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Wells Fargo Energy Conference – Rice Energy

Rice Energy · Dec 9, 2015 · 40 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 Energy Conference – Rice Energy – slide 1
    Wells Fargo Energy Conference December 8-9, 2015
  2. Wells Fargo 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. Wells Fargo 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. Wells Fargo Energy Conference – Rice Energy – slide 4
    Industry Activity Concentrated in the Core RICEs assets are located in the three most active counties in Appalachia Appalachia Rig Counts(1): 2007 - 2015 December 2015: 61 Rigs 200 Early 2012 Activity migrated to most economic…
  5. Wells Fargo Energy Conference – Rice Energy – slide 5
    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% 168% 175% 20-30% Returns at Strip Pricing 169%…
  6. Wells Fargo Energy Conference – Rice Energy – slide 6
    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…
  7. Wells Fargo Energy Conference – Rice Energy – slide 7
    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…
  8. Wells Fargo Energy Conference – Rice Energy – slide 8
    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…
  9. Wells Fargo Energy Conference – Rice Energy – slide 9
    Pennsylvania Assets 9 www.riceenergy.com
  10. Wells Fargo Energy Conference – Rice Energy – slide 10
    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…
  11. Wells Fargo Energy Conference – Rice Energy – slide 11
    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…
  12. Wells Fargo Energy Conference – Rice Energy – slide 12
    Pennsylvania Utica: A Natural Extension for Rice Significant Utica potential underlies RICEs Pennsylvania assets RICE Acreage RICE PA UTICA POTENTIAL Current Rig(1) RRC Test: 59 MMcfe/d Acreage highly prospective and geologically…
  13. Wells Fargo Energy Conference – Rice Energy – slide 13
    Pennsylvania Utica: A Natural Extension for Rice 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…
  14. Wells Fargo Energy Conference – Rice Energy – slide 14
    Ohio Assets 14 www.riceenergy.com
  15. Wells Fargo Energy Conference – Rice Energy – slide 15
    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…
  16. Wells Fargo Energy Conference – Rice Energy – slide 16
    Ohio Q3 2015 Production Summary Top 100 Wells RICE & GPOR: Strong Partnership Demonstrated by Top-Tier Well Results 1,088 Utica Shale wells producing in Q3 2015(1) - RICE & GPOR partnership takes top 21 wells (300 MMcfe/d avg) Quality…
  17. Wells Fargo Energy Conference – Rice Energy – slide 17
    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…
  18. Wells Fargo Energy Conference – Rice Energy – slide 18
    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…
  19. Wells Fargo Energy Conference – Rice Energy – slide 19
    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…
  20. Wells Fargo Energy Conference – Rice Energy – slide 20
    Midstream Assets 20 www.riceenergy.com
  21. Wells Fargo Energy Conference – Rice Energy – slide 21
    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…
  22. Wells Fargo Energy Conference – Rice Energy – slide 22
    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…
  23. Wells Fargo Energy Conference – Rice Energy – slide 23
    Water Services Business Drop Down Summary TRANSACTION OVERVIEW TRANSACTION HIGHLIGHTS RMP acquired RICEs water business for consideration of 200 million at Immediately accretive to distributable cash flow per unit & RMP closing plus a…
  24. Wells Fargo Energy Conference – Rice Energy – slide 24
    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…
  25. Wells Fargo Energy Conference – Rice Energy – slide 25
    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…
  26. Wells Fargo Energy Conference – Rice Energy – slide 26
    Finance and Marketing 26 www.riceenergy.com
  27. Wells Fargo Energy Conference – Rice Energy – slide 27
    Diverse Market Exposure FT portfolio includes 1.3 MMDth/d (1.2 Bcf/d) of firm capacity to premium North American markets(1) Canada (MDth/d) Canadian Markets 2015 2016 2017 4 25 75 Northeast (MDth/d) 2015 2016 2017 282 201 191…
  28. Wells Fargo Energy Conference – Rice Energy – slide 28
    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%…
  29. Wells Fargo Energy Conference – Rice Energy – slide 29
    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…
  30. Wells Fargo Energy Conference – Rice Energy – slide 30
    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)…
  31. Wells Fargo Energy Conference – Rice Energy – slide 31
    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…
  32. Wells Fargo Energy Conference – Rice Energy – slide 32
    Appendix 32 www.riceenergy.com
  33. Wells Fargo Energy Conference – Rice Energy – slide 33
    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…
  34. Wells Fargo Energy Conference – Rice Energy – slide 34
    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)…
  35. Wells Fargo Energy Conference – Rice Energy – slide 35
    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 mistream fees) IRR (full mistream fees) EUR (Bcf/1,000') 2.0 2.0 2.5 2.2 4 NYMEX…
  36. Wells Fargo Energy Conference – Rice Energy – slide 36
    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…
  37. Wells Fargo Energy Conference – Rice Energy – slide 37
    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…
  38. Wells Fargo Energy Conference – Rice Energy – slide 38
    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…
  39. Wells Fargo Energy Conference – Rice Energy – slide 39
    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…
  40. Wells Fargo Energy Conference – Rice Energy – slide 40
    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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