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Wells Fargo Energy Conference – PDC Energy, Inc.

PDC Energy, Inc. · Jun 21, 2016 · 38 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 – PDC Energy, Inc. – slide 1
    WELLS FARGO ENERGY CONFERENCE June 21, 2016
  2. Wells Fargo Energy Conference – PDC Energy, Inc. – slide 2
    PDC Energy Company Overview Core Wattenberg 2.6B 96,000 net acres Market Cap(1) 3.0B Enterprise Value(1) 273 YE15 Proved Reserves (MMBoe) 2,150 2P Horizontal Locations at YE15 Utica Shale 20 22 65,000 net acres…
  3. Wells Fargo Energy Conference – PDC Energy, Inc. – slide 3
    Track Record of Operational Execution (1) SRL = StandardReach Lateral (2) Continuing Operations 6/21/16 4
  4. Wells Fargo Energy Conference – PDC Energy, Inc. – slide 4
    Solid First Quarter Met Internal Expectations As of March 31, 2016 Valueadd Wattenberg drilling prioritizes IRRs and 4.6 1Q16 Total Production (MMBoe) margins Average production of 50,200 Boe/d Companyrecord 34 Hz operated TILs…
  5. Wells Fargo Energy Conference – PDC Energy, Inc. – slide 5
    2016 Capital and Production Outlook Targeting cash flow neutrality 425 2016e capital budget: 410 440 2016e Capex Midpoint 35% production growth yearoveryear Initiating new technological advancements Drill and complete first XRL…
  6. Wells Fargo Energy Conference – PDC Energy, Inc. – slide 6
    Financial Strength and Discipline Strong balance sheet discipline Maintain Debt/ EBITDAX(1) ratio below 2.0x and Debt to Capital below 40% (YE15 = 33%) 2016e debt per flowing Boe expected to decrease more than 75% from 2012 level…
  7. Wells Fargo Energy Conference – PDC Energy, Inc. – slide 7
    Low Costs Continue to Drive Margins Source: Wells Fargo Securities, LLC 50% decrease in allin cash operating costs since 2014 (including interest expense) Substantial production increase drives reduced per Boe metrics Strong…
  8. Wells Fargo Energy Conference – PDC Energy, Inc. – slide 8
    Debt and Liquidity As of 3/31/16, Pro Forma for Settlement of Convertible Notes Available liquidity of 812 million(1) Pro Forma Debt / LTM EBITDAX(2) of 1.1x Debt Maturities 115 million 3.25% convertible senior notes settled May…
  9. Wells Fargo Energy Conference – PDC Energy, Inc. – slide 9
    Crude Oil and Natural Gas Hedges Summary Hedges in place as of March 31, 2015 plus hedges entered into prior to May 15, 2016 Apr Dec 61% of crude oil volumes at weighted average floor price of 73.92/Bbl 2016 68% of natural gas…
  10. Wells Fargo Energy Conference – PDC Energy, Inc. – slide 10
    ASSET OVERVIEW 11
  11. Wells Fargo Energy Conference – PDC Energy, Inc. – slide 11
    Core Wattenberg Asset Summary Wattenberg 2P Inventory 96,000 Inner Middle Net Acres Outer 100% 2016e TIL Breakdown SRLs Acreage HBP MRLs XRLs 135/160 Spuds TILs 2,150 2P Hz Locations (4,700 avg. lateral…
  12. Wells Fargo Energy Conference – PDC Energy, Inc. – slide 12
    Core Wattenberg Strategic Acreage Trade with Noble Trade with Noble Energy expected to Close in Early 4Q 2016 Receive 13,500 net acres in Middle Core in exchange for 11,700 net acres Adds incremental value through increased working…
  13. Wells Fargo Energy Conference – PDC Energy, Inc. – slide 13
    Middle Core Supporting Increased Type Curves Acreage Shown Reflects Post Noble Trade Peterson 16 wells/section OUTER CORE SRL Design TIL: 2Q15 320 acre unit 8 total wells 4 plugnperf 4 sliding sleeve MIDDLE CORE R&R/Trimar 20…
  14. Wells Fargo Energy Conference – PDC Energy, Inc. – slide 14
    2015 Downspacing Projects 20 Wells/Section Sustained well performance over 10 months MRL downspacing test 6,700 laterals 10 wells 1 plugnperf well 9 sliding sleeve wells 22 Wells/Section Consistent performance from all…
  15. Wells Fargo Energy Conference – PDC Energy, Inc. – slide 15
    Solidifying Development Outlook Successful downspacing tests enable focus on true potential of Core Wattenberg Vertical development, GOR data and leaseholds are key variables in spacing design Well spacing of 2024 wells per section…
  16. Wells Fargo Energy Conference – PDC Energy, Inc. – slide 16
    Monobore Drilling Gains To-Date Current Implementation Monobore drilling saves 1 day in spudtospud times 50100k savings per well realized todate All 2016 SRL and MRL wells expected to be drilled using monobore 95/8 casing cemented…
  17. Wells Fargo Energy Conference – PDC Energy, Inc. – slide 17
    Middle Core Inventory Provides Resilient Returns Type Well Profile Comparison Type Well IRR Comparison(1) 35 Flat 37 / 45 / 55 45 / 55 / 65 2.00 Flat 2.13 / 2.50 / 2.75 2.50 / 3.00 / 3.50 NYMEX Pricing NYMEX Pricing NYMEX…
  18. Wells Fargo Energy Conference – PDC Energy, Inc. – slide 18
    Moving Beyond Wattenberg Line Pressure Constraints 2013 Processing AKA/APC DCP 2014 Processing AKA/APC Lucerne 2 plant online DCP 2015 Processing AKA/APC Lucerne 2 plant provided significant relief to line pressure DCP…
  19. Wells Fargo Energy Conference – PDC Energy, Inc. – slide 19
    Significant Long-Term Crude Oil Takeaway in Wattenberg Multiple takeaway options (refinery, pipeline, trucking and rail) Expected takeaway capacity exceeds production forecasts for the basin well past 2020 PDC has firm capacity of…
  20. Wells Fargo Energy Conference – PDC Energy, Inc. – slide 20
    Utica Asset Summary Producing Pads 65,000 2016 Pad Locations PDC Acreage Net Acres 52% Acreage HBP 23 Hz Producing Wells 35mm 2016e Capex 5/5 Spuds TILs 6/21/16 21
  21. Wells Fargo Energy Conference – PDC Energy, Inc. – slide 21
    Utica Testing New Areas & Designs in 2016 Approximately 35 million capital plan for 2016 Mason 2well pad (expected 3Q16 TIL) Delineate condensate fairway in southern acreage Test new completion design from Cole & Dynamite wells…
  22. Wells Fargo Energy Conference – PDC Energy, Inc. – slide 22
    PDC Energy Vision and Strategy Delivering Stakeholders Delivering value added growth Value Community involvement/education Dedicated, highlyvalued employees Corporate Corporate Development Development Longterm/multiyear focus…
  23. Wells Fargo Energy Conference – PDC Energy, Inc. – slide 23
    Investor Relations Mike Edwards, Senior Director Investor Relations michael.edwardspdce.com Kyle Sourk, Manager Investor Relations kyle.sourkpdce.com Corporate Headquarters PDC Energy, Inc. 1775 Sherman Street Suite 3000 Denver,…
  24. Wells Fargo Energy Conference – PDC Energy, Inc. – slide 24
    APPENDIX 25
  25. Wells Fargo Energy Conference – PDC Energy, Inc. – slide 25
    2,500 Setback Details No New Oil & Gas Development Within 2,500 of Occupied Structures and Broadly Defined Areas of Special Concern Industry Viewpoint Colorado 90% off limits Confident that the resources are in place to defeat this…
  26. Wells Fargo Energy Conference – PDC Energy, Inc. – slide 26
    2016 Financial Guidance 2015 2016 Guidance(2) Actual Low High Production 15.4 20.0 22.0 Crude oil, natural gas and NGLs sales 379 366 402 Realized gain on derivatives 239 251 251 Other Income 2 1 1 Adjusted total revenue 620 618…
  27. Wells Fargo Energy Conference – PDC Energy, Inc. – slide 27
    2016 Corporate Marketing and Pricing Summary 2016 Strip Pricing as of 03/23/16 with 3 Months of Actuals; Percentages May Vary Due to Rounding CRUDE OIL NATURAL GAS NGLs Wattenberg Wattenberg Wattenberg NYMEX Oil Price: 41/Bbl NYMEX…
  28. Wells Fargo Energy Conference – PDC Energy, Inc. – slide 28
    Updated 2016 Core Wattenberg EUR Analysis Based on Evaluation of Public Production Data 2,500 Wells Included in Study 2016 EUR ANALYSIS 2.63.6 EUR Variability Ratio Range for Inner Core Middle Core Outer Core Represents…
  29. Wells Fargo Energy Conference – PDC Energy, Inc. – slide 29
    PDC Energy Modest Price Recovery Case Stable Capital Development Plan 23% 3Year Production CAGR…
  30. Wells Fargo Energy Conference – PDC Energy, Inc. – slide 30
    PDC Energy Price Rebound Case Increasing Capital Development Plan 27% 3Year Production CAGR…
  31. Wells Fargo Energy Conference – PDC Energy, Inc. – slide 31
    PDC Energy Balance Sheet Preservation Case (35/2 FLAT) Decreasing Capital Development Plan 31% Average Annual DebttoCap 10mm Revolver balance YE18e 300 Spuds 3.0x YE18e Debt / EBITDAX NYMEX 2016 2017 2018 Oil…
  32. Wells Fargo Energy Conference – PDC Energy, Inc. – slide 32
    PDC Energy 3-Year Outlook Recap 6/21/16 33
  33. Wells Fargo Energy Conference – PDC Energy, Inc. – slide 33
    Middle Core Increased SRL EUR to 490 MBoe Increased Type Curve from 440 MBoe Majority of PDCs Middle Core inventory Middle Core Net Acres: 60,000 Oil: 2P Locations: 1,350 3640% Over 1,300 locations with IRRs 30%(1) Avg. Lateral…
  34. Wells Fargo Energy Conference – PDC Energy, Inc. – slide 34
    Middle Core Increased MRL EUR to 685 MBoe Increased Type Curve from 600 MBoe Nearly 200 locations under current plans Middle Core Net Acres: 60,000 Oil: 2P Locations: 180 3640% Average drill times of 10 to 12 days Avg. Lateral…
  35. Wells Fargo Energy Conference – PDC Energy, Inc. – slide 35
    Middle Core Initial XRL EUR of 850 MBoe Based on Industry Data 70 locations with current lease Middle Core Net Acres: 60,000 Oil: 2P Locations: 70 configurations Avg. Lateral Length: 9,500 3640% Expected drill times of 13 to 15…
  36. Wells Fargo Energy Conference – PDC Energy, Inc. – slide 36
    Year-End 2015 Proved Reserves Summary YE2014 Proved Reserves 250 MMBoe 2015 15.4 Significant Wattenberg production Production MMBoe growth through technical improvements Dominated by moving Outer Core PUDs in Reserve…
  37. Wells Fargo Energy Conference – PDC Energy, Inc. – slide 37
    Reconciliation of Non-US GAAP Financial Measures In millions, except per share data Three Months Ended Adjusted EBITDA from net income (loss): March 31, 2016 2015 Net income (loss) (71.5) 17.1 Gain on commodity derivative…
  38. Wells Fargo Energy Conference – PDC Energy, Inc. – slide 38
    Reconciliation of Non-US GAAP Financial Measures In millions, except per share data Three Months Ended Adjusted net income (loss) from net income (loss): March 31, 2016 2015 Net income (loss) (71.5) 17.1 Gain on commodity…

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