How much cash does Yangarra really make, and what is a share of it worth?

The words on this page

Real cash (true cash)

What was left in the bank each year after every bill, every tax payment and every well drilled. Not profit, and not "cash flow" as companies usually quote it, which leaves the drilling out. The strictest number there is.

Required return

The yearly return you insist on for taking the risk. A dollar promised in ten years is worth less than a dollar today; this rate says how much less. 9% is a common professional figure for a large Canadian producer; the reserve engineers use 10%.

Well life (reserve life)

How long the wells keep producing. After the life you choose, nothing is counted. At 31 December 2025 Yangarra reported 80.6 million boe of proved reserves and 118.6 million boe of proved plus probable, a stated reserve life index of 23.05 years proved and 33.93 years on 2P against 2025 production of 10,003 boe a day; the model caps the 2P life at 30 years.

What a share is worth

Every future year's cash, shrunk back to today's dollars at your required return, added up, less the debt, less the cost of cleaning up the wells, divided by the number of shares. Pay less than this and you earn more than your required return; pay more and you earn less.

Where the default growth comes from

Yangarra's 2026 capital budget of $60 million is intended to hold production at 10,000 boe a day, flat against 2025's 10,003, so the growth dial starts at 0 per cent.

The arithmetic, step by step

1. Count the real cash each past year: cash generated by operations as reported, plus interest paid put back, minus rent on leases, minus every dollar spent on wells and plants. Buying and selling assets is shown separately.
2. Project it. The starting cash you choose (an average of the history, or the latest year) grows at your growth dial for ten years, then at the long-run rate for as long as the wells keep producing. Nothing is counted after the well life ends.
3. Bring it back to today. Each year's cash is shrunk by your required return, counted at mid-year because cash arrives through the year rather than on 31 December.
4. Turn it into a share value. Add up the shrunk cash; take off net debt of C$125M; take off the C$18M cost of cleaning up the wells if that switch is on; divide by 105.595M shares.
5. Work it backwards. "The growth today's price assumes" is the ten-year growth rate at which this start is worth exactly the share price.

Where the numbers come from

• The ten year average is dragged below zero by the 2017 to 2019 Cardium build out, when Yangarra spent roughly twice its operating cash flow growing production from 3,000 to 12,600 boe a day. The five year average shows the steadier current business; the start selector lets you choose.
• Interest for 2018 to 2025 is the cash interest and finance costs paid disclosed in the audited statements; the 2018 figure of $4.35 million comes from the supplemental disclosure in the 2019 statements, since the 2018 statements themselves disclose no cash interest figure. For 2016 and 2017 the statements disclose only the accrued interest and finance cost expense ($2.19 and $2.73 million), which is used as the cash figure.
• Net debt is the bank debt on the audited balance sheets; Yangarra carries no cash (its accounts sweep to the credit facility), so bank debt is net debt. It excludes lease obligations of roughly $2 to $6 million and the working capital deficit. Yangarra's own adjusted net debt measure, which adds net working capital, was $110.4 million at 30 June 2026 versus the $124.6 million of bank debt used here.
• The 2016 bank debt of $65.1 million was classified entirely as current at that year end because the facility was up for renewal, not because it was called.
• Lease payments are zero before 2019 because IFRS 16 took effect that year; from 2020 they are the lease principal plus the lease interest paid in financing activities, and for 2019 the audited statement presents only the $1.23 million principal repayment there.
• Yangarra has never paid a dividend or bought back shares; the zeros are real. Acquisitions are also zero apart from a $1.4 million property purchase in 2016; small land purchases sit inside capital spending.
• The 105.6 million share count is common shares issued at 30 June 2026. Weighted diluted shares for the first half of 2026 were 112.5 million, with about 8 million restricted share units driving the difference.
• 2025 production of 10,003 boe a day was 42 per cent oil and liquids; only 60 per cent of 2025 capital produced 2025 volumes because drilling paused five months on weak prices.

For the technically minded

The method is the one used to evaluate capital projects, from Ted Lawrence, The Business Guide to Economic Evaluations: Projects, Leases, Tariffs and Acquisitions (2017). "Real cash" is the book's project cash flow (chapter 3) with depreciation, debt servicing and debt-like leases restructured out (chapters 4, 5 and 19); short operating leases stay in as a cost of producing, a chapter 19 judgment. The value per share follows the share-purchase evaluation of chapter 20: present value of the company's cash flows at the cost of capital (chapter 10), mid-year discounting (chapter 12), plus non-required assets, less net debt and the decommissioning liability. "What you gain or lose" is the bid-curve NPV of chapter 20; "when you get your money back" is the discounted payout of chapter 13; the bars follow the project profile of chapter 6. The reverse solve on growth is a plain reverse DCF.

Discount-rate anchors: 9% is a common cost-of-equity figure for a large Canadian producer and 10% is the reserve-report convention (PV10). The long-run rate defaults to 0% here: a depleting resource should not be assumed to grow forever, so anything above zero is a judgment you make with the dial.