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Barclays CEO Energy Conference – PDC Energy, Inc.

PDC Energy, Inc. · Sep 7, 2016 · 43 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. Barclays CEO Energy Conference – PDC Energy, Inc. – slide 1
    BARCLAYS 2016 CEO ENERGY-POWER CONFERENCE 9/7/2016
  2. Barclays CEO Energy Conference – PDC Energy, Inc. – slide 2
    PDC Energy Pro Forma Company Overview Acquisition Expected to Close in 4Q16 Current / Pro Forma Core Wattenberg 96,000 net acres 3.5B / 5B Est. Enterprise Value 1.1x…
  3. Barclays CEO Energy Conference – PDC Energy, Inc. – slide 3
    PDC Energy Strong Second Quarter Results Valueadd Wattenberg drilling prioritizes IRRs and 57,112 Production (Boe/d) margins Production of 5.2 MMBoe Reduced LOE to 2.63/Boe 34 TILs in 2Q Currently completing first batch of XRL…
  4. Barclays CEO Energy Conference – PDC Energy, Inc. – slide 4
    PDC Energy 2016 Re-Guided Outlook As of August 9, 2016 Increased production range to 21 22 MMBoe 410 40% increase over 2015 at midpoint 2016e Capex Midpoint Reduced Wattenberg rig count to three from four Reduced 2016e spuds and…
  5. Barclays CEO Energy Conference – PDC Energy, Inc. – slide 5
    PDC Energy Debt and Liquidity Overview As of 6/30/16; Does Not Include Any Acquisition Related Financing Available liquidity of 797 million(1) Debt / LTM EBITDAX(2) of 1.1x Debt Maturities 700 million revolver 450 million…
  6. Barclays CEO Energy Conference – PDC Energy, Inc. – slide 6
    PDC Energy Hedges Summary Jul Dec 60% of expected crude oil production at weighted average floor price of 73.92/Bbl 2016 64% of expected natural gas production at weighted average floor price of 3.43/Mcf 4.5 MMBbls crude oil at…
  7. Barclays CEO Energy Conference – PDC Energy, Inc. – slide 7
    Transformative Core Delaware Basin Acquisition Acquisition Attributes Largescale acquisition of operated core NEW MEXICO acreage in toptier Delaware basin Significant inventory of highly economic(1) Wolfcamp A, B and C wells with…
  8. Barclays CEO Energy Conference – PDC Energy, Inc. – slide 8
    Key Delaware Basin Acquisition Highlights Deal Overview 1.5 billion purchase price privately negotiated Culberson with Kimmeridge Energy Management Company Loving 590 million privately placed equity to the seller and 915 million…
  9. Barclays CEO Energy Conference – PDC Energy, Inc. – slide 9
    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…
  10. Barclays CEO Energy Conference – PDC Energy, Inc. – slide 10
    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…
  11. Barclays CEO Energy Conference – PDC Energy, Inc. – slide 11
    CORE DELAWARE POSITION 13
  12. Barclays CEO Energy Conference – PDC Energy, Inc. – slide 12
    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…
  13. Barclays CEO Energy Conference – PDC Energy, Inc. – slide 13
    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…
  14. Barclays CEO Energy Conference – PDC Energy, Inc. – slide 14
    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…
  15. Barclays CEO Energy Conference – PDC Energy, Inc. – slide 15
    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…
  16. Barclays CEO Energy Conference – PDC Energy, Inc. – slide 16
    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…
  17. Barclays CEO Energy Conference – PDC Energy, Inc. – slide 17
    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…
  18. Barclays CEO Energy Conference – PDC Energy, Inc. – slide 18
    CURRENT ASSET OVERVIEW 20
  19. Barclays CEO Energy Conference – PDC Energy, Inc. – slide 19
    Core Wattenberg Asset Summary Wattenberg 2P Inventory 96,000 Inner Middle Net Acres (pretrade) Outer 100% 2016e TIL Breakdown SRLs Acreage HBP MRLs XRLs 128/140 Spuds TILs 2,150 2P Hz Locations (4,700 avg.…
  20. Barclays CEO Energy Conference – PDC Energy, Inc. – slide 20
    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…
  21. Barclays CEO Energy Conference – PDC Energy, Inc. – slide 21
    Core Wattenberg Recent Completion Tests 2016 Analyst Day Type Curves; Pro Forma NBL Acreage Trade Land Map LDS Project OUTER CORE 10 well pad 20well per section equivalent MRL Design TIL: 2Q16 15 55% increase in proppant…
  22. Barclays CEO Energy Conference – PDC Energy, Inc. – slide 22
    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,…
  23. Barclays CEO Energy Conference – PDC Energy, Inc. – slide 23
    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;…
  24. Barclays CEO Energy Conference – PDC Energy, Inc. – slide 24
    PDC Energy Vision and Strategy Delivering Value Delivering Value Added Growth Corporate Development Longterm/Multiyear Focus Operational Execution Technical Initiatives Financial Discipline Balance Sheet Focus TopTier Assets…
  25. Barclays CEO Energy Conference – PDC Energy, Inc. – slide 25
    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,…
  26. Barclays CEO Energy Conference – PDC Energy, Inc. – slide 26
    APPENDIX 28
  27. Barclays CEO Energy Conference – PDC Energy, Inc. – slide 27
    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…
  28. Barclays CEO Energy Conference – PDC Energy, Inc. – slide 28
    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…
  29. Barclays CEO Energy Conference – PDC Energy, Inc. – slide 29
    Established Acquisition Strategy Originally Presented at April 2016 Analyst Day TopTier Expanded Portfolio Corporate Assets Inventory Optionality Accretion Must compete with Wattenberg Existing base production Provides new core…
  30. Barclays CEO Energy Conference – PDC Energy, Inc. – slide 30
    Key Deal Terms Transaction Details 1.5 billion purchase price (22,000 per net acre(1)) 9.4 million shares privately placed to the seller valued at 590 million and 915 million of cash consideration 1.4 billion of current liquidity…
  31. Barclays CEO Energy Conference – PDC Energy, Inc. – slide 31
    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…
  32. Barclays CEO Energy Conference – PDC Energy, Inc. – slide 32
    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…
  33. Barclays CEO Energy Conference – PDC Energy, Inc. – slide 33
    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…
  34. Barclays CEO Energy Conference – PDC Energy, Inc. – slide 34
    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…
  35. Barclays CEO Energy Conference – PDC Energy, Inc. – slide 35
    Pro Forma 3-Year Outlook Organic Base Case Range Pro Forma Acquisition Range 55 Production (MMBOE) 100 3Year CAGR Stand Alone 20% 45 Pro Forma 31% Est. Combined 2018 Daily Production (Mboe/d) 35 40% 25 Est. Pro…
  36. Barclays CEO Energy Conference – PDC Energy, Inc. – slide 36
    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 PreTrade PostTrade 2H16 Rig Count 4 Rig Count 3…
  37. Barclays CEO Energy Conference – PDC Energy, Inc. – slide 37
    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…
  38. Barclays CEO Energy Conference – PDC Energy, Inc. – slide 38
    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…
  39. Barclays CEO Energy Conference – PDC Energy, Inc. – slide 39
    Monobore Drilling Gains To-Date Current Implementation Monobore drilling saves 1 day in spudtospud times 50100k savings per well realized todate All wells expected to be drilled using monobore technology 95/8 casing cemented to…
  40. Barclays CEO Energy Conference – PDC Energy, Inc. – slide 40
    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…
  41. Barclays CEO Energy Conference – PDC Energy, Inc. – slide 41
    2016 Revised Financial Guidance 2015 2016 Guidance(2) Actual Low High Production 15.4 21.0 22.0 Capital Expenditures 559 400 420 Crude oil, natural gas and NGLs sales 379 449 487 Realized gain on derivatives 239 216 216 Other…
  42. Barclays CEO Energy Conference – PDC Energy, Inc. – slide 42
    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)…
  43. Barclays CEO Energy Conference – PDC Energy, Inc. – slide 43
    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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