Yangarra Resources Ltd T.YGR

A different point of view

[ppp]

Everybody here seems to think that production growth is the key driver for YGR. But if they manage to achieve guidance of production growth of 2000 barrels at todays prices, free cash flow would already be at 52 mil. We all understand that YGR needs to bring their debt down to 1x cash flow, works out to, at todays prices, about 155 mil. This should be achieved in 2022 based on them having 52 mil free cash flow. Basically we are investing in a company that was able to grow production by 20% and reduce debt by close to 25%.

For 2023 they are guiding about 80 mil free cashflow, based on todays natural gas & oil prices. This will mean that approx. half could be designated for a dividend and would still leave a substantial amount for more debt reduction, share buybacks or production increases. Based on a 40 mil potential dividend, investors buying the shares today could expect close to .50 per share div. Possibly 20 to 25%.

Basically all this company needs to do is meet guidance for cap/x and production growth and 4.00 a share should be easily acheivable.

[Hendrick3]

I use FFO compare with share price as a guiding metric for undervalued stocks. All I needed to see was FFO of 38 cents in 4Q on a price of $1.75 to know this was a screaming buy. This is also confirmed by YGR having the most discounted share price to reserves in the industry. In essence this is trading at about or under 2022 FFO. In terms of debt, who cares. In this pricing environment, more

[ppp]

FFO is a good metric to look at companies at a glance. I like Free funds flow better, as it gives you a better view of their effiiciency, You can have lots of FFO, but if it takes to much to keep production flat your not gaining. That is what concerned me here for a long time.  Yes I agree Debt is not a concern at these  oil and gas prices, It depends on your time frame as an investor

[Hendrick3]

My problem with FCF is it's very hard to break out maintenance capital from growth capital. Lots of companies claiming FCF numbers while production shrank and lots being penalized for low FCF while production grew. FFO doesn't have those issue. It's pure funds generation