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Scotia Howard Weil Energy Conference – Rice Energy

Rice Energy · Mar 22, 2016 · 44 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. Scotia Howard Weil Energy Conference – Rice Energy – slide 1
    Investor Presentation Scotia Howard Weil Energy Conference March 22 23, 2016
  2. Scotia Howard Weil Energy Conference – Rice Energy – slide 2
    Company Overview: More Than Just an E&P Company NYSE: RICE NYSE: RMP Upstream E&P Rice Midstream Holdings GP Holdings Rice Midstream Partners Marcellus + Utica Shale Development Ohio Gathering System RMP Units and IDRs Pennsylvania…
  3. Scotia Howard Weil Energy Conference – Rice Energy – slide 3
    Concentrated Core Upstream Assets Premier E&P Company in the Lowest Cost Gas Shale Plays 100% of assets located in the cores of the Marcellus and Utica Valuable production base of 624 MMcfe/d (1.2B PD + Hedge PV10)(1) Low breakevens…
  4. Scotia Howard Weil Energy Conference – Rice Energy – slide 4
    Strategic Midstream Assets RICE MIDSTREAM HOLDINGS RICE MIDSTREAM PARTNERS (RMH) (RMP) PENNSYLVANIA 133,000 dedicated acres in the core 114,000 acres dedicated in core of of dry gas Utica dry gas Marcellus Primary customers: RICE &…
  5. Scotia Howard Weil Energy Conference – Rice Energy – slide 5
    Western Greene County Midstream Update Renegotiated midstream agreement substantially improves RICE well economics in Greene County Development area located in western Greene County, PA in the heart of the Marcellus dry gas core and…
  6. Scotia Howard Weil Energy Conference – Rice Energy – slide 6
    Track Record of Low-Cost Growth MARCELLUS D&C COSTS (/FT.) UTICA D&C COSTS (/FT.) PER UNIT CASH COSTS (/MCFE)(1) 1,439 1.80 2,457 1,237 1.50 1,181 1,150 0.44 1.34 1,651 0.43 1,450 0.38 0.34 0.38 0.38 0.55 0.38 0.36 0.43 0.31…
  7. Scotia Howard Weil Energy Conference – Rice Energy – slide 7
    Well Positioned to Navigate Environment 2016 budget positions RICE for success in 2016 and beyond Focused on balance sheet and E&P returns while creating significant future midstream value 2016 D&C budget maintains clean balance sheet…
  8. Scotia Howard Weil Energy Conference – Rice Energy – slide 8
    RICE trades at Attractive Valuation Relative to Peers RICE trades at a 3.3x discount to peers despite a strong financial position, core assets and growing cash flow The median EBITDA multiple implies a 24.62 RICE stock price, a 90%…
  9. Scotia Howard Weil Energy Conference – Rice Energy – slide 9
    2016 Capital Budget Overview Budget Goals: 1) Healthy Balance Sheet 2) Attractive E&P Returns 3) Growing Midstream Value E&P Capex: 640MM Land, 80 15% reduction E&P - 640MM (30% YOY production growth) from 2015 2016 E&P budget funded…
  10. Scotia Howard Weil Energy Conference – Rice Energy – slide 10
    2016 D&C Budget Maintains Clean Balance Sheet while Investing in 2017 2016 production guidance achieved 560 MM with 355 million of capex 2016 Budget Build pads and drill wells to be completed Incremental 205 million of capex in in…
  11. Scotia Howard Weil Energy Conference – Rice Energy – slide 11
    2016 Guidance 2016E E&P GUIDANCE(1) D&C & Land Capital Expenditures Net Wells Turned to Sales(2) Average Net Daily Production MM Wells 54 MMcfe/d 830 49 800 900 50 720 800 740 43 700 12 700 115 640 40 7 27 600 552 545 250 600 80…
  12. Scotia Howard Weil Energy Conference – Rice Energy – slide 12
    Healthy Balance Sheet Protected by Strong Hedge Book SUMMARY HEDGE SUMMARY Ample Liquidity: 1.4B of total liquidity YE15(1) consisting of Hedged Volume Avg. Wtd. Fixed Price HHUB Strip BBtu/d /MMBtu 1.1B of E&P liquidity and 300MM of…
  13. Scotia Howard Weil Energy Conference – Rice Energy – slide 13
    Strategic Preferred Investment 375MM equity investment fortifies balance sheet and illuminates significant embedded midstream value Transaction Highlights Attractive cost of capital attributable to RMHs midstream assets and future GP…
  14. Scotia Howard Weil Energy Conference – Rice Energy – slide 14
    Attractive Single Well Economics RICE continues to drive down D&C and operating costs to maximize returns Inventory currently generates 30% returns at strip(1); HHUB PV10 breakevens of 2.08-2.18 HHUB DRY GAS SINGLE WELL ECONOMICS…
  15. Scotia Howard Weil Energy Conference – Rice Energy – slide 15
    Right-Sized Firm Transport Portfolio Growing Exposure to an Improving Local Basis Market Right-Sized: FT covers 80% of 2016 takeaway volumes. FT coverage decreases to 60% in 2020. Right Exposure: 30% of 2016 gas exposed to local…
  16. Scotia Howard Weil Energy Conference – Rice Energy – slide 16
    Meaningful Value Derived from Developed Drilling Locations 156 net proved developed wells + hedge value are worth 9 / share at strip pricing, with 800 net undeveloped Marcellus & Utica locations remaining to drive future growth in proved…
  17. Scotia Howard Weil Energy Conference – Rice Energy – slide 17
    Significant Unrealized Midstream Value Embedded Within RICE Track record of crystalizing midstream value Significant value creation on the horizon 1B of midstream monetizations and financings executed to date MM RMH Current and Future…
  18. Scotia Howard Weil Energy Conference – Rice Energy – slide 18
    IDR Value Driven through the Drill-Bit RICEs best-in-class E&P development plus a growing 3rd party midstream business positions RMP for top-tier distribution growth RMPs low-risk growth begins to generate IDR cash flows to RICE in…
  19. Scotia Howard Weil Energy Conference – Rice Energy – slide 19
    Why Invest in Rice 100% of Leasehold in Core of Marcellus and Utica Differentiated Technical Approach Has Led to Industry Leading Well Results Create Significant Midstream Value through RICE and 3rd Party Core Dedications Firm…
  20. Scotia Howard Weil Energy Conference – Rice Energy – slide 20
    Marcellus Type Curve Updated MARCELLUS SINGLE WELL TYPE CURVE 14.0 Restricted Rate Cumulative Production 12.0 Current Prior Var. 1 Year 3.4 3.8 (0.4) 10.0 2 Year 5.2 5.6 (0.4) MMcf/d 5 Year 8.1 8.2 (0.1) 8.0 10 Year 10.6…
  21. Scotia Howard Weil Energy Conference – Rice Energy – slide 21
    Utica Type Curve Updated UTICA SINGLE WELL TYPE CURVE 20.0 Restricted Rate Cumulative Production Choke management extends flat Current Prior Var. time from 9 months to 12 months. 1 Year 5.8 5.2 0.6 15.0 2 Year Incorporated…
  22. Scotia Howard Weil Energy Conference – Rice Energy – slide 22
    Utica Returns Are Driven by Flat-Time Production RICEs single well returns are driven by flat-time production and are resilient to post- flat period decline curve assumptions: RICEs Utica wells produce 6 Bcf during 12 month flat…
  23. Scotia Howard Weil Energy Conference – Rice Energy – slide 23
    Inventory Update RICE MAINTAINS 10+ YEAR INVENTORY OF DRY GAS LOCATIONS DRY GAS LOCATIONS GENERATE 30% RETURNS AT STRIP(2) Marcellus Net Locations IRR (adj mistream fees)(3) IRR (full mistream fees) 3.50 HHUB and 27/bbl NGLs RICE…
  24. Scotia Howard Weil Energy Conference – Rice Energy – slide 24
    Economics PV10 & IRRS (1) ECONOMIC ASSUMPTIONS Economics Adjusted for Gathering Ownership at 3.50 HHUB Marcellus Utica Dry Utica Wet and 27/bbl NGLs Type Well Assumptions 90% 16.0 Spacing 750 1,000 1,000 Lateral Length 7,000 9,000…
  25. Scotia Howard Weil Energy Conference – Rice Energy – slide 25
    RICE Fourth Quarter 2015 Highlights Initiated production from 6 Marcellus wells; 5 wells ahead of schedule EXECUTION IS DRIVING Average lateral length of 7,500 ft. Increased proved reserves 30% to 1.7 Tcfe INDUSTRYLEADING GROWTH 4Q15…
  26. Scotia Howard Weil Energy Conference – Rice Energy – slide 26
    RICE Fourth Quarter 2015 Financial Summary Solid fourth quarter results supported by well-capitalized balance sheet and ample liquidity QUARTERLY HIGHLIGHTS CAPITALIZATION AT 12/31/2015(1) Net production averaged 624 MMcfe/d; 57%…
  27. Scotia Howard Weil Energy Conference – Rice Energy – slide 27
    2016 Detailed Guidance RICE 2016 GUIDANCE(1) RMP 2016 GUIDANCE(1) Guidance Guidance Guidance Net Wells Spud Online Total Net Production (MMcfe/d) 700 - 740 2016 Capital Budget ( in millions) Operated Marcellus 25 27 % Natural gas 100 %…
  28. Scotia Howard Weil Energy Conference – Rice Energy – slide 28
    Asset Quality Industry High Grading to Quality RICEs footprint is located in the epicenter of remaining activity in Appalachia due to best in class economics Appalachia Rig Counts(1): 2007 - 2016 February 2016: 43 Rigs 200 Early 2012…
  29. Scotia Howard Weil Energy Conference – Rice Energy – slide 29
    Pennsylvania Utica: A Natural Extension for Rice The Utica core extends directly underneath RICEs Pennsylvania assets. Initial RICE and Industry wells point to massive resource potential. OH WV PA Guernsey Belmont Marshall Washington /…
  30. Scotia Howard Weil Energy Conference – Rice Energy – slide 30
    Ohio Q4 2015 Production Summary Top 100 Wells RICEs Top-Tier Well Results and Midstream Footprint Located in Prolific Appalachian Core 1,236 Utica Shale wells producing in Q4 2015(1) RICE upstream & midstream assets positioned in the…
  31. Scotia Howard Weil Energy Conference – Rice Energy – slide 31
    Differentiated Long-Term Production per Well Our drilling and completion techniques have yielded greater production profile per well than our peers WASHINGTON & GREENE COUNTY HISTORICAL PRODUCTION(1) UTICA & SUSQUEHANNA, PA HISTORICAL…
  32. Scotia Howard Weil Energy Conference – Rice Energy – slide 32
    Most Efficient Growth in Appalachia RICEs peer-leading production growth is driven by a focus on well quality, not quantity RICE reached over 850 MMcfe/d of gross operated production with fewer wells than every other operator(1) in…
  33. Scotia Howard Weil Energy Conference – Rice Energy – slide 33
    RMP: High Growth MLP in Prolific Appalachian Basin Legend RMP Gathering Pipeline RMP OVERVIEW 2016 GUIDANCE(1) RMP Gathering Pipeline to be Constructed Beaver OH PA RMP Water Pipeline PA gas gathering system of 2016E EBITDA of…
  34. Scotia Howard Weil Energy Conference – Rice Energy – slide 34
    Attractive Drop Down Potential OH Gathering Legend RMH OVERVIEW 2016 GUIDANCE(1) Ohio Gathering Pipeline Ohio Gathering Pipeline to be Constructed OH gas gathering system of over 2016E EBITDA of 40MM - Strike Force JV AMI 2.0…
  35. Scotia Howard Weil Energy Conference – Rice Energy – slide 35
    Attractive Drop Down Potential Strike Force JV TRANSACTION OVERVIEW STRATEGIC RATIONALE RICE and GPOR completed the formation of Utica Shale Strike Force strengthens RICEs leading midstream position in the strategic midstream JV…
  36. Scotia Howard Weil Energy Conference – Rice Energy – slide 36
    Water Services Business Drop Down Summary TRANSACTION OVERVIEW TRANSACTION HIGHLIGHTS RMP acquired Rice Energys water business for 200 million in Immediately accretive to distributable cash flow per unit November 2015 25 million earn…
  37. Scotia Howard Weil Energy Conference – Rice Energy – slide 37
    2015 Midstream System Statistics Pennsylvania Ohio RMP Gathering and Compression Statistics Gathering and Compression Statistics Assets Design Gathering Capacity (MMDth/d) 4.0 Design Gathering Capacity (MMDth/d) 2.0 YE15 YE16 YE15…
  38. Scotia Howard Weil Energy Conference – Rice Energy – slide 38
    RICE and RMP Market Snapshot Rice Energy Inc. Rice Midstream Partners LP (NYSE: RICE) (NYSE: RMP) millions, except per share data, as of 3/18/2016 millions, except per unit data, as of 3/18/2016 Management Ownership 30% Common Units…
  39. Scotia Howard Weil Energy Conference – Rice Energy – slide 39
    RICE and RMP Organizational Structure 750MM Credit Facility EIG Managed Funds 100% Series A Common Equity 100% Series B Preferred Equity DE (375MM invested) Rice Midstream 300MM Credit Facility + 8.25% common Holdings LLC 100MM…
  40. Scotia Howard Weil Energy Conference – Rice Energy – slide 40
    Diverse Market Exposure FT portfolio includes 1.2 MMDth/d (1.1 Bcf/d) of firm capacity to premium North American markets(1) CANADA (MDTH/D) Canadian 2016 2017 2018 Markets 25 42 125 Appalachian Markets MIDWEST (MDTH/D) NORTHEAST…
  41. Scotia Howard Weil Energy Conference – Rice Energy – slide 41
    Basis Exposure & Realized Pricing PRICING COMMENTARY BASIS EXPOSURE 100% - HHUB is increasingly challenged 90% 22% (0.05) 26% RICE is 87% hedged in 2016; 50%+ 80% 37% 38% 31% 33% (0.10) in 2017 70% 18% 17% (0.15) 60% 14% 9%…
  42. Scotia Howard Weil Energy Conference – Rice Energy – slide 42
    Hedging Summary HEDGE SUMMARY 2016 2017 2018 2019 RICEs gas will be marketed into 4 areas Hedged M2 / Dominion Volumes (BBtu/d) 189 163 165 150 (1) Gulf Coast (ELA, M1) Wtd Avg Floor Price (/MMBtu) 2.35 2.20 2.50 2.48 (2) TCO % of…
  43. Scotia Howard Weil Energy Conference – Rice Energy – slide 43
    Hedging Detail FIXED PRICE HEDGES BASIS HEDGES All-In Fixed Price Derivatives 2016 2017 2018 2019 Basis Contract Derivatives 2016 2017 2018 2019 TCO Basis Swaps NYMEX Natural Gas Swaps Volume Hedged (BBtu/d) 44 27 19 10 Volume Hedged…
  44. Scotia Howard Weil Energy Conference – Rice Energy – slide 44
    RICE 4Q 2015 Adjusted EBITDAX Reconciliation Three Months Ended Year Ended ( in thousands) December 31, 2015 December 31, 2015 Adjusted EBITDAX reconciliation to net income (loss): Net income (274,253) (267,999) Interest expense…

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