Slide 1: Corporate Presentation October 2015
Corporate Presentation October 2015 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 5.8 $99.6 Basic 67.7 Total Proved 20.5 $225.4 Options (weighted avg. price $1.84) 6.3 2P 37.4 $395.1 Fully Diluted 74.0 Total Cardium Locations 462 Gross (266 Net)
Slide 3: Corporate Strategy
Corporate Strategy • Establish Sustainability • Target and maintain 2,500 – 2,750 boe/d while spending within cash-flow at US$45/bbl WTI 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 pa
Slide 4: 2015 Third and Fourth Quarter / 2016 Plans
2015 Third and Fourth Quarter • Drill and complete a 2-mile Willesden Green Cardium well • Drill and complete two 1-mile Ferrier Cardium wells • Complete the three farm-in wells drilled in first half (two 1.5-mile wells and one 1-mile well) 2016 • Hold production at 2,500 – 2,750 boe/d while spendin
Slide 5: 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 6: Why Own Yangarra?
Why Own Yangarra? • Focused on maximizing 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 and concentration • Large future drilling inventory • Consistent, low risk Cardiu
Slide 7: 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⁾ 80% 70% 60% 50% IRR 40% 67% 65% 30% 20% 41% 34% 31% 33% 24% 26% 27% 10% 12% 0% 2010 2011 2012 2013 2014 1. Half cycle IRR is based on actua
Slide 8: F&D and Recycle Ratios
F&D and Recycle Ratios Finding and Development Recycle Ratios $40.00 4.0x $35.00 3.5x $30.00 3.0x $25.00 2.5x $/boe $20.00 2.0x $15.00 1.5x $10.00 1.0x $5.00 0.5x $- 0.0x 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 Proven F&D P+P F&D Proven Recycle P+P Recycle • Consistent improvement in, and
Slide 9: Low-Cost Producer Low-Cost Driller
Low-Cost Producer • Company founded on a low cost operations Netback Analysis ($/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 10: Updated Completion Technology Extended Reach Well Results
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 $200,000 • Improved initial rates Number Of Stages 20 Cost per S
Slide 11: Average 1-mile Well Costs ($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 1,187 200 Drill $2,000 1,134 1,000 2,832 $1,000 2,134 1,563 1,808 1,300 $0 2011 2012 2013 2014 2015 (est) Monobore Drilling Cemented Completions Service Costs Reductions Extended Reach TSX: YGR 11
Slide 12: Cardium Formation
Cardium Formation • Interest in 100+ sections • 85+ horizontal wells drilled • Secured firm capacity on gas systems • Increased firm capacity from 0 in 2014 to 6.0 Yangarra mmcf/d currently Field Office Red Deer 80 km Rocky Mountain House TSX: TSX:YGR YGR 12
Slide 13: Cardium Down-Spacing
Cardium Down-Spacing Recovery Factors – Tightest Rock Scenario • Average Cardium section has 4 million bbls of oil in place 6 Wells per 12.8% • To maximize returns we need to Section Recovery determine the correct balance between recoveries and interference • To date, we have not seen any interferen
Slide 14: Cardium Drilling Inventory
Cardium Drilling Inventory (1) Drilling Locations (1-mile laterals) Proportionate (gross locations) 500 450 115 North 78 Ferrier 400 Locations Willesden 350 Green 84 2-mile Locations Locations 212 1-mile Locations 300 Locations 250 200 269 150 Willesden Green 100 Locations 38 1.5-mile 50 Locations 0
Slide 15: Well Economics (1-Mile Wells)
Well Economics (1-Mile Wells) Cardium Willesden Green 300 150 WTI (US$/bbl) $45.00 $55.00 $65.00 Cum. Prod. (‘000) Natural Gas ($/GJ) $3.00 $3.00 $3.00 200 100 NPV10 BT (C$mm) $0.6 $1.3 $1.9 Bbl/day IRR BT (%) 25% 44% 71% 100 50 P/I Ratio 10 BT (x) 1.3x 1.5x 1.8x Payout (Years) 2.6 1.7 1.2 EUR Oil (
Slide 16: Debt and Cash Flow Sensitivity
Debt and Cash Flow Sensitivity 2016 Debt/CF 2016 Free Cash Flow 3.00 $18,000,000 $16,000,000 2.50 $14,000,000 2.00 $12,000,000 $10,000,000 1.50 $8,000,000 1.00 $6,000,000 Sustaining Capital $4,000,000 • 2,500 boe/d = $20,125,000 • 2,750 boe/d = $22,150,000 0.50 $2,000,000 0.00 $0 $45.00 $55.00 $65.0
Slide 17: Sustainability Analysis
Sustainability Analysis Production Run Rate Production boe/d 2,500 2,750 Decline Rate % 35% 35% Annual Production Decline boe/d 875 963 Maintenance Capex Production Replacement boe/d 875 963 Capital Efficiency $/boe/d 23,000 23,000 Maintenance Capex $ 20,125,000 22,150,000 Cash Flow $45 WTI USD/bbl
Slide 18: Risk Management Program
Risk Management Program Oil Hedges 2015: 300 bbl/d at C$102.56 WTI/bbl 2015: 500 bbl/d costless collar C$65.00 WTI/bbl and a ceiling of C$73.50 WTI/bbl 2015: 800 bbl/d Edmonton par to WTI differential at US$6.75/bbl 2016: 400 bbl/d costless collar C$73.45 WTI/bbl and a ceiling of C$85.00 WTI/bbl 201
Slide 19: Appendix
on Itd. Appendix TSX: YGR 19
Slide 20: Glauconite Formation
Glauconite Formation 35 36 31 32 33 34 35 36 31 32 33 34 35 36 31 32 33 34 35 36 31 32 33 34 35 36 31 32 33 34 35 36 31 32 33 34 35 36 31 32 33 34 6 5 4 3 2 26 25 30 29 28 27 26 25 30 29 28 27 26 25 30 29 28 27 26 25 30 29 28 27 26 25 30 29 28 27 26 25 30 29 28 27 26 25 30 29 28 27 24 19 20 21 22 23
Slide 21: Duvernay South Block
Sinopec Daylight Resourceful T46 Duvernay South Block Resourceful Penn West Resourceful Enerplus Resourceful Enerplus Enerplus Penn West T45 Enerplus ConocoPhillips Bellatrix Sinopec Daylight T44 ConocoPhillips ConocoPhillips Encana Talisman Encana Encana T43 Encana Encana Encana Mosaic Encana Encan
Slide 22: 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 23: 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 24: Yangarra Resources Ltd. contact details
Yangarra Resources Ltd. 1530, 715 – 5 Ave. SW Calgary, Alberta T2P 2X6 403-262-9558 TSX: YGR 24