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IPAAS OGIS NEW YORK – Jones Energy Inc.

Jones Energy Inc. · Apr 20, 2015 · 29 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. IPAAS OGIS NEW YORK – Jones Energy Inc. – slide 1
    IPAAs OGIS New York April 2015
  2. IPAAS OGIS NEW YORK – Jones Energy Inc. – slide 2
    Who is Jones Energy Experienced Operator Midcon focus for over 26 years Horizontal experts with 600 wells drilled Cost Leader Fit for purpose operations 26% AFE reduction since December Trusted Partner Numerous strategic…
  3. IPAAS OGIS NEW YORK – Jones Energy Inc. – slide 3
    Key Statistics NYSE Ticker: JONE Share Price: 9.50 Anadarko Basin Key Formation: Cleveland Market Cap: 585 million Cleveland Production: 17.0 MBoe/d Arkoma Basin Key Formation: Woodford Enterprise 1.4 billion Woodford…
  4. IPAAS OGIS NEW YORK – Jones Energy Inc. – slide 4
    Cleveland is a World Class Resource Play Strong results across Jones Cleveland acreage Top wells on acreage from all four major acquisitions TOP 10 JONE CLEVELAND WELLS1 IP30 Top 4 wells have IRRs greater than 100% Well (Boe/d) 8…
  5. IPAAS OGIS NEW YORK – Jones Energy Inc. – slide 5
    Midcontinent Activity Resilient Midcon activity has composed 20% of total US rig count throughout recent cycles 40% of Midcon rigs operated by private E&Ps US Rig Activity by Region as a % of Total 100% 90% Other 80% 70%…
  6. IPAAS OGIS NEW YORK – Jones Energy Inc. – slide 6
    Focused on the Cleveland in 2015 3 rigs currently running 2,500 Cleveland locations remain Jones Cleveland Locations Gross: 704 AFE has dropped 26% since Net: 477 December 2014 Targeting addition of 2 rigs in 2Q15 30% oil uplift…
  7. IPAAS OGIS NEW YORK – Jones Energy Inc. – slide 7
    Reduced Cycle Time Improves Efficiency and Returns Significant improvement in cycle time since October Open hole completions driving further improvements 90 80 50% improvement 70 since Oct peak 60 50 Days Spud to Sales…
  8. IPAAS OGIS NEW YORK – Jones Energy Inc. – slide 8
    Cost Reductions for 33 Stage Open Hole Wells 1,000,000 in cost reductions since 4Q 2014 4.0 3.8 3.0 2.8 Achieved Reductions: 1,000,000 AFE in millions 2.6 2.0 Breakdown of Savings: Targeted Reductions: 200,000 Frack…
  9. IPAAS OGIS NEW YORK – Jones Energy Inc. – slide 9
    Impact of Cost Reductions on Returns Well level IRRs for 2015 Cleveland drilling program Unhedged Cleveland Well Level IRRs 90% 2.7 MM AFE 80% 70% 60% 50% IRR 40% 30% 20% 10% - 3,400 3,100 2,800 2,500 2,200…
  10. IPAAS OGIS NEW YORK – Jones Energy Inc. – slide 10
    Cleveland Frack Optimization Successful Number of Frack Stages 60 Open Hole Completion 43 Perf and Plug Completion Sliding Sleeve Completion 33 20 20 8-12 12 4-5 2004 - 2006 2007 - 2009 2010 2011 2012 2013 2014…
  11. IPAAS OGIS NEW YORK – Jones Energy Inc. – slide 11
    33 Frack Stages: Ideal Cleveland Density Strong correlation between frack stages and cumulative oil production 33 stages is appropriate frack density for Cleveland Supported by historical Cleveland production data and frack trial…
  12. IPAAS OGIS NEW YORK – Jones Energy Inc. – slide 12
    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 Oil Rate (bpd) Total (Mboe) 241 274 100 10 0 50 100 150 200 250…
  13. IPAAS OGIS NEW YORK – Jones Energy Inc. – slide 13
    Increased Oil with Greater Predictability Increased frack density means more oil and more predictable results Only 30 Cleveland wells required to achieve type curve Expected range of outcomes more narrow and higher on average IP90…
  14. IPAAS OGIS NEW YORK – Jones Energy Inc. – slide 14
    Oil Uplift Has Created Significant Value 270,000 investment translates to: 1,250,000 1,750,000 in incremental oil revenue per location 475,000 765,000 in incremental PV-10 value per location Value accelerates as oil price increases…
  15. IPAAS OGIS NEW YORK – Jones Energy Inc. – slide 15
    2014 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 10 11 12 13 14 15 16 17 18 19 JONE 3 6 1 2 4 5 7 8 9 10 11 12 13 14 15 16…
  16. IPAAS OGIS NEW YORK – Jones Energy Inc. – slide 16
    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…
  17. IPAAS OGIS NEW YORK – Jones Energy Inc. – slide 17
    Ready for Market Opportunities with Strong Balance Sheet 562.5 million borrowing base reaffirmed 500 million in liquidity 90% of debt outstanding matures in 7 years 2.8x net debt/EBITDAX for trailing twelve months2 Debt Maturities…
  18. IPAAS OGIS NEW YORK – Jones Energy Inc. – slide 18
    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…
  19. IPAAS OGIS NEW YORK – Jones Energy Inc. – slide 19
    APPENDIX
  20. IPAAS OGIS NEW YORK – Jones Energy Inc. – slide 20
    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…
  21. IPAAS OGIS NEW YORK – Jones Energy Inc. – slide 21
    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…
  22. IPAAS OGIS NEW YORK – Jones Energy Inc. – slide 22
    Tonkawa An Untapped Opportunity Average formation depth: Drilled 6 wells in 2014 Tonkawa: 7,500 feet Cleveland: 8,500 feet Target AFE of 3.5 million Marmaton: 9,000 feet Tonkawa Drilling program halted due to oil drop 2.9 million…
  23. IPAAS OGIS NEW YORK – Jones Energy Inc. – slide 23
    Marmaton Shows Promise As Others Drill Ahead Marmaton lies just below Cleveland Average formation depth: Tonkawa: 7,500 feet Majority of Jones Anadarko acreage Cleveland: 8,500 feet lies within the Marmaton fairway Marmaton: 9,000…
  24. IPAAS OGIS NEW YORK – Jones Energy Inc. – slide 24
    Able to Ramp Activity as Margins Dictate Operational flexibility allows us to ramp activity up and down Drilling History by Formation 140 Reduced 2015 activity with focus on the 120 Cleveland Brown Dolomite Dropped all rigs in…
  25. IPAAS OGIS NEW YORK – Jones Energy Inc. – slide 25
    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…
  26. IPAAS OGIS NEW YORK – Jones Energy Inc. – slide 26
    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…
  27. IPAAS OGIS NEW YORK – Jones Energy Inc. – slide 27
    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…
  28. IPAAS OGIS NEW YORK – Jones Energy Inc. – slide 28
    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…
  29. IPAAS OGIS NEW YORK – Jones Energy Inc. – slide 29
    Corporate Structure Updated for recent capital markets transactions Stock trading liquidity has improved significantly post-recent transactions Metalmark, Class B Common Class A Common Management Stock Stock Public & Other 59% of…

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