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Corporate Presentation – Yangarra Resources Ltd.

Yangarra Resources Ltd. · Mar 31, 2014 · 32 slides

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Slides

  1. Corporate Presentation – Yangarra Resources Ltd. – slide 1
    Yangarra was recognized as a TSX Venture 50 company in 2014. TSX Venture 50 is a trade-mark of TSX Inc. and is used under license Corporate Presentation March 2014 TSX-V: YGR
  2. Corporate Presentation – Yangarra Resources Ltd. – slide 2
    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…
  3. Corporate Presentation – Yangarra Resources Ltd. – slide 3
    Proven operational track record, on a per share basis Production per share growth of 134% since 2010 Reserve per share growth of 86% since 2010 Focus on improving economics and accelerating capital CAPEX / well down 41% since 2011…
  4. Corporate Presentation – Yangarra Resources Ltd. – slide 4
    Publicly listed junior oil and gas company TSX-V: YGR Shares Outstanding Basic 148 million Options/Warrants (weighted average 0.57) 13 million Fully Diluted 161 million Insider Ownership Basic 17% Fully Diluted 25% Market…
  5. Corporate Presentation – Yangarra Resources Ltd. – slide 5
    Fourth Quarter 2013 Production 2,764 boe /d Liquid Content 46% Sales Price 44.67 /boe Royalty income 0.70 / boe Royalty expense (2.19) /boe Production costs (6.20) / boe Transportation costs (1.27) / boe Operating netback 35.70 /…
  6. Corporate Presentation – Yangarra Resources Ltd. – slide 6
    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,…
  7. Corporate Presentation – Yangarra Resources Ltd. – slide 7
    30,000,000 20,000 25,000,000 15,000 (Cashflow) 20,000,000 (mboe) 15,000,000 10,000 10,000,000 5,000 5,000,000 0 0 2010 2011 2012 2013 Cashflow Reserves Cashflow per share growth Reserves per share growth 2011 278%…
  8. Corporate Presentation – Yangarra Resources Ltd. – slide 8
    What Have We Learned About our Business 6000 25 41% reduction in Drilling Represents 70% average drilling costs of Corporate Costs 5000 since 2011 473 Staff count is down and 20 performance is up 4000 498 1,807 373 15 Equip 3000…
  9. Corporate Presentation – Yangarra Resources Ltd. – slide 9
    Drilling cost per meter Completion cost per stage 800 250,000 700 200,000 600 500 150,000 400 Cost per meter 300 100,000 Cost per 200 stage 50,000 100 0 0 2010 2011 2012 2013 2010 2011 2012 2013 10
  10. Corporate Presentation – Yangarra Resources Ltd. – slide 10
    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…
  11. Corporate Presentation – Yangarra Resources Ltd. – slide 11
    P+P Reserves (mboe) Reserve Value PV10 ( millions) 20,000 300 18,000 250 16,000 14,000 200 12,000 Oil Oil 10,000 150 NGL's NGL's 8,000 Natural gas Natural gas 100 6,000 4,000 50 2,000 0 0 2010 2011 2012 2013 2010 2011…
  12. Corporate Presentation – Yangarra Resources Ltd. – slide 12
    CAPEX budget for 2014 50.0 million Budget focused on Cardium Wells - Split between Farm-in locations and pre-existing locations - Includes one Duvernay vertical test well Funded with cash flow and the existing credit facilities 2014…
  13. Corporate Presentation – Yangarra Resources Ltd. – slide 13
    Central Alberta Interest in 140 sections of land 71 total wells drilled since 2010 Focus Cardium and Glauc plays Pembina Light oil Edmonton Willesden Green High netback Ferrier Rocky Mountain House Red Deer Quick payouts…
  14. Corporate Presentation – Yangarra Resources Ltd. – slide 14
    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 2013 capital budget Glauconitic will focus on the 20m…
  15. Corporate Presentation – Yangarra Resources Ltd. – slide 15
    Gross Net Net Booked in Locations Locations 2013 reserve Inventory Type report Cardium Light Oil (includes 105 78 35 farm-in) Glauconite Liquids Rich 40 26 11 Total 145 104 46 8+ years of drilling inventory in Cardium and Glauconite…
  16. Corporate Presentation – Yangarra Resources Ltd. – slide 16
    Drilled or participated in 38 gross (24.6 net) HZ Cardium wells (32 operated) Reservoir is characterized by 60-85% oil and liquid weighting Currently being developed with four wells per section Yangarra owns a 15 % override on 11…
  17. Corporate Presentation – Yangarra Resources Ltd. – slide 17
    47 gross (29 net) sections in the Willesden Green area that offset existing Yangarra land holdings 61 gross (37 net) Cardium locations indentified Pay 100% to earn 75%, earn one section per earning well 7 net earning wells over a two…
  18. Corporate Presentation – Yangarra Resources Ltd. – slide 18
    Hoadley Glauconite Barrier Island Complex: Development of our Glauconite lands commenced in March 2010 with the drilling of our first horizontal (HZ) well Drilled or participated in 22 gross HZ (13.3 net) wells to date into the…
  19. Corporate Presentation – Yangarra Resources Ltd. – slide 19
    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…
  20. Corporate Presentation – Yangarra Resources Ltd. – slide 20
    Yangarra owns 61 Gross (61 net) sections of Duvernay land North Block Three vertical strat test wells before October 2015 will continue all 60 sections until October 2020 Estimated to contain 80-100 bcf Original Gas in Place…
  21. Corporate Presentation – Yangarra Resources Ltd. – slide 21
    Oil Hedges 2014: 1,200 bbl/d hedged at 95.02/bbl 2015: 900 bbl/d hedged at 90.59/bbl Natural Gas Hedges 2014: 5,000 GJ/d hedged at 3.39/GJ or 4.20/mcf* Interest Rate Swaps 4.70% Fixed rate on 10 million (June 2014-June 2018) 4.85% Fixed…
  22. Corporate Presentation – Yangarra Resources Ltd. – slide 22
    Q3 2013 Operating costs/boe Q3 2013 G&A/boe 35.00 10.00 30.00 8.00 25.00 20.00 6.00 15.00 4.00 10.00 2.00 5.00 0.00 0.00 YGR YGR Management team with strong operations background Maintain low operating costs through…
  23. Corporate Presentation – Yangarra Resources Ltd. – slide 23
    Q3 2013 Debt to Cash Flow Q3 2013 Debt/Equity 10.00 1.40 9.00 1.20 8.00 7.00 1.00 6.00 0.80 5.00 4.00 0.60 3.00 0.40 2.00 1.00 0.20 0.00 0.00 YGR YGR Focus on reducing costs and maximizing profit Lower natural gas…
  24. Corporate Presentation – Yangarra Resources Ltd. – slide 24
    Maximize netbacks in the current price environment by focusing on oil targets Maintain top-tier drilling and completion costs Maintain low operating costs through operational presence and cost efficiencies Continue to grow drilling…
  25. Corporate Presentation – Yangarra Resources Ltd. – slide 25
    Appendix 26
  26. Corporate Presentation – Yangarra Resources Ltd. – slide 26
    2014 (1,200 bbl/d hedged) 2014 Natural Gas (5,000 GJ/d hedged) 100 bbl/d 98.30 WTI/CAD for 2014 1,000 GJ/d at 3.11/GJ for Jan Dec 2014 100 bbl/d 100.00 WTI/CAD for 2014 1,000 GJ/d at 3.05/GJ for Jan Dec 2014 100 bbl/d 91.40 WTI/CAD…
  27. Corporate Presentation – Yangarra Resources Ltd. – slide 27
    Cash Flow Sustainability Ratio (2013) vs. Debt / Cash Flow 500 EV Liquids 225% 500 EV Gas…
  28. Corporate Presentation – Yangarra Resources Ltd. – slide 28
    Yangarra is highly leveraged to the Duvernay play in terms of acres to Enterprise Value 29
  29. Corporate Presentation – Yangarra Resources Ltd. – slide 29
    Texas Water Demand Irrigation 55.9% Municipal 26.9% Manufacturing 9.6% Steam Electric 4.1% Livestock 1.8% Mining (including oil and gas) 1.6% The amount of water required to drill all 2916 of the Marcellus wells permitted in Pennsylvania…
  30. Corporate Presentation – Yangarra Resources Ltd. – slide 30
    31
  31. Corporate Presentation – Yangarra Resources Ltd. – slide 31
    YGR PEY BNP BXE WCP DTX TVE YO TOU RMP NVS NGL Production 2,238 56,343 73,580 21,852 21,448 7,573 3,162 2,384 74,096 6,639 4,637 10,255 Gas Weighting 54% 89% 63% 72% 31% 20% 41% 69% 89% 49% 12% 42% Netback 34.56 21.13 21.55 20.37…
  32. Corporate Presentation – Yangarra Resources Ltd. – slide 32
    Yangarra Resources Ltd. 1530, 715 5 Ave. SW Calgary, Alberta T2P 2X6 403-262-9558 33

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