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JP Morgan Global High Yield Leveraged Finance Conf – Petroquest Energy Inc.

Petroquest Energy Inc. · Feb 24, 2014 · 46 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. JP Morgan Global High Yield Leveraged Finance Conf – Petroquest Energy Inc. – slide 1
    March 2014
  2. JP Morgan Global High Yield Leveraged Finance Conf – Petroquest Energy Inc. – slide 2
    Our Daily Focus Utilize Strong Gulf Coast Cash Flow to Develop High-Return Onshore Resource Assets 3
  3. JP Morgan Global High Yield Leveraged Finance Conf – 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 * 2007-2013, Gulf Coast has generated 400 MM of…
  4. JP Morgan Global High Yield Leveraged Finance Conf – Petroquest Energy Inc. – slide 4
    Our Properties Gulf Coast Tulsa RESERVES: East Texas 301.8 Bcfe (1) (81% Long Life) Mid-Con Gulf Coast PRODUCTION: Mid-Con 2014E production: 38.0 Bcfe (1) (63% Long Life) 48 Bcfe (2) East Texas Gulf Coast Mid-Con…
  5. JP Morgan Global High Yield Leveraged Finance Conf – Petroquest Energy Inc. – slide 5
    Valuation Decoupled from Strong Growth 2010 2014E % Change Production: (1) Oil (Bbls/d) 1,817 2,871 58% NGL (Bbls/d) 1,128 3,754 233% Gas (Mcf/d) 67,128 92,750 38% Total (Mmcfe/d) 84,798 132,500 56% Proved Reserves (Bcfe) (2) 193…
  6. JP Morgan Global High Yield Leveraged Finance Conf – Petroquest Energy Inc. – slide 6
    Onshore Growth Assets Accelerate Development of Long-lived, Low-risk Woodford Shale and Cotton Valley Assets 7
  7. JP Morgan Global High Yield Leveraged Finance Conf – Petroquest Energy Inc. – slide 7
    Mid-Continent Miss Lime Trend 54,000 Gross acres Areas of Interest O K L A H O M A Tulsa Woodford Shale Oklahoma City Trend 93,000 Gross acres 8
  8. JP Morgan Global High Yield Leveraged Finance Conf – Petroquest Energy Inc. – slide 8
    Woodford Position Ramping Up Development Expansion Area Liquids Rich Acreage 35,000 acres Legacy Gas Acreage 60,000 acres Asset Highlights and Current Liquids Rich Focus: Average IP rate: 2,869 Mcf/d and 275 BOE of NGLs/d…
  9. JP Morgan Global High Yield Leveraged Finance Conf – Petroquest Energy Inc. – slide 9
    Woodford Liquids Rich Gas 2014 Horizontal Well Economics 140% 117% 120% Capital 4MM 96% 100% 75% 80% 60% 40% 20% 0% 3.50 4.00 4.50 /Mcf Assumptions: Drilled under JV Promote Price Capital (M) IP Rate 2.6 MMcfd +…
  10. JP Morgan Global High Yield Leveraged Finance Conf – Petroquest Energy Inc. – slide 10
    Continuous Improvement in the Woodford PetroQuest Operated Woodford Horizontal Wells 5000 4500 4000 PQ 49+ 3500 PQ 25-48 3000 PQ 1-24 Gas Rate, MCFED 2500 2000 34% Improvement in Average Production 1500…
  11. JP Morgan Global High Yield Leveraged Finance Conf – Petroquest Energy Inc. – slide 11
    PQ Woodford Performance 2014: Most Active Year In Companys History 60 140 Dry Gas Wells Liquids Rich Wells 50 50 120 Cumulative Production PDP Reserves 100 40 34 80 Wells 30 Bcfe 30 60 19 20 16 40 9 9 10 5 20…
  12. JP Morgan Global High Yield Leveraged Finance Conf – Petroquest Energy Inc. – slide 12
    East Texas Horizontal Cotton Valley Program 13
  13. JP Morgan Global High Yield Leveraged Finance Conf – Petroquest Energy Inc. – slide 13
    Horizontal Cotton Valley Operator Activity Gross Hor. CV Operator Acres Wells PQ 48,000 9 Anadarko 50,000 30 Indigo 90,000 47 Samson 25,000 16 Devon 55,000 24 14
  14. JP Morgan Global High Yield Leveraged Finance Conf – Petroquest Energy Inc. – slide 14
    Horizontal Cotton Valley Inventory 197 Travis Peak Locations Existing CV Horizontal Wells PQ 2014 (6 7 Wells) CV Drilling Plan PQ CV Horizontal (210 Wells) Development Program* PQ Bossier Horizontal Development *…
  15. JP Morgan Global High Yield Leveraged Finance Conf – 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. JP Morgan Global High Yield Leveraged Finance Conf – 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. JP Morgan Global High Yield Leveraged Finance Conf – Petroquest Energy Inc. – slide 17
    Liquids Rich Horizontal Cotton Valley Horizontal Well Economics 70% 65% 66% 60% 55% 52% 50% IRR 45% 40% 40% 35% 30% 25% 3.50 4.00 4.50 Gas* NGL IRR Payback 3.50 30 39.7 % 20 Months 4.00 35 51.6 % 16 Months…
  18. JP Morgan Global High Yield Leveraged Finance Conf – 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 (2013-2014) Phase III: Development 2014+ RRC…
  19. JP Morgan Global High Yield Leveraged Finance Conf – Petroquest Energy Inc. – slide 19
    Cash Flowing Gulf Coast Assets Attractive Development Prospects with Minimal Funding Requirements 20
  20. JP Morgan Global High Yield Leveraged Finance Conf – Petroquest Energy Inc. – slide 20
    Gulf Coast Lafayette Houston Areas of Interest: Onshore S. LA / Shallow Water GOM 21
  21. JP Morgan Global High Yield Leveraged Finance Conf – Petroquest Energy Inc. – slide 21
    Gulf Coast Assets: Free Cash Flow Funds Growth (1) 200 Gulf Coast Cash Flow Gulf Coast Capex 180 Over 400MM of Free Cash 160 Flow since 2007 140 120 MM 100 80 2014: GCB Cash Flow expected to increase 60 while Capex…
  22. JP Morgan Global High Yield Leveraged Finance Conf – Petroquest Energy Inc. – slide 22
    La Cantera/Thunder Bayou Shallow Fields 23
  23. JP Morgan Global High Yield Leveraged Finance Conf – Petroquest Energy Inc. – slide 23
    Thunder Bayou Stratigraphic Cross Section 24
  24. JP Morgan Global High Yield Leveraged Finance Conf – Petroquest Energy Inc. – slide 24
    La Cantera/Thunder Bayou Deep Expressions 25
  25. JP Morgan Global High Yield Leveraged Finance Conf – Petroquest Energy Inc. – slide 25
    Pelican Point 2 26
  26. JP Morgan Global High Yield Leveraged Finance Conf – Petroquest Energy Inc. – slide 26
    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…
  27. JP Morgan Global High Yield Leveraged Finance Conf – Petroquest Energy Inc. – slide 27
    Funding The Future Enhanced Liquids Profile Meaningfully Improves Cash Flow and Margins 28
  28. JP Morgan Global High Yield Leveraged Finance Conf – Petroquest Energy Inc. – slide 28
    Accelerating Cash Flow Profile Discretionary Cash Flow * 80.0 70.0 58.6 MM 60.0 MM 50.0 38.4 MM 40.0 30.0 20.0 10.0 1H13 2H13 ** Total Production Oil Production 4,000 200 180 3,500 160 3,000 2,871 140 132.5 2,393…
  29. JP Morgan Global High Yield Leveraged Finance Conf – Petroquest Energy Inc. – slide 29
    Product Diversification Gas to Liquids Liquids Production Will Drive Cash Margin Expansion 7000 6,625 6000 5000 4,556 Barrels of Liquids/Day 4000 3,551 2,953 3000 2,638 2,673 2,474 2,517 3,889 2000 1000 0 (1)…
  30. JP Morgan Global High Yield Leveraged Finance Conf – Petroquest Energy Inc. – slide 30
    Debt Metrics Poised for Improvement with Growing Cash Flow Profile Debt/EBITDA Comparison Debt Ratios 5.0x 2013 12/31/14 4.4x Target 4.5x 4.2x Debt to EBITDA (1) (4) 3.1X 2.0X 4.0x 3.7x 3.5x Interest Coverage (1) (2) 3.5X 5X…
  31. JP Morgan Global High Yield Leveraged Finance Conf – Petroquest Energy Inc. – slide 31
    Capital Investment Program (Liquids Focused) 80 160 2014E 70 133 140 60 Texas Gulf Coast 50 72 Gross Wells 120 MMCFE/D 25% 25% Gross Wells 40 104 30 100 40 20 Gross Wells 80 Woodford 10 50% 0 60 2013 2014E…
  32. JP Morgan Global High Yield Leveraged Finance Conf – Petroquest Energy Inc. – slide 32
    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) 1,600 1,400 189 1,200 1,000 MM 800 600 1,149 1,172 400…
  33. JP Morgan Global High Yield Leveraged Finance Conf – Petroquest Energy Inc. – slide 33
    The Opportunity GROWTH: Positioned to post record reserves and production in 2014 through internally funded budget VALUE: Currently trading at 2.1x analyst 2014E cash flow estimate (1) CATALYSTS: High impact Gulf Coast projects…
  34. JP Morgan Global High Yield Leveraged Finance Conf – Petroquest Energy Inc. – slide 34
    Appendix 35
  35. JP Morgan Global High Yield Leveraged Finance Conf – Petroquest Energy Inc. – slide 35
    Appendix 1 Hedging Positions Natural Gas Daily Hedged Volumes (Mmbtu) Price 2014 10,000 4.00 2014 20,000 4.20 Mar14 Dec14 5,000 4.29 Oil Daily Hedged Volumes (Bbls) Price 2014 400 101.15 (1) 2014 350 93.26 (2) Jan14 Jun14…
  36. JP Morgan Global High Yield Leveraged Finance Conf – Petroquest Energy Inc. – slide 36
    Appendix 2 ( in thousands) 2008 2009 2010 2011 2012 3Q13 4Q13 2013 Net Income (Loss) (102,100) (95,330) 41,987 5,409 (137,218) 383 2,291 8,943 Income tax expense (benefit) (55,581) (14,635) 1,630 (1,810) 1,636 17 794 320 Interest…
  37. JP Morgan Global High Yield Leveraged Finance Conf – Petroquest Energy Inc. – slide 37
    Appendix 3 ( in thousands) 2008 2009 2010 2011 2012 1H13 2H13 2013 Net income (loss) (96,960) (90,190) 47,126 10,548 (132,079) 8,836 5,246 14,082 Reconciling items: Deferred tax expense (benefit) (55,581) (14,635) 1,630 (1,810)…
  38. JP Morgan Global High Yield Leveraged Finance Conf – Petroquest Energy Inc. – slide 38
    Appendix 4 - 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…
  39. JP Morgan Global High Yield Leveraged Finance Conf – Petroquest Energy Inc. – slide 39
    Appendix 5 - 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…
  40. JP Morgan Global High Yield Leveraged Finance Conf – Petroquest Energy Inc. – slide 40
    Appendix 6 - 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…
  41. JP Morgan Global High Yield Leveraged Finance Conf – Petroquest Energy Inc. – slide 41
    Appendix 7 - 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 12/31/13 have…
  42. JP Morgan Global High Yield Leveraged Finance Conf – Petroquest Energy Inc. – slide 42
    Appendix 8 - 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…
  43. JP Morgan Global High Yield Leveraged Finance Conf – Petroquest Energy Inc. – slide 43
    Appendix 9 - 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 +…
  44. JP Morgan Global High Yield Leveraged Finance Conf – Petroquest Energy Inc. – slide 44
    Appendix 10 - Panola County Cotton Valley Room to Run Legend Cotton Valley Wells PQ CV Vertical Wells PQ CV Horizontal Wells PQ Area Carthage Field Area of Mutual 4.4 TCF of Interest Unrisked Resource Potential 2.2 Tcfe…
  45. JP Morgan Global High Yield Leveraged Finance Conf – Petroquest Energy Inc. – slide 45
    Appendix 11 -Woodford Liquids Rich Gas Horizontal Well Economics (Without JV Promote) Capital 3.75MM 40% Capital 4.0MM Capital 4.25MM IRR 20% 0% 3.50 4.00 4.50 /Mcf Assumptions: Price Capital (M) IP Rate 2.6 MMcfd +…
  46. JP Morgan Global High Yield Leveraged Finance Conf – Petroquest Energy Inc. – slide 46
    400 East Kaliste Saloom Road, Suite 6000 Lafayette, Louisiana 70508 Phone: (337) 232-7028 Fax: (337) 232-0044 www.petroquest.com NYSE: PQ 47

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