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43RD ANNUAL SCOTIA HOWARD WEIL ENERGY CONFERENCE – Jones Energy Inc.

Jones Energy Inc. · Mar 26, 2015 · 28 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. 43RD ANNUAL SCOTIA HOWARD WEIL ENERGY CONFERENCE – Jones Energy Inc. – slide 1
    Scotia Howard Weil Energy Conference March 2015
  2. 43RD ANNUAL SCOTIA HOWARD WEIL ENERGY CONFERENCE – Jones Energy Inc. – slide 2
    Jones Energy Overview NYSE Ticker: JONE Share Price: 8.64 Anadarko Basin Key Formation: Cleveland Market Cap: 530 million Cleveland Production: 17.0 MBoe/d Enterprise Arkoma Basin 1.4 billion Key Formation: Woodford Value:…
  3. 43RD ANNUAL SCOTIA HOWARD WEIL ENERGY CONFERENCE – Jones Energy Inc. – slide 3
    Prepared for Today and Focused on the Future Laser focus on execution and cost 25% AFE reduction since December 2014 Strong hedging protects 2015 & beyond 90% of 2015 oil and gas volumes hedged Flexible drilling program High…
  4. 43RD ANNUAL SCOTIA HOWARD WEIL ENERGY CONFERENCE – Jones Energy Inc. – slide 4
    Well Results Prove Cleveland is a World Class Resource Play Strong results across Jones Cleveland acreage TOP 10 JONE CLEVELAND WELLS1 IP30 Well (Boe/d) Elmer Graves 615-1H 1,432 Peyton Ranch 417-1H 1,251 Kelln 65-2H 1,116…
  5. 43RD ANNUAL SCOTIA HOWARD WEIL ENERGY CONFERENCE – Jones Energy Inc. – slide 5
    Solid Growth in 2014 Avg Daily Production EBITDAX 25.0 23.2 350 301.4 300 20.0 17.0 250 205.0 in millions 15.0 MBoepd 200 10.0 150 100 5.0 50 - 0 2013 2014 2013 2014 Proved Reserves Oil Reserves 140.0 30.0…
  6. 43RD ANNUAL SCOTIA HOWARD WEIL ENERGY CONFERENCE – Jones Energy Inc. – slide 6
    Focused on the Cleveland in 2015 3 rigs currently running Jones Cleveland Locations AFE has dropped 25% since 2,500 Cleveland locations remain Gross: 704 December 2014 Net: 477 Targeting addition of 2 rigs in 2Q15 30% oil uplift…
  7. 43RD ANNUAL SCOTIA HOWARD WEIL ENERGY CONFERENCE – Jones Energy Inc. – slide 7
    Cost Reductions for 33 Stage Open Hole Wells 900,000 in cost reductions since 4Q 2014 4.0 3.8 3.0 2.9 All-in Cleveland AFE Achieved Reductions: 900,000 AFE in millions 2.6 Key Categories: Achieved Cost Reductions 2.0…
  8. 43RD ANNUAL SCOTIA HOWARD WEIL ENERGY CONFERENCE – Jones Energy Inc. – slide 8
    Impact of Cost Reductions on Returns Cleveland Drilling and Completion AFE Current 2,650 2,850 3,100 3,800 Price Well level internal rates of return 70.00 / 4.00 58% 48% 38% 21% 65.00 / 3.50 44% 36% 28% 15% 60.00 / 3.25 34%…
  9. 43RD ANNUAL SCOTIA HOWARD WEIL ENERGY CONFERENCE – Jones Energy Inc. – slide 9
    Cleveland Frack Optimization Completed 60 Number of Frack Stages 43 Open Hole Completion Perf and Plug Completion 33 Sliding Sleeve Completion 20 20 8-12 12 4-5 2004 - 2006 2007 - 2009 2010 2011 2012 2013 2014 2015…
  10. 43RD ANNUAL SCOTIA HOWARD WEIL ENERGY CONFERENCE – Jones Energy Inc. – slide 10
    Optimization Drives Oil Uplift Oil Uplift Comparison 1,000 EUR 20 stage 33 stage Oil (Mbbls) 81 112 +38% increase Gas (MMcf) 541 545 NGL (Mbbls) 70 71 Total (Mboe) 241 274 Oil Rate (bpd) 100 10 0 50 100 150 200 250…
  11. 43RD ANNUAL SCOTIA HOWARD WEIL ENERGY CONFERENCE – Jones Energy Inc. – slide 11
    Uplift Has Created Significant Value 270,000 investment translates to: 1,200,000 in incremental oil revenue per location (at 55 WTI) 450,000 in PV-10 value per location (at 55 WTI) Value accelerates as oil price increases…
  12. 43RD ANNUAL SCOTIA HOWARD WEIL ENERGY CONFERENCE – Jones Energy Inc. – slide 12
    Commodity Price Realizations - Steady and Predictable Better differentials than many other regions 2014 average differentials (inclusive of transport): Oil: 4 per bbl differential to WTI Piper Valero Pipeline Gas: 0.70 per MMBtu…
  13. 43RD ANNUAL SCOTIA HOWARD WEIL ENERGY CONFERENCE – Jones Energy Inc. – slide 13
    LOE and G&A Costs Among the Best LOE per Boe Cash G&A per Boe 30 12 25 10 20 8 15 6 10 4 5 2 0 0 JONE 10 11 12 13 14 15 16 17 18 19 1 2 3 4 5 6 7 8 9 JONE 10 11 12 13 14…
  14. 43RD ANNUAL SCOTIA HOWARD WEIL ENERGY CONFERENCE – Jones Energy Inc. – slide 14
    Hedges Support Value Hedges provide security in an uncertain commodity price environment 90% of estimated 2015 oil and gas production hedged at 85/bbl and 4.50 per Mcf 70% of total production hedged through 2016 at similar prices…
  15. 43RD ANNUAL SCOTIA HOWARD WEIL ENERGY CONFERENCE – Jones Energy Inc. – slide 15
    Hedges Protect 2015 Revenue Hedging Impact on 2015 Revenue 100% Only 5% change in total revenue due to hedges 80% Projected Revenue 60% 40% 20% 0% 60 oil / 3.25 gas 30 oil / 2 gas 10 oil / 1 gas Unhedged Revenue…
  16. 43RD ANNUAL SCOTIA HOWARD WEIL ENERGY CONFERENCE – Jones Energy Inc. – slide 16
    Ready for Market Opportunities with Strong Balance Sheet 500 million in available liquidity1 90% of debt outstanding matures in 7 years 2.8x net debt/EBITDAX for trailing twelve months2 Debt Maturities Summary 600 500 400 in…
  17. 43RD ANNUAL SCOTIA HOWARD WEIL ENERGY CONFERENCE – Jones Energy Inc. – slide 17
    Jones Energy Prepared for Today and Focused on the Future Mid-Continent Focus History of success for over 26 years Expertise creates opportunities Operational Excellence Fit for purpose operations A leader in cost management Solid…
  18. 43RD ANNUAL SCOTIA HOWARD WEIL ENERGY CONFERENCE – Jones Energy Inc. – slide 18
    APPENDIX
  19. 43RD ANNUAL SCOTIA HOWARD WEIL ENERGY CONFERENCE – Jones Energy Inc. – slide 19
    2015 Cleveland Type Curve Key statistics shown below for 2015 Cleveland type curve (274 Mboe EUR) Cleveland 3P EUR of 305 Mboe, but with a higher gas component Key Statistic: Oil Gas NGL Total IP Bbl/d Mcf/d Bbl/d Boe/d IP30 228…
  20. 43RD ANNUAL SCOTIA HOWARD WEIL ENERGY CONFERENCE – Jones Energy Inc. – slide 20
    The Anadarko Basin Prolific History with Stacked Pay Potential Stacked pay zones provide significant development opportunities Current Target Formations Tonkawa Sandstone Lease Acreage: 122,000 Gross Locations: 324…
  21. 43RD ANNUAL SCOTIA HOWARD WEIL ENERGY CONFERENCE – Jones Energy Inc. – slide 21
    Tonkawa An Untapped Opportunity Tonkawa Drilled 6 wells in 2014 2.9 million acres Target AFE of 3.5 million Drilling program halted due to oil drop Average formation depth: Ready to scale when economics dictate Tonkawa: 7,500…
  22. 43RD ANNUAL SCOTIA HOWARD WEIL ENERGY CONFERENCE – Jones Energy Inc. – slide 22
    Marmaton Shows Promise As Others Drill Ahead Marmaton Lime 1.0 million acres Marmaton lies just below the Cleveland Majority of Jones Anadarko acreage lies within the Marmaton fairway Marmaton Sand Results by other operators…
  23. 43RD ANNUAL SCOTIA HOWARD WEIL ENERGY CONFERENCE – Jones Energy Inc. – slide 23
    Able to Ramp Activity as Margins Dictate Operational flexibility allows us to ramp activity up and down Drilling History by Formation Reduced 2015 140 activity with focus on the Cleveland 120 Brown Dolomite Dropped all rigs in…
  24. 43RD ANNUAL SCOTIA HOWARD WEIL ENERGY CONFERENCE – Jones Energy Inc. – slide 24
    2015 Full Year Guidance and 1Q Production Guidance 2015E 1Q15E Total Production (MMBoe) 7.9 8.7 2.15 2.25 Average Daily Production (MBoe/d) 21.7 23.7 24.0 25.0 Oil (MBbls/d) 6.6 7.1 7.4 7.6 Natural Gas (MMcf/d) 54.8 60.3 60.0…
  25. 43RD ANNUAL SCOTIA HOWARD WEIL ENERGY CONFERENCE – Jones Energy Inc. – slide 25
    Hedge Positions 2015 2016 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Crude Swaps (Mbbl) 572 613 595 572 492 465 457 411 Hedge Price / Bbl 85.48 82.93 84.60 84.05 83.53 83.67 83.64 83.35 Natural Gas Swaps (MMcf) 5,232 5,095 4,740 4,636 4,340 4,130…
  26. 43RD ANNUAL SCOTIA HOWARD WEIL ENERGY CONFERENCE – Jones Energy Inc. – slide 26
    NGL Hedge Position Detail 2015 2016 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Mt. Belvieu NGLs (MBbl) Ethane 59 55 50 46 - - - - Propane 42 42 39 39 - - - - Iso Butane 6 3 3 3 3 3 3 - Butane 17 15 15 16 6 6 6 3 N. Gasoline 27 24 24 23 18 18 18 13…
  27. 43RD ANNUAL SCOTIA HOWARD WEIL ENERGY CONFERENCE – Jones Energy Inc. – slide 27
    NGL Barrel Component Detail Cleveland Conway Cleveland Natural Gasoline 12% (80% of forecasted 2015 NGL production) Iso Butane 5% Butane 12% Basket Ethane 37% Propane 34% Propane 34% Butane 12% Ethane 37% Iso Butane 5% Natural…
  28. 43RD ANNUAL SCOTIA HOWARD WEIL ENERGY CONFERENCE – Jones Energy Inc. – slide 28
    Corporate Structure Updated for recent capital markets transactions Stock trading liquidity has improved significantly post-recent transactions Metalmark, Class B Common Stock Class A Common Stock Management 59% of voting power in…

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