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Wells Fargo Securities Energy Symposium – Jones Energy Inc.

Jones Energy Inc. · Dec 9, 2015 · 25 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. Wells Fargo Securities Energy Symposium – Jones Energy Inc. – slide 1
    Wells Fargo Securities Energy Symposium December 9, 2015
  2. Wells Fargo Securities Energy Symposium – Jones Energy Inc. – slide 2
    Jones Energy Overview NYSE Ticker: JONE Share Price: 4.90 Anadarko Basin Cleveland Market Cap: 303 million Arkoma Basin Woodford Enterprise 1.1 billion Value: Austin Shares 61.8 million Outstanding: Production as 25.3…
  3. Wells Fargo Securities Energy Symposium – Jones Energy Inc. – slide 3
    Reduced Capex, Raised Production Guidance (Again) 2015 Capex Guidance Spud final wells of 2015 in October 260 30 million savings, despite Reducing rigs to lever cost negotiations leasing and working 240 interest capture additions…
  4. Wells Fargo Securities Energy Symposium – Jones Energy Inc. – slide 4
    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…
  5. Wells Fargo Securities Energy Symposium – Jones Energy Inc. – slide 5
    Peer Leading Hedge Book More hedged than peers in 2016 and 2017 at better prices, 150 million in MTM value Most peers are not very hedged in 2017 2016 Oil Hedges 2017 Oil Hedges 90% 90 45% 90 80% 80 40% 80 70% 70 35% 70 60% 60…
  6. Wells Fargo Securities Energy Symposium – Jones Energy Inc. – slide 6
    Operational Flexibility in 2016 Option to maintain cash flow neutral or positive position through 2016 At 3 rigs, positive cash flow plus production growth exit to exit At 4 rigs, 15% production growth with minimal outspend…
  7. Wells Fargo Securities Energy Symposium – Jones Energy Inc. – slide 7
    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 2015 budget incorporated 22 days 25.2 25 23.1 20 17.2…
  8. Wells Fargo Securities Energy Symposium – Jones Energy Inc. – slide 8
    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…
  9. Wells Fargo Securities Energy Symposium – Jones Energy Inc. – slide 9
    Returns Improve with Further Cost Reductions 10/28/15 Cleveland Well Level IRR Strip 140% 2.0mm AFE 120% 2.2mm AFE 100% 2.4mm AFE 80% 60% 40% 20% - 45 50 55 60 65 70 75 WTI Price (/bbl) Note: Oil prices held…
  10. Wells Fargo Securities Energy Symposium – Jones Energy Inc. – slide 10
    Focused on the Cleveland in 2015 YE 14 Jones Cleveland Locations Production continues Gross: 704 Net: 477 to beat expectations 3Q production above 115 miles wide top end of guidance Oil uplift achieved with gas bonus Reduced…
  11. Wells Fargo Securities Energy Symposium – Jones Energy Inc. – slide 11
    2015 33-Stage Open Hole Reservoir Performance Oil Performance 1,000 40 37 wells in sample Actual Expected Well Count 35 30 Well Count 25 Gross Oil , Bbl/day 100 20 15 10 5 10 0 0 50 100 150 200 250 300 350 Days on…
  12. Wells Fargo Securities Energy Symposium – Jones Energy Inc. – slide 12
    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,…
  13. Wells Fargo Securities Energy Symposium – Jones Energy Inc. – slide 13
    Expanding in the Core 5 million lease budget for 2H15, roughly one-third remaining 10,000 net acres acquired already with one-third of the budget remaining Royalty terms on average have improved from 22% to 19% 50,000+ net acres…
  14. Wells Fargo Securities Energy Symposium – Jones Energy Inc. – slide 14
    Leasing Now Creates Tremendous Value Low cost path to add immediate value, 75 net locations added already Some locations could be booked as PUDs this year Compelling value proposition, as high as 28:1 return on investment PV-10…
  15. Wells Fargo Securities Energy Symposium – Jones Energy Inc. – slide 15
    Cleveland Growth Opportunity is Meaningful Over 3,000 undrilled locations owned by 10 largest operators Large opportunity as many operators not active Undeveloped Cleveland Locations by Operator 800 700 Over 3,000 undrilled…
  16. Wells Fargo Securities Energy Symposium – Jones Energy Inc. – slide 16
    Jones Energy is Built for Times Like These Capital Discipline Maximizes Value 2015 CAPEX reduced from 240 mm to 210 mm while increasing production 420 mm of liquidity targeting cash flow neutral to positive 2016 Low cost, high value…
  17. Wells Fargo Securities Energy Symposium – Jones Energy Inc. – slide 17
    Excellence: Strived for in All That We Do 17
  18. Wells Fargo Securities Energy Symposium – Jones Energy Inc. – slide 18
    APPENDIX
  19. Wells Fargo Securities Energy Symposium – Jones Energy Inc. – slide 19
    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:…
  20. Wells Fargo Securities Energy Symposium – Jones Energy Inc. – slide 20
    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…
  21. Wells Fargo Securities Energy Symposium – Jones Energy Inc. – slide 21
    2015 Guidance and 4Q Production Guidance 2015E 4Q15E Total Production (MMBoe) 9.0 - 9.1 2.0 - 2.1 Average Daily Production (MBoe/d) 24.7 - 25.0 22.0 - 23.2 Oil (MBbls/d) 7.0 - 7.1 5.9 - 6.2 Natural Gas (MMcf/d) 64.4 - 65.1 58.0 -…
  22. Wells Fargo Securities Energy Symposium – Jones Energy Inc. – slide 22
    Hedge Positions 2015 2016 2017 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Crude Swaps (Mbbl) 579 564 465 457 411 287 272 248 233 Hedge Price / Bbl 83.77 80.78 83.67 83.64 83.35 80.07 80.49 76.58 77.14 Natural Gas Swaps (MMcf) 4,646 4,820 4,270 3,960…
  23. Wells Fargo Securities Energy Symposium – Jones Energy Inc. – slide 23
    NGL Hedge Position Detail 2015 2016 2017 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Mt. Belvieu NGLs (MBbl) Ethane 46 - - - - - - - - Propane 39 19 15 14 12 - - - - Iso Butane 3 3 3 3 - 3 3 1 - Butane 16 15 15 15 12 6 5 3 3 N. Gasoline 23 18 18…
  24. Wells Fargo Securities Energy Symposium – Jones Energy Inc. – slide 24
    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…
  25. Wells Fargo Securities Energy Symposium – Jones Energy Inc. – slide 25
    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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