Corporate Presentation February 2015 TSX: YGR TSX: YGR
• Our job is to create shareholder value • Integrity and ethical behavior are essential to success • Sound ethics and shareholders interests are compatible • It is okay to be wrong: own it, accept it, learn from it • Embrace adversity, it is a difficult business • Diversity of skill-sets within the team are critical to success • Loyalty, performance and achievement are recognized • Top decile performance in all categories is the goal • Full cycle Corporate IRR is what measures our success 2 TSX: YGR
Publicly listed junior oil and gas company TSX: YGR Shares Outstanding Basic 57.7 million Options/Warrants (weighted average $1.90) 4.1 million Fully Diluted 61.8 million Insider Ownership Basic 15% Fully Diluted 21% Market Capitalization (at $1.20/share) $69 million Q4 Net Debt ($90 million in ATB credit facilities) (estimate) $58 million Enterprise Value $127 million Q3/2014 net debt to annualized cash flow 1.4 : 1 Forecast 2014 net debt to 2014 cash flow 1.5 : 1 Proved plus Probable Reserves @ Dec 31, 2014 (Deloitte) 37.4 million boe Net Present Value @ 10% (P+P) @ Dec 31, 2014 $395 million NAV / Share (with no undeveloped land value) @ Dec 31, 2014 $5.84 3 TSX: YGR
Management Team Randall Faminow, VP, Land Jim Evaskevich, President & CEO • • 30+ years of experience in all aspects of oil and gas land work, 30+ years extensive executive experience with strong including negotiation, acquisitions and divestments, contracts operations background and mergers James Glessing, CA, CFO Lorne Simpson B.Sc., C.E.T., VP, Operations • 15+ years oil and gas accounting experience • 30+ years experience in the industry • Executive and financial experience as CFO with North Peace • Supervisor, Drilling Ops with PetroBakken Energy Ltd. Energy Corp • Engineered, drilled or completed 250 HZ Cardium • Controller at BlackRock Ventures, wells, 200 HZ Bakken wells, 2 HZ Duvernay wells, 25 • Canadian Natural Resources, Shell and Deloitte HZ Montney wells, and dozens of Blue Sky, Viking, SWS, Glauc, and Rock Creek HZ wells Board of Directors Gordon Bowerman Neil Mackenzie • • Chairman Director of various public companies, including Canyon • President of Cove Resources Ltd Technical Services • • Founder of several successful private and public oil Currently a partner in Blackstone Fluids, an oil and gas and gas companies drilling fluids company Robert Weir Ted Morton • • President of Weir Resource Management Ltd A former Canadian politician and cabinet minister in the Alberta government • Has held various positions in the Alberta Government Jim Evaskevich included Minister of Energy (2011-2012), Minister of • President and CEO of Yangarra Resources Ltd Finance and Enterprise (2010-2011), and Minster of Sustainable Resources (2006-2010) 4 TSX: YGR
Half Cycle IRR (1) Full Cycle IRR (2) 80% 70% 60% 50% IRR 40% 67% 65% 30% 20% 41% 34% 31% 26% 24% 10% 12% 0% 2010 2011 2012 2013 1. Half cycle IRR is based on actual drilling and completion costs, production to date and P+P reserves. 2. Full cycle IRR allocates all other capital costs to the wells (i.e. land, G&G, infrastructure) 5 TSX: YGR
Completion cost per stage Drilling cost per meter $250,000 $800 $700 $200,000 $600 $500 $150,000 $400 $100,000 $300 $200 $50,000 $100 $0 $0 2010 2011 2012 2013 2010 2011 2012 2013 Q3 2014 Operating costs/boe versus peers Q3 2014 G & A/boe versus peers 25.00 8.00 7.00 20.00 6.00 Average $15.39 5.00 15.00 4.00 Average $3.21 10.00 3.00 2.00 5.00 1.00 0.00 0.00 YGR MEI SRX RE TVE MQL RTK AEI ZAR GXE CJ SRX RE YGR RTK AEI CJ GXE TVE MQL MEI ZAR 6 TSX: YGR
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50,000,000 4,000 40,000,000 (Cashflow) 3,000 (mboe) 30,000,000 2,000 20,000,000 1,000 10,000,000 Cashflow Production 0 0 2010 2011 2012 2013 2014 (est) 0.00006 Production per share 0.80 Cash Flow per Share 0.70 0.00005 0.60 0.00004 0.50 0.00003 0.40 0.30 0.00002 0.20 0.00001 0.10 - - 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 9 TSX: YGR
P+P Reserves (mboe) Reserve Value PV10 ($ millions) 40,000 500 400 30,000 300 Oil 20,000 NGL's 200 10,000 Natural gas 100 0 0 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 Reserve Value PV10 ($ millions) P+P Reserves (mboe) 500 40,000 400 30,000 300 PROB 20,000 200 PUD PDNP 10,000 100 PDP 0 0 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 • Replaced 2013 production by 1,887% (614% in 2012) • Finding and development recycle ratio of 3.55 times on P+P reserves • Finding and development costs of $11.92/boe on proved plus probable reserves • Reserve life index of 34 years • Future development costs of $297 million 10 TSX: YGR
Central Alberta • Interest in 140 sections of land • 85 + horizontal wells drilled since 2010 • Focus • Cardium and Glauc plays Pembina Edmonton • Light oil Willesden Green • Rocky Mountain House High netback Ferrier Red Deer • Quick payouts Calgary 11 TSX: YGR TSX: YGR
T44 T44 LOWE LOWER CARD UPPER UPPE R CARDIUM GASSY GASSY IUM OIL CAR CARDIUM T43 T43 DIUM WILLESDEN GREEN CARDIUM FIELD L L O O W W E E R R T42 T42 CAR CARDIUM DIUM P R O S P E C T I V E UPPE UPPER C C A A H R R D D Z I I T41 U U T41 M M O I L PRO ROSP SPECT CTIVE VE LOWER LOW ER CARD RDIUM IUM HZ HZ O OIL GAS T40 T40 FERRIER CARDIUM FIELD P R O S P E C HZ T I V E P O R I O L S H P E Z C Legend T OIL I V E Wells T39 T39 cardium wtr inj PROSPECTIVE HZ cardium gas GAS cardium oil Working PROSPECTIVE HZ OIL yangarra land Farmin land T38 T38 Cardium Show Map cardium pool outlines T37 T37 By : Poruchny Date : 2013/12/04 Scale = 1:85000 Project : cardium show map R9 R8 R7 R6 R5W5 12 TSX: YGR TSX: YGR
T42 T42 T41 T41 HOADLEY BARRIER ISLAND BARRIER ISLAND T40 T40 HOADLEY CHANNEL HANNEL any any cut cut amoun amount T39 T39 Legend Wells glauc @TD glauc pens HZ glauc liquid rich gas All Glauc liquid rich gas T38 T38 Working CHANNEL Yangarra land any any cut cut amoun amount Glauconite Show Map T37 T37 Porosity Trends By : Poruchny Date : 2013/12/04 Scale = 1:85000 Project : glauc show map2 R9 R8 R7 R6 R5 R4 R3W5 13 TSX: YGR
• Let industry de-risk the play • Continue land-base to 2020 with strat test wells • Larger players are migrating to the Duvernay which may provide opportunities in plays like the Cardium and Glauc in Central Alberta • Continue to collect data and further de- risk Yangarra’s acreage The Duvernay represents option value that is not reflected in the current share price 14 TSX: YGR
• Early production rates show initial liquids yields up to 200 bbl/MMcf • Duvernay operators are still establishing Best Practices for Drilling and Completion • Production data supports the emergence of an economically attractive liquids fairway • Geological parameters (mineralogy, thickness, HC potential, TOC, fractures, brittleness, net pay, etc.) are generally known from industry activity/results, public data/analysis and YGR proprietary work • Reservoir Characteristics evolving • Local variations in rock YGR Acreage properties/well performance can be expected with further drilling 15 TSX: YGR
• Very Active Areas with high capital investment currently by majors and large independents • North Block primarily in liquids window with new YGR NORTH BLOCK horizontal drilling by Vermillion/Black Swan immediately offsetting (2 miles) YGR land • South Block surrounded by drilling activity (Shell, Encana, Talisman, Black Swan Swan/Paramount) YGR SOUTH BLOCK 16 TSX: YGR
• 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 wells and 2 vertical wells in the SWS formation Yangarra Land 17 TSX: YGR
Appendix 18 TSX: YGR
Colorado Group 650m thick Cardium 5m • Vertical production Second White Specks 30m exists in all zones Viking 5m • All zones meet the criteria for horizontal drilling Glauconitic 20m Ellerslie 10m Rock Creek 15m Duvernay 19 TSX: YGR TSX: YGR
$6,000 41% reduction in Drilling Represents 70% average drilling costs of Corporate Costs $5,000 since 2011 473 Staff count is down and performance is up 498 $4,000 1,807 373 Equip $3,000 Complete 1,792 273 1,376 Drill 1,134 $2,000 2,832 2,134 2,088 $1,000 1,563 $0 2010 2011 2012 2013 20 TSX: YGR
• Acreage within the liquids/volatile oil fairway • South Block (Willesden Green) • 7 Net Sections YGR NORTH • Net Pay ~ 36 m BLOCK • OGIP ranges from 70 to 100 BCF/sec • North Block (Pembina) • 54 Net Sections • Net Pay ~ 20 to 24 m YGR SOUTH • OGIP ranges from 40 to 50 BLOCK BCF/sec* *OGIP estimated internally using geochemical, petrophysical and geomechanical analyses of offset wells and proprietary reservoir studies 21 TSX: YGR
YGR acreage is optimal with high average porosity > 6% YGR Acreage 22 TSX: YGR
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