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Johnson Rice 2016 Energy Conference – PDC Energy, Inc.

PDC Energy, Inc. · Sep 22, 2016 · 39 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. Johnson Rice 2016 Energy Conference – PDC Energy, Inc. – slide 1
    JOHNSON RICE 2016 ENERGY CONFERENCE 9/21/2016
  2. Johnson Rice 2016 Energy Conference – PDC Energy, Inc. – slide 2
    PDC Energy Pro Forma Company Overview Acquisition Expected to Close in 4Q16 2Q16 / Post Closing Core Wattenberg 96,000 net acres 3.5 / 5.3 Est. Enterprise Value (Billions) 1.1x / 2.2x YE16e Debt/EBITDAX(1) 64 / 71 Est.…
  3. Johnson Rice 2016 Energy Conference – PDC Energy, Inc. – slide 3
    PDC Energy 2016 Results and Outlook 2Q16 Results 2016e Re-Guide Highlights Increased production range to 21 22 MMBoe 57,112 Production (Boe/d) 40% increase over 2015 at mid-point Reduced capital expenditures 400 - 420 million…
  4. Johnson Rice 2016 Energy Conference – PDC Energy, Inc. – slide 4
    PDC Energy Debt and Liquidity Overview As of 6/30/16; Pro Forma for Acquisition Related Financing & Acquisition Issued 9.1 million shares of equity for gross 1,000 Debt Maturity Schedule proceeds of 575 million (millions) Current…
  5. Johnson Rice 2016 Energy Conference – PDC Energy, Inc. – slide 5
    PDC Energy Hedges Summary Hedges in place as of June 30, 2016 plus hedges entered into prior to September 1, 2016 Jul Dec 60% of expected crude oil production at weighted average floor price of 73.92/Bbl 2016 64% of expected natural…
  6. Johnson Rice 2016 Energy Conference – PDC Energy, Inc. – slide 6
    Transformative Core Delaware Basin Acquisition Acquisition Attributes Large-scale acquisition of operated core NEW MEXICO acreage in top-tier Delaware basin Significant inventory of highly economic(1) Wolfcamp A, B and C wells with…
  7. Johnson Rice 2016 Energy Conference – PDC Energy, Inc. – slide 7
    Key Delaware Basin Acquisition Highlights Deal Overview 1.5 billion purchase price privately negotiated with Kimmeridge Energy Management Company Culberson Loving 590 million privately placed equity to the seller and 915 million of…
  8. Johnson Rice 2016 Energy Conference – PDC Energy, Inc. – slide 8
    Premier Portfolio Scalability in Two Top-Tier Basins Pro Forma Core Wattenberg & Core Delaware Basins Portfolio Multiple years of highly economic drilling in Core Wattenberg and Core Delaware Internal rates of return extremely…
  9. Johnson Rice 2016 Energy Conference – PDC Energy, Inc. – slide 9
    Competitive Returns Provide Portfolio Optionality Pro Forma Acquisition Portfolio 2,860 highly economic identified locations(1) Competitive returns across portfolio provides optionality Competition for capital drives innovation and…
  10. Johnson Rice 2016 Energy Conference – PDC Energy, Inc. – slide 10
    Core Delaware Acreage Overview PDC Acreage 93% NM TX Average WI Western Central Central Basin Midland Loving Platform 100% Basin Delaware Basin Approximate Operated Position Eastern 710 Currently Identified…
  11. Johnson Rice 2016 Energy Conference – PDC Energy, Inc. – slide 11
    Core Delaware Highly Productive Acreage PDC Acreage Acquired Well XEC Gato del Sol Silverback Folk Rowling Wolfcamp A Wolfcamp A IP30: 2,000 Boe/d IP30: 1,513 Boe/d Lateral Length: 9,000 Lateral Length: 6,200 Arris Phillips HW…
  12. Johnson Rice 2016 Energy Conference – PDC Energy, Inc. – slide 12
    Core Delaware Detailed Acreage Block Overview See Appendix For Additional Detail Eastern Wolfcamp A 1,000 MBoe Eastern Block Central Block Western Block Net Acreage 17,500 23,500 16,000 Working Interest 91% 87% 100% Recent Arris…
  13. Johnson Rice 2016 Energy Conference – PDC Energy, Inc. – slide 13
    Core Delaware Expansive Inventory Upside Acquisition Model Assumes Maximum Density of Only 12 Wells per Section Well Spacing & Inventory Summary Max ACQ Peer Eastern Inventory Central Inventory Western Inventory Bench Spacing Tests…
  14. Johnson Rice 2016 Energy Conference – PDC Energy, Inc. – slide 14
    Core Delaware Operations Summary Current Summary 7,000 Boe/d net production 21 horizontal wells online WESTERN Two additional wells in completion & flowback phase Five salt water disposal wells Producing Hz Well CENTRAL EASTERN…
  15. Johnson Rice 2016 Energy Conference – PDC Energy, Inc. – slide 15
    Core Delaware 100% Owned & Operated Midstream Future Upside from Buildout of 100% Owned and Operated Midstream Infrastructure Midstream Assets: Current & Future Gas gathering systems to central delivery points (CDP) Water…
  16. Johnson Rice 2016 Energy Conference – PDC Energy, Inc. – slide 16
    CURRENT ASSET OVERVIEW 18
  17. Johnson Rice 2016 Energy Conference – PDC Energy, Inc. – slide 17
    Core Wattenberg Asset Summary Wattenberg 2P Inventory 96,000 Inner Middle Net Acres (pre-trade) Outer 100% 2016e TIL Breakdown SRLs Acreage HBP MRLs XRLs 128/140 2016 Spuds 2016 TILs 2,150 2P Hz Locations (4,700…
  18. Johnson Rice 2016 Energy Conference – PDC Energy, Inc. – slide 18
    Core Wattenberg Strategic Acreage Trade 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 interests,…
  19. Johnson Rice 2016 Energy Conference – PDC Energy, Inc. – slide 19
    Core Wattenberg Recent Completion Tests 2016 Analyst Day Type Curves; Pro Forma NBL Acreage Trade Land Map LDS Project OUTER CORE 10 well pad 20-well per section equivalent MRL Design TIL: 2Q16 15 - 55% increase in proppant…
  20. Johnson Rice 2016 Energy Conference – PDC Energy, Inc. – slide 20
    Core Wattenberg Midstream Overview 2013 Processing Source: Company reports; BTU Analytics production AKA/APC DCP 2014 Processing AKA/APC DCP 2015 Processing OIL AKA/APC Multiple takeaway options (refinery, pipeline,…
  21. Johnson Rice 2016 Energy Conference – PDC Energy, Inc. – slide 21
    Utica 2016 Program Update 65,000 net acres; 52% HBP 35MM capital plan in 2016 Neff well: May TIL o 10,000 lateral testing efficiency improvements o Encouraging early results Mason pad: June TIL o Delineate southern acreage;…
  22. Johnson Rice 2016 Energy Conference – PDC Energy, Inc. – slide 22
    PDC Energy Vision and Strategy Delivering Value Delivering Value Added Growth Corporate Development Long-term/Multi-year Focus Operational Execution Technical Initiatives Financial Discipline Balance Sheet Focus Top-Tier…
  23. Johnson Rice 2016 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. Johnson Rice 2016 Energy Conference – PDC Energy, Inc. – slide 24
    APPENDIX 26
  25. Johnson Rice 2016 Energy Conference – PDC Energy, Inc. – slide 25
    Low Costs Continue to Drive Margins Source: Wells Fargo Securities, LLC 50% decrease in all-in cash operating costs since 2014 (including interest expense) Substantial production increase drives reduced per Boe metrics Strong…
  26. Johnson Rice 2016 Energy Conference – PDC Energy, Inc. – slide 26
    Established Acquisition Strategy Originally Presented at April 2016 Analyst Day Top-Tier Expanded Portfolio Corporate Assets Inventory Optionality Accretion Must compete with Wattenberg Existing base production Provides new core…
  27. Johnson Rice 2016 Energy Conference – PDC Energy, Inc. – slide 27
    Eastern Acreage Block: 17,500 Net Acres PDC Acreage Existing Well Acquired Well Wolfcamp A Area Highlights Cumulative BOE per 5,000 of Lateral 17,500 net acres 91% WI 69% NRI (76% N/G) Oil: 50 70% Silverback Folk Rowling Wolfcamp…
  28. Johnson Rice 2016 Energy Conference – PDC Energy, Inc. – slide 28
    Central Acreage Block: 23,500 Net Acres PDC Acreage Existing Well Acquired Well Wolfcamp A / Wolfcamp B Area Highlights Cumulative BOE per 5,000 of Lateral 23,500 net acres 87% WI 66% NRI (76% N/G) Capitan - Dorothy State Oil: 30…
  29. Johnson Rice 2016 Energy Conference – PDC Energy, Inc. – slide 29
    Western Acreage Block: 16,000 Net Acres PDC Acreage Existing Well Acquired Well Wolfcamp A Area Highlights Cumulative BOE per 10,000 of Lateral 16,000 net acres 100% WI 78% NRI (78% N/G) Oil: 20 50% Gas: 30 50% NGLs: 20…
  30. Johnson Rice 2016 Energy Conference – PDC Energy, Inc. – slide 30
    Delaware Basin Netback Summary CRUDE OIL NGLs NATURAL GAS Key Highlights Key Highlights Key Highlights Currently trucked at competitive NGLs piped via multiple pipelines Strong relative basis pricing rates to Gulf Coast Limited…
  31. Johnson Rice 2016 Energy Conference – PDC Energy, Inc. – slide 31
    Pro Forma 3-Year Outlook Organic Base Case Range Pro Forma Acquisition Range 55 Production (MMBOE) 100 3-Year CAGR Stand Alone 20% 45 Pro Forma 31% Est. Combined 2018 Daily Production (Mboe/d) 35 40% 25 Est. Pro…
  32. Johnson Rice 2016 Energy Conference – PDC Energy, Inc. – slide 32
    Strategic Acreage Trade Pro Forma Estimates Trade with Noble Energy expected to Close in Early 4Q 2016 OUTER OUTER CORE CORE MIDDLE MIDDLE CORE CORE INNER INNER CORE CORE Pre-Trade Post-Trade 2H16 Rig Count 4 Rig Count 3…
  33. Johnson Rice 2016 Energy Conference – PDC Energy, Inc. – slide 33
    Updated 2016 Core Wattenberg EUR Analysis Based on Evaluation of Public Production Data 2,500 Wells Included in Study 2016 EUR ANALYSIS 2.6-3.6 EUR Variability Ratio Range for Inner Core Middle Core Outer Core Represents…
  34. Johnson Rice 2016 Energy Conference – PDC Energy, Inc. – slide 34
    Significant Drilling Efficiencies Improvements 2016 drill times improved by 75% since 2014 and 100% since 2013 2016 efficiency gains further improving drill times Original forecast of 1,900 feet drilled per day per well Feet…
  35. Johnson Rice 2016 Energy Conference – PDC Energy, Inc. – slide 35
    Monobore Drilling Gains To-Date Current Implementation Monobore drilling saves 1 day in spud-to-spud times 50-100k savings per well realized to-date All wells expected to be drilled using monobore technology 9-5/8 casing cemented…
  36. Johnson Rice 2016 Energy Conference – PDC Energy, Inc. – slide 36
    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…
  37. Johnson Rice 2016 Energy Conference – PDC Energy, Inc. – slide 37
    2016 Revised Financial Guidance As of August 9, 2016; Does not include Delaware Basin Acquisition (expected to close in December 2016) 2015 2016 Guidance(2) Actual Low High Production 15.4 21.0 22.0 Capital Expenditures 559 400…
  38. Johnson Rice 2016 Energy Conference – PDC Energy, Inc. – slide 38
    Reconciliation of Non-US GAAP Financial Measures In millions, except per share data Three Months Ended Six Months Ended Adjusted EBITDA from net income (loss): June 30, June 30, 2016 2015 2016 2015 Net (loss) (95.5) (46.9) (167.0)…
  39. Johnson Rice 2016 Energy Conference – PDC Energy, Inc. – slide 39
    Reconciliation of Non-US GAAP Financial Measures In millions, except per share data Three Months Ended Six Months Ended Adjusted net income (loss) from net income (loss): June 30, June 30, 2016 2015 2016 2015 Net income (loss)…

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