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Q1 2010 Earnings Call – Petroquest Energy Inc.

Petroquest Energy Inc. · May 5, 2010 · 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. Q1 2010 Earnings Call – Petroquest Energy Inc. – slide 1
    May 2010
  2. Q1 2010 Earnings Call – Petroquest Energy Inc. – slide 2
    Corporate Characteristics Historically, the Company has been successful in growing through the drill bit and strategic acquisitions Strong historical drilling success rate 92% since 1999 Consummated reserve and leasehold…
  3. Q1 2010 Earnings Call – Petroquest Energy Inc. – slide 3
    A History of Consistent Growth (1 ) Reserves 26% CAGR Production 32% CAGR Cash Flow 82% CAGR Stock price 20% CAGR (1) Begins in 1999 3
  4. Q1 2010 Earnings Call – Petroquest Energy Inc. – slide 4
    Resuming Operational Activity (Growth) Capital expenditures budget expected to double in 2010 to approximate cash flow 65% of 2010 direct capex allocated to long-life assets Large operated position allows for control of timing of…
  5. Q1 2010 Earnings Call – Petroquest Energy Inc. – slide 5
    Our Properties PQ operated Non-operated Tulsa Arkoma Arkoma Basin Basin PQ Office Locations East East Texas Texas (1) As of March 31, 2010 81% Reserves (1) 81% Reserves (1) Lafayette 19% Reserves (1) 19% Reserves…
  6. Q1 2010 Earnings Call – Petroquest Energy Inc. – slide 6
    Our Portfolio UNCONVENTIONAL PLAYS Three separate Three separate basins all EAST TX ARKOMA basins all core poised for growth to PQ Gulf Coast South Offshore Louisiana GOM CONVENTIONAL PLAYS Unrisked Drilling Estimated 1P…
  7. Q1 2010 Earnings Call – Petroquest Energy Inc. – slide 7
    Arkoma Basin Approximately 49,000 net acres in the Woodford Shale Approximately 18,000 net acres in the Fayetteville Shale Current production approximately 33,000 Mcf/day net 7
  8. Q1 2010 Earnings Call – Petroquest Energy Inc. – slide 8
    Woodford Shale Recent Activity Four Woodford wells completed in 4Q09 with average IP of 6.5 MMcf/d 11 gross operated Woodford wells budgeted for 2010 55% of 2010 capital budget allocated to Woodford Continued improvement in IP…
  9. Q1 2010 Earnings Call – Petroquest Energy Inc. – slide 9
    Gross Woodford Production (PQ Operated) 70,000 Drilling Drilling Operations Operations Mcf/d Suspended Suspended Drilling Operations 60,000 Resumed 50,000 First Rig Second Rig 40,000 30,000 20,000 10,000 Third Rig 0 Feb07…
  10. Q1 2010 Earnings Call – Petroquest Energy Inc. – slide 10
    3D Seismic Based Drilling PQ 27 PQ 9 6000 ne Limesto ka anuc Wap 7000 e Shal dford Woo 8000 IP 12.5 MMcfe IP 2.9 MMcfe Section Section Section Line Line Line 9000 3D Seismic Profile 10
  11. Q1 2010 Earnings Call – Petroquest Energy Inc. – slide 11
    Woodford Decline Curves (1) Source: Simmons & Company 11
  12. Q1 2010 Earnings Call – Petroquest Energy Inc. – slide 12
    IRR Woodford Horizontal Well Economics /Mcf Capital (M) Assumptions: Price* 4,000 5,000 6,000 IP Rate 5.0 MMcfd 4 14.3% 7.3% 3.0% IRR % /Mcf EUR 4.6 Bcf 6 46.7% 31.4% 21.9% Well Cost - 4.0 to 6.0 MM 8 81.2% 58.4%…
  13. Q1 2010 Earnings Call – Petroquest Energy Inc. – slide 13
    Woodford Shale PQ Delivers Top Max Monthly Rate Horizontal Woodford Shale Completions PQ WOODFORD PROGRAM PQ delivered highest maximum monthly initial Max Monthly Gas Rate, Mcfd 4,500 production rate of any company 4,000 15%…
  14. Q1 2010 Earnings Call – Petroquest Energy Inc. – slide 14
    Woodford Shale - Upside Leverage Ticker Woodford Acres Acres/EV (1) PQ 49,000 91.1 NFX 165,000 17.6 DVN XTO Macintosh SM 49,000 15.7 Hughes PQ PQ Haskell Pittsburg CLR 47,000 5.5 Latimer XTO 160,000 4.3 CLR Pontotac DVN…
  15. Q1 2010 Earnings Call – Petroquest Energy Inc. – slide 15
    Fayetteville Shale Approximately 18,000 net acres Current production approximately 6,000 Mcf/day net 3% of 2010 capital budget allocated to Fayetteville 15
  16. Q1 2010 Earnings Call – Petroquest Energy Inc. – slide 16
    Fayetteville Shale - Upside Leverage Ticker Fayetteville Acres Acres/EV (1) CHK HK SWN SWN 857,000 59.5 Stone PQ 18,000 33.5 XTO PQ HK 157,000 17.6 Van Buren Pope SWN CHK 415,000 15.4 HK Cleburne CHK XTO 380,000 10.1 (1)…
  17. Q1 2010 Earnings Call – Petroquest Energy Inc. – slide 17
    East Texas Anchored by SE Carthage field: 23,900 net acres and 1Q10 avg daily production of 10.1 MMcf/d Horizontal Cotton Valley program: two to three wells planned for 2010 Travis Peak program: three to four wells planned for…
  18. Q1 2010 Earnings Call – Petroquest Energy Inc. – slide 18
    East Texas - Haynesville/Bossier Upside Source: RBC Capital Markets 18
  19. Q1 2010 Earnings Call – Petroquest Energy Inc. – slide 19
    Near-Term Gulf Coast Drilling Inventory Focus near term capital on low cost recompletion opportunities, low risk development projects and select high impact drilling prospects 35% of 2010 capex budget allocated to GOM/GC basin…
  20. Q1 2010 Earnings Call – Petroquest Energy Inc. – slide 20
    2009 Strategy & Results Focus for 2009 was building liquidity through reduction of Capex 12/31/08 12/31/09 Capex (mm) 358 59 Production (Bcfe) 33.8 34.2 Reserves (Bcfe) 185 179 Revolver Debt (mm) 130 29 Debt/Proved Mcfe 1.29…
  21. Q1 2010 Earnings Call – Petroquest Energy Inc. – slide 21
    Arkoma Basin Strong Growth Metrics G R CA % 52 Includes Woodford and Fayetteville 21
  22. Q1 2010 Earnings Call – Petroquest Energy Inc. – slide 22
    Summary of Diversification Efforts th r ow G 0 % 16 h owt G r 7% 15 * Using the SECs previous reporting methodology, proved reserves would have been 202.2 Bcfe (194% growth; year end 2009 prices of 5.79 per mcf and…
  23. Q1 2010 Earnings Call – Petroquest Energy Inc. – slide 23
    Comparative Valuation P/2010E CF P/2011E CF Resource Peer Group Multiple(1) Multiple(1) Brigham Exploration 19.1 9.0 Carrizo Oil & Gas 5.9 3.8 Chesapeake Energy 3.4 3.3 Clayton Williams 2.8 2.1 Continental Resources 12.1 8.9…
  24. Q1 2010 Earnings Call – Petroquest Energy Inc. – slide 24
    Capital Investment Program Diversification Reduces Risk 2008 2009 2010E ETX ETX ETX 7% 15% 5% GOM GOM 21% 24% GOM ARK ARK 18% ARK 55% 52% 58% Gulf Coast Gulf Coast Gulf Coast 11% 12% 21% 280 million 59 million 110…
  25. Q1 2010 Earnings Call – Petroquest Energy Inc. – slide 25
    Focused Effort to Fund Drilling with Cash Flow 350 Direct CapEx (excluding acq.) 300 Cash Flow (1) 250 MM 200 88 million liquidity build 150 100 50 0 2004 2005 2006 2007 2008 (2) 2009 (3) (1) See…
  26. Q1 2010 Earnings Call – Petroquest Energy Inc. – slide 26
    Hedging Positions Target of hedging 40%-50% of annual production approximately 40% of the 2010E gas production is hedged (based on mid-point of production guidance) Gas hedging positions (costless collars) 26
  27. Q1 2010 Earnings Call – Petroquest Energy Inc. – slide 27
    Summary and Outlook Capex budget expected to double in 2010 Woodford drilling budget up 200%+ from 2009 Assets in place to provide reserve and production growth Operational and cost improvements in the Woodford Sequential…
  28. Q1 2010 Earnings Call – Petroquest Energy Inc. – slide 28
    Appendix 28
  29. Q1 2010 Earnings Call – Petroquest Energy Inc. – slide 29
    Appendix - 1 ( in thousands) 2004 2005 2006 2007 2008 2009 Net income (loss) 16,348 21,417 23,986 40,619 (96,960) (90,190) Reconciling items: Deferred tax expense (benefit) 8,511 12,477 14,604 23,664 (55,581) (14,635) Gain…
  30. Q1 2010 Earnings Call – Petroquest Energy Inc. – slide 30
    400 East Kaliste Saloom Road, Suite 6000 Lafayette, Louisiana 70508 Phone: (337) 232-7028 Fax: (337) 232-0044 www.petroquest.com NYSE: PQ 30

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