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Q1 2015 INVESTOR PRESENTATION – Chesapeake Energy Corp

Chesapeake Energy Corp · May 6, 2015 · 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. Q1 2015 INVESTOR PRESENTATION – Chesapeake Energy Corp – slide 1
    INVESTOR PRESENTATION 1Q15 1 I INVESTOR PRESENTATION 5/6/2015
  2. Q1 2015 INVESTOR PRESENTATION – Chesapeake Energy Corp – slide 2
    STRONG STRATEGIC POSITION CHK Strong liquidity Industry-leading cash costs Superior capital efficiency Talented people High-quality assets 3 I INVESTOR PRESENTATION 5/6/2015
  3. Q1 2015 INVESTOR PRESENTATION – Chesapeake Energy Corp – slide 3
    1Q15 FINANCIAL & OPERATIONAL RESULTS ADJ. EARNINGS/FDS ADJ. EBITDA PROD. and G&A EXP. 0.11 928 mm 5% YOY 5.75/boe(1) ADJ. PRODUCTION LIQUIDS MIX(3) ADJ. OIL PRODUCTION 14% YOY 29% of Total Production 17% YOY 686 mboe/d(2)…
  4. Q1 2015 INVESTOR PRESENTATION – Chesapeake Energy Corp – slide 4
    EAGLE FORD LOW-COST VALUE GENERATION 1Q15 operational updates 600 700 incremental wells added to undrilled inventory following successful down spacing tests First 3 wells with 10,000+ laterals drilled in 1Q15 7% sequential…
  5. Q1 2015 INVESTOR PRESENTATION – Chesapeake Energy Corp – slide 5
    EAGLE FORD SPACING TEST RESULTS 50 Southern Wet Gas Area No appreciable production impact from Cumulative Oil (mbo) 660' Spacing reduced spacing 500' Spacing 25 Increased drillable locations by 600 700 to 4,500 total Lower…
  6. Q1 2015 INVESTOR PRESENTATION – Chesapeake Energy Corp – slide 6
    EAGLE FORD DRIVING CAPITAL EFFICIENCY WITH LONGER LATERALS Field development planning focused on prioritizing longer lateral wells Successfully drilled five wells with laterals 10,000 in 1Q15 One 10,000 lateral well pays out twice…
  7. Q1 2015 INVESTOR PRESENTATION – Chesapeake Energy Corp – slide 7
    HAYNESVILLE STRATEGIC DEVELOPMENT DRIVES VALUE CREATION 1Q15 operational updates Two 7,500 lateral tests flowing an average of 17 mmcf/d Doubled commercial Haynesville area Commercialization of the Bossier Shale 4% sequential…
  8. Q1 2015 INVESTOR PRESENTATION – Chesapeake Energy Corp – slide 8
    HAYNESVILLE NEW WELL DESIGNS ARE EXPANDING THE PLAY Increased lateral lengths and enhanced stimulations have expanded the core of the play EUR expected to increase 200% Expected 42% reduction in cost per lateral foot 50%…
  9. Q1 2015 INVESTOR PRESENTATION – Chesapeake Energy Corp – slide 9
    HAYNESVILLE NEW STIMULATION TECHNIQUES DRIVE PERFORMANCE Enhanced stimulations have expanded the core of the play Extending production peaks Greater than a 25% increase in EUR Expands developable area by 90,000 net acres to a total…
  10. Q1 2015 INVESTOR PRESENTATION – Chesapeake Energy Corp – slide 10
    HAYNESVILLE BREAKING THROUGH DEVELOPMENT BARRIERS 7,500 lateral test results Wells located in traditional 6 8 bcf contour interval Production test exceeds offsets by more than 8 mmcf/d 8.2mm Field estimated D&C cost 12 I…
  11. Q1 2015 INVESTOR PRESENTATION – Chesapeake Energy Corp – slide 11
    BOSSIER SHALE CREATING VALUE IN ALL PRODUCTIVE FORMATIONS Cumulative Well Count Capital efficiencies and enhanced 4,500 ft 422 completion techniques open play for 7,500 ft development 10,000 ft 285 Low existing well count allows…
  12. Q1 2015 INVESTOR PRESENTATION – Chesapeake Energy Corp – slide 12
    MISSISSIPPIAN LIME CONSISTENTLY OUTPERFORMING EXPECTATIONS 1Q15 operational updates 11% sequential production increase to 32 mboe/d net Currently running three rigs & one completion crew 48 wells brought online in 1Q15 had…
  13. Q1 2015 INVESTOR PRESENTATION – Chesapeake Energy Corp – slide 13
    MISSISSIPPIAN LIME IMPROVED KNOWLEDGE DRIVES PERFORMANCE 500 2012 20% Increase in EUR over two years 400 2013 Daily Production (boe/d) 2014 300 200 Significant well performance improvement over the last 100 three years…
  14. Q1 2015 INVESTOR PRESENTATION – Chesapeake Energy Corp – slide 14
    MISSISSIPPIAN LIME LEADING THE INDUSTRY 45% capital reduction projected from 2012 to 2015 2015 development program generates 39% ROR at 2.5 mm(1) Capital efficiency improvements and field delineation program continue to generate…
  15. Q1 2015 INVESTOR PRESENTATION – Chesapeake Energy Corp – slide 15
    MID-CONTINENT NORTH IMPROVED OPERATING EFFICIENCY STRENGTHENS BASE PRODUCTION Increase in pre-emptive artificial lift installation and optimization Proactive work-over and recompletion program generated 100% ROR 6% reduction in…
  16. Q1 2015 INVESTOR PRESENTATION – Chesapeake Energy Corp – slide 16
    ENHANCING OUR BASE PRODUCTION IMPROVED RECOVERY FROM OUR ASSETS Abundant opportunities within Chesapeake 4,600 under-stimulated legacy wells Re-stimulating the Barnett Early field completions were small 1,100+ potential re-frac…
  17. Q1 2015 INVESTOR PRESENTATION – Chesapeake Energy Corp – slide 17
    UTICA 2015 STRATEGIC FOCUS 1Q15 operational updates Five rigs currently; two rigs by middle of 3Q15 Four frac crews currently; 2.5 on average for remainder of year Minimum two rigs to hold acreage Strategic priorities CHK/TOT JV…
  18. Q1 2015 INVESTOR PRESENTATION – Chesapeake Energy Corp – slide 18
    UTICA INDUSTRY-LEADING PERFORMANCE Drilling Performance Average Well Cost 30 1,200 12 Drill Days Penetration Rate 25 1,000 10 Gross Capex / Well, mm 20 800 8 Drill Days Ft / Day 15 600 6 10 400 4 5 200 2 0 0…
  19. Q1 2015 INVESTOR PRESENTATION – Chesapeake Energy Corp – slide 19
    UTICA ENHANCED COMPLETIONS PROGRESS Completion Performance 20% EUR improvement driven by 41 enhanced completions Lateral Length per Well Stages per Well Longer lateral lengths 29 Increased stages per well 17 Tailored…
  20. Q1 2015 INVESTOR PRESENTATION – Chesapeake Energy Corp – slide 20
    UTICA IMPROVING PERFORMANCE LEADS TO CORE EXPANSION Columbiana County Well Results Optimized completions 2,000 Early Wells 1,800 3 Wells New Wells Enhanced geologic interpretation 1,600 Expected Type Curve 1,400 Targeting…
  21. Q1 2015 INVESTOR PRESENTATION – Chesapeake Energy Corp – slide 21
    UTICA BASE OPTIMIZATION Operating more efficiently Decreasing downtime through 2015 Base Gross Operated Production better winter operations 200 preparation Original Forecast 180 Current Forecast Choke management 160 Pressure…
  22. Q1 2015 INVESTOR PRESENTATION – Chesapeake Energy Corp – slide 22
    POWDER RIVER 2015 STRATEGIC FOCUS 1Q15 operational updates Gross Unrisked Resources One rig current through YE15 One frac crew currently; limited crews remainder of year Federal Units limit amount of activity needed (1) to…
  23. Q1 2015 INVESTOR PRESENTATION – Chesapeake Energy Corp – slide 23
    POWDER RIVER SUSSEX PERFORMANCE Sussex Drilled Wells Peak 24-Hour Rates 14 days Jul 2014 TIL Recent spud to rig release record Peak 1,000 boe/d 3.2mm drilling cost (1 mm savings) (88% Oil) Feb 2014 TIL Peak 1,420 boe/d (75%…
  24. Q1 2015 INVESTOR PRESENTATION – Chesapeake Energy Corp – slide 24
    POWDER RIVER NIOBRARA COMPLETION PERFORMANCE 20% EUR improvement driven by enhanced completions Averaged lateral length of 5,425 in 2014 Niobrara Type Curve (+7% vs. 2013) 1,400 700 2014 Program Daily Avg. Rate Averaged 20 frac…
  25. Q1 2015 INVESTOR PRESENTATION – Chesapeake Energy Corp – slide 25
    NORTHERN MARCELLUS 2015 STRATEGIC FOCUS 1Q15 operational updates One rig current through YE15 One frac crew currently; limited crews remainder of year Strategic priorities Minimum activity required to hold acreage Continue to…
  26. Q1 2015 INVESTOR PRESENTATION – Chesapeake Energy Corp – slide 26
    NORTHERN MARCELLUS DRILLING PERFORMANCE Drill Days Ft per Day Extensive use of Operations Support 30 1,500 Center to reduce trouble time 25 1,250 26 25 Improvement in all segments leading 20 1,000 Ft. / Day Days to…
  27. Q1 2015 INVESTOR PRESENTATION – Chesapeake Energy Corp – slide 27
    NORTHERN MARCELLUS ENHANCED COMPLETIONS LEADING TO BETTER RESULTS ROR Comparison vs. Realized Gas Price 100 2015 +20% 90 80 EUR Improvement 2013 70 Rate of Return (%) 60 2011 50 40 30% ROR price threshold has been cut in…
  28. Q1 2015 INVESTOR PRESENTATION – Chesapeake Energy Corp – slide 28
    OPERATIONS SUPPORT CENTER CENTRAL COMMAND CENTER Provides 24/7 real-time analysis and execution support Reducing trouble and nonproductive time Geologic well navigation and placement Production monitoring and control Liquids…
  29. Q1 2015 INVESTOR PRESENTATION – Chesapeake Energy Corp – slide 29
    SUPPLY CHAIN STRONG SUCCESS CAPTURING SUPPLIER COST SAVINGS Captured supply chain savings 2015 Estimated Capex Savings by Category Cost per well savings of 15% Rig Mobilization 39% LOE supplier cost reductions 0.10/boe Fuel…
  30. Q1 2015 INVESTOR PRESENTATION – Chesapeake Energy Corp – slide 30
    LOWER 2015 CAPEX AND ACTIVITY D&C Capex and Rig Count Completion Activity 1.4 60 300 18 1.2 16 50 250 14 1.0 in billions Frac Crews 40 200 12 Well Count 0.8 10 30 150 0.6 8 20 100 6 0.4 4 0.2 10 50 2 0.0 - 0…
  31. Q1 2015 INVESTOR PRESENTATION – Chesapeake Energy Corp – slide 31
    COMPANY GAS DIFFERENTIALS 2.50 MVC Shortfall Basis & Btu Non-Basis(1) 2.00 0.17 - 0.19 0.21 - 0.23 0.11 0.35 - 0.45 0.30 - 0.40 0.33 1.50 1.41 1.35 - 1.45 1.35 - 1.45 (/mcf) 1.00 0.50 0.00 2014 2015 2016 (2)…
  32. Q1 2015 INVESTOR PRESENTATION – Chesapeake Energy Corp – slide 32
    2015E OUTLOOK SUMMARY 2015E Adjusted Production Growth 1 3% Absolute Production: Liquids mmbbls 62 64 Oil mmbbls 38.5 39.5 NGL(1) mmbbls 23.5 24.5 Natural gas - bcf 1,025 1,040 Total absolute production mmboe 233 237 Absolute…
  33. Q1 2015 INVESTOR PRESENTATION – Chesapeake Energy Corp – slide 33
    STRONG STRATEGIC POSITION CHK Strong liquidity Industry-leading cash costs Superior capital efficiency Talented people High-quality assets 36 I INVESTOR PRESENTATION 5/6/2015
  34. Q1 2015 INVESTOR PRESENTATION – Chesapeake Energy Corp – slide 34
    REDUCED ACTIVITY LEVELS 2015E 2015E YE 2015 Avg.Op Rigs Avg.Op Rigs Op. Rigs (2/25 Outlook) (3/23 Outlook) (3/23 Outlook) Eagle Ford 12 14 8 10 24 Utica 35 35 23 Haynesville 78 56 24 PRB: Niobrara & Upper Cretaceous 34 23 12…
  35. Q1 2015 INVESTOR PRESENTATION – Chesapeake Energy Corp – slide 35
    RECONCILIATION OF ADJUSTED EARNINGS PER SHARE ( in mm) Three Months Ended: 3/31/2015 3/31/2014 Net income available to common stockholders (3,782) 374 Adjustments, net of tax: Unrealized gains on derivatives 192 80 Restructuring…
  36. Q1 2015 INVESTOR PRESENTATION – Chesapeake Energy Corp – slide 36
    RECONCILIATION OF ADJUSTED EBITDA ( in mm) Three Months Ended: 3/31/2015 3/31/2014 Cash provided by operating activities 423 1,291 Changes in assets and liabilities 487 332 (1) Operating cash flow 910 1,614 Net income (3,720)…
  37. Q1 2015 INVESTOR PRESENTATION – Chesapeake Energy Corp – slide 37
    CAPTURING MORE FOR LESS NORTHERN DIVISION Utica: 53% Improvement Marcellus North: 39% Improvement Powder River: 46% Improvement Note: Capex / EUR is defined as net drilling and completion (D&C) costs per well divided by net…
  38. Q1 2015 INVESTOR PRESENTATION – Chesapeake Energy Corp – slide 38
    CAPTURING MORE FOR LESS SOUTHERN DIVISION Haynesville: 67% Improvement Eagle Ford: 38% Improvement Mississippian Lime: 47% Improvement Note: Capex / EUR is defined as net drilling and completion (D&C) costs per well divided…
  39. Q1 2015 INVESTOR PRESENTATION – Chesapeake Energy Corp – slide 39
    DRILLING AND SERVICES COMMITMENTS 150 PTL Commitment Fulfilled Drill Commitment Fulfilled 125 Drill Commitment Penalty Total Commitment ( in mm) 100 51 75 Rigs 71 50 Rigs 25 65 Rigs 51 Rigs 45 0 Q1 2015 1Q15 Q2…
  40. Q1 2015 INVESTOR PRESENTATION – Chesapeake Energy Corp – slide 40
    CORPORATE INFORMATION CHESAPEAKE HEADQUARTERS PUBLICLY TRADED SECURITIES CUSIP TICKER 6100 N. Western Avenue 3.25% Senior Notes due 2016 165167CJ4 CHK16 Oklahoma City, OK 73118 6.25% Senior Notes due 2017 027393390 N/A WEBSITE:…

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