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Bank of America Leveraged Finance Conference – PDC Energy, Inc.

PDC Energy, Inc. · Jun 2, 2015 · 37 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. Bank of America Leveraged Finance Conference – PDC Energy, Inc. – slide 1
    June 2, 2015 BANK OF AMERICA LEVERAGED FINANCE CONFERENCE
  2. Bank of America Leveraged Finance Conference – PDC Energy, Inc. – slide 2
    PDC Energy High Quality Assets Company Highlights Core Wattenberg Market Cap: 2.3 Billion(1) Enterprise Value: 2.8 Billion(1) YE 2014 proved reserves 250 MMBoe 64% liquids, 30% proved developed Stress tested to 50/Bbl only 9%…
  3. Bank of America Leveraged Finance Conference – PDC Energy, Inc. – slide 3
    2015 Executing on Value Added Growth Q1 15: 32,162 Boe/d (2.9MMBoe) total production; wellpositioned to meet fullyear guidance 15% quarterly growth rate over Q4 14 Q1 15: 14,519 Bbls/d crude oil production (45% of total) 16%…
  4. Bank of America Leveraged Finance Conference – PDC Energy, Inc. – slide 4
    PDC Energy Outstanding Growth Track Record PAGE (1) From continuing operations June 2, 2015 5
  5. Bank of America Leveraged Finance Conference – PDC Energy, Inc. – slide 5
    Core Wattenberg Position Summary 96,000 net acres, 100% HBP Third largest leaseholder and producer Strong, repeatable, lower risk projects 2,640 total 2P locations Based on 16 Niobrara &4 Codell per section 1,000 locations with…
  6. Bank of America Leveraged Finance Conference – PDC Energy, Inc. – slide 6
    Wattenberg Capitalizing on Lower Cost Structure 2014 Development Increased ERL Drilling Minimal ERL development Tighter Stage Spacing Traditional completion design Standard stage spacing Improved Completion Design 2014 Cost…
  7. Bank of America Leveraged Finance Conference – PDC Energy, Inc. – slide 7
    Wattenberg Industry-Leading Breakeven Prices Source: BAML Research; February 2015; Oil price needed for 10% rate-of-return PDC Outer Core 2P Inventory (NIO/CDL): 700/165 Avg. EUR: 310 MBoe Est. NYMEX Breakeven(1): 45/Bbl PDC…
  8. Bank of America Leveraged Finance Conference – PDC Energy, Inc. – slide 8
    Updated EUR Analysis Shows 2015 Improvements Based on Evaluation of Public Production Data (1) 1,400 industry Hz Niobrara wells included in updated analysis of CO DJ Basin EURs now range from 292 to 630 MBoe in Core Wattenberg (all…
  9. Bank of America Leveraged Finance Conference – PDC Energy, Inc. – slide 9
    Core Wattenberg Niobrara Type Curves Inner Core Niobrara Inner Core 2P Inventory IRRs(1) 60/3.25 Flat NYMEX Pricing Producing Wells: 9 wells 2P Locations: 100 3Phase EUR: 625 MBoe IRR(1): 76% PV10: 3.7MM Middle Core Niobrara…
  10. Bank of America Leveraged Finance Conference – PDC Energy, Inc. – slide 10
    ERL Middle Core Niobrara Type Curve Updated Capital Cost(1): 4.4MM 3Phase EUR: 600 MBoe (2) Potential 2P Locations : 1,000 IRR(2): 47% PV10: 3.3MM 6,700 lateral 2015 focus for PDC Similar IP rates to standard laterals…
  11. Bank of America Leveraged Finance Conference – PDC Energy, Inc. – slide 11
    New Codell Type Curves in Core Wattenberg Updated Economics Include Increased Stage Density and Updated Capital Costs Inner / Middle Codell Producing Wells: 27 wells Net Acres: 65,500 2P Locations: 372 3Phase EUR: 440 MBoe…
  12. Bank of America Leveraged Finance Conference – PDC Energy, Inc. – slide 12
    2015 Expectations for Further Downspacing 20 Wells/Section HalfSection (2,640) Chesnut (2015 TIL) 480acre unit ERL downspacing test 6,700 laterals 10 wells 5 NIO (64acre spacing) 5 CDL (64acre spacing) 22 Wells/Section…
  13. Bank of America Leveraged Finance Conference – PDC Energy, Inc. – slide 13
    Plug-n-Perf Completions Improving Performance Enhancements Not Included in 2015 Guidance or Updated Economics; results as of 3/15/15 Completion Design Comparison Sliding Sleeve PlugnPerf 2014 Maxey Project (Middle Core) (Middle…
  14. Bank of America Leveraged Finance Conference – PDC Energy, Inc. – slide 14
    Testing Additional Technological Enhancements Enhancements Not Included in 2015 Guidance or Updated Economics; results as of 3/15/15 AccessFrac BioVert(1) Completion Material Designed to divert frac fluid during completion Aimed…
  15. Bank of America Leveraged Finance Conference – PDC Energy, Inc. – slide 15
    DCP Midstream Expansion - Wattenberg Plants and compression strategically placed around PDC acreage Current midstream capacity 650 MMcf/d Expected YE2015 DCP system capacity of 850 MMcf/d growing to 890 MMcf/d by YE2016…
  16. Bank of America Leveraged Finance Conference – PDC Energy, Inc. – slide 16
    Substantial Long-Term Crude Oil Takeaway Additional Options and Capacity Provides Support for Long-Term Wellhead Deduct Estimated at 10 per Barrel Multiple takeaway options (refinery, pipeline, trucking and rail) Expected takeaway…
  17. Bank of America Leveraged Finance Conference – PDC Energy, Inc. – slide 17
    Utica Position Summary 680 MBoe Condensate Window(1) Net Acres: 67,000 % HBP: 50% Producing Hz Wells: 19 Potential Hz Locations: 220 2015 Est. Capital: 35MM 1,200 MBoe WetGas Window(1) PAGE (1) Production data…
  18. Bank of America Leveraged Finance Conference – PDC Energy, Inc. – slide 18
    Dynamite Wells Continue to Impress As of March 15, 2015; Average Dynamite Lateral Length of 5,500 Appx. 15% above type curve Dynamite performance tracking above 680 MBoe type curve after 90 days Updated completion design…
  19. Bank of America Leveraged Finance Conference – PDC Energy, Inc. – slide 19
    Utica Gas Gathering Summary Two Primary Long-Term Processing Contracts MarkWest (MWE) PDC volumes flow to Seneca Plant Access to all major NGL takeaway projects in the northeast region MWE has current capacity of 1.1 Bcf/d…
  20. Bank of America Leveraged Finance Conference – PDC Energy, Inc. – slide 20
    Operational Efficiency 3-Year Base Case from 2015 to 2017 Actual 20% decrease in Operating Costs/Boe from 20122014 Project 5055% decrease in Operating Costs/Boe from 20122017 Operational Resilience deliver improving cash cost…
  21. Bank of America Leveraged Finance Conference – PDC Energy, Inc. – slide 21
    2015 Financial Guidance In millions, except per share data 2014 2015 Guidance (3) Actual Low High Production (MMBoe) 9.3 (1) 13.5 14.5 Crude oil, natural gas and NGLs sales 471 361 400 Realized gain (loss) on derivatives (1) 188…
  22. Bank of America Leveraged Finance Conference – PDC Energy, Inc. – slide 22
    Crude Oil and Natural Gas Hedges Summary Hedges in place as of March 31, 2015 plus hedges entered into prior to April 30, 2015 Apr Dec 85% of crude oil volumes at weighted average floor price of 88.82/Bbl 2015 75% of natural gas…
  23. Bank of America Leveraged Finance Conference – PDC Energy, Inc. – slide 23
    Debt and Liquidity As of 3/31/15 115 million 3.25% convertible debt Debt Maturity Schedule (in millions) matures in May 2016 700 million revolver matures May 2018 450 million elected commitment level 0 million drawn 12…
  24. Bank of America Leveraged Finance Conference – PDC Energy, Inc. – slide 24
    Debt and Liquidity Analysis PAGE June 2, 2015 25
  25. Bank of America Leveraged Finance Conference – PDC Energy, Inc. – slide 25
    PDCE mapped against Moodys E&P industry methodology indicates a rating in the Ba1 category Factor mapping Independent E&P Industry Rating factors and sub-factors A Baa Ba B Caa Ca PDCE Reserves and production characteristics (40%…
  26. Bank of America Leveraged Finance Conference – PDC Energy, Inc. – slide 26
    What Sets PDC Apart Source: Acreage Estimates from Company Filings PAGE (1) PDC data includes shares from recent equity issuance. June 2, 2015 27
  27. Bank of America Leveraged Finance Conference – PDC Energy, Inc. – slide 27
    Investor Relations Mike Edwards, Senior Director Investor Relations michael.edwardspdce.com Kyle Sourk, Manager Investor Relations kyle.sourkpdce.com Corporate Headquarters PDC Energy, Inc. 1775 Sherman Street Suite 3000 Denver,…
  28. Bank of America Leveraged Finance Conference – PDC Energy, Inc. – slide 28
    Summary GAAP Financial Results (from continuing operations) In millions, except per share data Three Months Ended March 31, Measure 2015 2014 Total crude oil, natural gas and NGLs sales 74.1 120.0 Production costs 24.2 18.1…
  29. Bank of America Leveraged Finance Conference – PDC Energy, Inc. – slide 29
    Summary Non-GAAP Financial Results In millions, except per share data Three Months Ended March 31, (1) Measure 2015 2014 Adjusted net income 7.0 9.6 Adjusted net income per diluted share 0.19 0.27 Adjusted cash flows from…
  30. Bank of America Leveraged Finance Conference – PDC Energy, Inc. – slide 30
    Reconciliation of Non-GAAP Financial Measures In millions, except per share data Three Months Ended March31 Adjusted EBITDA from net income (loss): 2015 2014 Net income (loss) 17.1 (2.1) (Gain) loss on commodity derivative…
  31. Bank of America Leveraged Finance Conference – PDC Energy, Inc. – slide 31
    Reconciliation of Non-GAAP Financial Measures In millions, except per share data Three Months Ended March31 Adjusted net income (loss) from net income (loss): 2015 2014 Net income (loss) 17.1 (2.1) (Gain) loss on commodity…
  32. Bank of America Leveraged Finance Conference – PDC Energy, Inc. – slide 32
    PDC Future Outlook Case Scenarios Resilient Case Base Case Upside Case Px NYMEX Crude NYMEX Gas Px NYMEX Crude NYMEX Gas Px NYMEX Crude NYMEX Gas 2015 50.00 3.25 2015 51.72 2.86 2015 50.00 3.25 2016 50.00 3.25 2016 57.47 3.19 2016…
  33. Bank of America Leveraged Finance Conference – PDC Energy, Inc. – slide 33
    PDC Resilient Case: 50 Crude / 3.25 Gas Flat 2015, 2016, 2017: 5 Wattenberg Rigs (1) Shaded Areas Represent Guidance/Outlook Range Spend close to cash flow, grow production and maintain CFPS through 2017 PAGE (1) Range: base…
  34. Bank of America Leveraged Finance Conference – PDC Energy, Inc. – slide 34
    PDC Base Case: Current Strip Price 2015, 2016, 2017: 5 - 6 - 7 Wattenberg Rigs; 0 - 0.5 - 1 Utica Rigs Shaded Areas Represent Guidance/Outlook Range Rig additions in Wattenberg drilling Middle/Inner Core wells, resume drilling in…
  35. Bank of America Leveraged Finance Conference – PDC Energy, Inc. – slide 35
    PDC Upside Case: 50 - 60 - 70 / BBL 2015, 2016, 2017: 5 - 6.5 - 8 Wattenberg Rigs; 0 - 0.5 - 1 Utica Rigs Shaded Areas Represent Guidance/Outlook Range Accelerate Wattenberg drilling with improved oil price outlook, deploy rig in…
  36. Bank of America Leveraged Finance Conference – PDC Energy, Inc. – slide 36
    Niobrara Gas-Oil Ratio (GOR) Discussion Niobrara GOR variation in Wattenberg critical for accurate forecasting Varying Liquids Content Across Core Areas Range of Area Type Curve Inner Middle Outer Producing GOR Stable After 1…
  37. Bank of America Leveraged Finance Conference – PDC Energy, Inc. – slide 37
    Codell GOR Variation in Wattenberg Codell GOR variation in Wattenberg critical for accurate forecasting Varying Liquids Content Across Core Areas Range of Area Type Curve Inner/Middle Outer Producing GOR Stabilizes After 1 2…

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