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Q3 2016 Results – Rice Energy

Rice Energy · Nov 2, 2016 · 30 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. Q3 2016 Results – Rice Energy – slide 1
    Third Quarter 2016 Supplemental Presentation November 2, 2016
  2. Q3 2016 Results – Rice Energy – slide 2
    Company Overview: The Premier Appalachian Company NYSE: RICE NYSE: RMP Upstream Rice Midstream Holdings GP Holdings Rice Midstream Partners Marcellus + Utica Shale Development Ohio Gathering System RMP Units + IDRs Pennsylvania…
  3. Q3 2016 Results – Rice Energy – slide 3
    Vantage Energy Acquisition Consistent with RICEs Strategy Signed September 26, 2016 and closed October 19, 2016 Vantage Energy Inc. 174,000 effective net acres Core acquisition with organic upside potential 85,000 PA Marcellus(4)…
  4. Q3 2016 Results – Rice Energy – slide 4
    Rice Energy Unique Combination of Size, Growth and Returns Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 7B+ 2017E Enterprise Value 50% 2017E Growth 225,000 Core Dry Acres 1,000 Core Dry…
  5. Q3 2016 Results – Rice Energy – slide 5
    Best-In-Class Production Per Well Differentiation of RICE wells is evident in 1-3 year cumulative production per well. 100% of expected RICE future Appalachia activity is focused within our proven concentrated acreage positions in the…
  6. Q3 2016 Results – Rice Energy – slide 6
    30% of Appalachia Rigs Now Feeding Rice Midstream Systems RICE has positioned itself as the premier core dry gas midstream player in Appalachia Total Appalachia Rigs: 47 Core Rigs Feeding Rice Midstream Systems Non Core Rigs…
  7. Q3 2016 Results – Rice Energy – slide 7
    Third Quarter 2016 RICE Highlights Solid Third Quarter Results Net production of 747 MMcfe/d, a 23% increase over 3Q15 and 3Q16 exit rate of 800 MMcfe/d Net income of 91 million for the third quarter, a 40% increase over 3Q15 Adjusted…
  8. Q3 2016 Results – Rice Energy – slide 8
    Third Quarter 2016 Operational Highlights MARCELLUS OPERATIONAL HIGHLIGHTS UTICA OPERATIONAL HIGHLIGHTS 3Q16 Marcellus development costs averaged 720 per Turned to sales 11 gross (7 net) Utica wells in 3Q16 lateral ft. Avg. lateral…
  9. Q3 2016 Results – Rice Energy – slide 9
    RICE Third Quarter 2016 Consolidated Financial Summary Solid third quarter results supported by well-capitalized balance sheet and ample liquidity QUARTERLY HIGHLIGHTS CAPITALIZATION 79% of 3Q16 production sold to premium,…
  10. Q3 2016 Results – Rice Energy – slide 10
    Track Record of Low-Cost Growth MARCELLUS D&C COSTS (/FT.) UTICA D&C COSTS (/FT.) E&P PER UNIT CASH COSTS (/MCFE)(1) 1.80 1,507 2,588 0.44 1.50 1,269 1,218 1.34 1.28 1.23 0.43 1.13 1,715 0.38 0.34 0.23 0.23 800 0.22 1,250 0.38…
  11. Q3 2016 Results – Rice Energy – slide 11
    Healthy Balance Sheet Protected by Strong Hedge Book SUMMARY HEDGE SUMMARY Ample Liquidity: 1.6B of total liquidity(1)(2) consisting of 1.3B of E&P Hedged Volume NYMEX Avg. Wtd. Floor Price Total Avg. Wtd. Floor Price BBtu/d /MMBtu…
  12. Q3 2016 Results – Rice Energy – slide 12
    Updated E&P and Midstream Guidance E&P E&P Capital Expenditures Net Wells Turned to Sales(1) Average Net Production MM Wells 61 MMcfe/d 1,210 1,200 60 1,400 1,318 175 51 50 1,200 1,000 44 27 830 12 1,000 800 740 735 40 7 790…
  13. Q3 2016 Results – Rice Energy – slide 13
    2017 D&C Budget Maintains Strong Balance Sheet while Investing in 2018 Preliminary 2017 outlook: 950-1,125MM 2017 Budget Capex: 950 1,125MM Build pads, and drill and complete wells to be turned to sales in Production: 1.28 1.36…
  14. Q3 2016 Results – Rice Energy – slide 14
    Meaningful Takeaway Capacity Expected to Outpace Supply Growth Appalachian Basin currently running 47 rigs which is roughly the maintenance level to keep current production flat at 22 Bcf/d 125 rigs needed through 2019 to fill…
  15. Q3 2016 Results – Rice Energy – slide 15
    Firm Transportation and Basis Exposure Cost of firm transportation must be factored into realized pricing comparisons across Appalachian peers RICEs balanced FT portfolio + hedging strategy protects short-term basis weakness. 15% of…
  16. Q3 2016 Results – Rice Energy – slide 16
    Basis Exposure & Realized Pricing PRICING COMMENTARY BASIS EXPOSURE Right-sized FT portfolio covers 100% 0.00 90% 17% 18% 21% 60% of 2017 takeaway volumes 29% (0.10) Basis Differential (/MMBtu) 80% 37% decreasing to 40% in 2020…
  17. Q3 2016 Results – Rice Energy – slide 17
    Well Positioned for Strong Continued Growth Financial Strength Healthy balance sheet, ample liquidity and robust hedges Budget focused on balance sheet and E&P returns while creating significant future midstream value Healthy Balance…
  18. Q3 2016 Results – Rice Energy – slide 18
    RICE and RMP Market Snapshot Rice Energy Inc. Rice Midstream Partners LP (NYSE: RICE) (NYSE: RMP) millions, except per share data millions, except per unit data Management Ownership (1) 14% Common Units 73 Subordinated Units 29…
  19. Q3 2016 Results – Rice Energy – slide 19
    Appendix 19 www.riceenergy.com
  20. Q3 2016 Results – Rice Energy – slide 20
    2016 Updated RICE Guidance Updating 2016 guidance to reflect acquisition of Vantage Energy RICE 2016 E&P GUIDANCE Denotes Guidance Updates Prior Updated Prior Updated Net Wells Spud Online Spud Online Total Net Production (MMcfe/d)…
  21. Q3 2016 Results – Rice Energy – slide 21
    2016 Updated Midstream Guidance RMH 2016 GUIDANCE We are unable to provide a projection of full-year 2016 Denotes Guidance Updates RMH net income, the most comparable financial measures to RMH Adjusted EBITDA, calculated in accordance…
  22. Q3 2016 Results – Rice Energy – slide 22
    Compelling Pro Forma Company Profile 2016E Production 720-740 MMcfe/d 60 MMcfe/d(1) 780-800 MMcfe/d 2017E Production 900-955 MMcfe/d 380-400 MMcfe/d 1,280-1,355 MMcfe/d 70%YoY Growth 560MM D&C 40MM D&C(1) 600MM D&C 2016E Upstream…
  23. Q3 2016 Results – Rice Energy – slide 23
    Vantage Energy Acquisition Deal Summary KEY TRANSACTION DETAILS PRO FORMA CAPITALIZATION(2) (MM) 9/30/16 Adjusted PF 9/30/16 2.7B consideration privately negotiated with Vantage Cash Ascribed 2.1B upstream and 600MM midstream…
  24. Q3 2016 Results – Rice Energy – slide 24
    Attractive Single Well Economics RICE continues to drive down D&C and operating costs to maximize returns Inventory currently generates 110% returns at strip; HHUB PV10 breakevens of 1.90 HHUB(1) DRY GAS SINGLE WELL ECONOMICS 150%…
  25. Q3 2016 Results – Rice Energy – slide 25
    Hedging Summary HEDGE SUMMARY 4Q16 2017 2018 2019 2020 RICEs gas will be marketed into 4 areas Hedged M2 / Dominion Volumes (BBtu/d) 362 393 432 357 297 (1) Gulf Coast (ELA, M1) Wtd Avg Floor Price (/MMBtu) 2.21 2.18 2.28 2.36 2.41…
  26. Q3 2016 Results – Rice Energy – slide 26
    Hedging Detail FIXED PRICE HEDGES BASIS HEDGES All-In Fixed Price Derivatives 4Q16 2017 2018 2019 2020 Basis Contract Derivatives 4Q16 2017 2018 2019 2020 Appalachian Basis Swaps NYMEX Natural Gas Swaps Volume Hedged (BBtu/d) 165 173…
  27. Q3 2016 Results – Rice Energy – slide 27
    Significant Unrealized Midstream Value Embedded Within RICE Track record of crystallizing midstream value Significant value creation on the horizon RMH Current and Future Value ( in millions) 2016E 2018E MM 3,000 Growth in value…
  28. Q3 2016 Results – Rice Energy – slide 28
    GP Holdings Value Driven through the Drill Bit RICEs best-in-class E&P development plus a growing 3rd party midstream business positions RMP for top-tier distribution growth RMPs low-risk growth has begun to generate IDR cash flows to…
  29. Q3 2016 Results – Rice Energy – slide 29
    RICE 3Q 2016 Adjusted EBITDAX Reconciliation Three Months Ended Twelve Months Ended ( in thousands) September 30, 2016 September 30, 2016 Adjusted EBITDAX reconciliation to net income (loss): Net income 91,078 (318,579) Interest…
  30. Q3 2016 Results – Rice Energy – slide 30
    RMP 3Q 2016 Adjusted EBITDA and DCF Reconciliation Three Months Ended Twelve Months Ended ( in thousands) September 30, 2016 September 30, 2016 Reconciliation of Net Income to Adjusted EBITDA and DCF: Net income 24,989 106,176…

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