Enercoms The Oil and Gas Conference 20 August 18-19, 2015
Second Quarter 2015 Highlights Drilling inside cash flow 2Q cash flow exceeded capex 2Q15 production of 25.3 Mboe/d Anadarko Basin Above guidance for all commodities Cleveland Arkoma Basin Achieving 2.6 MM AFE Woodford Rigs…
Hedges Through 2019 220 million in mark-to-market hedge value as of mid-August Over 100% of PDP hedged through 1H19 JONE 2H15 and 2016 Hedge Position 100% 90.00 90% 80.00 80% 70.00 Hedge price (/boe) 70% 60.00 60% %…
Well Protected Against Recent Drop in NGL Prices Consistent hedging of NGLs has resulted in strong realizations as prices have dropped 700 50 45 600 40 500 35 per weighted NGL Bbl 30 000's of NGL Bbls 400 25 300 20…
Prepared for Fall Borrowing Base Redetermination 562.5 million borrowing base reaffirmed in April 462.5 million in undrawn capacity as of June 30, close to cash flow neutral 2H15 Lead agent advised 610 million available in spring,…
Jones Leading the Pack in Minimizing Outspend Leader among peers with positive EBITDAX less capex for both 2015 and 2016 2015 Consensus EBITDAX less Capex 2016 Consensus EBITDAX less Capex 50 40 20 0 0 -50 -20 -100 -40 -60…
2016 Liquidity Provides Flexibility Potential to maintain cash flow neutral position through 2016 At 3 rigs, positive cash flow projected in 2016 Even at 5 rigs, annual outspend estimated less than 40 million Projected 2016 Cash…
Focused on Execution and Delivering Results Decreased drilling times equal cost savings and higher rig utilization Average Spud to Rig Release 35 30 29.2 25.2 25 23.2 20 17.9 Days 15 10 5 0 2012 2013 2014…
Open-Hole Completions Save Time and Money Return to open-hole completions resulting in improved cycle times 2014 vs. 2015 Cycle Times Spud to Sales (in days) 80.0 35.0 70.0 30.0 26.0 24.7 60.0 25.0 23.1 20.2 50.0 20.0 17.9…
Opportunities Abound for Jones Growth Opportunities Out-of-Basin M&A Working Interest New Plays in In-Basin M&A and Leasing and Organic Capture Existing Footprint Organic Growth Growth 2015 forecast 2015 program Tonkawa Joint…
Focused on the Cleveland in 2015 YE 14 Jones Cleveland Locations 5 rigs currently running Gross: 704 Net: 477 Working interest capture of 20-25% Production is beating budgeted expectations Frack optimization successful 2015…
Evolution of a World Class Resource: Cleveland from 1940-2002 Cleveland was developed vertically for over 60 years Over 2,000 vertical wells de-risked play Vertical wells drilled from 1940 - 2002 12
Cleveland from 2002-2015 Horizontal development dominates activity 2,200 horizontal wells drilled (Jones accounts for 20%) Established best practices including cost focus, increased frack stages, geosteering Vertical wells…
Size of the Prize is Huge: Cleveland is Only 30% Developed Size of the prize is huge Horizontal Cleveland Locations 5,800 remaining Cleveland 2,200 locations Over 3,000 undrilled locations owned by 10 largest operators 5,800…
Cleveland Leasing Program Underway Starting with 5 million lease budget for 2H15 Potentially better commercial terms (reduced royalties vs. current leases) 50,000+ net acres available today (350 400 net locations) JONE Rigs…
Leasing Now Creates Tremendous Value Low cost path to add immediate value Some locations could be booked as PUDs this year Compelling value proposition 5 Million Leasing Program Potential 200 180 At 500 per acre, 5 million…
Joint Ventures Create Value with Little Upfront Cost It only takes one deal to make a difference ExxonMobil JV has created significant value for JONE 50/50 heads-up deal since 2004 ExxonMobil JV Acreage JONE Acreage Over 100…
Jones Energy Goals for 2015 Solidify Financial Position Continued high liquidity of greater than 485 million Manage Capital Spending Capex focused on Cleveland development and leasing Drive Down Well Costs Reduced AFE to 2.6…
APPENDIX
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…
Cost Reductions for 33 Stage Open Hole Wells Over 30% in negotiated cost reductions since 4Q 2014 4.0 3.8 Achieved Reductions: 1,200,000 3.0 Breakdown of Savings: Frack Services 487,000 AFE in millions Rig Rates 122,000…
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…
Increased Oil with Greater Predictability Increased frack density means more oil and more predictable results 30 Cleveland wells required to achieve type curve Cleveland Oil IP90 16% 14% As of 2Q15 earnings call, 33 of % of…
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…
2015 Revised Guidance and 3Q Production Guidance Revised 2015E 3Q15E Total Production (MMBoe) 8.4 - 8.9 2.0 - 2.1 Average Daily Production (MBoe/d) 23.0 - 24.5 22.0 - 23.0 Oil (MBbls/d) 6.8 - 7.3 6.3 - 6.6 Natural Gas (MMcf/d)…
Corporate Structure Updated for recent capital markets transactions Stock trading liquidity has improved significantly post-recent transactions Metalmark, Class A Common Stock Class B Common Stock Management 50.6% of voting power…
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