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IPAA OGIS NEW YORK – Bonanza Creek Energy, Inc.

Bonanza Creek Energy, Inc. · Apr 20, 2015 · 30 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. IPAA OGIS NEW YORK – Bonanza Creek Energy, Inc. – slide 1
    Integrity Teamwork Transparency April 2015 Investor Presentation
  2. IPAA OGIS NEW YORK – Bonanza Creek Energy, Inc. – slide 2
    Bonanza Creek Overview Market Cap(1): 1.3 billion Wattenberg Field(2) Arkansas 20,000 7,000 Enterprise Value(1): 2.1 billion Boe/d Boe/d Resilient asset base at lower prices 0 0 Q4 Q4 Q4 Q4 2011 2014 2011 2014 Low cost…
  3. IPAA OGIS NEW YORK – Bonanza Creek Energy, Inc. – slide 3
    Strong Growth and Cash Flow Track Record Sales Volumes(1) (Boe/d) Adjusted EBITDAX(2) (thousands) 25,000 120,000 100,000 20,000 80,000 15,000 60,000 10,000 40,000 5,000 20,000 - - 2007 2008 2009 2010 2011 2012 2013 2014 Q1 Q2…
  4. IPAA OGIS NEW YORK – Bonanza Creek Energy, Inc. – slide 4
    Wattenberg Niobrara Resilient to Low Oil Prices Selected U.S. Oil / Liquids Basin IRRs at the Strip and Theoretical IRR with 20% Reduction in Capex Internal Rate of Return (IRR) 40% IRR at the Strip IRR -20% Cost Deflation 35% 30%…
  5. IPAA OGIS NEW YORK – Bonanza Creek Energy, Inc. – slide 5
    How to Thrive Through the Bottom of a Cycle Discretionary Deployment of Capital Majority of leasehold is HBP 14 million required to maintain leases not intending to drill in 2015 No long term rig, frac or sand commitments…
  6. IPAA OGIS NEW YORK – Bonanza Creek Energy, Inc. – slide 6
    Cutting Spending Increasing Production Capital Expenditures Budget(1) Annual Daily Avg. Sales Volumes(1) 700 32,000 600 30,000 500 28,000 (millions) 400 26,000 300 24,000 200 100 22,000 - 20,000 2014 2015 2014 2015…
  7. IPAA OGIS NEW YORK – Bonanza Creek Energy, Inc. – slide 7
    ExplorationDelineationOptimizationEfficiency Wattenberg Field Operated HZ Wells Drilled Since 2011 Cumulative 2011 2012 2013 2014 2015 Operated Wells Drilled 3%3% 2% 1% 3% 7% 10% 29% 10% 14% 4 40 127 241 46% 9% 318 34% 29% 100%…
  8. IPAA OGIS NEW YORK – Bonanza Creek Energy, Inc. – slide 8
    Deep Organic Development Inventory 30 Years of Wattenberg 3P Inventory (2,000 net locations) Wattenberg Wattenberg Arkansas Cotton Valley Niobrara B North Park Codell 5-acre spacing Basin Niobrara Wattenberg Niobrara B/C…
  9. IPAA OGIS NEW YORK – Bonanza Creek Energy, Inc. – slide 9
    Contiguous Acres Support Full Development 70,000 net acres in Extension Area Zero exposure to urban population Near established infrastructure Blocky acreage attractive for long laterals Prospective for Up to Five Stacked Pay…
  10. IPAA OGIS NEW YORK – Bonanza Creek Energy, Inc. – slide 10
    Evolution of Greater Wattenberg Development 2012 2015 2012 Niobrara B productive across acreage 2013 Niobrara C productive across acreage; Codell productive across 15,000 net acres 2014 Niobrara B / C stacking confirmed;…
  11. IPAA OGIS NEW YORK – Bonanza Creek Energy, Inc. – slide 11
    Leading Relative HZ Niobrara Well Performance Creaming Curve(1) (Wattenberg HZ wells since 2013) Key Takeaways & Methodology 3,000 Superior 90-day cumulative well production history Creaming curves show rate of change and relative…
  12. IPAA OGIS NEW YORK – Bonanza Creek Energy, Inc. – slide 12
    Concentrated Land Position in Wattenberg 97,000 gross (70,000 net) acres LEGEND Current BCEI Leasehold Existing Horizontal Wells BCEI BBG/EOG NBL CRZO PDCE OTHER 13
  13. IPAA OGIS NEW YORK – Bonanza Creek Energy, Inc. – slide 13
    2015 Rockies Drilling Program 1 Goal: Leverage Existing Infrastructure; Minimize Non-Well Capital 70+ wells into 8 shared facilities LEGEND Large Centralized Battery 2015 Planned Drill Pad Future Salt Water Disposal Well…
  14. IPAA OGIS NEW YORK – Bonanza Creek Energy, Inc. – slide 14
    Increased Confidence in 40-Acre Downspacing 45,000 18 Stages: 15 Wells 28 Stages: 9 Wells 40,000 28-Stage Pad Avg. 35,000 354 Mboe Type Curve Cumulative Production (Boe) 30,000 25,000 20,000 18-Stage Pad Avg.…
  15. IPAA OGIS NEW YORK – Bonanza Creek Energy, Inc. – slide 15
    Strong Proved & 3P Reserves Growth Wattenberg 1P Reserves(1) 558 MMBoe Net 3P Reserves 1 2 3 4 5 6 7 8 9 10 11 12 13 70,000 Codell Wattenberg 1P 60,000 7% 14% Arkansas 50,000 55% 8% 40,000 60% 30,000 20,000 68% 40% 32% 10,000…
  16. IPAA OGIS NEW YORK – Bonanza Creek Energy, Inc. – slide 16
    Wattenberg Hz Niobrara B Target Type Well Type Well Economics 4,000 9,000 EUR(1) (MBoe) 354 687 Current Cost per Well 3.6 MM 5.9 MM NPV-10 at 60/BO 0.9 MM 3.1 MM ROR Sensitivity to WTI Crude Oil Price(2) 70% XRL 5.9MM SRL 3.6MM…
  17. IPAA OGIS NEW YORK – Bonanza Creek Energy, Inc. – slide 17
    Crude Oil Pipeline Infrastructure Expanding Rail Capacity by YE 2015 Operator Capacity Timing Multiple 120,000 Bbl/d Existing Plains 35,000 Bbl/d 3Q 2015 ARB Midstream 70,000 Bbl/d 4Q 2015 Pipeline Capacity by YE 2017 Pipeline…
  18. IPAA OGIS NEW YORK – Bonanza Creek Energy, Inc. – slide 18
    Significant Gas Processing Upgrades 19
  19. IPAA OGIS NEW YORK – Bonanza Creek Energy, Inc. – slide 19
    Mid-Continent Operations (Arkansas) Conventional Cotton Valley: 6,500 8,800 feet ERA SYSTEM SERIES GROUP FORMATION CENOZOIC EOCENE Claiborne PALEOCENE Wilcox Low-risk infill development down to 5-acre spacing TERTIARY CRETACEOUS…
  20. IPAA OGIS NEW YORK – Bonanza Creek Energy, Inc. – slide 20
    Lenticular Oil-Weighted Cotton Valley Sands Pin-Point Fracture Technology Focused completion technology Improved recovery of OOIP Highly repeatable Dorcheat Unit 37 25-30 sand/shale sequences Each zone individually pressured…
  21. IPAA OGIS NEW YORK – Bonanza Creek Energy, Inc. – slide 21
    Financial Overview 22
  22. IPAA OGIS NEW YORK – Bonanza Creek Energy, Inc. – slide 22
    Strict Focus on Cash Operating Costs Unit Cash Operating Costs (/Boe)(1) Unit Revenue & Cash Margins (/Boe)(1) 25 75 71.85 72.95 68.47 20 6.06 60 66.64 7.82 76% 6.54 3.39 68% 68% 15 71% 51.71 45 4.61 7.51 6.86 6.34 66% 10…
  23. IPAA OGIS NEW YORK – Bonanza Creek Energy, Inc. – slide 23
    Significant Production Hedged Hedge Volume Summary(1)(2) 2015 2016 Crude Oil 10,000 Bbl/d 5,500 Bbl/d Natural Gas 15,000 Mcf/d Oil Hedging: Fixed Price Swaps Oil Hedging: 3-Way Collars Gas Hedging: 3-Way Collars 7,000 110 7,000…
  24. IPAA OGIS NEW YORK – Bonanza Creek Energy, Inc. – slide 24
    BCEI vs Basin Focused Peers Unit EBITDAX 45 EBITDAX / Boe (MRQ) Peer Group CASH MARGIN 40 Avg: 35 30.05 30 AVERAGE 25 20 15 LEVERAGE VALUATION 10 5 0 Bakken Eagle Miss Lime Marcellus/ Permian BCEI DJ…
  25. IPAA OGIS NEW YORK – Bonanza Creek Energy, Inc. – slide 25
    Investment Recap Company Headquarters Investor Relations 410 17th Street, Suite 1400 James Masters Contiguous Denver, Colorado 80202 (720) 440-6121 Acreage (720) 440-6100 jmastersbonanzacrk.com Resilient Maximizing Assets to…
  26. IPAA OGIS NEW YORK – Bonanza Creek Energy, Inc. – slide 26
    Appendix 27
  27. IPAA OGIS NEW YORK – Bonanza Creek Energy, Inc. – slide 27
    Wattenberg Horizontal Niobrara Economics(1) Target Three-Stream SRL 354 and XRL 687 MBoe Type Curves 700 SRL 354 (2-stream IPs): 650 30-day Avg: 30-day 458 boepd Avg: 458 boepd 60-day Avg: 60-day 400 boepd Avg: 400 boepd 600…
  28. IPAA OGIS NEW YORK – Bonanza Creek Energy, Inc. – slide 28
    Legacy Acreage Correlation to Wells Ranch Niobrara A Bench Thinner and resistivity less developed A Niobrara B Bench Similar thickness and resistivity A Niobrara C Bench Slightly thinner lower chalk bench; similar resistivity…
  29. IPAA OGIS NEW YORK – Bonanza Creek Energy, Inc. – slide 29
    Reconciliation to Adjusted EBITDAX Adjusted EBITDAX is a supplemental non-GAAP financial measure that is used by management and external users of the Companys consolidated financial statements, such as industry analysts, investors,…
  30. IPAA OGIS NEW YORK – Bonanza Creek Energy, Inc. – slide 30
    Reconciliation to Cash Margin We define unhedged cash margin per Boe as oil and natural gas revenues, less (1) lease operating expense, (2) oil and natural gas taxes, and (3) cash G&A expense (excludes stock-based compensation), divided…

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