Corporate Presentation December 2013 TSX-V: YGR
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 a number of risks and uncertainties which could cause actual results to differ materially from those anticipated by the Company and described in the forward looking statements or information. These risks and uncertainties which may cause actual results to differ materially from the forward looking statements or information include, among other things: general economic and business conditions; the risk of instability affecting the jurisdictions in which the Company operates; the risks of the oil and natural gas industry, such as operational risks in exploring for, developing and producing crude oil and natural gas and market demand; the possibility that government policies or laws may change or governmental approvals may be delayed or withheld; risks and uncertainties involving geology of oil and natural gas deposits; the uncertainty of reserves estimates and reserves life; the ability of the Company to add production and reserves through acquisition, development and exploration activities; the Company’s ability to enter into or renew production and reserves through acquisition, development and exploration activities; the Company’s ability to enter into or renew leases; potential delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of estimates and projections relating to production (including decline rates), costs and expenses; fluctuations in oil and natural gas prices, foreign currency exchange rates and interest rates; risks inherent in the Company’s marketing operations, including credit risk; health, safety and environmental risks; and uncertainties as to the availability and cost of financing. Readers are cautioned that the foregoing list is not exhaustive of all possible risks and uncertainties. The reader is cautioned not to place undue reliance on this forward-looking information. The forward looking statements or information contained in this presentation are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward looking statements or information, whether as a result of new information, future events or otherwise unless required by applicable securities laws. The forward looking statements or information contained in this presentation are expressly qualified by this cautionary statement. �
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 represent a value equivalency; therefore Boe's may be misleading if used in isolation. References to natural gas liquids ("NGLs") in this news release include condensate, propane, butane and ethane and one barrel of NGLs is considered to be equivalent to one barrel of crude oil equivalent (Boe). One ("BCF") equals one billion cubic feet of natural gas. One ("Mmcf") equals one million cubic feet of natural gas. Reserve Definitions: (a) "Proved " reserves are those reserves that can be estimated with a high degree of certainty to be recoverable. It is likely that the actual remaining quantities recovered will exceed the estimated proved reserves. (b) " Probable" reserves are those additional reserves that are less certain to be recovered than proved reserves. It is equally likely that the actual remaining quantities recovered will be greater or less than the sum of the estimated proved plus probable reserves. the actual remaining quantities recovered will be greater or less than the sum of the estimated proved plus probable reserves. (c) "Developed " reserves are those reserves that are expected to be recovered from existing wells and installed facilities or, if facilities have not been installed, that would involve a low expenditure (e.g. when compared to the cost of drilling a well) to put the reserves on production. (d) "Developed Producing" reserves are those reserves that are expected to be recovered from completion intervals open at the time of the estimate. These reserves may be currently producing or, if shut-in, they must have previously been on production, and the date of resumption of production must be known with reasonable certainty. (e) " Developed Non-Producing" reserves are those reserves that either have not been on production, or have previously been on production, but are shut in, and the date of resumption of production is unknown. (f) "Undeveloped " reserves are those reserves expected to be recovered from know accumulations where a significant expenditure (for example, when compared to the cost of drilling a well) is required to render them capable of production. They must fully meet the requirements of the reserves classification (proved, probable, possible) to which they are assigned. (g) The Net Present Value (NPV ) is based on AJM Forecast Pricing and costs. The estimated NPV does not necessarily represent the fair market value of our reserves. There is no assurance that forecast prices and costs assumed in the AJM evaluations will be attained, and variances could be material. �
� Proven operational track record, on a per share basis � Production per share growth of 146% since 2010 � Reserve per share growth of 62% since 2010 � Focus on improving economics and accelerating capital � CAPEX / well down 41% since 2011 drilling program � � Cardium wells now offer 10-14 month paybacks with IRRs of over 100% Cardium wells now offer 10-14 month paybacks with IRRs of over 100% � Focus on balance sheet strength � Forecasted Q4 debt to cash flow of 1.0 : 1 � Forecasted Net Debt of $36 million at year-end ($65 million in ATB credit facilities) � Running Room Established � Recently executed 29 net section / 37 net location Cardium farm-in to bring total inventory in the Glauc and Cardium to 104 net locations Yangarra has reached a corporate transition point having established operational excellence � and financial flexibility coupled with significant running room in their core area
Publicly listed junior oil and gas company TSX-V: YGR Shares Outstanding Basic 147 million Options/Warrants (weighted average $0.54) 12 million Fully Diluted 159 million Insider Ownership Basic 20% 20% Fully Diluted Fully Diluted 25% Market Capitalization (at $0.54/share) $86 million Forecast year-end Net Debt ($65 million in ATB credit facilities) $36 million Enterprise Value $122 million Forecast Q4 Net Debt to annualized Cash Flow 1.0 : 1 Proved plus Probable Reserves (Dec 31, 2012) 12.5 million boe Net Present Value @ 10% (P+P) (not including land) $167 million �
Third Quarter 2013 Production 2,238 boe /d Liquid Content 46% Sales Price $ 43.95 /boe Royalty income 0.95 / boe Royalty expense Royalty expense (3.42) /boe (3.42) /boe Production costs (5.45) / boe Transportation costs (1.47) / boe Operating netback $ 34.56 / boe G&A and other (excludes non-cash items) (1.76) / boe Finance expenses (2.32) / boe Cash flow netback $ 30.49 / boe �
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 Michael d’Entremont, COO Lorne Simpson B.Sc., C.E.T., VP, Operations � 30+ years experience with reservoir development, � 30+ years experience in the industry horizontal drilling and multi-stage fracture technology � Supervisor, Drilling Ops with PetroBakken Energy Ltd. � Livingston Energy, Cdn. Hunter, Amoco Canada Petroleum � Engineered, drilled or completed 250 HZ Cardium wells, 200 HZ Bakken wells, 2 HZ Duvernay wells, 25 HZ Montney wells, and James Glessing, CA, CFO dozens of Blue Sky, Viking, SWS, Glauc, and Rock Creek HZ wells � � 15 years oil and gas accounting experience 15 years oil and gas accounting experience � Executive and financial experience as CFO with North Peace Energy Corp � Controller at BlackRock Ventures, � Canadian Natural Resources, Shell and Deloitte Board of Directors W.W. (Chuck) Charlton Gordon Bowerman � � Chairman President of Charlton Capital Corp � President of Cove Resources Ltd � Founder of several successful private and public oil Jim Evaskevich and gas companies � President and CEO of Yangarra Resources Ltd Robert Weir � President of Weir Resource Management Ltd Alan T. Pettie Q.C. � Senior Partner at BD&P �
2,500 14,000 12,000 2,000 10,000 (boe/d) (mboe) 1,500 8,000 6,000 1,000 4,000 500 2,000 0 0 2010 2011 2012 Production Reserves Production per share growth Reserves per share growth 2010 3% 2010 0% 2011 55% 2011 13% 2012 52% 2012 38% �
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