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IPAA How Do You Survive In 2016 – RBC Capital Markets

RBC Capital Markets · Sep 1, 2016 · 20 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. IPAA How Do You Survive In 2016 – RBC Capital Markets – slide 1
    How Do You Survive In 2016 Global Oversupply Oil Price Collapse Increasing Leverage Sources of Capital for E&Ps in 2016 Asset Sales Corporate Joint Ventures Restructurings Debt for equity exchanges Bankruptcies (20+…
  2. IPAA How Do You Survive In 2016 – RBC Capital Markets – slide 2
    Quiet A&D Market In 2015; 2016 Expected To Be Much Busier Annual U.S. E&P Onshore A&D Supply (B) (1) Key Drivers to 2016 Supply 1 Borrowing base redeterminations 2 Capital markets largely closed 3 Lack of hedging 4 2015 failed…
  3. IPAA How Do You Survive In 2016 – RBC Capital Markets – slide 3
    Who is Selling 2015 Asset Supply by Seller Type ( MM) Conventional Assets Resource Plays Resource Plays 3 RBC Capital Markets Richardson Barr
  4. IPAA How Do You Survive In 2016 – RBC Capital Markets – slide 4
    Most Interesting Transactions Over The Last 12 Months 2.8 B 1.1 B 3.0 B 900 MM 1.9 B Key Takeaways Reeves Co. Canadian New Enhance Chinese New Validation entrant; entrant; pension buyer capital Capital…
  5. IPAA How Do You Survive In 2016 – RBC Capital Markets – slide 5
    Commodity Supply/Demand Fundamentals Trumping Geopolitics WTI Oil Price 1997 to 2015 Aug 2008 Dec 2010 Global financial crisis 4 Arab Spring 145.29 Jul 1997 Sep 2001 5 Asian financial 9/11 terrorist 6 crisis attacks 3 Mar 2003…
  6. IPAA How Do You Survive In 2016 – RBC Capital Markets – slide 6
    How Are Oil Prices Affecting Deal Making WTI Oil Price Buyers underwriting using Consensus price decks strip, run upside 40% decline versus the stripinhistorically oil price sensitivities with long-term allowed publics to of…
  7. IPAA How Do You Survive In 2016 – RBC Capital Markets – slide 7
    Capital Markets Have Shut DownExcept For The Permian E&P Equity Capital Markets E&P Debt Capital Markets Small / Mid Caps have raised 43 Billion in High Yield since 2013 HY Market Largely Closed; Turning to 2nd / 3rd Lien…
  8. IPAA How Do You Survive In 2016 – RBC Capital Markets – slide 8
    Lack of Hedging Will Lead To Increased Asset Supply 2016 Total Prod. Hedged & Leverage by Market Cap Oil 5.3x 5.2x Gas Net Debt / 2016E EBITDA Less than 20% of estimated total U.S. production is hedged in 2016 2.1x…
  9. IPAA How Do You Survive In 2016 – RBC Capital Markets – slide 9
    Decrease in Rig Activity & CapEx Across U.S. Resource Plays CapEx estimated to decrease by 30% from 2015 to 2016 January 9, 2015 Hz Rig Count January 15, 2016 Hz Rig Count 9 Sources: Baker Hughes Rig Count. Regions per Baker Hughes…
  10. IPAA How Do You Survive In 2016 – RBC Capital Markets – slide 10
    Causing Production Declines In Most U.S. Basins Deepwater GOM (oil growth est. +19% 2015-2017) and Permian production growth offsetting production declines Marcellus Permian Haynesville Bakken Eagle Ford Eagle Ford DJ…
  11. IPAA How Do You Survive In 2016 – RBC Capital Markets – slide 11
    However, Global Supply Expected To Increase Global Liquids Production (MMBopd) 11 RBC Capital Markets Richardson Barr
  12. IPAA How Do You Survive In 2016 – RBC Capital Markets – slide 12
    Private Equity Armed With 85+ Billion Financial Sponsors Increasingly Active In The E&P Space 85+ B In E&P Focused Capital Non-Texas-based Texas-based Yorktown Others Total Financial Sponsor Universe 250+ Total U.S.-Focused…
  13. IPAA How Do You Survive In 2016 – RBC Capital Markets – slide 13
    Publics Cautious Acquisition Posture Creating Opportunity for Private Equity WPX GPOR DVN Jul-15 Jun-15 May-15 Dec-15 2,750 MM 620 MM(1) 3,873 MM 2,500 MM(1) 36,000/acre 10,700/acre 31,500/acre(2) 21,500/acre(3) Delaware /…
  14. IPAA How Do You Survive In 2016 – RBC Capital Markets – slide 14
    When Will Core-of-Core Valuations Start To Be Impacted Permian Basin Valuations Versus Oil Price Conf. September 2014 7,080 million August 2015 July 2015 41,900 / Acre 274 million 281 million 39,800 / Acre 35,500 / Acre…
  15. IPAA How Do You Survive In 2016 – RBC Capital Markets – slide 15
    RBC Insights On Current Buyer Methodology Present Value (MM) At Varying Discount Rates Reserve Category PV0 PV8 PV10 PV12 PV15 PV20 PV25 PV30 PV40 PDP PDNP Bench 1 (Core) Bench 2 (Core) Bench 3 (Emerging Core) 15 RBC…
  16. IPAA How Do You Survive In 2016 – RBC Capital Markets – slide 16
    A&D Adjusts As It Needs To Just Need Stability Oil Price vs. Rig Activity 2009 2014 A&D Comfort Zone: 70 80+ New Comfort Deals still were getting done in 40 - 45 / Bbl environment Source: Bloomberg and Baker Hughes data…
  17. IPAA How Do You Survive In 2016 – RBC Capital Markets – slide 17
    How Do You Get A Deal Done In The Current Environment 1 Sellers acceptance of bid valuations 2 Market for bigger deals is very efficient (youre not going to steal anything) 3 Marry technical valuation with market metrics…
  18. IPAA How Do You Survive In 2016 – RBC Capital Markets – slide 18
    RBC Deal In The Market: Vanguard SCOOP / STACK Opportunity Highlights Asset Locator Map 20,000+ net acres across the SCOOP / STACK - Acreage is predominantly held by production Current net production of 8,000 Boepd Asset - 50%…
  19. IPAA How Do You Survive In 2016 – RBC Capital Markets – slide 19
    RBC Deal In The Market: EnerVest Barnett Opportunity Highlights Asset Locator Map 116,444 gross / 72,601 net acres spanning all major phase windows of the Barnett (93% HBP) TX - Avg. 56% WI / 44% NRI Asset Overview Upside includes…
  20. IPAA How Do You Survive In 2016 – RBC Capital Markets – slide 20
    Recent U.S. RBC Richardson Barr Transactions 500+ Million 100 500 Million have divested certain oil and gas has divested certain oil and gas has divested its oil and natural gas has divested oil and gas has divested certain oil and…

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