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THE ENERCOM OIL AND GAS CONFERENCE – Gastar Exploration, Ltd.

Gastar Exploration, Ltd. · Aug 19, 2014 · 52 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. THE ENERCOM OIL AND GAS CONFERENCE – Gastar Exploration, Ltd. – slide 1
    The Oil & Gas Conference Denver, Colorado August 19, 2014 E X PA N D I N G 2014 Gastar Exploration Inc. O U R H O R I Z O N S 1
  2. THE ENERCOM OIL AND GAS CONFERENCE – Gastar Exploration, Ltd. – slide 2
    Overview Company Profile Gastar Exploration Inc. is a Houston-based independent energy company currently developing: Liquids-rich natural gas in the Marcellus Shale in West Virginia Hunton Limestone horizontal oil play in…
  3. THE ENERCOM OIL AND GAS CONFERENCE – Gastar Exploration, Ltd. – slide 3
    Key Investment Criteria World-class development position in the liquids-rich Marcellus Shale High-Quality Resource Strong drilling results in the Hunton Limestone exploitation oil play Base Significant Utica potential under…
  4. THE ENERCOM OIL AND GAS CONFERENCE – Gastar Exploration, Ltd. – slide 4
    Asset Overview YTD 2014 Net Production by Region Utica Dry Gas Marcellus Shale Mid-Continent 11,700 net acres(2) 3.7 Mboe/d 59,000 net acres(1) 39% Appalachia 5.9 Mboe/d 61% Hunton Limestone Oil Play 9.6 MBoe/d 126,000 net…
  5. THE ENERCOM OIL AND GAS CONFERENCE – Gastar Exploration, Ltd. – slide 5
    Premier Position in the Marcellus and Utica Acreage position lies near other leading players in the basin Appalachia Overview Marcellus and Utica Map Core acreage prospective in both the Utica Marcellus wet gas and the Utica dry Dry…
  6. THE ENERCOM OIL AND GAS CONFERENCE – Gastar Exploration, Ltd. – slide 6
    Hunton: First Mover Advantage Large, contiguous acreage position with multiple horizontal targets Asset Overview Hunton Asset Map 126,000 net acres Gastar/Husky AMI 176 MMBoe of risked net unbooked Hunton and Stack Play…
  7. THE ENERCOM OIL AND GAS CONFERENCE – Gastar Exploration, Ltd. – slide 7
    Proven Track Record of Growth Significant reserves and production growth through acquisitions and the drill bit Proved Reserves by Type MMBoe 80.0 60.0 62% 30% 40.0 7% 2% 34% 20.0 17% 15% 27% 63% 18% 36% 14% 50% 59%…
  8. THE ENERCOM OIL AND GAS CONFERENCE – Gastar Exploration, Ltd. – slide 8
    Balanced Portfolio Proved Reserves by Product MMBoe 80.0 60.0 46% 45% 40.0 28% 23% 54% 20.0 0.7% 55% 72% 77% 99.3% 0.0 2010 2011 2012 2013 6/30/2014 Gas Liquids Total Daily Production(1) MBoe/d 10.0 15% 21%…
  9. THE ENERCOM OIL AND GAS CONFERENCE – Gastar Exploration, Ltd. – slide 9
    2014 Production Growth Significant ramp up in daily production Daily Production (MBoe/d) 15.0 13.5 12.0 10.4 9.6 6.3 9.0 4.8 4.3 6.0 7.2 3.0 5.6 5.3 0.0 YTD 6/30/2014 FY'14 Guidance Dec'14 Avg. Gas Liquids Exit…
  10. THE ENERCOM OIL AND GAS CONFERENCE – Gastar Exploration, Ltd. – slide 10
    Cash Profit Margin Historical (/Boe) Cash Profit Margins significantly improved with increased liquids production 60.00 80% 75% 70% 71% 48.00 64% 44.62 7.54 39.72 36.00 49% 3.44 8.22 48% 28.58 3.35 5.60 24.00 21.49…
  11. THE ENERCOM OIL AND GAS CONFERENCE – Gastar Exploration, Ltd. – slide 11
    Capital Budget Focused on Liquids 93% of 2014 D&C and infrastructure budget targets liquids-rich plays Capital % of 2014 Capital Investment Area (MM) Total Capitalized Mid-Continent 106 47% Costs Land 5MM West Appalachia 71 32%…
  12. THE ENERCOM OIL AND GAS CONFERENCE – Gastar Exploration, Ltd. – slide 12
    MARCELLUS AND UTICA 2014 Gastar Exploration Inc. 13
  13. THE ENERCOM OIL AND GAS CONFERENCE – Gastar Exploration, Ltd. – slide 13
    Marcellus Shale Activity concentrated in ultra liquids-rich portion of the play Marshall & Wetzel Counties, W. Va. Marcellus Activity Map 11,700 net acres (27% HBP) prospective for Marcellus 50% WI, 41.5% NRI Atinum 50% JV…
  14. THE ENERCOM OIL AND GAS CONFERENCE – Gastar Exploration, Ltd. – slide 14
    Marcellus/Utica Gastar Marshall/Wetzel Acreage Target Formations Marcellus Shale Silica-Rich Organic Mudstone Condensate Window Depth: 6,500 TVD Thickness: 50 Porosity: 12%15% TOC: 1112 wt. % Overpressured (.65 psi/ft) Utica…
  15. THE ENERCOM OIL AND GAS CONFERENCE – Gastar Exploration, Ltd. – slide 15
    Marshall & Wetzel Production Overview Consistent production and excess takeaway capacity Third party infrastructure operational issues resolved late 2013 Arbitration settled in Q2 2014 Gross Marcellus Production Last well…
  16. THE ENERCOM OIL AND GAS CONFERENCE – Gastar Exploration, Ltd. – slide 16
    Infrastructure Overview OHIO WEST VIRGINIA Operational Improved run-time No flow restrictions expected Marshall Processing Monroe Fort Beeler capacity 520 MMBtu/d Total system capacity growing to +1 BCF/d Central receipt point…
  17. THE ENERCOM OIL AND GAS CONFERENCE – Gastar Exploration, Ltd. – slide 17
    Liquids-Rich Window of Marshall & Wetzel Counties Marshall Co. Marcellus Wells High Btu gas and condensate yields OHIO W. VIRGINIA Producing 57 Future Drilling Locations 114 3040 Bbls/MMcf condensate 2014 Drilling 4050…
  18. THE ENERCOM OIL AND GAS CONFERENCE – Gastar Exploration, Ltd. – slide 18
    Marcellus Marshall & Wetzel Counties Economics 8.0 Bcfe EUR(1) Daily Peak Rate 4.2 MMcf/d & 230 Bbl/d 63% Gas (processed) 34% IRR(1) Cost 7.9MM (5,000 lateral) 1.19/Mcfe F&D Cost (processed) PV10 6.0MM per well (100% WI) Est.…
  19. THE ENERCOM OIL AND GAS CONFERENCE – Gastar Exploration, Ltd. – slide 19
    Utica Overview Overview Utica Activity Map Underlies core 11,700 acre Marcellus Rice IP: 42 MMcfe/d GPOR 2 wells Hess 1 well (Bigfoot 9H) IP: 2945 MMcfe/d IP: 25 MMcfe/d position in Marshall and Wetzel Counties OHIO GPOR 30…
  20. THE ENERCOM OIL AND GAS CONFERENCE – Gastar Exploration, Ltd. – slide 20
    Utica Position in Marshall & Wetzel Counties Initial Utica Well Simms U-5H completed well soaking OHIO W. VIRGINIA Marshall Co. Utica Wells Future Drilling Locations 79* 2014 Drilling Flowback late August Blake Utica Test Gross…
  21. THE ENERCOM OIL AND GAS CONFERENCE – Gastar Exploration, Ltd. – slide 21
    Utica Acreage is the Core of the Core Point Pleasant Shale Point Pleasant Shale Porosity Cross-Section Porosity Cross-Section A A GASTAR SIMMS U-5H 4-6% Porosity Up to 17% Porosity VERY HIGH Landing point PRESSRURE,…
  22. THE ENERCOM OIL AND GAS CONFERENCE – Gastar Exploration, Ltd. – slide 22
    Simms/Dangel Cross-Section Statoil USA Onshore Prop Inc Dangel 1-H Gastar Simms U-5H 5 Miles to west of Gastars acreage Target Depth: 11,350 TVD Porosity: 6 12% Porosity: Avg. 11% (up to 17%) Net pay of +/- 74 Net pay of 92…
  23. THE ENERCOM OIL AND GAS CONFERENCE – Gastar Exploration, Ltd. – slide 23
    Point Pleasant Paleography and SSTVD Structure East and West Appalachian Acreage on same shelf with similar features Point Pleasant Paleogeography Point Pleasant SSTVD Structure Higher porosities in Pleasant Point are Structure is…
  24. THE ENERCOM OIL AND GAS CONFERENCE – Gastar Exploration, Ltd. – slide 24
    Utica Marshall & Wetzel Counties Economics 15.0 Bcfe EUR(1) Daily Peak Rate 20 MMcf/d 100% Gas (dry) 25% IRR(1) Cost 12.0MM (5,000 lateral) 0.98/Mcfe F&D Costs PV10 7.3MM per well (100% WI) Est. Average Cum. Daily Rate: 1st…
  25. THE ENERCOM OIL AND GAS CONFERENCE – Gastar Exploration, Ltd. – slide 25
    Appalachia Summary 2014 Capital Activity 16 gross wells (8.0 net) 10 gross (5.0 net) Marcellus D&C 4 gross (2.0 net) Marcellus Drilled 1 gross (0.5 net) Utica D&C 1 gross (0.5 net) Utica Drilled Net Drilling Locations 106 net…
  26. THE ENERCOM OIL AND GAS CONFERENCE – Gastar Exploration, Ltd. – slide 26
    HUNTON & STACK PLAYS 2014 Gastar Exploration Inc. 27
  27. THE ENERCOM OIL AND GAS CONFERENCE – Gastar Exploration, Ltd. – slide 27
    Oklahoma Hunton Limestone Play Exposure to over 130MMBOE of net reserve potential, primarily oil Overview Hunton Activity Map 126,000 net acres (28% HBP) Primary targets: Lower and Upper Hunton OKLAHOMA Additional horizons: Stack…
  28. THE ENERCOM OIL AND GAS CONFERENCE – Gastar Exploration, Ltd. – slide 28
    Gastar/Husky AMI Horizontal Well Activity Lower Hunton Gastar / Husky AMI Activity Map OKLAHOMA Drilling Flowback Awaiting Completion Producing Encouraging results leading to full scale development 2014 Gastar…
  29. THE ENERCOM OIL AND GAS CONFERENCE – Gastar Exploration, Ltd. – slide 29
    Gastar/Husky Lower Hunton Drilling Overview Gastar/Husky Wells Cumulative Production Averages(2) Date Flowback Current 5 Day Approx. NRI % Commenced IP Rate(1) 30 Day 60 Day 90 Day 180 Day 270 Day 360 Day Average(3) % Oil(4)…
  30. THE ENERCOM OIL AND GAS CONFERENCE – Gastar Exploration, Ltd. – slide 30
    Hunton Well Activity Current Approx. AFE Working Lateral Length Costs (1) Well Name Interest (in feet) (MM) Status Hobbs Ranch 1-19H 29.50% 4,400 5.0 WOC Yeti 1-29H 32.80% 5,300 5.0 WOC Cline 1-13H 54.30% 5,100 5.0 WOC…
  31. THE ENERCOM OIL AND GAS CONFERENCE – Gastar Exploration, Ltd. – slide 31
    Gastar/Husky AMI Lower Hunton Economics 358 MBoe EUR (wet gas) 395 MBoe EUR (processed) Peak daily Rate 660 Boe/d 63% Oil 79% Liquids (processed) 52% IRR(1) Cost 5.5MM (4,200 lateral) 17.85/Boe F&D Cost (processed) PV10 4.1…
  32. THE ENERCOM OIL AND GAS CONFERENCE – Gastar Exploration, Ltd. – slide 32
    Gastar/Husky AMI Drilling Results Lower Hunton Wells are currently outperforming type curve 300,000 15 13 12 240,000 12 11 10 9 180,000 9 WELL COUNT 8 CUM (BOE) 7 6 120,000 6 5 4 3 60,000 3 0 0…
  33. THE ENERCOM OIL AND GAS CONFERENCE – Gastar Exploration, Ltd. – slide 33
    WEHLU Upper Hunton Potential single well reserves in excess of 167 MBoe WEHLU discovered in 1943 Produced 100+ MMBbl 80% from Upper Hunton 62 PUDs on northern WEHLU acreage No value assigned to southern WEHLU potential Operated…
  34. THE ENERCOM OIL AND GAS CONFERENCE – Gastar Exploration, Ltd. – slide 34
    WEHLU Hunton Development Previous operator drilled 12 horizontal and 12 vertical wells Other Operator EUR range: Horizontal 31-243 MBoe Vertical 15-205 MBoe All horizontals drilled in the upper Hunton except one No horizontal…
  35. THE ENERCOM OIL AND GAS CONFERENCE – Gastar Exploration, Ltd. – slide 35
    WEHLU Upper Hunton Economics 167 MBoe EUR (unprocessed) 182 MBoe EUR (processed) Peak Daily Rate 247 Boe/d 75% Oil 85% Liquids (processed) 53% IRR(1) Cost 3.0MM (4,200 lateral) 20.14/Boe F&D Cost (processed) PV10 2.2 million…
  36. THE ENERCOM OIL AND GAS CONFERENCE – Gastar Exploration, Ltd. – slide 36
    WEHLU Lower Hunton Potential Potential single well reserves in excess of 250 MBoe Not been developed horizontally Targeting both secondary (fractures) and primary porosity Operated well completed: Easton 22-1H Current 5 day…
  37. THE ENERCOM OIL AND GAS CONFERENCE – Gastar Exploration, Ltd. – slide 37
    WEHLU Lower Hunton Economics 250 MBoe EUR (unprocessed) 286 MBoe EUR (processed) Peak daily rate 583 Boe/d 60% Oil 78% Liquids (processed) 37% IRR(1) Cost 5.5MM (4,200 lateral) 23.49/Boe F&D Cost (processed) PV10 2.8 million…
  38. THE ENERCOM OIL AND GAS CONFERENCE – Gastar Exploration, Ltd. – slide 38
    Woodford Activity Woodford Activity Map IPs up to 1000+ Boe/d Gastar acreage unexplored Other operator activity de-risking the play Non-operated participation Checkerboard farm out Initial well spud August 2014 Net potential…
  39. THE ENERCOM OIL AND GAS CONFERENCE – Gastar Exploration, Ltd. – slide 39
    Meramec/Mississippi Lime Activity Meramec / Miss Lime Activity Map IPs range up to 1800+ Boe/d Meramec play naturally fractured carbonate like Hunton Other operator activity de-risking the play Net potential acres 60,000 Est.…
  40. THE ENERCOM OIL AND GAS CONFERENCE – Gastar Exploration, Ltd. – slide 40
    Oklahoma Summary 2014 Capital Activity 36 (18.7 net) gross wells 29 gross (11.9 net) non-operated AMI Hunton wells 7 gross (6.8 net) operated Hunton wells Net Drilling Locations 542 net locations on existing acreage Exposure to…
  41. THE ENERCOM OIL AND GAS CONFERENCE – Gastar Exploration, Ltd. – slide 41
    FINANCIAL OVERVIEW 2014 Gastar Exploration Inc. 42
  42. THE ENERCOM OIL AND GAS CONFERENCE – Gastar Exploration, Ltd. – slide 42
    Financial Strategy Grow NAV and reserves per share through exploitation of existing assets Target Appropriate Target Net Debt-to-EBITDA < 3.0x Leverage Ratios and Strong interest and dividend coverage (EBITDA-to-Interest 3.0x)…
  43. THE ENERCOM OIL AND GAS CONFERENCE – Gastar Exploration, Ltd. – slide 43
    Liquidity & Pro Forma Credit Statistics Year-End Liquidity 250.0 (149) 145 43 200.0 (20) 150.0 100.0 25 44 50.0 0.0 Cash 6/30/14 Borrowing Base 06/30/2014 2nd Half Remaining Excess Effective 8/13/14 Revolver Cashflow 2014…
  44. THE ENERCOM OIL AND GAS CONFERENCE – Gastar Exploration, Ltd. – slide 44
    Collateral Coverage Collateral Coverage ( in millions) 1,200 1,033.3 1,000 930.8 207.0 104.5 800 320.2 million 826.3 826.3 600 826.3 Net Debt 345.0 400 20.0 200 325.0 0 Senior Secured Notes + Credit Proved…
  45. THE ENERCOM OIL AND GAS CONFERENCE – Gastar Exploration, Ltd. – slide 45
    PDP Hedging Program Volume Hedged in Downside and Upside Price Scenarios Downside Hedge Percentages (PDP) Crude(1) NatGas NGL Lights 2014 95% 99% 50% 2015 86% 57% 23% 2016 90% 19% 2017 74% 2018 23% Upside Hedge Percentages…
  46. THE ENERCOM OIL AND GAS CONFERENCE – Gastar Exploration, Ltd. – slide 46
    PDP Hedging Program Liquids Hedging Strategy Bbl/d 3,500 91.75 100.00 86.91 83.97 2,800 80.98 80.00 88.00 2,100 76.00 1,400 64.00 700 52.00 0 (1) (2) 40.00 2014 2015 2016 2017 2018 Volume Average Hedge Floor Price…
  47. THE ENERCOM OIL AND GAS CONFERENCE – Gastar Exploration, Ltd. – slide 47
    APPENDIX 2014 Gastar Exploration Inc. 48
  48. THE ENERCOM OIL AND GAS CONFERENCE – Gastar Exploration, Ltd. – slide 48
    Balance Sheet Assets ( in millions) As of 6/30/2014 Cash and cash equivalents 24.8 Other current assets 21.6 Total current assets 46.4 Total property, plant and equipment, net 567.8 Other assets 12.4 Total assets 626.5…
  49. THE ENERCOM OIL AND GAS CONFERENCE – Gastar Exploration, Ltd. – slide 49
    Realized Prices - Historical Realized Oil Prices Realized Gas Prices 6.00 120% 100.00 93% 93% 100% 87% 99% 88.00 75% 80% 4.80 96% 72% 92.84 81% 80% 81% 5.02 77% 85.12 3.60 72% 76.00 82.61 60% 3.52 70.91 3.21 3.02 64.00 40%…
  50. THE ENERCOM OIL AND GAS CONFERENCE – Gastar Exploration, Ltd. – slide 50
    Production Costs Historical (/Boe) Lease Operating Expense Transportation 9.00 4.00 3.51 7.20 6.74 3.20 5.88 5.40 2.40 2.25 4.65 3.60 2.80 2.92 1.60 1.24 0.72 0.65 1.80 0.80 0.00 0.00 2011 2012 2013 Q1 2014 Q2 2014 2011…
  51. THE ENERCOM OIL AND GAS CONFERENCE – Gastar Exploration, Ltd. – slide 51
    Hedge Detail Natural Gas Oil Period Contract Type Volume Hedged Price Period Contract Type Volume Hedged Price Aug - Dec 14 NYMEX Swap 9,196 MMBtu/d 4.06 Aug - Dec 14 NYMEX Swap 750 Bbl/d 90.35 Aug - Dec 14 NYMEX Swap 2,000 MMBtu/d…
  52. THE ENERCOM OIL AND GAS CONFERENCE – Gastar Exploration, Ltd. – slide 52
    References Cornell, S. R. 2000. Sequence Stratigraphy and Event Correlations of upper Black River and lower Trenton Group Carbonates of northern New York State and southern Ontario, Canada, unpublished M.S. Thesis, University of…

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