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MARCH 2015 INVESTOR PRESENTATION – Memorial Resource Development Corp.

Memorial Resource Development Corp. · Mar 26, 2015 · 59 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. MARCH 2015 INVESTOR PRESENTATION – Memorial Resource Development Corp. – slide 1
    Analyst Field Trip Presentation Shreveport, Louisiana
  2. MARCH 2015 INVESTOR PRESENTATION – Memorial Resource Development Corp. – slide 2
    Agenda Introduction William J. Scarff President Executive John A. Weinzierl Chief Executive Officer Summary Operational Larry R. Forney Senior VP, Chief Operating Officer Overview Geology Kyle McQuire Staff Geologist…
  3. MARCH 2015 INVESTOR PRESENTATION – Memorial Resource Development Corp. – slide 3
    Executive Summary 4
  4. MARCH 2015 INVESTOR PRESENTATION – Memorial Resource Development Corp. – slide 4
    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,…
  5. MARCH 2015 INVESTOR PRESENTATION – Memorial Resource Development Corp. – slide 5
    Terryville Field Pure-Play Reserves Breakdown (1) Asset Overview 1P By Category Terryville Total MRD 1.4 Tcfe Key Statistics Complex Other Louisiana (1) PUD32% Gross Acres 81,012 27,772 108,784 (1) Net Acres 68,032 25,300 93,332…
  6. MARCH 2015 INVESTOR PRESENTATION – Memorial Resource Development Corp. – slide 6
    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…
  7. MARCH 2015 INVESTOR PRESENTATION – Memorial Resource Development Corp. – slide 7
    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…
  8. MARCH 2015 INVESTOR PRESENTATION – Memorial Resource Development Corp. – slide 8
    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…
  9. MARCH 2015 INVESTOR PRESENTATION – Memorial Resource Development Corp. – slide 9
    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…
  10. MARCH 2015 INVESTOR PRESENTATION – Memorial Resource Development Corp. – slide 10
    Transitioned to Pure-Play Story(1) MRD / MEMP Transaction Overview Proved Reserves MRD received: Outside All of MEMPs position in the Terryville Field Outside 1% 16% Cash consideration of 78 million MEMP received: Primarily…
  11. MARCH 2015 INVESTOR PRESENTATION – 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. MARCH 2015 INVESTOR PRESENTATION – Memorial Resource Development Corp. – slide 12
    Operational Overview 13
  13. MARCH 2015 INVESTOR PRESENTATION – Memorial Resource Development Corp. – slide 13
    Terryville Field World Class Asset Large, conventional tight gas reservoir best exploited through horizontal drilling Elevated pore pressure (0.8 psi/ft) creates prolific original gas in place Excellent High reservoir energy plus…
  14. MARCH 2015 INVESTOR PRESENTATION – Memorial Resource Development Corp. – slide 14
    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…
  15. MARCH 2015 INVESTOR PRESENTATION – Memorial Resource Development Corp. – slide 15
    Significant Production Growth From Horizontal Wells Gross Terryville Field Production(1) Horizontal redevelopment increases Terryville gross production by 11x from 53 wells(1) 450,000 12,000 400,000 May 2010: 10,000 MRD…
  16. MARCH 2015 INVESTOR PRESENTATION – Memorial Resource Development Corp. – slide 16
    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…
  17. MARCH 2015 INVESTOR PRESENTATION – Memorial Resource Development Corp. – slide 17
    Louisiana Methodist Orphanage (LMO) LMO Represents a Sizable Step-Out Well Located Outside of NSAI 3P Acreage When Drilled Louisiana Methodist Orphanage YE 2013 Reserves Map Summary Target: Upper Red 19N 4W Lateral length: 6,150…
  18. MARCH 2015 INVESTOR PRESENTATION – Memorial Resource Development Corp. – slide 18
    LMO Results Confirm Reservoir Quality Encouraging Results YE 2014 Reserves Map Verified over-pressured nature of the reservoir Pressure gradient consistent with balance of the field 19N 4W Confirmed hydrocarbons across all four…
  19. MARCH 2015 INVESTOR PRESENTATION – Memorial Resource Development Corp. – slide 19
    LMO Geology Comparable Rock Quality Across the Field Microscopic Core Images LMO Geo-Steering Cross Section Only 60% of lateral drilled in target porosity zone LMO Upper Red Microscopic Image Gamma Ray BF Fallin Upper Red…
  20. MARCH 2015 INVESTOR PRESENTATION – Memorial Resource Development Corp. – slide 20
    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…
  21. MARCH 2015 INVESTOR PRESENTATION – Memorial Resource Development Corp. – slide 21
    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…
  22. MARCH 2015 INVESTOR PRESENTATION – Memorial Resource Development Corp. – slide 22
    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…
  23. MARCH 2015 INVESTOR PRESENTATION – Memorial Resource Development Corp. – slide 23
    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…
  24. MARCH 2015 INVESTOR PRESENTATION – Memorial Resource Development Corp. – slide 24
    Multi-Zone Well Pad Development Plan Drives Efficiency Efficient Full Field Stacked Development Extensive Multi-Well Pad Experience 7 horizontal laterals per zone per section 14 multi-well pads built through YE 2014 770 spacing between…
  25. MARCH 2015 INVESTOR PRESENTATION – Memorial Resource Development Corp. – slide 25
    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…
  26. MARCH 2015 INVESTOR PRESENTATION – Memorial Resource Development Corp. – slide 26
    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…
  27. MARCH 2015 INVESTOR PRESENTATION – Memorial Resource Development Corp. – slide 27
    Geology 14
  28. MARCH 2015 INVESTOR PRESENTATION – Memorial Resource Development Corp. – slide 28
    Geologic Setting Lower Cotton Valley Sands are Widespread Lower Cotton Valley sands were deposited over a vast area (900 square miles) in North Louisiana Conventional core sample evaluation at Terryville Field confirmed shoreface…
  29. MARCH 2015 INVESTOR PRESENTATION – Memorial Resource Development Corp. – slide 29
    Terryville Field Geology Expanded Overpressured Sand Schematic Cross Section Type Log Overpressured Lower Cotton Valley sands thicken into Terryville Field due to large growth fault 1 3 4 0103 3 0103 2 0103 1 0103 0 0102 9 0102 8…
  30. MARCH 2015 INVESTOR PRESENTATION – Memorial Resource Development Corp. – slide 30
    LCV Stratigraphy Consistent Across the Terryville Field Wallace 9-1 Colvin T C 1-ALT Wright Heirs 14 2-ALT Woodland Acres 4-1 A UPPER DEEP A PINK LOWER DEEP PINK UPPER RED LOWER RED 10 miles Four consistent, well…
  31. MARCH 2015 INVESTOR PRESENTATION – Memorial Resource Development Corp. – slide 31
    Continuous Focus on Well Placement DL Sanford 18-7 HC 1 Real-Time Gamma Ray Data TARGET ZONE South North DL Sanford 18-17 HC 1 (IP30 29.3 MMcfe/d) Multi-disciplinary input to well planning Main Structural Geology,…
  32. MARCH 2015 INVESTOR PRESENTATION – Memorial Resource Development Corp. – slide 32
    Reserves 14
  33. MARCH 2015 INVESTOR PRESENTATION – Memorial Resource Development Corp. – slide 33
    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…
  34. MARCH 2015 INVESTOR PRESENTATION – Memorial Resource Development Corp. – slide 34
    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…
  35. MARCH 2015 INVESTOR PRESENTATION – Memorial Resource Development Corp. – slide 35
    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…
  36. MARCH 2015 INVESTOR PRESENTATION – Memorial Resource Development Corp. – slide 36
    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…
  37. MARCH 2015 INVESTOR PRESENTATION – Memorial Resource Development Corp. – slide 37
    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…
  38. MARCH 2015 INVESTOR PRESENTATION – Memorial Resource Development Corp. – slide 38
    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…
  39. MARCH 2015 INVESTOR PRESENTATION – Memorial Resource Development Corp. – slide 39
    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…
  40. MARCH 2015 INVESTOR PRESENTATION – Memorial Resource Development Corp. – slide 40
    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…
  41. MARCH 2015 INVESTOR PRESENTATION – Memorial Resource Development Corp. – slide 41
    Financial Overview 14
  42. MARCH 2015 INVESTOR PRESENTATION – Memorial Resource Development Corp. – slide 42
    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)…
  43. MARCH 2015 INVESTOR PRESENTATION – Memorial Resource Development Corp. – slide 43
    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…
  44. MARCH 2015 INVESTOR PRESENTATION – Memorial Resource Development Corp. – slide 44
    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)…
  45. MARCH 2015 INVESTOR PRESENTATION – Memorial Resource Development Corp. – slide 45
    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…
  46. MARCH 2015 INVESTOR PRESENTATION – Memorial Resource Development Corp. – slide 46
    Rich NGLs Drive Strong Economics Liquids Provide 36% of Revenues MRDs NGL Barrel is Heavy (MM) Current realized NGL pricing is 39% of WTI due to high concentration of C-5 100 Gas Oil & NGLs 100% Pentane 90 14% 90% Pentane 46%…
  47. MARCH 2015 INVESTOR PRESENTATION – Memorial Resource Development Corp. – slide 47
    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…
  48. MARCH 2015 INVESTOR PRESENTATION – Memorial Resource Development Corp. – slide 48
    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…
  49. MARCH 2015 INVESTOR PRESENTATION – Memorial Resource Development Corp. – slide 49
    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%…
  50. MARCH 2015 INVESTOR PRESENTATION – Memorial Resource Development Corp. – slide 50
    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…
  51. MARCH 2015 INVESTOR PRESENTATION – Memorial Resource Development Corp. – slide 51
    Investment Highlights Best-in-Class Assets with Top Tier Growth Premier Drilling Economics with Extensive Inventory Funding Growth Predominately with Internally Generated Cash Flow Coupled with a Conservative Balance…
  52. MARCH 2015 INVESTOR PRESENTATION – Memorial Resource Development Corp. – slide 52
    Appendix
  53. MARCH 2015 INVESTOR PRESENTATION – Memorial Resource Development Corp. – slide 53
    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…
  54. MARCH 2015 INVESTOR PRESENTATION – Memorial Resource Development Corp. – slide 54
    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% 6.2% limited partner interest…
  55. MARCH 2015 INVESTOR PRESENTATION – Memorial Resource Development Corp. – slide 55
    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%…
  56. MARCH 2015 INVESTOR PRESENTATION – Memorial Resource Development Corp. – slide 56
    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;…
  57. MARCH 2015 INVESTOR PRESENTATION – Memorial Resource Development Corp. – slide 57
    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…
  58. MARCH 2015 INVESTOR PRESENTATION – Memorial Resource Development Corp. – slide 58
    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…
  59. MARCH 2015 INVESTOR PRESENTATION – Memorial Resource Development Corp. – slide 59

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