6m=> 100/07-01-048-10W5/00 <=12376.5m=> 100/08-32-046-09W5/00 Vermillion Strat Test Vermillion HZ Offset (1977) Sinopec HZ Producer A at
Slide 27: Oil, Natural Gas and Interest Rate Hedges
Oil Hedges 2015: 1,100 bbl/d hedged at $93.32/bbl Natural Gas Hedges 2015: 2,000 GJ/d hedged at $4.11/GJ or $5.10/mcf* Interest Rate Swaps 4.70% Fixed rate on $10 million (June 2014-June 2018) 4.85% Fixed rate on $10 million (June 2014-June 2018) * Assumes Yangarra specific heat value TSX: YGR 27
Slide 28: Third Quarter 2014 Production and Netbacks
Third Quarter 2014 Production 3,039 boe /d Liquid Content 48% Sales Price $ 52.80 /boe Royalty income 0.90 / boe Royalty expense (3.40) / boe Production costs (6.45) / boe Transportation costs (1.52) / boe Field Operating netback $ 42.33 / boe Commodity contract settlement (5.13) / boe Operating net
Slide 29: 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 a number of risks and unce
Slide 30: Boe conversion and 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 represent a value eq
Slide 31: Yangarra Resources Ltd.
Yangarra Resources Ltd. 1530, 715 – 5 Ave. SW Calgary, Alberta T2P 2X6 403-262-9558 TSX: YGR 31
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