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IPAA OGIS ENERGY CONFERENCE – Memorial Resource Development Corp.

Memorial Resource Development Corp. · Apr 21, 2015 · 42 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. IPAA OGIS ENERGY CONFERENCE – Memorial Resource Development Corp. – slide 1
    IPAA OGIS Energy Conference New York, New York John A. Weinzierl Andrew J. Cozby Chief Executive Officer Sr. Vice President and Chief Financial Officer April 21, 2015
  2. IPAA OGIS ENERGY CONFERENCE – Memorial Resource Development Corp. – slide 2
    The Premier Horizontal E&P Company Consolidated core position in the Terryville Complex of North Louisiana Prolific Top tier returns projected single well IRRs of 200% at current commodity prices(1) Asset Base High quality,…
  3. IPAA OGIS ENERGY CONFERENCE – Memorial Resource Development Corp. – slide 3
    A Pure-Play Terryville Company Asset Overview Asset Swap with MEMP Transitioned MRD to Pure-Play Terryville Total MRD Proved Reserves Key Statistics Complex Other Louisiana Gross Acres(1) 81,012 27,772 108,784 Outside (1) Outside 1%…
  4. IPAA OGIS ENERGY CONFERENCE – Memorial Resource Development Corp. – slide 4
    High Production Rates Throughout Cotton Valley Trend MRD has the Top 23 Wells in the Cotton Valley Trend 23 Active Cotton Valley Horizontal Rigs across +250 miles Terryville Complex Dowling 19-30 HC-2 31.6 MMcfe/d Lloyd 5-6H 11.3…
  5. IPAA OGIS ENERGY CONFERENCE – Memorial Resource Development Corp. – slide 5
    Horizontal Drilling Unlocks Full Potential Legacy Vertical Production Focused on Commingling Sections, Horizontal Development Focused on Specific Zones Legacy Vertical Development CV Stacked Horizontal Targets Competitor 8,500…
  6. IPAA OGIS ENERGY CONFERENCE – Memorial Resource Development Corp. – slide 6
    World Class Asset Productivity MRD Has Top Productive Wells Top 100 Gas Wells by Operator Peak 30-Day Mcfe Production Since 2012, 47 wells of 17,000 horizontal gas wells in the U.S. have peak monthly production over 21 MMcfe/d Other…
  7. IPAA OGIS ENERGY CONFERENCE – Memorial Resource Development Corp. – slide 7
    Best-in-Class Performance and Economics Exceptional Horizontal Well Results in Four Primary Zones(1) High IRRs at Current Prices(2) Average IP-30 172% per Quarter Avg. 17.7 MMcfe/d (MMcfe/d) 21.6 21.2 18.7 17.2 16.7 15.2…
  8. IPAA OGIS ENERGY CONFERENCE – Memorial Resource Development Corp. – slide 8
    Terryville Field Strong Horizontal Well Results (Unhedged)(1) MRDs drilling inventory projected to be highly economic across all commodity price environments 80 oil / 4.00 gas 70 oil / 3.50 gas 60 oil / 3.00 gas 50 oil / 2.50 gas NPV10…
  9. IPAA OGIS ENERGY CONFERENCE – Memorial Resource Development Corp. – slide 9
    Expanding Reserves in the Terryville Field Proved Reserve Growth (1) Bcfe 1,800 (20) (83) 1,600 31 254 (247) 1,400 324 1,200 1,000 Represents a 800 45% Y-o-Y 1,632 1,632 increase 1,385 600 1,126 400 200 0 12/31/13…
  10. IPAA OGIS ENERGY CONFERENCE – Memorial Resource Development Corp. – slide 10
    Step-Outs Continue to Largely De-Risk the Terryville Field 1P, 2P & 3P Then and Now Significant category shift from YE2013 (1) 2,000 1,933 1,750 1,500 1,431 1,077 1,250 381 Mgmt locations in 743 NSAI 3P 1,000 acreage 2x…
  11. IPAA OGIS ENERGY CONFERENCE – Memorial Resource Development Corp. – slide 11
    Multi-Year Drilling Inventory Drives Upside Potential Terryville Locations(1) Terryville Horizontal Locations by Pay-Zone(1)(2) Zone Proved Prob. Poss. NSAI 3P Mgmt Total Upper Red 81 41 53 175 243 418 Lower Red 52 48 53 153 271 424 35+…
  12. IPAA OGIS ENERGY CONFERENCE – Memorial Resource Development Corp. – slide 12
    Significant and Growing Acreage Position MRD continues to pursue attractive bolt-on acreage in and around the Terryville Field where MRD believes it has the ability, local knowledge and resources to add to MRDs already significant…
  13. IPAA OGIS ENERGY CONFERENCE – Memorial Resource Development Corp. – slide 13
    Results Outperform Type Curves Management Type Curves MRD Management PUD Assumptions Upper Red Lower Red Lower Deep Pink Updated management type curves based on Lateral Length (feet) 7,500 7,500 7,500 well performance, spacing and…
  14. IPAA OGIS ENERGY CONFERENCE – Memorial Resource Development Corp. – slide 14
    Producing Wells Are Greater Than NSAI PUD Type Curves TL McCrary / Wright Area Production (7 wells) vs NSAI PUD Type Curve Colvin Estate Area Production (2 wells) vs NSAI PUD Type Curve 35,000 35,000 Average Lateral Length = 4,900…
  15. IPAA OGIS ENERGY CONFERENCE – Memorial Resource Development Corp. – slide 15
    2015 MRD Development Plan First 2014 NSAI Pad Name Production Wells Zone(1) Res. Category P1 Colvin Estate Q414 2 2 UR Proved 20N 5W 20N 4W 20N 3W P2 D L Sanford Q414 1 1 UR Proved P3 Dowling Q414 2 2 UR Proved P4 TL McCrary Q414…
  16. IPAA OGIS ENERGY CONFERENCE – Memorial Resource Development Corp. – slide 16
    Expanded Activity Following the LMO Step-Out Well (1) MRDs Future Development Continuing South Based on Encouraging Results of the LMO LMO LMO initial production 1Q15 Verified over-pressured formations Confirmed target zones at 19N…
  17. IPAA OGIS ENERGY CONFERENCE – Memorial Resource Development Corp. – slide 17
    Proven Track Record with Step-Out Wells(1) Follow-up Wells Consistently Outperforming Initial Step-Out Wells Northwest Step-Out Colquitt well completed in late 2012 IP-30: 17.5 MMcfe/d Spurred further development throughout the…
  18. IPAA OGIS ENERGY CONFERENCE – Memorial Resource Development Corp. – slide 18
    Operations & Financial Summary 14
  19. IPAA OGIS ENERGY CONFERENCE – Memorial Resource Development Corp. – slide 19
    2014 and Recent Activity Completed 31 horizontal wells in 2014 20.2 MMcfe/d IP-30 2-well Colvin Estates pad 50.1 MMcfe/d IP-30 (easternmost wells) Solid Well Results 1-well DL Sanford pad 30.5 MMcfe/d IP-30 (northwestern-most well)…
  20. IPAA OGIS ENERGY CONFERENCE – Memorial Resource Development Corp. – slide 20
    Secured Midstream Infrastructure Supports Development Plan Sufficient, Build Extensive Existing OutTakeaway Eliminates Potential Constraints Diverse Regional Takeaway Currently 500 MMcf/d of available processing DCP Regency Minden…
  21. IPAA OGIS ENERGY CONFERENCE – Memorial Resource Development Corp. – slide 21
    Multi-Well Pads Great Efficiencies Across All Stages of Development Drilling Completion of a Multi-Well Pad Site Reduced location cost Reduced mobilization time (no rig up and rig down) Batch drilling of hole sections Completion…
  22. IPAA OGIS ENERGY CONFERENCE – Memorial Resource Development Corp. – slide 22
    Continued Operational Performance Improvement Increasing Lateral Lengths Frac Cost / Stage (M) Feet (M) 8,000 50 160 150 7,088 45 7,000 43 40 5,870 6,000 120 35 5,000 4,428 4,468 30 31 81 78 4,000 25 80 65 20 3,000 15 19.7…
  23. IPAA OGIS ENERGY CONFERENCE – Memorial Resource Development Corp. – slide 23
    Potential D&C Capex Reductions Drilling AFE Break-Down by Category Total D&C Casing Aggressively pursuing cost savings across all 16% Rig Day Rates cost categories 24% Location 4% Anticipate reductions in largest cost categories…
  24. IPAA OGIS ENERGY CONFERENCE – Memorial Resource Development Corp. – slide 24
    Financial Strategy and Capitalization Financial Update Capitalization MRD Segment (1) Preserve Financial Flexibility ( in MM) 12/31/2014 Operate free cash flow positive asset base Pro Forma Keep leverage at conservative levels Cash…
  25. IPAA OGIS ENERGY CONFERENCE – Memorial Resource Development Corp. – slide 25
    Fiscal Year 2015 Guidance Highlights Detailed Guidance FY15 total D&C capital 2015 FY Guidance expenditures of 500MM Low High Net Average Daily Production (MMcfe/d) 325 - 365 2015 daily production projected to Natural Gas (MMcf/d)…
  26. IPAA OGIS ENERGY CONFERENCE – Memorial Resource Development Corp. – slide 26
    MRD Peer Comparison MRD Historical LOE Expense (/Mcfe) 2014 FY Total Cash Cost (/Mcfe) (1) 1.20 Historical LOE Expense (/Mcfe) 7.00 Cash G&A Other Expenses 1.01 6.00 5.08 5.00 0.80 0.74 4.00 0.50 2.89 3.36 3.00 0.40 0.32…
  27. IPAA OGIS ENERGY CONFERENCE – Memorial Resource Development Corp. – slide 27
    MRD Has an Attractive Hedge Portfolio On a relative basis, MRD has larger hedge volumes and a longer dated hedge book than its peers Percent of Total Production Hedged(1) 2015 2016 % Hedged % Hedged 100% 94% 100% 88% 90% 90% 90%…
  28. IPAA OGIS ENERGY CONFERENCE – Memorial Resource Development Corp. – slide 28
    MRD Hedging Overview: 2015 through 2018 MRDs commodity risk management policy provides for hedging estimated production from total proved reserves Proactive policy reduces MRDs exposure to movements in commodity prices and provides…
  29. IPAA OGIS ENERGY CONFERENCE – Memorial Resource Development Corp. – slide 29
    Robust Cash Margins in all Price Environments Low per unit costs and attractive hedge positions provide strong cash margins 5.00 Total Realized Price = 4.62 Total Realized Total Realized 4.50 Price = 4.42 Price = 4.32 Total…
  30. IPAA OGIS ENERGY CONFERENCE – Memorial Resource Development Corp. – slide 30
    Investment Highlights Best-in-Class Assets with Top Tier Growth Premier Drilling Economics with Extensive Inventory Secured Infrastructure Supports Growth Plans Funding Growth Predominately with Internally Generated Cash…
  31. IPAA OGIS ENERGY CONFERENCE – Memorial Resource Development Corp. – slide 31
    Appendix
  32. IPAA OGIS ENERGY CONFERENCE – Memorial Resource Development Corp. – slide 32
    Organizational Chart & Ownership(1) NGP Funds Headquarters: Houston, TX Employees: 500 full-time Certain Former Management Members of MRD Holdco LLC Public WildHorse Resources 18% 39% 43% Memorial Resource Development…
  33. IPAA OGIS ENERGY CONFERENCE – Memorial Resource Development Corp. – slide 33
    Terryville Drilling Inventory 35+ Year Inventory in Four Primary Zones Terryville Future Horizontal Locations by Reserve Category (1) Distribution of Locations Lower Upper Upper Lower Deep Deep 4 Primary Other Total of Locations(2) Red…
  34. IPAA OGIS ENERGY CONFERENCE – Memorial Resource Development Corp. – slide 34
    NSAI Location Methodology is Conservative Volumetric Methodology Underestimates Reserves In Place NSAI original gas in place (OGIP) calculation for Upper NSAI YE14 PDP UPPER RED EUR DISTRIBUTION 100% Red in 1P acreage implies 43 Bcfe…
  35. IPAA OGIS ENERGY CONFERENCE – Memorial Resource Development Corp. – slide 35
    MRD Location Methodology MRD Methodology - Based on Well Performance, Spacing and Lateral Length TL McCrary / Wright Area Units NSAI Upper Red 11 WRIGHT 14-11H-1 12 PDP EURs T L MCCRARY 14-11 HC 5 WRIGHT 13-12HC 2 T L MCCRARY 14-11…
  36. IPAA OGIS ENERGY CONFERENCE – Memorial Resource Development Corp. – slide 36
    MRD Location Methodology MRD Methodology - Based on Well Performance, Spacing and Lateral Length Colvin Estate Unit ZEL_29-32_HC 2 29 BRAZZEL 29-32 HC 1 28 A SU 53-TV NSAI Upper Red PDP EURs LCV RB SU A-RUS Colvin Estate…
  37. IPAA OGIS ENERGY CONFERENCE – Memorial Resource Development Corp. – slide 37
    MRD NSAI Reserve Detail Oil Natural Gas NGLs Total % Gas PV-10 (MBbl) (MMcf) (MBbl) (MMcfe) (%) (M) PDP 3,290 358,795 18,211 487,800 74% 1,186,884 PDNP 615 33,386 1,713 47,351 71% 102,958 PUD 8,698 788,748 42,665 1,096,928 72%…
  38. IPAA OGIS ENERGY CONFERENCE – Memorial Resource Development Corp. – slide 38
    Hedges Help Protect 2015 Revenue Significant hedge book allows MRD to have minimal revenue change even in draconian price environment Hedging Impact on 2015 Revenue 5.00 Total Realized Total Realized Total Realized Total Realized…
  39. IPAA OGIS ENERGY CONFERENCE – Memorial Resource Development Corp. – slide 39
    Adjusted EBITDA Reconciliation Adjusted EBITDA is a non-GAAP financial measure. We evaluate segment performance based on Adjusted EBITDA. Adjusted EBITDA is defined as net income (loss), plus interest expense; debt extinguishment costs;…
  40. IPAA OGIS ENERGY CONFERENCE – Memorial Resource Development Corp. – slide 40
    Adjusted Net Income Reconciliation MRD Segment Adjusted Net Income is a supplemental non-GAAP financial measure that is used by external users of MRDs financial statements. We define MRD Segment Adjusted Net Income as net income excluding…
  41. IPAA OGIS ENERGY CONFERENCE – Memorial Resource Development Corp. – slide 41
    Reconciliation of PV-10 to Standardized Measure PV-10 is a non-GAAP financial measure and differs from the standardized measure of discounted future net cash flows, which is the most directly comparable GAAP financial measure. PV-10 is a…
  42. IPAA OGIS ENERGY CONFERENCE – Memorial Resource Development Corp. – slide 42

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