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October 2016 Company Update – PDC Energy, Inc.

PDC Energy, Inc. · Oct 10, 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. October 2016 Company Update – PDC Energy, Inc. – slide 1
    COMPANY UPDATE October 2016
  2. October 2016 Company Update – PDC Energy, Inc. – slide 2
    PDC Energy Pro Forma Company Overview Delaware Acquisition Expected to Close in 4Q16 Core Wattenberg 2Q16 / Post Closing 96,000 net acres 3.5 / 5.4 Est. Enterprise Value (Billions) 1.1x / 2.2x YE16e Debt/EBITDAX(1) 64…
  3. October 2016 Company Update – PDC Energy, Inc. – slide 3
    PDC Energy 2016 Results and Outlook These Do Not Include Delaware Basin Acquisition Expected to Close in December 2016 2Q16 Results 2016e Re-Guide Highlights Increased production range to 21 22 MMBoe 57,112 Production (Boe/d) 40%…
  4. October 2016 Company Update – 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) 9.4…
  5. October 2016 Company Update – 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. October 2016 Company Update – PDC Energy, Inc. – slide 6
    Transformative Core Delaware Basin Acquisition Expected to Close in Q4 2016 Acquisition Attributes Large-scale acquisition of operated core NEW MEXICO acreage in top-tier Delaware basin Significant inventory of highly economic(1)…
  7. October 2016 Company Update – PDC Energy, Inc. – slide 7
    Key Delaware Basin Acquisition Highlights Expected to Close in Q4 2016 Deal Overview 1.5 billion purchase price privately negotiated with Kimmeridge Energy Management Company Culberson Loving 590 million privately placed equity to…
  8. October 2016 Company Update – PDC Energy, Inc. – slide 8
    Premier Portfolio Scalability in Two Top-Tier Basins Pro Forma Core Wattenberg & Core Delaware Basins Portfolio (upon closing) Multiple years of highly economic drilling in Core Wattenberg and Core Delaware Internal rates of return…
  9. October 2016 Company Update – PDC Energy, Inc. – slide 9
    Competitive Returns Provide Portfolio Optionality Pro Forma Acquisition Portfolio (upon closing) 2,860 highly economic identified locations(1) Competitive returns across portfolio provides optionality Competition for capital drives…
  10. October 2016 Company Update – PDC Energy, Inc. – slide 10
    Core Delaware Acreage Overview PDC Acreage (upon closing) 93% NM TX Average WI Western Central Central Loving Midland 100% Basin Platform Basin Delaware Basin Approximate Operated Position 710 Currently…
  11. October 2016 Company Update – PDC Energy, Inc. – slide 11
    Core Delaware Highly Productive Acreage PDC Acreage Acquired Well (upon closing) 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…
  12. October 2016 Company Update – 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. October 2016 Company Update – 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. October 2016 Company Update – PDC Energy, Inc. – slide 14
    Core Delaware Operations Summary Current Summary 7,000 Boe/d net production 23 horizontal wells online WESTERN 7 vertical wells online Five salt water disposal wells Producing CENTRAL EASTERN First rig started in September Hz…
  15. October 2016 Company Update – 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. October 2016 Company Update – PDC Energy, Inc. – slide 16
    CURRENT ASSET OVERVIEW 18
  17. October 2016 Company Update – PDC Energy, Inc. – slide 17
    Core Wattenberg Asset Summary Wattenberg 2P Inventory(1) 96,000 Inner Middle Net Acres Outer 100% 2016e TIL Breakdown SRLs Acreage HBP MRLs 128/140 XRLs Spuds TILs 2,150 2P Hz Locations (4,700 avg. lateral…
  18. October 2016 Company Update – PDC Energy, Inc. – slide 18
    Core Wattenberg Completed Strategic Acreage Trade Trade with Noble Energy Closed September 28, 2016 Middle Core net acreage increased to 70,300 from 60,000 Adds incremental value through increased working interests, improved…
  19. October 2016 Company Update – PDC Energy, Inc. – slide 19
    Core Wattenberg Recent Completion Tests 2016 Analyst Day Type Curves; Acreage Map Post Noble Trade Closing LDS Project OUTER CORE 10 well pad 20-well per section equivalent MRL Design TIL: 2Q16 15 - 55% increase in proppant…
  20. October 2016 Company Update – 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. October 2016 Company Update – 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. October 2016 Company Update – 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. October 2016 Company Update – 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. October 2016 Company Update – PDC Energy, Inc. – slide 24
    APPENDIX 26
  25. October 2016 Company Update – 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. October 2016 Company Update – 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. October 2016 Company Update – 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. October 2016 Company Update – 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. October 2016 Company Update – 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. October 2016 Company Update – 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. October 2016 Company Update – PDC Energy, Inc. – slide 31
    Pro Forma 3-Year Outlook Organic Base Case Range Pro Forma Acquisition Range Production (MMBOE) 100 55 3-Year CAGR Stand Alone 20% 45 Pro Forma 31% Est. Combined 2018 Daily Production (Mboe/d) 35 40% 25 Est. Pro…
  32. October 2016 Company Update – PDC Energy, Inc. – slide 32
    Strategic Acreage Trade Pro Forma Estimates Trade with Noble Energy Closed September 28, 2016 OUTER OUTER CORE CORE MIDDLE MIDDLE CORE CORE INNER INNER CORE CORE Pre-Trade Post-Trade 2H16 Rig Count 4 Rig Count 3 Middle…
  33. October 2016 Company Update – 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. October 2016 Company Update – 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. October 2016 Company Update – 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. October 2016 Company Update – 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. October 2016 Company Update – 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. October 2016 Company Update – 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. October 2016 Company Update – 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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