Value Microcaps Junior Energy

[Bobwins]

YGR.v/ygraf.pk C$.60

Ok, this is my newest find. I think it's a double/triple before year end.

Yangarra is a junior operating out of Alberta. They have 116.3million shares out plus 19.4 million warrants/options for FD share count of 135.7million. FD Market cap is C$81.4 million.

Q2 they earned 1.66million or .01/share. Cashflow was .03/share on 975boepd at 39% oil/liquids. They reported in August that they were at 2,000boepd and 45% liquids. Forecasting 2500boepd exit rate 12/11.

Using estimate of 1500boepd, $37/barrel netback = 5.1million cashflow in Q3 or .0378.

Averaging 2,000boepd gets them to .05 FD cashflow.

Typical junior with liquids heavy production is getting 100,000/flowing barrel. At current production, Yangarra is valued at 35,000.

Yangarra is drilling Cardium and Glauconite wells. They have over 5 years of drill sites in inventory. That isn't counting any ngas wells. Yangarra was 100% gas a couple of years ago so they are making rapid progress towards their goal of 50% liquids by 12/11.

Yangarra came close to bankruptcy in 2008-9. They are using very little debt and drilling out of cashflow. They issued a bunch of shares this year, raising 23 million so far but that has tanked the stock price. I think when they post Q3, the overhang will get absorbed.

Yangarra is working closely with Gasfrac. So far they feel Gasfrac is expanding their recoverable hydrocarbons but they are trying to recover the propane to lower costs. There is about $500K of propane injected into a typical frac so they hope to recover it so that it can be reused or sold. Current progress looks good so their frac costs will drop from 1.5 million to around 1 million per well AND they get enhanced recoveries.

I bought my shares at .60. I think this is a winner!

http://www.yangarra.ca/Financial-Reports/Presentations/