NBF note on Q1 Yangarra (YGR) in line Q1. Average production of 10.0 mboe/d (vs. cons. 10.4 mboe/d), with the company reporting some lost production due to third-party outages (~500 boe/d for the quarter) and, as a result of lower royalty payments (-19% Q/Q on a per boe basis), significant cash cost reductions were realized (-15% Q/Q), resulting in CFPS in line with expectations at $0.43/sh (vs. cons. $0.42/sh). Q1 volumes were negatively affected by a force majeure at a third-party gas plant, reducing production by 1,500 boe/d in March (~500 boe/d loss for the quarter), although we do not expect this to be a continuing theme as the company has indicated that the affected production was back online as of April 1.
- Significant free cash was generated during the quarter, with a 54% payout on a capital spend of $21mm, seeing excess cash used to reduce net debt -9% Q/Q to $179mm. On our revised estimates, we forecast the company to meet its leverage target in mid-2022, with an annualized D/ CF of 0.6x.