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Wells Fargo West Coast Energy Conference – Rice Energy

Rice Energy · Jun 21, 2016 · 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. Wells Fargo West Coast Energy Conference – Rice Energy – slide 1
    Wells Fargo West Coast Energy Conference June 21, 2016
  2. Wells Fargo West Coast Energy Conference – Rice Energy – slide 2
    Company Overview: More Than Just an E&P Company NYSE: RICE NYSE: RMP Upstream Rice Midstream Holdings GP Holdings Rice Midstream Partners Marcellus + Utica Shale Development Ohio Gathering System RMP Units and IDRs Pennsylvania…
  3. Wells Fargo West Coast 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 675 MMcfe/d (1.2B PD + Hedge PV10)(1) 55-75% single…
  4. Wells Fargo West Coast Energy Conference – Rice Energy – slide 4
    Strategic Midstream Assets RICE MIDSTREAM HOLDINGS RICE MIDSTREAM PARTNERS PENNSYLVANIA (RMH) (RMP) 146,000 dedicated acres in the core 114,000 acres dedicated in core of of dry gas Utica dry gas Marcellus Washington Primary…
  5. Wells Fargo West Coast Energy Conference – Rice Energy – slide 5
    Recent RICE Highlights Strong First Quarter Results Net production 675 MMcfe/d; 53% increase over prior year quarter Increased Adjusted EBITDAX to 109MM; 30% increase over prior year quarter Continued efficiency gains and service cost…
  6. Wells Fargo West Coast Energy Conference – Rice Energy – slide 6
    Track Record of Low-Cost Growth MARCELLUS D&C COSTS (/FT.) UTICA D&C COSTS (/FT.) E&P PER UNIT CASH COSTS (/MCFE)(1) 1,507 2,588 1.80 1,269 0.44 1.50 1,218 1,150 1.34 1,715 1.23 925 0.43 1,450 1,380 0.38 0.34 0.23 0.38 0.38…
  7. Wells Fargo West Coast Energy Conference – Rice Energy – slide 7
    Attractive Single Well Economics RICE continues to drive down D&C and operating costs to maximize returns Inventory currently generates 65% returns at strip; HHUB PV10 breakevens of 2.00 HHUB(1) DRY GAS SINGLE WELL ECONOMICS 150%…
  8. Wells Fargo West Coast 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 31.91 RICE stock price, a 53%…
  9. Wells Fargo West Coast Energy Conference – Rice Energy – slide 9
    First Quarter 2016 Operational Highlights MARCELLUS OPERATIONAL HIGHLIGHTS UTICA OPERATIONAL HIGHLIGHTS Turned to sales 9 gross (9 net) Marcellus wells in 1Q16 Leading edge Utica costs of 1,380 per lateral foot for 8 Avg. lateral…
  10. Wells Fargo West Coast Energy Conference – Rice Energy – slide 10
    Healthy Balance Sheet Protected by Strong Hedge Book SUMMARY HEDGE SUMMARY Ample Liquidity: 1.5B of total liquidity(1)(3) consisting of 1.2B Hedged Volume Avg. Wtd. Fixed Price HHUB Strip BBtu/d /MMBtu of E&P liquidity and 330MM of…
  11. Wells Fargo West Coast Energy Conference – Rice Energy – slide 11
    Executing the Most Efficient Program in Appalachia: 1 Bcf/d From 180 Wells Our unmatched efficiency is a byproduct of focusing on maximizing the value of every well we drill Gross Operated Production Gross Operated Production vs.…
  12. Wells Fargo West Coast Energy Conference – Rice Energy – slide 12
    Differentiated Long-Term Production Differentiation of RICE wells is evident in 1-3 year cumulative production per well. 100% of RICE future activity is focused within our proven concentrated acreage positions in the Marcellus + Utica…
  13. Wells Fargo West Coast Energy Conference – Rice Energy – slide 13
    Well Positioned to Navigate Environment Financial Strength Healthy balance sheet, ample liquidity and robust hedges 2016 budget focused on balance sheet and E&P returns while creating significant future midstream value Healthy Balance…
  14. Wells Fargo West Coast Energy Conference – Rice Energy – slide 14
    Asset Detail 15 www.riceenergy.com
  15. Wells Fargo West Coast Energy Conference – Rice Energy – slide 15
    Marcellus and Utica Single Well Type Curves MARCELLUS SINGLE WELL TYPE CURVE Marce Restricted Rate Marcellus Current Prio 12.0 EUR (Bcf / 1,000') 2.16 1. 10.0 Lateral Length 7,000 7,0 EUR (Bcf) 15.1 13 8.0 Interwell Spacing (ft)…
  16. Wells Fargo West Coast Energy Conference – Rice Energy – slide 16
    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…
  17. Wells Fargo West Coast Energy Conference – Rice Energy – slide 17
    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…
  18. Wells Fargo West Coast Energy Conference – Rice Energy – slide 18
    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…
  19. Wells Fargo West Coast Energy Conference – Rice Energy – slide 19
    Appendix 20 www.riceenergy.com
  20. Wells Fargo West Coast Energy Conference – Rice Energy – slide 20
    RICE and RMP Market Snapshot Rice Energy Inc.(1)(2) Rice Midstream Partners LP(1)(3) (NYSE: RICE) (NYSE: RMP) millions, except per share data millions, except per unit data Management Ownership 25% Common Units 52 Subordinated Units…
  21. Wells Fargo West Coast Energy Conference – Rice Energy – slide 21
    RICE First Quarter 2016 Consolidated Financial Summary Solid first quarter results supported by well-capitalized balance sheet and ample liquidity QUARTERLY HIGHLIGHTS CAPITALIZATION AT 3/31/2016 Three Months Ended Net production…
  22. Wells Fargo West Coast Energy Conference – Rice Energy – slide 22
    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…
  23. Wells Fargo West Coast Energy Conference – Rice Energy – slide 23
    2016 Guidance E&P (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 80 500 500 30…
  24. Wells Fargo West Coast Energy Conference – Rice Energy – slide 24
    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 %…
  25. Wells Fargo West Coast Energy Conference – Rice Energy – slide 25
    RICE and RMP Organizational Structure 875MM Borrowing Base(1) 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…
  26. Wells Fargo West Coast Energy Conference – Rice Energy – slide 26
    Meaningful Value Derived from Developed Drilling Locations 156 net proved developed wells + hedge value are worth 9 / share at strip pricing(1), with 800 net undeveloped Marcellus & Utica locations remaining to drive future growth in…
  27. Wells Fargo West Coast Energy Conference – Rice Energy – slide 27
    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 May 2016: 29 Rigs 200 Early 2012 180…
  28. Wells Fargo West Coast Energy Conference – Rice Energy – slide 28
    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…
  29. Wells Fargo West Coast Energy Conference – Rice Energy – slide 29
    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…
  30. Wells Fargo West Coast Energy Conference – Rice Energy – slide 30
    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 /…
  31. Wells Fargo West Coast Energy Conference – Rice Energy – slide 31
    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…
  32. Wells Fargo West Coast Energy Conference – Rice Energy – slide 32
    Basis Exposure & Realized Pricing PRICING COMMENTARY BASIS EXPOSURE 100% - HHUB is increasingly challenged 90% 17% 26% (0.05) RICE is 88% hedged in rem. 2016; 80% 32% 32% 30% 32% 50%+ in 2017 19% (0.10) 70% 16% 8% 12% 9% 60%…
  33. Wells Fargo West Coast Energy Conference – Rice Energy – slide 33
    Hedging Summary HEDGE SUMMARY 2Q - 4Q 2016 2017 2018 2019 2020 RICEs gas will be marketed into 4 areas (1) Gulf Coast (ELA, M1) Hedged M2 / Dominion Volumes (BBtu/d) 183 142 169 205 143 Wtd Avg Floor Price (/MMBtu) 2.33 2.18 2.44…
  34. Wells Fargo West Coast Energy Conference – Rice Energy – slide 34
    Hedging Detail FIXED PRICE HEDGES BASIS HEDGES All-In Fixed Price Derivatives 2Q - 4Q 2016 2017 2018 2019 2020 Basis Contract Derivatives 2Q - 4Q 2016 2017 2018 2019 2020 TCO Basis Swaps NYMEX Natural Gas Swaps Volume Hedged (BBtu/d)…
  35. Wells Fargo West Coast Energy Conference – Rice Energy – slide 35
    Significant Unrealized Midstream Value Embedded Within RICE Track record of crystallizing midstream value Significant value creation on the horizon 1B of midstream monetizations and financings executed to date MM RMH Current and Future…
  36. Wells Fargo West Coast Energy Conference – Rice Energy – slide 36
    GP Holdings 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…
  37. Wells Fargo West Coast Energy Conference – Rice Energy – slide 37
    RMP: High Growth MLP in Prolific Appalachian Basin DRY NATURAL GAS GATHERING & COMPRESSION SERVICES Legend RMP Gathering Pipeline Strategically located midstream assets RMP Gathering Pipeline to be Constructed Beaver 100% of…
  38. Wells Fargo West Coast Energy Conference – Rice Energy – slide 38
    Integrated Water Services Business MIDSTREAM FRESH WATER SERVICES Fresh water distribution systems & related facilities servicing Carroll Beaver Allegheny Marcellus and Utica completion operations in PA and OH Access to 18 MMGPD of…
  39. Wells Fargo West Coast Energy Conference – Rice Energy – slide 39
    Attractive Drop Down Potential Ohio Utica LARGE SCALE GATHERING SYSTEMS TO SUPPORT UTICA DEVELOPMENT Legend Ohio Gathering Pipeline 146,000 dedicated core gross acres in Belmont and Monroe Ohio Gathering Pipeline to be Constructed…
  40. Wells Fargo West Coast Energy Conference – Rice Energy – slide 40
    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 YE16…
  41. Wells Fargo West Coast Energy Conference – Rice Energy – slide 41
    RICE 1Q 2016 Adjusted EBITDAX Reconciliation Three Months Ended ( in thousands) March 31, 2016 Adjusted EBITDAX reconciliation to net income (loss): Net income 3,305 Interest expense 24,521 Depreciation, depletion and amortization…

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