Yangarra Resources Ltd. · TSX:YGR
Yangarra Resources — Investor Presentation (May 2019)
26 slides from Yangarra Resources's investor presentation, May 2019
Slide 1: Corporate Presentation May 2019
TSX: YGR YGR 1-26 PAD CORPORATE PRESENTATION MAY 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 85.4 14% Insider Ownership Options mm 8.3 $4.36 Weighted Average Ex. Price Fully Diluted mm 93.7 22% 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 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 60 0.80 $15.00 45 0
Slide 4: Prudent Leverage Balanced Against Long-Term Return on Capital
PRUDENT LEVERAGE BALANCED AGAINST LONG-TERM RETURN ON CAPITAL IMPROVING BUSINESS MODEL DRIVING LONG-TERM RETURN ON CAPITAL EMPLOYED BALANCE SHEET EFFICIENCY RETURN ON CAPITAL EMPLOYED VS. FDC 25,000 4.5x 14.0% 23,000 4.0x 20.0x 12.0% 21,000 3.5x 19,000 10.0% 15.0x 3.0x 17,000 8.0% 15,000 2.5x 10.0x
Slide 5: NAV Growth Outstripping Share Performance
NAV GROWTH OUTSTRIPPING SHARE PERFORMANCE PDP NAV GROWTH WHILE SOLIDIFYING 2P NAV YEARLY RESERVES GROWTH & SHARE PRICE 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 econ
Slide 6: 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 7: Strategic Outlook
STRATEGIC OUTLOOK SUSTAINABLE ORGANIC GROWTH & INTERNALLY FINANCED REMAIN CONCENTRATED PRODUCTION POTENTIAL WITH 2 RIGS (YEAR-ROUND) (1) ➢ Geographically & geologically concentration in the 35,000 Assumes 30 locations/year prolific Cardium sands (45-one mile) & ~500 net 30,000 ➢ Focus drives multipl
Slide 8: 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 9: 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 157% Half Cycle owned infrastructure allowing Yangarra to compete in acquiring additional lands 2018 107% Full Cycle ➢ Go-forward focus on operations (
Slide 10: 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 11: 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 12: 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 13: 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 14: 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 / 8 WELLS / Total Sections 125.0 106.0 ONE WELL SECTION SECTION ➢ Yangarra divides Cardium Total Acres 80,000 67,840 85% o
Slide 15: 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 16: 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 100,000 $35.00 Awaiting Q4 2018 Reporting Awaiting Q4 2018 Reporting TOG 90,000 Reported Q4 2018 Reported Q4 2018 POU $30.00 80,000 VET WCP WCP TVE YGR LQA
Slide 17: 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% YGR POU Awaiting Q4 2018 Reporting Awaiting Q4 2018 Reporting 90% Reported Q4 2018 Rep
Slide 18: Outlier in Every Performance Metric Except Valuation
OUTLIER IN EVERY PERFORMANCE METRIC EXCEPT VALUATION LACK OF REQUIREMENT FOR EXTERNAL FINANCING ALLOWS INVESTORS TO FOCUS ON SHARE UPSIDE ROBUST BALANCE SHEET (CONSENSUS) 2019 CONSENSUS VALUATION 140.0% 10.0x $60,000 Awaiting Q4 2018 Reporting Awaiting Q4 2018 Reporting Reported Q4 2018 Reported Q4
Slide 19: 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 20: Appendix
APPENDIX RISK MANAGEMENT, ANALYST COVERAGE, PRESENTATION FOOTNOTES & FORWARD LOOKING STATEMENTS yangarra resources ltd. MAY 2019| PG 20 (Refer to end of presentation for slide notes & advisories)
Slide 21: 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 22: Presentation Footnotes
PRESENTATION FOOTNOTES JANUARY 2019 ➢ Slide 2: 2019E: 24 locations; 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 Report”). NAV = NPV10 Reserve Value less Net Debt an
Slide 23: 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 year ended December 31, 2018, as filed on the SEDAR profile of Y
Slide 24: 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 25: 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 26: 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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