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UBS Global Oil and Gas Conference – Jones Energy Inc.

Jones Energy Inc. · May 19, 2015 · 30 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. UBS Global Oil and Gas Conference – Jones Energy Inc. – slide 1
    UBS Global Oil and Gas Conference May 19, 2015
  2. UBS Global Oil and Gas Conference – Jones Energy Inc. – slide 2
    Who is Jones Energy Experienced Operator Midcon focus for over 26 years Cost Leader Fit for purpose operations Trusted Partner Numerous strategic partnerships Steward of Capital History of value creation 2
  3. UBS Global Oil and Gas Conference – Jones Energy Inc. – slide 3
    Key Statistics NYSE Ticker: JONE Share Price: 9.85 608 Anadarko Basin Market Cap: Key Formation: Cleveland million Arkoma Basin Enterprise Key Formation: Woodford 1.4 billion Value: Sponsor 30% Ownership: Austin Shares 61.7…
  4. UBS Global Oil and Gas Conference – Jones Energy Inc. – slide 4
    First Quarter 2015 Highlights 1Q15 Production of 26.4 Mboe/d More than 3,000 Boe/d above 4Q14 Cleveland AFE now below 2.65 MM Margins support additional rigs 33 stage wells performing as expected 12 drilled / 11 completed…
  5. UBS Global Oil and Gas Conference – Jones Energy Inc. – slide 5
    Cleveland is a World Class Resource Play Strong results across Jones Cleveland acreage TOP 10 JONE CLEVELAND WELLS1 Top wells on acreage from all four major acquisitions IP30 Well (Boe/d) Elmer Graves 615-1H 1,432 Peyton Ranch…
  6. UBS Global Oil and Gas Conference – Jones Energy Inc. – slide 6
    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%…
  7. UBS Global Oil and Gas Conference – Jones Energy Inc. – slide 7
    Focused on the Cleveland in 2015 Jones Cleveland Locations 2,500 Cleveland locations remain 3 rigs currently running Gross: 704 Net: 477 Fourth rig by end of May (fifth rig to follow) 30% oil uplift achieved Frack optimization…
  8. UBS Global Oil and Gas Conference – Jones Energy Inc. – slide 8
    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 40…
  9. UBS Global Oil and Gas Conference – Jones Energy Inc. – slide 9
    Cost Reductions for 33 Stage Open Hole Wells Over 30% in negotiated cost reductions since 4Q 2014 4.0 3.8 3.0 Achieved Reductions: 1,150,000 Breakdown of Savings: AFE in millions Frack Services 487,000 2.65 Rig Rates…
  10. UBS Global Oil and Gas Conference – Jones Energy Inc. – slide 10
    How Jones Creates Unmatched Value in the Cleveland Geographic Focus Average Cleveland AFEs - Jones vs. Competitors Best in class Midcontinent horizontal driller Unconventional Experience Drilled over 600 horizontal wells in 9…
  11. UBS Global Oil and Gas Conference – Jones Energy Inc. – slide 11
    Impact of Cost Reductions on Returns Well level IRRs for 2015 Cleveland drilling program Unhedged Cleveland Well Level IRRs 2.65 MM AFE 90% 80% 70% 60% 50% IRR 40% 30% 20% 10% - 3,400 3,100 2,800 2,500 2,200 Well…
  12. UBS Global Oil and Gas Conference – Jones Energy Inc. – slide 12
    Cleveland Frack Optimization Successful 60 Number of Frack Stages 43 Open Hole Completion Perf and Plug Completion Sliding Sleeve Completion 33 20 20 8-12 12 4-5 2004 - 2006 2007 - 2009 2010 2011 2012 2013 2014…
  13. UBS Global Oil and Gas Conference – Jones Energy Inc. – slide 13
    33 Frack Stages: Ideal Cleveland Density Strong correlation between frack stages and cumulative oil production 33 stages is appropriate frack density for Cleveland Cumulative Oil vs. Frack Stages (at 280 days) 50 60 Expected…
  14. UBS Global Oil and Gas Conference – Jones Energy Inc. – slide 14
    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 50 100 150 200 250 300…
  15. UBS Global Oil and Gas Conference – Jones Energy Inc. – slide 15
    Increased Oil with Greater Predictability Increased frack density means more oil and more predictable results Only 30 Cleveland wells required to achieve type curve Cleveland Oil IP90 16% 14% % of wells with given IP90…
  16. UBS Global Oil and Gas Conference – Jones Energy Inc. – slide 16
    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…
  17. UBS Global Oil and Gas Conference – Jones Energy Inc. – slide 17
    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…
  18. UBS Global Oil and Gas Conference – Jones Energy Inc. – slide 18
    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…
  19. UBS Global Oil and Gas Conference – Jones Energy Inc. – slide 19
    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…
  20. UBS Global Oil and Gas Conference – Jones Energy Inc. – slide 20
    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…
  21. UBS Global Oil and Gas Conference – Jones Energy Inc. – slide 21
    Jones Energy Prepared for Today and Focused on the Future Mid-Continent Focus Operational Excellence Solid Financial Position Focused on Value Creation Substantial Footprint with Running Room 21
  22. UBS Global Oil and Gas Conference – Jones Energy Inc. – slide 22
    APPENDIX
  23. UBS Global Oil and Gas Conference – Jones Energy Inc. – slide 23
    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…
  24. UBS Global Oil and Gas Conference – Jones Energy Inc. – slide 24
    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…
  25. UBS Global Oil and Gas Conference – Jones Energy Inc. – slide 25
    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…
  26. UBS Global Oil and Gas Conference – Jones Energy Inc. – slide 26
    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…
  27. UBS Global Oil and Gas Conference – Jones Energy Inc. – slide 27
    2015 Full Year Guidance and 2Q Production Guidance 2015E 2Q15E Total Production (MMBoe) 7.9 8.7 2.05 2.15 Average Daily Production (MBoe/d) 21.7 23.7 22.5 23.5 Oil (MBbls/d) 6.6 7.1 6.7 7.0 Natural Gas (MMcf/d) 54.8 60.3 57.0…
  28. UBS Global Oil and Gas Conference – Jones Energy Inc. – slide 28
    Hedge Positions 2015 2016 2Q 3Q 4Q 1Q 2Q 3Q 4Q Crude Swaps (Mbbl) 613 595 572 492 465 457 411 Hedge Price / Bbl 82.93 84.60 84.05 83.53 83.67 83.64 83.35 Natural Gas Swaps (MMcf) 5,095 4,740 4,636 4,340 4,130 3,960 3,800 Hedge…
  29. UBS Global Oil and Gas Conference – Jones Energy Inc. – slide 29
    NGL Hedge Position Detail 2015 2016 2Q 3Q 4Q 1Q 2Q 3Q 4Q Mt. Belvieu NGLs (MBbl) Ethane 55 50 46 - - - - Propane 42 39 39 - - - - Iso Butane 3 3 3 3 3 3 - Butane 15 15 16 6 6 6 3 N. Gasoline 24 24 23 18 18 18 13 Sub-Total Mt. Belvieu…
  30. UBS Global Oil and Gas Conference – Jones Energy Inc. – slide 30
    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…

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