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BAML 2014 ENERGY CONFERENCE – Chesapeake Energy Corp

Chesapeake Energy Corp · Nov 13, 2014 · 28 slides

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Slides

  1. BAML 2014 ENERGY CONFERENCE – Chesapeake Energy Corp – slide 1
    Bank of America Merrill Lynch 2014 Energy Conference November 13, 2014
  2. BAML 2014 ENERGY CONFERENCE – Chesapeake Energy Corp – slide 2
    WHERE WE ARE TODAY CORPORATE PROGRESSION 2013 2014 2015 + TRANSFORMATION FOUNDATION E&P LEADERSHIP 3 I BOAML ENERGY CONFERENCE 11/13/2014
  3. BAML 2014 ENERGY CONFERENCE – Chesapeake Energy Corp – slide 3
    APPLYING OUR BUSINESS STRATEGIES Balance capital expenditures with Develop world-class inventory cash flow from operations Target top-quartile operating and Divest noncore assets and financial metrics noncore affiliates Pursue…
  4. BAML 2014 ENERGY CONFERENCE – Chesapeake Energy Corp – slide 4
    3Q14 OPERATIONAL AND FINANCIAL RESULTS TOTAL ADJ. PROD. LIQUIDS MIX ADJ. OIL PROD. 11% YOY (1) to 29% of Total Production(2) 5% Q/Q (1) 726 mboe/d 28% in 2Q14 118.9 mbbls/d ADJ. EARNINGS/FDS ADJ. EBITDA CAPEX 12% YOY…
  5. BAML 2014 ENERGY CONFERENCE – Chesapeake Energy Corp – slide 5
    CAPITAL DISCIPLINE (1) 14.2 in billions 7.6 (2) 5.7 60% Decrease in 36% Increase in Operating Capital Investment Cash Flow (1) Operating Cash Flow before changes in assets and liabilities (2) 2014 based on midpoint…
  6. BAML 2014 ENERGY CONFERENCE – Chesapeake Energy Corp – slide 6
    GROWING PRODUCTION WHILE MANAGING INVENTORY Inventory Count mmboe 7 I BOAML ENERGY CONFERENCE 11/13/2014
  7. BAML 2014 ENERGY CONFERENCE – Chesapeake Energy Corp – slide 7
    OPERATIONS UPDATE Operating cash flow(1) for first nine months of 3Q14 Daily Avg. Net Production (mboe/d) 2014 of approximately 4.2 billion, compared to capital expenditures of 3.5 billion(2) Adjusted production(3) for first nine…
  8. BAML 2014 ENERGY CONFERENCE – Chesapeake Energy Corp – slide 8
    CAPTURING MORE FOR LESS NORTHERN DIVISION Utica: 54% Improvement Marcellus North: 30% Improvement (1) (1) Powder River Basin: 50% Improvement (1) Note: Capex / EUR is defined as net drilling and completion (D&C) costs…
  9. BAML 2014 ENERGY CONFERENCE – Chesapeake Energy Corp – slide 9
    CAPTURING MORE FOR LESS SOUTHERN DIVISION Haynesville: 64% Improvement Eagle Ford: 34% Improvement (1) (1) Mississippian Lime: 39% Improvement (1) Note: Capex / EUR is defined as net drilling and Completion (D&C) costs…
  10. BAML 2014 ENERGY CONFERENCE – Chesapeake Energy Corp – slide 10
    EAGLE FORD ASSET OVERVIEW 3Q14 avg. net production of 102 mboe/d 449,000 net acres 61% avg WI Up 12% sequentially Averaged 21 operated rigs (plus 3 spudder rigs) 40% of 2014 estimated E&P capex Avg. completed well cost of 6.0…
  11. BAML 2014 ENERGY CONFERENCE – Chesapeake Energy Corp – slide 11
    EAGLE FORD DRILLING PERFORMANCE Drilling performance continues to improve with increased pad drilling Centralized production facilities provide efficiencies 2014 avg. completed lateral lengths of 6,300 feet and 20 frac stages 135…
  12. BAML 2014 ENERGY CONFERENCE – Chesapeake Energy Corp – slide 12
    UTICA ASSET OVERVIEW 3Q14 avg. net production of 86 mboe/d 1 million net acres 61% avg WI Up 27% sequentially Averaged 7 operated rigs and connected 77 gross wells in 3Q14 Avg. completed well cost of 6.5 million(1) Decreased 16%…
  13. BAML 2014 ENERGY CONFERENCE – Chesapeake Energy Corp – slide 13
    POWDER RIVER BASIN OIL GROWTH ENGINE Closed transaction with RKI in August 14 388,000 net acres 79% avg WI exchanged nonoperated northern acreage for RKIs southern acreage and 450 mm cash 3Q14 avg net production of 14 mboe/d Up…
  14. BAML 2014 ENERGY CONFERENCE – Chesapeake Energy Corp – slide 14
    HAYNESVILLE ASSET OVERVIEW 3Q14 avg. net production of 562 mmcfe/d Up 11% sequentially Averaged 9 operated rigs and connected 14 387,000 net acres 71% avg WI gross wells in 3Q14 Avg. completed well cost of 8.2 million(1)…
  15. BAML 2014 ENERGY CONFERENCE – Chesapeake Energy Corp – slide 15
    HAYNESVILLE D&C IMPROVEMENT IMPACTS Haynesville Shale Well Cost Progress Report (m) ROR (%) 4.00/MCF 4,000 5,000 6,000 7,000 8,000 9,000 10,000 20% 40% 60% 8550 August 2013 Actual Reducing chemicals 8,500 17% (FR/Gel) 8350 Capex…
  16. BAML 2014 ENERGY CONFERENCE – Chesapeake Energy Corp – slide 16
    REDUCING LEVERAGE (mm) 2012 2014E(1)(2) Term Loan 2,000 -- Long-Term Bonds 10,666 11,821 Credit Facility 418 -- GAAP Debt 13,084 11,821 10% VPPs 3,187 1,720 Operating & Finance Leases 1,255 -- Subsidiary Preferred 2,500 --…
  17. BAML 2014 ENERGY CONFERENCE – Chesapeake Energy Corp – slide 17
    EXECUTING OUR PLAN Production growth(1) 9 12% Cash flow 5,250 5,450 MM Capital 5,000 5,400 MM(2) Cash costs LOE, G&A and interest expense Leverage Reduce adjusted leverage by 30% YE 2014 (1) Growth range based on 2013…
  18. BAML 2014 ENERGY CONFERENCE – Chesapeake Energy Corp – slide 18
    APPENDIX 19 I BOAML ENERGY CONFERENCE 11/13/2014
  19. BAML 2014 ENERGY CONFERENCE – Chesapeake Energy Corp – slide 19
    TRANSFORMING OUR BUSINESS Organizational structure Portfolio management and capital allocation process Decision rights Corporate budget process and plan Focus on capital efficiency Performance measurement and Cash cost…
  20. BAML 2014 ENERGY CONFERENCE – Chesapeake Energy Corp – slide 20
    UPSIDE POTENTIAL CHK 21 I BOAML ENERGY CONFERENCE 11/13/2014
  21. BAML 2014 ENERGY CONFERENCE – Chesapeake Energy Corp – slide 21
    NORTHERN MARCELLUS ASSET OVERVIEW 3Q14 avg. net production of 882 mmcfe/d Up 1% sequentially Averaged 3 operated rigs and connected 23 gross wells in 3Q14 Avg. completed well cost of 7.0 million(2) 230,000+ net acres(1) CHK…
  22. BAML 2014 ENERGY CONFERENCE – Chesapeake Energy Corp – slide 22
    MID-CONTINENT ASSET OVERVIEW 3Q14 avg. net production of 96 mboe/d Averaged 18 operated rigs and connected 63 gross wells in 3Q14 249,000 net acres actively being developed in aggregate Mississippian Lime 164,000 net acres Miss.…
  23. BAML 2014 ENERGY CONFERENCE – Chesapeake Energy Corp – slide 23
    CURRENT HEDGE POSITION Natural Gas Oil 72% 64% 42% Swaps 4.09/mcf NYMEX 26% 94.22/bbl Three-Way NYMEX Collars 4.50-5.24/mcf NYMEX 4.11 - 4.37/mcf NYMEX Q4 2014 Total 2015 Volume (bcf) 194 319 Natural Gas Hedges…
  24. BAML 2014 ENERGY CONFERENCE – Chesapeake Energy Corp – slide 24
    UTICA DOWNSTREAM MARKETING ADVANTAGE Average transportation rates of 0.22 per mcf per day for balance of 2014 Dawn and 0.24 per mcf per day for 2015 Gulf Coast Market Access 440 MMcfd to the Gulf Coast for 2015 Utica 732 MMcfd…
  25. BAML 2014 ENERGY CONFERENCE – Chesapeake Energy Corp – slide 25
    SENIOR NOTE PROFILE Sr. Notes: 11.8 billion Convertibles 9/30/2014 WACD 5.0% Other Senior Notes 2,263 Avg. Maturity: 5.2 years 1,800 1,700 1,500 1,500 1,100 1,015 500 396 0 2014 2015 2016 2017 2018 2019 2020 2021…
  26. BAML 2014 ENERGY CONFERENCE – Chesapeake Energy Corp – slide 26
    RECONCILIATION OF ADJUSTED EARNINGS PER SHARE ( in mm, except per share data) Three Months Ended: 9/30/2014 9/30/2013 Net income available to common stockholders 169 156 Adjustments, net of tax: Unrealized losses on derivatives…
  27. BAML 2014 ENERGY CONFERENCE – Chesapeake Energy Corp – slide 27
    RECONCILIATION OF ADJUSTED EBITDA ( in mm) Three Months Ended: 9/30/2014 9/30/2013 Cash provided by operating activities 1,184 1,381 Changes in assets and liabilities 109 31 (1) Operating cash flow 1,293 1,412 Net income 692…
  28. BAML 2014 ENERGY CONFERENCE – Chesapeake Energy Corp – slide 28
    CORPORATE INFORMATION CHESAPEAKE HEADQUARTERS PUBLICLY TRADED SECURITIES CUSIP TICKER 3.25% Senior Notes due 2016 165167CJ4 CHK16 6100 N. Western Avenue 6.25% Senior Notes due 2017 027393390 N/A Oklahoma City, OK 73118 6.50% Senior…

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