PennEnergy Resources DUG East 2016 Richard D. Weber Chairman and CEO June 22, 2016
Extending the Core of the Marcellus to the North of Pittsburgh 2016 DUG East
PennEnergy Resources Founded in 2011 Rich Weber (Atlas) Greg Muse (Atlas, Marathon) John Johnston (EXCO, EOG) 450+ MM of Equity Commitments EnCap Wells Fargo PER Management 32 hand-picked employees Guided by Core Values…
PennEnergy Resources Operations - Commenced production January 2014 - 100 Mmcfe/d - 36 horizontal wells Greater producing Pittsburgh Metro Area Land - 79,000 gross acres (74,000 net) - 65% HBP - Average remaining term…
Operators in Southwestern PA Edgemark REX SNYDER EQT XTO REX Key Producers in the Core PER PER RRC Marcellus North of Pittsburgh CHK PER XTO EQT PER include: RRC RRC CVX GREATER CNX - PennEnergy Resources CNX PITTSBURGH…
Stacked Pay Reservoirs in the SW PA Core Upper Devonian Shales Depth 4500-5000 Marcellus Depth 5500-6500 Utica/ Pt. Pleasant Depth 10,000-11,000 D U G E AST
PennEnergy uses an integrated approach to define the Core of the Play Geology Reservoir Characterization Production Performance Economics D U G E AST
Net Pays Determined from Rock & Petrophysical Analysis Applied to Regional Log Data Core Samples Integrate Rock Data with Apply Models to Log Database for Net for Reservoir Full Suite E-Logs to derive Pay Determination…
High TOCs & Porosity (hot colors) in the Marcellus extend from Greene & Washington Counties north through Allegheny, Beaver, Butler & Armstrong Counties Greene S. Washington Washington PER Beaver W Butler A A A B Wet Gas…
Resulting Net Pay and Gas-in-Place maps indicate the Core of the Marcellus extends across PennEnergys acreage PER Acreage D U G E AST Net Marcellus Thickness C.I.= 5 GIP Marcellus BCF/section
Marcellus EUR BCFE/1000 Derived from Decline Curve Analysis of over 3,000 Marcellus Horizontal Wells Early wells in play account for many of lower performers Greater Pittsburgh Metro Area Production matches well with Net Pay…
Net Pay analysis demonstrates that the Core of the Upper Devonian (Middlesex, Genesee, Burkett) extends through PennEnergys Beaver County acreage - Additional contribution from Genesee & Middlesex members appears critical -…
Utica/Pt. Pleasant Potential Proprietary seismic and amplitude modeling indicates increased Pt. Pleasant porosity across the central and southern portions of PennEnergys acreage. Modeling also shows a decrease in porosity and…
Dry Marcellus Production Comparison - Normalized Production Histories of over 500 Marcellus Wells in South (Washington & Greene Cos. PA) & North ( SE Butler, W Armstrong N. Allegheny) Core Areas Comparing South to North Core Areas PER…
Wet Marcellus Production Comparison - Normalized Production Histories of 500 Marcellus Wells in South (Washington Co. PA) & North ( E. Beaver & W. Butler) Comparing South to North Core Areas PER Wells Only - Comparison to South South…
Example PER Production Histories : Steady, Consistent Rates with Low Declines PER Marcellus Dry Gas Butler/Armstrong Cos. PA Field Average to Date: 2.70 Bcf/1000 PER W73-1H PER W74-4H PER W23-1H Monthly Monthly Monthly Daily…
EUR Probability Distribution - PER wells compared to SW PA PER field averages exceed P50 in both Wet & Dry Marcellus Dry Gas Wet Gas Dataset comprised of 500+ Marcellus Dry Gas…
PennEnergy Economics Wet Gas Type Curve ROR % at Flat Pricing 1,000,000 100% Mcfe 75% Mcfe/Month 10,000 50% 100 25% 0% 1 2.00 2.50 3.00 3.50 1 5 9 13 17 21 25 29 33 37 41 45 49 Year IRR - Dry Gas IRR - Wet Gas1 Area…
PennEnergy Resource Potential Gross EUR/1000 Actual Net Area Reservoir Gas Type Reserves Acreage (Bcfe) Laterals (Tcfe) Marcellus, Upper Beaver Devonian 36,054 Wet gas 2.36 586 6.5 Butler/Armstrong Marcellus 42,969 Dry gas…
Market Optionality D U G E AST
Top Tier Operator Well Cost Comparison 1,000 950 Average 910/Ft 900 All-In /Ft 850 800 750 RRC PER REX EQT RICE ANTERO COG SWN /1,000' 819 872 883 900 925 944 957 980 Average Well Cost 5,630 5,234 5,300 6,300 7,585…
Best in Class Environmental Performance PennEnergys Violations have resulted in 0 in Fines PA DEP Inspections & Violations from 1/1/2013 5/31/2016 Unconventional Operations Only PER Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6…
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