Yangarra Resources Ltd. · TSX:YGR
Yangarra Resources — Investor Presentation (April 2021)
24 slides from Yangarra Resources's investor presentation, April 2021
Slide 1: Corporate Presentation
CORPORATE PRESENTATION TSX: YGR APRIL 2021
Slide 2: Yangarra
YANGARRA “YOU DON’T NEED AN INTRODUCTION TO SUCCEED IN LIFE. YOU NEED TO HAVE GOOD WORK.” – OSCAR DE LA RENTA Strong track record of generating net income throughout volatile commodity cycle Highly incentivized and aligned management & Board through 25% fully diluted insider ownership Geograph
Slide 3: Corporate Snapshot
CORPORATE SNAPSHOT “SIMPLICITY IS THE ULTIMATE SOPHISTICATION” – LEONARDO DA VINCI CAPITALIZATION SUMMARY Q1 2021 OPERATIONS SUMMARY Additional Information Q1 2021 Avg. boe/d 8,736 2020 Avg. boe/d 9,888 Basic Shares mm 85.5 18% Insider Ownership Q1 2021 Capital mm $18.6 2020 Capital mm $50.9 Options
Slide 4: 20+ Years of Running Room
20+ YEARS OF RUNNING ROOM “BEAUTY IS IN THE EYE OF THE BEHOLDER” – GREEK PROVERB ~70,400 gross acres (Tier 1) ~38,880 gross acres (Tier 2/3) Tier One inventory assuming 24 two‐mile wells/year: @ 6 well density: ~10.5 years @ 8 well density: ~15 years Tier 2/3 inventory is economic at current
Slide 5: Leadership
LEADERSHIP “A SMOOTH SEA NEVER MADE A SKILLED SAILOR” – FRANKLIN D. ROOSEVELT 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 ‐
Slide 6: Track Record of Growth
TRACK RECORD OF GROWTH “PROGRESS IS IMPOSSIBLE WITHOUT CHANGE, AND THOSE WHO CANNOT CHANGE THEIR MINDS CANNOT CHANGE ANYTHING” – GEORGE BERNARD SHAW PRODUCTION PROFILE CAPEX & PER WELL COSTS 14,000 2.2 $160 D&C CAPEX $5.0 Oil & NGLs (b/d) Facilities CAPEX 12,000 Gas (boed) 2.0 $140 2‐Mile Costs $4.5
Slide 7: Focus on Earnings and Living Within Cashflow
FOCUS ON EARNINGS AND LIVING WITHIN CASHFLOW “ONE BAD CHAPTER DOESN’T MEAN YOUR STORY IS OVER” ‐ ANONYMOUS HISTORICAL EARNINGS LIVING WITHIN CASHFLOW $140.0 2018 ROCE: 11.6%, 2019 ROCE: 10.0% $0.60 120 2020 ROCE: 2.3%, Q1 2021 (Annualized) ROCE: 8.2% Cumulative Cashflow $120.0 $0.50 100 Cumulative D
Slide 8: Five-Year Potential
FIVE‐YEAR POTENTIAL “SIMPLE CAN BE HARDER THAN COMPLEX” – STEVE JOBS FLAT PRODUCTION (~10,000 BOE/D) VS. INTERNALLY FINANCED GROWTH SCENARIO Full Development Annual FCF Cumulative 5‐year FCF Price Scenarios (mm) Flat Growth % Delta Base Assumptions ~10,000 BOED Annual FCF $45 WTI & $2.75/gj gas $125
Slide 9: Current Development Type Curve
CURRENT DEVELOPMENT TYPE CURVE THE GOOD, THE BAD & THE UGLY: THE AVERAGE OF EVERY WELL IN PROPOSED BUDGET TYPE CURVE FOR PROPOSED DRILL PROGRAM (AVERAGE OF ALL 1.5/2.0‐MILE WELLS IN TIER 1 AREAS) Lower DC&T 2.0 Mile Costs $mm 3.25 600 IP90 (56% Oil) boe/d 446 IP365 (43% Oil) boe/d 353 1st Year Capit
Slide 10: Historical Share Price & NAVs
HISTORICAL SHARE PRICE & NAVS “YOU MAKE MOST OF YOUR MONEY IN A BEAR MARKET, YOU JUST DON’T REALIZE IT AT THE TIME” – SHELBY CULLOM DAVIS YEARLY RESERVES GROWTH & SHARE PRICE PERFORMANCE Independent engineering evaluator price decks have evolved over the past 3‐4 years from being above $18.00 $18.
Slide 11: Reserves Volume Growth Per Share
RESERVES VOLUME GROWTH PER SHARE “THE BEST TIME TO PLANT A TREE WAS 20 YEARS AGO. THE SECOND BEST TIME IS NOW” – CHINESE PROVERB YEARLY RESERVES GROWTH (MMBOE & PER SHARE) F&D COSTS $30 $45 2.00 165 Proved 2P Operating Netback $40 Reserves per share (mmboe/share) 150 1.80 $25 Q1 2021 Operating Netba
Slide 12: Cardium Evolution
CARDIUM EVOLUTION ITS AN OLD SAYING BUT IT WORKS: “ THE BEST PLACE TO FIND OIL & GAS IS WHERE THERE IS ALREADY OIL & GAS” CONVENTIONAL CARDIUM HALO CARDIUM CARDIUM RELATIVE TO NORTH AMERICA North American Oil and Natural Gas Plays Half‐Cycle Payout Period Clearwater Marten Hills/Nipisi Mississippian
Slide 13: Cardium Revolution
CARDIUM REVOLUTION “SOME PEOPLE SAY THAT LESS IS MORE. BUT I THINK MORE IS MORE” – DOLLY PARTON ORIGINAL LOG & BIOTURBATED CORE 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% Yangarra approach: Bioturb.
Slide 14: Owned & Operated Infrastructure Lowers Costs
OWNED & OPERATED INFRASTRUCTURE LOWERS COSTS A PICTURE IS WORTH A THOUSAND WORDS, SO HERE IS YANGARRA’S PH.D. THESIS $10.00 Added seven emulsion Completion of gas Results: hauling trucks handling & process ~108 mmcf/d gas‐handling Central oil treating facilities Fleet of emulsion hauling $9.00 batte
Slide 15: Environment Social Governance Strategy
ENVIRONMENT SOCIAL GOVERNANCE STRATEGY “A PACK OF LEMMINGS LOOKS LIKE A GROUP OF RUGGED INDIVIDUALISTS COMPARED WITH WALL STREET WHEN IT GETS A CONCEPT IN ITS TEETH” ‐ WARREN BUFFET Yangarra is a leader on good environmental practices: Yangarra takes an unbiased approach to people & relationships ‐
Slide 16: Conclusion
CONCLUSION “FINALLY, IN CONCLUSION, LET ME SAY JUST THIS” – PETER SELLERS In the past five years, Yangarra has almost exclusively focused on the bioturbated Cardium 20+ years of inventory The expertise built‐up in de‐risking this play is now set to focus on developing it Discipline will be key
Slide 17: Appendix
APPENDIX RISK MANAGEMENT, ANALYST COVERAGE, PRESENTATION FOOTNOTES & FORWARD LOOKING STATEMENTS yangarra resources ltd. APRIL 2021| PG 17 (Refer to end of presentation for slide notes & advisories)
Slide 18: Analyst Coverage
ANALYST COVERAGE BROADLY COVERED BY THE STREET Acumen Capital Finance Partners Ltd. Cormark Securities Inc. Peters & Co Trevor Reynolds Garett Ursu, CFA Dan Grager [email protected] [email protected] [email protected] (403) 410‐6842 (403) 750‐7221 (403) 261‐2215 ATB Capital Markets Indu
Slide 19: Presentation Footnotes
PRESENTATION FOOTNOTES APRIL 2021 Slide 3: For FFO see definition on slide 18 Slide 4: Tier 1 includes acreage in Chedderville, Cow Lake, West Ferrier and East Willesden Green. Years of inventory calculated using (well density times # of sections less drilled wells), adjusted for well length and
Slide 20: Presentation Footnotes
PRESENTATION FOOTNOTES APRIL 2021 Non–IFRS and Additional IFRS Measures This document contains “funds flow from (used in) operations”, which is an additional IFRS measure. The Company uses funds flow generated from (used in) operations as a key measure to demonstrate the Company’s ability to generat
Slide 21: 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, 2020, as filed on the SEDAR profile of Y
Slide 22: 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 23: 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 24: 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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