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Capital One Southcoast 8th Annual Energy Conference – Petroquest Energy Inc.

Petroquest Energy Inc. · Dec 11, 2013 · 40 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. Capital One Southcoast 8th Annual Energy Conference – Petroquest Energy Inc. – slide 1
    December 2013
  2. Capital One Southcoast 8th Annual Energy Conference – Petroquest Energy Inc. – slide 2
    Our Daily Focus Utilize Strong Gulf Coast Cash Flow to Develop High-Return Onshore Resource Assets 3
  3. Capital One Southcoast 8th Annual Energy Conference – Petroquest Energy Inc. – slide 3
    Gulf Coast Cash Flow Magnifies Growth Woodford Development Minimal Reinvestment Capex * Free Cash Flow Cotton Valley Expansion Gulf Coast Assets Mississippian Evaluation * Since 2007, Gulf Coast has generated 306 MM of…
  4. Capital One Southcoast 8th Annual Energy Conference – Petroquest Energy Inc. – slide 4
    Returns Focused Growth Long-lived asset base focused in industry leading basins Typical Returns by Play* 60% 55% 55% 52% 51% 49% 50% 42% 40% 40% 36% 35% 35% 34% 33% 30% 30% 28% 27% IRR 30% 26% 23% 21% 20% 20% 19%…
  5. Capital One Southcoast 8th Annual Energy Conference – Petroquest Energy Inc. – slide 5
    Our Properties Gulf Coast Gulf Coast Acquired Acquired Gulf Coast Gulf Coast Legacy Legacy RESERVES: 302.1 Bcfe (1) East Texas (75% Long Life) Mid-Con Legacy Gulf Coast Acquired Mid-Con PRODUCTION: 41.4 Bcfe (1)…
  6. Capital One Southcoast 8th Annual Energy Conference – Petroquest Energy Inc. – slide 6
    Gulf Coast Basin Acquisition Proven Track Fully Developed High Record in Exploiting Margin Cash Flow Gulf Coast Assets 7
  7. Capital One Southcoast 8th Annual Energy Conference – Petroquest Energy Inc. – slide 7
    GOM Assets Acquired La Cantera EC 65 D-1 EC 65 D-2 EC 160 A-7 SS 72/225 MP 72/74 EC 160 A-8 WC 401 VR 229 A-1 WD 89 D-1 WD 89 D-2 EC 222 WD 89 D-3 EI 246 J-1 WD 89 D-4 EI 246 J-2 SS 238 C-1 (6) WD 89 D-5 EI 246 J-3 SS…
  8. Capital One Southcoast 8th Annual Energy Conference – Petroquest Energy Inc. – slide 8
    Acquisition Overview Attractive Price for Cash Generating Assets 300 278 Proved 3P 250 192 Reserves 5.3 MMBoe 8.5 MMBoe 200 107 PV10(1) 171 MM 278 MM MM 150 171 F&D per BOE 36.41 22.66 100 Price/PV10 1.1x 0.7x 50…
  9. Capital One Southcoast 8th Annual Energy Conference – Petroquest Energy Inc. – slide 9
    History of Positive Reserve Revisions Main Pass 74 Example 1P Reserves 3P Reserves SEC Booked Reserves Lease Line Water Level at Discovery Original Booked Reserves (1P) 2003: 7.6 Bcfe (net) Positive Reserve Revisions…
  10. Capital One Southcoast 8th Annual Energy Conference – Petroquest Energy Inc. – slide 10
    Onshore Growth Assets Accelerate Development of Long-lived, Low-risk Woodford Shale and Cotton Valley Assets 11
  11. Capital One Southcoast 8th Annual Energy Conference – Petroquest Energy Inc. – slide 11
    Woodford Position Ramping Up Development 2013 Liquids Rich Leasing Activity 25,000 acres Legacy Liquids Rich Acreage Legacy Dry Gas Acreage 3,000 acres 60,000 acres Asset Highlights and Current Liquids Rich Focus: Average…
  12. Capital One Southcoast 8th Annual Energy Conference – Petroquest Energy Inc. – slide 12
    Woodford Liquids Rich Gas Horizontal Well Economics (With JV Promote) 120% Capital 110% 4MM 100% 90% Wet Marcellus(1) 80% 80% Dry Marcellus(1) 70% 60% IRR 50% 40% 30% 20% 10% 0% 3.00 3.25 3.50 3.75 4.00 /Mcf…
  13. Capital One Southcoast 8th Annual Energy Conference – Petroquest Energy Inc. – slide 13
    Continuous Improvement in the Woodford PetroQuest Operated Woodford Horizontal Wells 4500 PQ 1-24 4000 PQ 25-48 3500 PQ 49+ 3000 Gas Rate, MCFED 2500 2000 34% Improvement in Average Production 1500 1000 500…
  14. Capital One Southcoast 8th Annual Energy Conference – Petroquest Energy Inc. – slide 14
    PQ Woodford Performance Expect to Replicate 8 years of drilling over the next 2.5 years 60 120 Wells Cumulative Production 50 50 50 PDP Reserves 100 40 80 34 Wells 30 Bcfe 30 60 20 16 40 19 10 9 20 9 4 1 5 -…
  15. Capital One Southcoast 8th Annual Energy Conference – Petroquest Energy Inc. – slide 15
    Liquids Rich Cotton Valley Program 6 non-operated wells completed in 2011 Average IP rate of 3.9 Mmcf/d and 244 barrels of NGLs/d 9 operated wells completed in 2011 2013 Average IP rate of 5.5 Mmcf/d and 371 barrels of NGLs/d…
  16. Capital One Southcoast 8th Annual Energy Conference – Petroquest Energy Inc. – slide 16
    Liquids Rich Cotton Valley Program True Resource Play Improving Well Performance With Each New Well 12 6.3 Mmcf + 458 Bbls 10 of NGLs Average IP Rate (Mmcfe/d) 5.2 Mmcf + 359 Bbls 8 of NGLs 4.4 Mmcf + 312 Bbls of NGLs…
  17. Capital One Southcoast 8th Annual Energy Conference – Petroquest Energy Inc. – slide 17
    Liquids Rich Cotton Valley Horizontal Well Economics 55% 52% 50% 45% IRR 40% 40% 35% 30% 28% 25% 3.00 3.50 4.00 Gas* NGL IRR Payback 3.00 25 28.1 % 26 Months 3.50 30 39.7 % 20 Months Assumptions: 4.00 35 51.6 %…
  18. Capital One Southcoast 8th Annual Energy Conference – Petroquest Energy Inc. – slide 18
    Mississippian Lime Utilizing Science to Enhance Value PQ Phase I: Exploration 14 wells High Visibility / High Variability (market) Grant PQ Kay Phase II: 3-D Acquisition/Reservoir Modeling (2013) Phase III: Development 2014+ RRC SD…
  19. Capital One Southcoast 8th Annual Energy Conference – Petroquest Energy Inc. – slide 19
    Cash Flowing Gulf Coast Assets Attractive Development Prospects with Minimal Funding Requirements 20
  20. Capital One Southcoast 8th Annual Energy Conference – Petroquest Energy Inc. – slide 20
    Gulf Coast Assets: Free Cash Flow Funds Growth Capex as a % of Net Cash Flow(1) Cum Net CF 80% 350 70% 280.6 305.6 300 62% Capex as a % of Cash Flow 60% 54% 249.8 250 50% 54% 45% 220.2 45% MM 200 40% 171.8 150…
  21. Capital One Southcoast 8th Annual Energy Conference – Petroquest Energy Inc. – slide 21
    La Cantera High Impact Discovery 22
  22. Capital One Southcoast 8th Annual Energy Conference – Petroquest Energy Inc. – slide 22
    PQ Operated Gulf Coast Drilling Summary Recent Projects First Prospect NRI Production Feet of Pay I.P. Rate Thibodeaux 1(La Cantera Prospect) 17% March 12 248 Net TVD 36,000 Mcfe Broussard Estates 2 (La Cantera Prospect) 17% Sept 12 310…
  23. Capital One Southcoast 8th Annual Energy Conference – Petroquest Energy Inc. – slide 23
    Funding The Future Enhanced Liquids Profile Meaningfully Improves Cash Flow and Margins 24
  24. Capital One Southcoast 8th Annual Energy Conference – Petroquest Energy Inc. – slide 24
    Gulf Coast Acquisition Impact Discretionary Cash Flow * 40.0 29.6 30.0 MM 19.8 20.0 10.0 0.0 2Q13 3Q13 ** Total Production Oil Production 4,000 200 180 3,500 160 3,000 2,871 140 132.5 2,385 118.5 2,500…
  25. Capital One Southcoast 8th Annual Energy Conference – Petroquest Energy Inc. – slide 25
    Product Diversification Gas to Liquids Liquids Production Will Drive Cash Margin Expansion 8,000 7,000 6,625 6,000 Barrels Per Day 5,000 4,629 4,000 3,550 2,953 2,871 3,000 2,639 2,673 2,474 2,517 2,385 2,000 1,415…
  26. Capital One Southcoast 8th Annual Energy Conference – Petroquest Energy Inc. – slide 26
    Debt Metrics Debt/EBITDA Comparison Debt Ratios 6.0x 3Q13 Target 4.9x Debt to EBITDA (1) (2) (6) 2.9X 2.0X 5.0x 4.5x Interest Coverage (1) (3) 3.7X 5X 4.0x 3.6x Debt to Proved Mcfe (2) (4) 1.60 < 1.00 3.4x3.4x Debt to…
  27. Capital One Southcoast 8th Annual Energy Conference – Petroquest Energy Inc. – slide 27
    Capital Investment Program (Liquids Focused) 160 160 2013E 140 140 135 140 Miss Lime 120 8% 105 Texas 133 100 120 8% MMCFE/D MM GOM.GC 80 38% Other 60 100 105 19% 40 87(2) 80 Woodford 20 27% 0 60 2012 Capex…
  28. Capital One Southcoast 8th Annual Energy Conference – Petroquest Energy Inc. – slide 28
    Committed to Fund Drilling with Cash Flow PQ has balanced Capex and cash flow over the past 8 years Direct CapEx (excluding acq.) Cash Flow Other Proceeds (1) 1,400 1,200 189 1,000 MM 800 600 1,074 1,079 400 200…
  29. Capital One Southcoast 8th Annual Energy Conference – Petroquest Energy Inc. – slide 29
    The Opportunity Positioned for considerable growth of reserves, production and cash flow while maintaining capital discipline Value: Currently trading at 2.0x analyst 2014E cash flow estimate (1) Balanced, diversified asset…
  30. Capital One Southcoast 8th Annual Energy Conference – Petroquest Energy Inc. – slide 30
    Appendix 31
  31. Capital One Southcoast 8th Annual Energy Conference – Petroquest Energy Inc. – slide 31
    Appendix 1 Hedging Positions Natural Gas Daily Hedged Volumes (Mmbtu) Price Feb13 Dec13 10,000 3.71 Mar13 Dec13 5,000 3.50 Apr13 Dec13 10,000 3.90 July13 Dec13 5,000 4.00 - 4.75 2013 10,000 2.00 -3.00 -4.09 2013 5,000 4.00…
  32. Capital One Southcoast 8th Annual Energy Conference – Petroquest Energy Inc. – slide 32
    Appendix 2 ( in thousands) 2008 2009 2010 2011 2012 3Q13 9M13 Net Income (Loss) (102,100) (95,330) 41,987 5,409 (137,218) 383 6,652 Income tax expense (benefit) (55,581) (14,635) 1,630 (1,810) 1,636 17 (474) Interest expense &…
  33. Capital One Southcoast 8th Annual Energy Conference – Petroquest Energy Inc. – slide 33
    Appendix 3 ( in thousands) 2008 2009 2010 2011 2012 2Q13 3Q13 9M13 Net income (loss) (96,960) (90,190) 47,126 10,548 (132,079) 4,949 1,670 10,506 Reconciling items: Deferred tax expense (benefit) (55,581) (14,635) 1,630 (1,810)…
  34. Capital One Southcoast 8th Annual Energy Conference – Petroquest Energy Inc. – slide 34
    Appendix 4 Woodford JV Transaction Summary Woodford JV closed May 2010 whereby partner received 29 Bcfe of PUD reserves and right to earn 50% of Woodford acreage Received cash payments totaling 88.0 million Through 9/30/13 have…
  35. Capital One Southcoast 8th Annual Energy Conference – Petroquest Energy Inc. – slide 35
    Appendix 5 PQ Woodford Performance Horizontal Woodford Shale Completions Max Monthly Gas Rate, Mcfd 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 - PQ A B C D E F G H I Source: compiled from public domain…
  36. Capital One Southcoast 8th Annual Energy Conference – Petroquest Energy Inc. – slide 36
    Appendix - 6 Panola County Cotton Valley Room to Run Legend Cotton Valley Wells PQ CV Vertical Wells PQ CV Horizontal Wells PQ Area Carthage Field of Mutual Area 4.4 TCF Interest 518 Bcfe CV/Bossier Potential 37
  37. Capital One Southcoast 8th Annual Energy Conference – Petroquest Energy Inc. – slide 37
    Appendix 7 Horizontal Cotton Valley 38
  38. Capital One Southcoast 8th Annual Energy Conference – Petroquest Energy Inc. – slide 38
    Appendix 8 - La Cantera Development Lower Cris R-1 200 feet of potential pay 30,000 MCF/D + 500 Bbls of oil Lower Cris R-2, Lobe A 2-3 Year Reserve Life (CURRENTLY PRODUCING) 30,000E MCF/D + 500 Bbls of oil 40,000E MCF/D +…
  39. Capital One Southcoast 8th Annual Energy Conference – Petroquest Energy Inc. – slide 39
    Appendix 9 -Woodford Liquids Rich Gas Horizontal Well Economics (Without JV Promote) 50% Capital 3.75MM Capital 4MM 40% Capital 4.25MM 34% 30% 30% IRR 26% 20% 10% 0% 3.00 3.25 3.50 3.75 4.00 Assumptions: /Mcf…
  40. Capital One Southcoast 8th Annual Energy Conference – Petroquest Energy Inc. – slide 40
    400 East Kaliste Saloom Road, Suite 6000 Lafayette, Louisiana 70508 Phone: (337) 232-7028 Fax: (337) 232-0044 www.petroquest.com NYSE: PQ 41

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