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Johnson Rice Energy Conference – Jones Energy Inc.

Jones Energy Inc. · Sep 28, 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. Johnson Rice Energy Conference – Jones Energy Inc. – slide 1
    Johnson Rice Energy Conference September 29-30, 2015
  2. Johnson Rice Energy Conference – Jones Energy Inc. – slide 2
    Jones Energy Overview NYSE Ticker: JONE Share Price: 5.38 Anadarko Basin Cleveland Market Cap: 330 million Arkoma Basin Woodford Enterprise 1.2 billion Value: Austin Shares 61.8 million Outstanding: Production as 25.3…
  3. Johnson Rice Energy Conference – Jones Energy Inc. – slide 3
    Reduced Capex, Unchanged Production Guidance Reduced activity from 5 rigs to 3 rigs 2015 Capex Guidance 260 Running 3 rigs as of September 3 240 No standby fees MM 220 Reducing 2015 capex guidance 200 Guidance reduced to…
  4. Johnson Rice Energy Conference – Jones Energy Inc. – slide 4
    Cash Flow Neutral in 2H15 3 rig program expected to result in cash flow neutral program in 2H15 2H15 capex expected to be 92 million, 30% reduction from 1H15 2015 full year spending projected to drop by nearly 60% from 2014 full year…
  5. Johnson Rice Energy Conference – Jones Energy Inc. – slide 5
    Breakeven WTI Price (/bbl) NGL realizations. 20 25 35 40 45 50 55 60 65 70 30 Eagle Ford Oil Tier 1 Bakken Tier 1 TFS Tier 1 JONE Cleveland SCOOP Condensate STACK San Juan Niobrara Tier 1 SCOOP Oil Eagle Ford…
  6. Johnson Rice Energy Conference – Jones Energy Inc. – slide 6
    Peer Leading Hedge Book More hedged than peers in 2016 and 2017 at better prices Most peers have no oil hedges in 2017 2016 Oil Hedges 2017 Oil Hedges 80% 90 40% 90 70% 80 35% 80 60% 70 30% 70 60 60 Hedge price Hedge…
  7. Johnson Rice Energy Conference – Jones Energy Inc. – slide 7
    Operational Flexibility in 2016 Option to maintain cash flow neutral position through 2016 At 3 rigs, positive cash flow projected in 2016 Even at 5 rigs, annual outspend estimated at only 30 million Scenarios do not incorporate…
  8. Johnson Rice Energy Conference – Jones Energy Inc. – slide 8
    Focused on Execution and Delivering Results Decreased drilling times equal sustained cost savings and higher rig utilization Average Spud to Rig Release 35 30 29.2 25.2 25 23.1 20 17.6 Days 15.9 15 13.7 10 5 0…
  9. Johnson Rice Energy Conference – Jones Energy Inc. – slide 9
    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) (in days) 35.0 80.0 30.0 70.0 26.0 25.0 23.1 60.0 19.7 20.0 17.6…
  10. Johnson Rice Energy Conference – Jones Energy Inc. – slide 10
    Line of Sight to Additional Cost Reductions 4.0 3.8 3.0 Achieved Reductions: 1,200,000 Breakdown of Savings: AFE in millions Frack Services 487,000 2.6 Rig Rates 122,000 2.0 Downhole Equipment 96,000 Casing 81,000…
  11. Johnson Rice Energy Conference – Jones Energy Inc. – slide 11
    Returns Improve with Further Cost Reductions IRRs reflect NYMEX strip pricing for August 28, 2015 plus differentials for all commodities Solid IRRs achievable with additional cost savings or minimal strip uplift Cleveland Well Level…
  12. Johnson Rice Energy Conference – Jones Energy Inc. – slide 12
    Focused on the Cleveland in 2015 YE 14 Jones Cleveland Locations 3 rigs currently running Gross: 704 Net: 477 Working interest capture of 20-25% 115 miles wide Production is beating budgeted expectations Frack optimization…
  13. Johnson Rice Energy Conference – Jones Energy Inc. – slide 13
    33 Stage Wells Performing as Expected Oil Performance 1,000 35 Actual Expected Well Count 30 wells in sample 30 25 Gross Oil, Bbl/d Well Count 20 100 15 10 5 10 0 0 50 100 150 200 250 300 350 Gas Performance Days on…
  14. Johnson Rice Energy Conference – Jones Energy Inc. – slide 14
    Size of the Prize is Huge: Cleveland is Only 30% Developed 5,800 remaining undeveloped Cleveland locations 3,000 undrilled locations owned by 10 largest operators Potential to capture additional locations at low cost (leasing, JVs,…
  15. Johnson Rice Energy Conference – Jones Energy Inc. – slide 15
    Expanding in the Core 5 million lease budget for 2H15 6,000 net acres acquired already with well over half of budget remaining Line of sight to leasing significant additional acreage by year end 50,000+ net acres available today…
  16. Johnson Rice Energy Conference – Jones Energy Inc. – slide 16
    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…
  17. Johnson Rice Energy Conference – Jones Energy Inc. – slide 17
    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 175 wells drilled through JV since 2000 in multiple zones ExxonMobil JV Acreage…
  18. Johnson Rice Energy Conference – Jones Energy Inc. – slide 18
    Cleveland Joint Venture Opportunity is Meaningful Over 3,000 undrilled locations owned by 10 largest operators Large potential JV opportunity as many operators not active Undeveloped Cleveland Locations by Operator 800 3 700 3…
  19. Johnson Rice Energy Conference – Jones Energy Inc. – slide 19
    Jones Energy, a Proven Winner Keys to Success Control the field Leasing program underway Working interest gains locations Play solid defense No drilling contracts = flexibility Ample liquidity Execute for the entire game AFEs…
  20. Johnson Rice Energy Conference – Jones Energy Inc. – slide 20
    Excellence: Strived for in All That We Do 20
  21. Johnson Rice Energy Conference – Jones Energy Inc. – slide 21
    APPENDIX
  22. Johnson Rice Energy Conference – Jones Energy Inc. – slide 22
    Strip Pricing as of August 28, 2015 IRR calculations incorporate: Crude oil and natural gas strip pricing as of August 28, 2015 NGL basket projected using relationship to crude by component Incorporates forward indications of NGL…
  23. Johnson Rice Energy Conference – Jones Energy Inc. – slide 23
    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…
  24. Johnson Rice Energy Conference – Jones Energy Inc. – slide 24
    TOPS Texas/Oklahoma Pennsylvanian Sands Hugoton Current Target Lower Permian Wolfcampian Brown Dolomite Formations Chase / Council Grove Admire Tonkawa Upper Virgil Sandstone Virgilian Douglas Lease Acreage:…
  25. Johnson Rice Energy Conference – Jones Energy Inc. – slide 25
    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…
  26. Johnson Rice Energy Conference – Jones Energy Inc. – slide 26
    2015 Guidance and 3Q Production Guidance 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) 58.5 - 62.5 56.5 -…
  27. Johnson Rice Energy Conference – Jones Energy Inc. – slide 27
    Hedge Positions 2015 2016 2017 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Crude Swaps (Mbbl) 586 579 564 465 457 411 287 272 248 233 Hedge Price / Bbl 84.99 83.77 80.78 83.67 83.64 83.35 80.07 80.49 76.58 77.14 Natural Gas Swaps (MMcf) 4,910…
  28. Johnson Rice Energy Conference – Jones Energy Inc. – slide 28
    NGL Hedge Position Detail 2015 2016 2017 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Mt. Belvieu NGLs (MBbl) Ethane 50 46 - - - - - - - - Propane 39 39 19 15 14 12 - - - - Iso Butane 3 3 3 3 3 - 3 3 1 - Butane 15 16 15 15 15 12 6 5 3 3 N.…
  29. Johnson Rice Energy Conference – Jones Energy Inc. – slide 29
    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…
  30. Johnson Rice Energy Conference – Jones Energy Inc. – slide 30
    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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