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Jefferies Energy Conference – Rice Energy

Rice Energy · Nov 11, 2015 · 41 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. Jefferies Energy Conference – Rice Energy – slide 1
    Jefferies Energy Conference November 11, 2015
  2. Jefferies Energy Conference – Rice Energy – slide 2
    Rice Energy Strategy Allocate 100% of Capital to Core Assets with Low Break-Even Returns Convert Acreage into Cash Flow in a Low-Risk Manner Protect Returns through FT Portfolio and Systematic Hedging Promote Operational…
  3. Jefferies Energy Conference – Rice Energy – slide 3
    Concentrated, Core Assets COMPANY TOTAL CORE ASSETS Highly concentrated position of 147,000 net acres in the Legend RMP Gathering Pipeline cores of the lowest breakeven gas shale plays in the U.S. RMP Gathering Pipeline to be…
  4. Jefferies Energy Conference – Rice Energy – slide 4
    RICE Third Quarter 2015 Highlights Initiated production from 14 Marcellus wells; 8 wells ahead of schedule EXECUTION IS DRIVING Average lateral length of 6,940 ft. & avg. cost of 1,029 per lateral foot 1st PA Utica well turned to sales…
  5. Jefferies Energy Conference – Rice Energy – slide 5
    RICE Third Quarter 2015 Financial Summary Solid third quarter results supported by well-capitalized balance sheet and ample liquidity FINANCIAL SUMMARY FINANCIAL & OPERATING STATISTICS 3Q15 net production of 609 MMcfe/d; 15% increase…
  6. Jefferies Energy Conference – Rice Energy – slide 6
    Industry Activity Concentrated in the Core RICEs assets are located in three of the four most active counties in Appalachia Appalachia Rig Counts(1): 2007 - 2015 October 2015: 66 Rigs Activity migrated to most economic counties 200…
  7. Jefferies Energy Conference – Rice Energy – slide 7
    Deep Inventory of High Returning Projects Low breakevens between 2.35-3.05/MMBtu = profitable returns throughout the commodity price cycle INVENTORY AND RETURNS SUMMARY IRR 200% 175% 171% 20-30% Returns at Strip Pricing 168%…
  8. Jefferies Energy Conference – Rice Energy – slide 8
    Firm Transportation De-Risks Production Growth RICE was early in identifying and securing its attractive portfolio of firm capacity Firm capacity covers 100% of 2015 and a significant portion of RICEs volumes in 2016-2018 FIRM…
  9. Jefferies Energy Conference – Rice Energy – slide 9
    Strong Balance Sheet with Stable and Predictable Cash Flows RICE is capable of funding 100% of 2015 capital plan with liquidity on-hand Favorable credit metrics & covenants ensure flexibility CASH & REVOLVER CAPACITY 9/30/15 MM…
  10. Jefferies Energy Conference – Rice Energy – slide 10
    Efficient Capital Allocation Drives Strong 2015 Growth 2015E UPDATED E&P GUIDANCE(1) D&C & Land Capital Expenditures Net Wells Turned to Sales(2) Average Net Daily Production MM Wells MMcfe/d 520 900 830 50 46 500 43 800 730 700 40 7…
  11. Jefferies Energy Conference – Rice Energy – slide 11
    Pennsylvania Assets 11 www.riceenergy.com
  12. Jefferies Energy Conference – Rice Energy – slide 12
    Strong Execution Drives Consistent Results OPERATIONAL HIGHLIGHTS MARCELLUS DEVELOPMENT MAP Concentrated core Marcellus assets in southwestern PA 114 net Marcellus wells producing at 3Q15 Avg. 3Q15 net production 410 MMcfe/d Deep…
  13. Jefferies Energy Conference – Rice Energy – slide 13
    Marcellus Single Well Economics TYPE WELL VERSUS HISTORICAL PRODUCTION (NORMALIZED FOR 7,000 LATERAL) (1) Restricted Rate 16.0 Cumulative Production 14.0 1 year 3.8 Bcf 12.0 2 years 5.6 Bcf 10.0 5 years 8.2 Bcf MMcf/d 8.0 10…
  14. Jefferies Energy Conference – Rice Energy – slide 14
    Deep Utica Test Well Update: Briggs 50U Pennsylvania Utica wells showing same long-term pressure decline profile as RICE Belmont County wells and demonstrating similar high quality reservoir characteristics RICE - Briggs 50U: Flowback +…
  15. Jefferies Energy Conference – Rice Energy – slide 15
    Deep Utica Potential in Pennsylvania OH WV PA County Fairfield Muskingum Guernsey Belmont Ohio/Marshall Washington / Greene Depth 5,000 6,000 7,500 9,500 10,500 12,000 13,000 West East Porosity 12% Point Pleasant Core 6%…
  16. Jefferies Energy Conference – Rice Energy – slide 16
    Ohio Assets 16 www.riceenergy.com
  17. Jefferies Energy Conference – Rice Energy – slide 17
    Utica: Dry-Gas Core Established, Significant Growth Ahead OPERATIONAL HIGHLIGHTS UTICA DEVELOPMENT MAP Concentrated core Utica assets in southeastern OH RICE 62% operated and 43% non-operated avg. WI with GPOR(1) in strategic AMI…
  18. Jefferies Energy Conference – Rice Energy – slide 18
    Confirmed World Class Shale Across Entire Position Focused acreage concentration allows for quick delineation and repeatable results. RICE has no stepouts. Porosity 1160 BTU 13% 0% 1050 BTU West End East End 10 Miles 123…
  19. Jefferies Energy Conference – Rice Energy – slide 19
    Consistent and Repeatable Utica Results in Ohio Geologic homogeneity yields strong wells with similar production and pressure profiles RATE VS TIME Managed choke program contributing to flat production profile Managed choke…
  20. Jefferies Energy Conference – Rice Energy – slide 20
    Utica Single Well Economics UTICA DRY TYPE WELL CURVE 20.0 Cumulative Production Restricted Rate 1 year 5.2 Bcf 15.0 2 years 7.8 Bcf 5 years 11.3 Bcf MMcf/d 10 years 14.2 Bcf 10.0 EUR 20.0 Bcf 5.0 1.0 2.0 3.0 4.0…
  21. Jefferies Energy Conference – Rice Energy – slide 21
    Midstream Assets 21 www.riceenergy.com
  22. Jefferies Energy Conference – Rice Energy – slide 22
    Strategic Midstream Assets in Appalachia OVERVIEW SYSTEM MAP RMP includes PA gathering & compression assets and PA & OH water services business Utica Fairway OH PENNSYLVANIA 3Q15 throughput of 671 MDth/d (17% 3rd PA Marcellus…
  23. Jefferies Energy Conference – Rice Energy – slide 23
    RMP: High Growth MLP in Prolific Appalachian Basin ASSET OVERVIEW SYSTEM MAP PA gas gathering system of 4.1 MMDth/d design Legend RMP Gathering Pipeline capacity by YE 2015 RMP Gathering PipelineBeaver to be Constructed Oversized…
  24. Jefferies Energy Conference – Rice Energy – slide 24
    Water Services Business Drop Down Summary TRANSACTION OVERVIEW TRANSACTION HIGHLIGHTS RMP is acquiring Rice Energys water business for consideration of 200 Immediately accretive to distributable cash flow per unit & RMP million at…
  25. Jefferies Energy Conference – Rice Energy – slide 25
    Attractive Drop Down Potential OH Gathering OVERVIEW SYSTEM MAP Includes OH gas gathering and compression Harrison assets OH PA Jefferson OH gathering 3Q15 throughput of 319 MDth/d WV 36% 3rd party Gathering throughput driven…
  26. Jefferies Energy Conference – Rice Energy – slide 26
    Attractive Drop Down Potential Strategic GPOR JV TRANSACTION OVERVIEW STRATEGIC RATIONALE RICE and GPOR executed a non-binding LOI to form midstream JV strengthens Rices leading midstream position in the core of JV to provide gas…
  27. Jefferies Energy Conference – Rice Energy – slide 27
    Finance and Marketing 27 www.riceenergy.com
  28. Jefferies Energy Conference – Rice Energy – slide 28
    Diverse Market Exposure FT portfolio includes 1.3 MMDth/d (1.2 Bcf/d)(1) of firm capacity to premium North American markets Canada (MDth/d) Canadian Markets 2015 2016 2017 4 25 75 Northeast (MDth/d) 2015 2016 2017 282 201 191…
  29. Jefferies Energy Conference – Rice Energy – slide 29
    Basis Exposure and Realized Pricing BASIS EXPOSURE AND BASIS DIFFERENTIAL 100% -/MMBtu Expect Appalachian basis exposure 13% (M2/M3/DTI) to decrease throughout 90% 24% 30% 23% (0.05) the year as firm transportation projects 80%…
  30. Jefferies Energy Conference – Rice Energy – slide 30
    Hedging Summary Hedge & Basis Summary RICEs gas will be marketed into 4 areas 4Q 2015 2016 2017 2018 2019 (1) Appalachia (M2, M3, & Dominion) Hedged M2 / Dominion Volumes (BBtu/d) 107 137 148 155 140 (2) TCO Wtd Avg Floor Price…
  31. Jefferies Energy Conference – Rice Energy – slide 31
    RICE and RMP Market Snapshot Rice Energy Inc. Rice Midstream Partners LP (NYSE: RICE) (NYSE: RMP) millions, except per share data, as of 11/9/15 millions, except per unit data, as of 11/9/15 Management Ownership 30% Common Units (1)…
  32. Jefferies Energy Conference – Rice Energy – slide 32
    Why Invest in Rice 100% of Leasehold in Core of Marcellus and Utica Differentiated Technical Approach Has Led to Industry Leading Well Results Owned and Operated Gathering and Water Midstream Infrastructure Supports Our Upstream…
  33. Jefferies Energy Conference – Rice Energy – slide 33
    Appendix 33 www.riceenergy.com
  34. Jefferies Energy Conference – Rice Energy – slide 34
    RICE and RMP Organizational Structure RICE owns 100% of the GP and IDRs and a 41% LP ownership, creating alignment between RMP and RICE 750MM Credit Facility Rice Midstream DE 300MM Credit Facility + Holdings LLC 100MM…
  35. Jefferies Energy Conference – Rice Energy – slide 35
    2015 Updated RICE Guidance E&P GUIDANCE(1) Net Wells Spud Guidance Production Guidance Pennsylvania 41 Total Net Production (MMcfe/d) 515 525 (2) Operated Utica 20 % Natural gas 100 % Non-operated Utica 9 % Marcellus 75 % (2)…
  36. Jefferies Energy Conference – Rice Energy – slide 36
    Economic Assumptions Summary Marcellus W. Greene Utica Dry Utica Wet Type Well Assumptions Lateral Length 7,000 7,000 8,000 8,000 Net Locations IRR (adj midstream fees) IRR (full midstream fees) EUR (Bcf/1,000') 2.0 2.0 2.5 2.2 NGL…
  37. Jefferies Energy Conference – Rice Energy – slide 37
    RICE Hedging Detail We employ financial instruments (primarily swaps & costless collars) to mitigate commodity price risk Assures base level of cash flow to reinvest in growth Target hedging 65% of forecasted production up to two years…
  38. Jefferies Energy Conference – Rice Energy – slide 38
    Differentiated Long-Term Production per Well Our drilling and completion techniques have yielded greater production profile per well than our peers WASHINGTON AND GREENE COUNTY HISTORICAL PRODUCTION (1) UTICA AND SUSQUEHANNA, PA…
  39. Jefferies Energy Conference – Rice Energy – slide 39
    Efficient Production Growth Demonstrates Production Potential RICEs peer-leading production growth is driven by a focus on well quality, not quantity RICE reached over 800 MMcfe/d of gross operated production with fewer wells than…
  40. Jefferies Energy Conference – Rice Energy – slide 40
    2015 Midstream System Statistics Marcellus (PA) Utica (OH) Gathering and Compression Statistics YE14 YE15 Gathering and Compression Statistics YE14 YE15 Gas Gathering Pipeline Mileage (miles) 81 111 Gas Gathering Pipeline Mileage…
  41. Jefferies Energy Conference – Rice Energy – slide 41
    RICE 3Q 2015 Adjusted EBITDAX Reconciliation Three Months Ended Nine Months Ended ( in thousands) September 30, 2015 September 30, 2015 Adjusted EBITDAX reconciliation to net income (loss): Net income 65,084 6,254 Interest expense…

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