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Wells Fargo Annual Energy Symposium – Chaparral Energy, Inc

Chaparral Energy, Inc · Jan 21, 2016 · 47 slides

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Slides

  1. Wells Fargo Annual Energy Symposium – Chaparral Energy, Inc – slide 1
    Wells Fargo Annual Energy Symposium December 2015
  2. Wells Fargo Annual Energy Symposium – Chaparral Energy, Inc – slide 2
    Company Representatives Mark Fischer - Chairman, Chief Executive Officer and Co-Founder Earl Reynolds - President and Chief Operating Officer Joe Evans - Chief Financial Officer and Executive Vice President Patrick…
  3. Wells Fargo Annual Energy Symposium – Chaparral Energy, Inc – slide 3
    Agenda Company Overview & Strategy Response to Commodity Weakness Asset Discussion E&P EOR Financial Overview 3
  4. Wells Fargo Annual Energy Symposium – Chaparral Energy, Inc – slide 4
    Company Overview & Strategy
  5. Wells Fargo Annual Energy Symposium – Chaparral Energy, Inc – slide 5
    Pure Mid-Continent Player Approximately 500,000 net surface acres Approximately 100,000 net surface acres in the STACK play Approximately 50,000 net surface acres in the Miss Lime Focus areas STACK, Miss Lime and North Burbank Large…
  6. Wells Fargo Annual Energy Symposium – Chaparral Energy, Inc – slide 6
    Third Quarter 2015 Results Decrease of 79% in Capex from Q3 2014 Q3 2015 Production Product to Q3 2015 Breakdown 92.0 million adjusted EBITDA 14% 4% decrease from Q2 to Q3 of 2015 19% decrease from Q3 2014 to Q3 2015 32% 54%…
  7. Wells Fargo Annual Energy Symposium – Chaparral Energy, Inc – slide 7
    Strong Track Record of Execution Liquids-focused reserves 64% oil and 11% NGLs Proven record of multiple years of sequential EBITDA and production growth 13.3% compounded annual growth rate in EBITDA from 2011 to 2014 435 357…
  8. Wells Fargo Annual Energy Symposium – Chaparral Energy, Inc – slide 8
    Low PDP Decline Rate Large and stable PDP asset value base Inclining EOR production profile and low decline portfolio of legacy production provides support and asset protection to multi-year growth inventory in a down pricing…
  9. Wells Fargo Annual Energy Symposium – Chaparral Energy, Inc – slide 9
    Leader Among Mid-Continent Peers in Oil Production Percentage of Q3 2015 Oil Produc7on 60% 50% 40% 30% 54% 48% 20% 39% 31% 31% 27% 10% 0% Chap NFX MPO SD XEC JONE Sources: Company 2015 Third quarter…
  10. Wells Fargo Annual Energy Symposium – Chaparral Energy, Inc – slide 10
    Favorable Reserve Life Comparison Long reserve life index of 15.5x Deep inventory of low-risk development drilling EOR development R/P Comparison with Average R/P of Public E&P Companies 16.0x 15.0x 14.0x 13.0x 15.5x…
  11. Wells Fargo Annual Energy Symposium – Chaparral Energy, Inc – slide 11
    High Netbacks and All-in Returns Are Key Focus Disciplined allocation of capital across the portfolio targets highest return projects Average 2015 Estimated EBITDA/Boe 50.00 40.00 30.00 20.00 38.93 32.26 25.18 24.36…
  12. Wells Fargo Annual Energy Symposium – Chaparral Energy, Inc – slide 12
    2015 Revised Capital Budget (mm) 2015B 2015 E&P Capital Allocation 2015 Allocatio Key Drilling Areas Capital* Component 2011 2012 2013 2014 Budget n% STACK 54 Drilling 172 239 269 419 109 53% Miss Lime 47 SCOOP 1 EOR 86 187 128…
  13. Wells Fargo Annual Energy Symposium – Chaparral Energy, Inc – slide 13
    Response to Commodity Weakness
  14. Wells Fargo Annual Energy Symposium – Chaparral Energy, Inc – slide 14
    Commodity Weakness Response We have taken an aggressive position to ensure we will be financially secure, leaner and more efficient through the current commodity downturn. Reduce AcEvity Realign Cost Structure Manage Cash Flow…
  15. Wells Fargo Annual Energy Symposium – Chaparral Energy, Inc – slide 15
    Focusing on Core Areas and Maintaining Production Reduced rig activity from 10 operated rigs in January to one rig by early April; added 2nd rig in November Expect pro-forma production to remain relatively flat based on efficient E&P…
  16. Wells Fargo Annual Energy Symposium – Chaparral Energy, Inc – slide 16
    Cost Reductions G&A Reductions LOE Reductions Aligned with current environment through Realized 20 25% absolute cost organizational restructure while maintaining the reduction discounts to date as a result of ability to quickly…
  17. Wells Fargo Annual Energy Symposium – Chaparral Energy, Inc – slide 17
    D&C Cost Reduction Summary 2014 2015 Targeted 2015 Projected Gross Well Cost Savings Range % Costs per Well Drilling 2.2 mm 15 - 30% 1.5 - 1.9 mm Completion 1.4 mm 15 - 30% 1.0 - 1.2 mm D&C Total 3.6 mm 20 - 30% 2.5 - 3.1 mm…
  18. Wells Fargo Annual Energy Symposium – Chaparral Energy, Inc – slide 18
    STACK - Oswego Cost Reductions Drilling Completions 5.0 4.5 38% Reduction from 2014 4.0 Drilling & Completion Cost M 3.5 3.0 82% ROR* 2.5 50/BBL Flat 2.0 1.5 1.0 0.5 0.0 1Q 2Q 3Q 4Q 2014 Summary 2015 Wells…
  19. Wells Fargo Annual Energy Symposium – Chaparral Energy, Inc – slide 19
    STACK-Osage/North Meramec - Cost Reductions Drilling Completions 5.0 43% Reduction from 2013 4.5 4.0 Drilling & Completion Cost M 3.5 3.0 26%- 43% ROR* 2.5 50/BBL Flat 2.0 1.5 1.0 0.5 0.0 2Q 3Q 4Q 1Q 2Q 3Q…
  20. Wells Fargo Annual Energy Symposium – Chaparral Energy, Inc – slide 20
    Mississippi Lime Cost Reductions Drilling Completions 5.0 4.5 39% Reduction from 2013 4.0 Drilling & Completion Cost M 3.5 3.0 25% ROR* 2.5 50/BBL Flat 2.0 1.5 1.0 0.5 0.0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 2013…
  21. Wells Fargo Annual Energy Symposium – Chaparral Energy, Inc – slide 21
    Summary Strong, pure play Mid-Continent E&P company Focused operations in EOR and the core of the core in the STACK and Miss Lime Proven record of execution Proactive resetting of cost structure Operations aligned with cash flow…
  22. Wells Fargo Annual Energy Symposium – Chaparral Energy, Inc – slide 22
    Core Focus Areas
  23. Wells Fargo Annual Energy Symposium – Chaparral Energy, Inc – slide 23
    Core Focus Areas MISS LIME Net Surface Acres: 48,500 Gross Unrisked Drilling Locations: 575 STACK Net Surface Acres: 100,000 Total Net Play Acres: 282,500 Gross Unrisked Drilling Locations: 4,200 EOR Q3 2015 Net Daily…
  24. Wells Fargo Annual Energy Symposium – Chaparral Energy, Inc – slide 24
    Unrisked Horizontal Drilling Inventory and Play Resource Potential STACK MISS LIME Net Resource Play Net Acres Gross Locations (MMboe) STACK Oswego 77,000 1,050 90 Osage 102,000 1,250 150 Meramec 34,000 600 60 Woodford…
  25. Wells Fargo Annual Energy Symposium – Chaparral Energy, Inc – slide 25
    Multiple STACK Pay Zones Industry Horizontal Drilling Targets 25
  26. Wells Fargo Annual Energy Symposium – Chaparral Energy, Inc – slide 26
    About the STACK Geological Characteristics Organic-rich Woodford Shale source Multiple reservoir targets act as natural conduits for oil migration Stratigraphic Trap Nemaha Ridge inhibits eastward migration of hydrocarbons N…
  27. Wells Fargo Annual Energy Symposium – Chaparral Energy, Inc – slide 27
    Our STACK Position Play Net Gross Wells Acres Unrisked Drilled Locations Oswego 77,000 1,050 15 N e m a Meramec 34,000 600 7 h a R Osage 102,000 1,250 33 i d STACK g e Woodfor 69,500 1,300 62 d Total 282,500 4,200 117…
  28. Wells Fargo Annual Energy Symposium – Chaparral Energy, Inc – slide 28
    STACK Reservoir Targets Meramec Oswego Osage Woodford Chaparral Acreage 28
  29. Wells Fargo Annual Energy Symposium – Chaparral Energy, Inc – slide 29
    STACK Oswego Kingfisher Economics 600 600 % EUR per Year Year 1 - 21% 500 Year 2 - 9% 500 Type Curve Parameters Year 3 - 6% EUR: 351 Mboe 400 Year 4 - 5% 400 Oil %: 94% D&C Cost: 3.0/2.5 million Mcf/d Bo/d 300…
  30. Wells Fargo Annual Energy Symposium – Chaparral Energy, Inc – slide 30
    STACK North Meramec Economics 500 1200 % EUR per Year 450 Year 1 - 23% Year 2 - 9% 1000 400 Year 3 - 6% Type Curve Parameters 350 Year 4 - 5% 800 EUR: 354 Mboe 300 Oil %: 53% Mcf/d Bo/d 250 600 D&C Cost: 3.5/3.0…
  31. Wells Fargo Annual Energy Symposium – Chaparral Energy, Inc – slide 31
    STACK South Meramec Economics 800 1000 % EUR per Year 700 Year 1 - 24% 900 Year 2 - 9% 800 Type Curve Parameters 600 Year 3 - 6% Year 4 - 5% 700 EUR: 434 Mboe 500 600 Oil %: 67% Mcf/d Bo/d 400 500 D&C Cost: 5.0/4.5…
  32. Wells Fargo Annual Energy Symposium – Chaparral Energy, Inc – slide 32
    STACK Osage Kingfisher Economics 250 1,000 % EUR per Year Year 1 - 21% 900 200 Year 2 - 9% 800 Type Curve Parameters Year 3 - 6% 700 EUR: 315 Mboe Year 4 - 5% 150 600 Oil %: 52% Mcf/d Bo/d 500 D&C Cost: 3.0/2.5…
  33. Wells Fargo Annual Energy Symposium – Chaparral Energy, Inc – slide 33
    STACK Osage Garfield Economics 300 1,600 % EUR per Year 1,400 250 Year 1 - 21% Type Curve Parameters Year 2 - 9% 1,200 EUR: 434 Mboe 200 Year 3 - 6% Year 4 - 5% 1,000 Oil %: 33% MCFD D&C Cost: 3.0/2.5 million Bo/d 150…
  34. Wells Fargo Annual Energy Symposium – Chaparral Energy, Inc – slide 34
    STACK East Canadian County Woodford Economics 450 1400 % EUR per Year 400 Year 1 - 24% 1200 350 Year 2 - 11% Type Curve Parameters Year 3 - 7% 1000 300 Year 4 - 5% EUR: 443 Mboe 800 Oil %: 59% Mcf/d 250 Bo/d 200…
  35. Wells Fargo Annual Energy Symposium – Chaparral Energy, Inc – slide 35
    Mississippi Lime Play Pratt Anticline Net Gross Wells Acres Unrisked Drilled Locations Miss Lime Miss 48,500 575 105 Lime N Geological Characteristics e Conventional traps m Weathered facies promotes a high total fluid…
  36. Wells Fargo Annual Energy Symposium – Chaparral Energy, Inc – slide 36
    Miss Lime Economics 160 1200 % EUR per Year 140 Year 1 - 17% 1000 Year 2 - 9% Type Curve Parameters 120 Year 3 - 6% Year 4 - 5% 800 EUR: 376 Mboe 100 Oil %: 46% Mcf/d Bo/d 80 600 D&C Cost: 3.0/2.5 million 60 400…
  37. Wells Fargo Annual Energy Symposium – Chaparral Energy, Inc – slide 37
    CO2 EOR Major Part of Growth Story
  38. Wells Fargo Annual Energy Symposium – Chaparral Energy, Inc – slide 38
    Leader in the CO2 EOR Industry Chaparral is the third-most active CO2-EOR operator in the U.S. of Active Producer CO 2-EOR Projects 33 25 8 7 6 5 4 4 3 3 3 3 Others 32 Total 136 Source: April 2014 Oil & Gas…
  39. Wells Fargo Annual Energy Symposium – Chaparral Energy, Inc – slide 39
    CO2 EOR-focused Areas Overview Inclining production provides stability during commodity down cycles CO2 project inventory 9 units injecting (1P reserves) 38 inventory (2P & 3P reserves) CO2 infrastructure 473 miles Operated…
  40. Wells Fargo Annual Energy Symposium – Chaparral Energy, Inc – slide 40
    Proven Performance Record Production Q3 2015 Gross Uplift CO2 Prior to Field Production Gross EUR Initiation Injection (Bo/d) (MMBo) (Bo/d) Panhandle Area Camrick 2001 103 1,186 8.0 North Perryton 2006 21 652 3.4 Booker 2009…
  41. Wells Fargo Annual Energy Symposium – Chaparral Energy, Inc – slide 41
    Total EOR Net Uplift Growth 4,775 4,000 3,644 2,757 3,000 Boe/d 2,185 1,624 2,000 1,000 - 2011 2012 2013 2014 2015 3Q YTD 41
  42. Wells Fargo Annual Energy Symposium – Chaparral Energy, Inc – slide 42
    North Burbank Overview Area Asset Map Our largest EOR field, CO2 injection began in June 2013 2014: 107 million in D&C capital Drilled 16 wells Phase 2 facility expansion 2015 Estimates: Recent gross production approximately…
  43. Wells Fargo Annual Energy Symposium – Chaparral Energy, Inc – slide 43
    North Burbank Gross Production* * Through November 30th, 2015 43
  44. Wells Fargo Annual Energy Symposium – Chaparral Energy, Inc – slide 44
    Financial Overview
  45. Wells Fargo Annual Energy Symposium – Chaparral Energy, Inc – slide 45
    Financial Metrics per BOE Production (Boe/d) LOE/Boe 14.36 14.35 13.65 16.00 30,088 35,000 26,691 28,784 14.00 11.47 24,911 30,000 4,285 12.00 4,312 3,729 25,000 3,415 10.00 9,428 8,783 20,000 9,032 9,247 8.00 15,000 6.00…
  46. Wells Fargo Annual Energy Symposium – Chaparral Energy, Inc – slide 46
    Hedge Portfolio Volumes Hedged as of 11/30/2015 5,000 Enhanced Swaps with Purchased and 16,000 Sold Put 3 - Way Oil Collars 4,500 Approximate Percentage of 2016E Gas Swaps 14,000 Production Hedged* 90% 4,000 80% 12,000 70%…
  47. Wells Fargo Annual Energy Symposium – Chaparral Energy, Inc – slide 47
    2014 Actuals & 2015 Revised Guidance Category 2014 2014 2015 Revised (PF)1 Guidance Production 11.0 10.3 10.0 - 10.6 (MMBoe) Capital 752 750 175 - 225 Expenditures (mm) LOE/Boe 13.65 13.26 11.25 - 12.25 LOE/Boe 12.89 12.53…

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