Yangarra Resources Ltd. · TSX:YGR
Yangarra Resources — Investor Presentation (September 2018)
22 slides from Yangarra Resources's investor presentation, September 2018
Slide 1: Corporate Presentation
TSX: YGR YGR 1-26 PAD CORPORATE PRESENTATION SEPTEMBER 2018
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: Investment Thesis
INVESTMENT THESIS DISCIPLINED GROWTH THROUGHOUT ENTIRE DEVELOPMENT CYCLE ➢ Focus on halo, bioturbated Cardium provides Yangarra with a proprietary knowledge OPERATIONALLY base AND operational synergies FOCUSED ➢ Continuous improvement approach to drilling & completions ➢ Yangarra’s investment in inf
Slide 4: 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 5: 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 6: Halo Cardium Inventory Accumulation
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 7: 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 8: Cardium Revolution: Conglomerate to Bioturbated
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 9: 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 10: 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 Total (boe/d) Avg. Type Year 1 BOE Decline: 39% DCET $mm $3.75 500 Oil (bbl/d) EURs will range across Production Per Da
Slide 11: 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 12: Production Logistics
PRODUCTION LOGISTICS OWNING INFRASTRUCTURE AND MINIMIZING THIRD-PARTY PROCESSING/FLUID HANDLING OPTIMIZES OUR COSTS YANGARRA INFRASTRUCTURE ➢ Operating interest above 90% ➢ Low operating costs and high netbacks achieved through a variety of production strategies: • Processing gas through owned facil
Slide 13: Comparative Metrics & Valuation
COMPARATIVE METRICS & VALUATION YANGARRA CONTINUES TO BE AN OUTLIER IN SUSTAINABLE GROWTH ONGOING GROWTH EXPECTATIONS (CONSENSUS) INTERNALLY FINANCED (CONSENSUS) ROBUST BALANCE SHEET (CONSENSUS) POU 100% 50% 140% POU YGR 90% 45% 130% 2019E / 2018E Production Growth 2018E / 2017 Production Growth 80%
Slide 14: Duvernay Option
DUVERNAY OPTION SIZE OF PRIZE REMAINS IN HAND WITH RELATIVELY LOW LEVEL OF CAPITAL COMMITMENT Yangarra Duvernay Rights YANGARRA’S DUVERNAY POSITION ON-TREND WITH THE ABOVE WELLS DRILLED IN THE AREA; DE-RISKING BY INDUSTRY WILL DRIVE OPTIONALITY FOR YANGARRA yangarra resources ltd. SEPTEMBER 2018 | P
Slide 15: 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 16: Appendix
APPENDIX RISK MANAGEMENT, ANALYST COVERAGE, PRESENTATION FOOTNOTES & FORWARD LOOKING STATEMENTS yangarra resources ltd. SEPTEMBER 2018 | PG 16 (Refer to end of presentation for slide notes & advisories)
Slide 17: 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 [email protected] [email protected] TD Securities Ltd. (403) 410-6842 (403) 705-4978 Sean
Slide 18: Presentation Footnotes
PRESENTATION FOOTNOTES SEPTEMBER 2018 ➢ Slide 2: 30 locations (45 one-mile equivalents); WTI US$55.00 Ed. Par C$63.75, AECO C$2.00/GJ; Reserves effective as at December 31, 2017 based on the reserve report prepared by Deloitte LLP, independent petroleum engineers (the “Reserves Report”). NAV = NPV10
Slide 19: 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 June 30, 2018, as filed on the SEDAR profile of Ya
Slide 20: 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 21: 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 22: 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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