Yangarra Resources Ltd T.YGR

Some quick questions please

[Angles]

Hi guys,

I have a quick question or two that concerns YGR's future stock price and here is why.

Don't get me wrong, as I strongly believe in the value and future of Yangarra, I just wonder if they will still be selling all their natural gas or shuttung most of it in.

The reason I am asking this is because of the abnormally low spot gas price ($0.80) and future months lows as well. See link for chart below;

https://www.gasalberta.com/gas-market/market-prices

In my opinion, this could effect (slow down income/losses or delay debt repayment plans) what you are saying about any upcoming earning reports.

Will they still be going ahead with the upcoming drilling plans they have announced? Is that mainly for oil and will it go ahead or could these low gas prices effect this too?

If they shut in any natural gas and delay any drilling plans, will this lead to a lower YGR stock price during the summer and early fall? Or until the floor of the gas price improves?

I already hold a small amount of YGR shares and I am looking to increase my holdings (at good prices only) but I fear the stock price is going to come down more, instead of appreciating as most say here. At least for a little while.

Just throwing my thoughts open for discussion. All my best to other YGR shareholders.

Angles

[TheRexmember]

There are better companies to own Angles. This is a value trap until there is a fundamental change to the company.  pou, tou, or crew if you want dyer gas. PNE another dryer gas producer after the next quarter should be a good buy with a Divvy.  if you want mixed gas and oil Veren and Whitecap are solid operators with good to great dividends.  lots of better bets with

[Hendrick3]

Angles, nobody has better fundamentals to share price than ygr at this price. Trading at market cap at around 1X ebitda and EV at 2X ebitda. The rest of industry trades at around 3x.and 5x. Their PDP reserves NAV are 3X share price. Why are they so low? Management had a bad drilling performance in 2H of 2023. Had a great 1q 2024 but with gas prices so low there is no impetus for a rally. I figure

[cfliesser]

Angles, it's a question of if you want something that has long term value potential or something that is fairly valued and pays a dividend today. Note that the reason for YGR value discount is that management continually fails to execute on drilling plans. I hold it because I think believe inmean reversion, not because I am confident in management.

[Hendrick3]

Management hasn't failed in building value or in delivering results. They have failed in delivering on expectations. They don't believe in under promising and over delivering as they feel it lacks integrity. It's the game almost ever Junior plays and as a result they are undervalued on a relative basis. I think management believes fundamentals will eventually be more important than

[cfliesser]

they have objectively failed on delivering results. Look back at production forecasts...

[Hendrick3]

No they have delivered better results such as FFO per share and EPS relative to others. Their PDP reserve additions have been top of the class.  They set high expectations for themselves and failed to deliver on those exalted expectations and that is why they are being punished. They are trading at 30% of their milk the cow reserves so they should be about $3.50 on a  relative

[Hendrick3]

I noticed no one answered your questions. Most natural gas producers will not produce below variable cost however with Ngl and crude stream intermingled they may be well above variable costs on most wells. For dry gas wells tgey would likely shut them in unless their variable costs are very low which YGR's typically are. No question if gas prices result in shut ins that will lower production

[Helloworld]

I doubt very highly YGR shuts in any wells. They will likely defer drilling and lower H2 Capex which will also hurt production but not immediately.  Need some big players like tou or cnq to shut in some production. Would be a big tailwind and help set a proper floor on aeco. 

[kavern23]

Helloworld...thats the problem does it make sense TOU or CNQ does shut in NG production? Tou probably is best gas marketer in Canada due to their size and brains. CNQ doesnt mind a period of NG prices low cause they can just buy good companies out. If things ever sink...I can see TOU looking at Arc. But the tea leaves are telling us that being bigger is better. about 20 reason on why. Probably

[Helloworld]

Aeco is currently under 80 cent strip for next 3 months. At that price point there are a lot of wells that will lose a lot of money that should be shut in.  It doesn't matter if you are 50% or 75% hedged and only minimal exposure to aeco, the incremental barrel is losing a lot of money for a lot of people right now.  Market is saying shut it in or it will go negative. 

[Hendrick3]

Everyone shuts in wells where the variable costs are greater than the price. It doesn't matter your volume, hedged volume etc. if they don't shut in below variable cost, they will go broke very quickly. Ygr management team may have lower variable costs but they still must shut in below variable cost. 

[kavern23]

Pretty much every YGR well has abit of oil or NGl's along with NG. Hard to really peg when YGR would.

[Hendrick3]

Well with mixed production you are still making positive cash so shutting in would not make sense. Dry gas producers are probably already shutting in. I don't think investors have discounted dry gas producers as heavily as would be expected. 

[Hendrick3]

Also AECO spot will rise eventually. With NY price close to $4 Cad the arbitrage opportunity is just too large to ignore. Someone will find a way to sell aeco gas to NY and will make a fortune. With that much of a differential th money is too large not to close the gap.