Core Oil Southern Delaware Basin Investor Presentation September 2016
Presenters Mark Papa Chief Executive Officer George Glyphis Chief Financial Officer 3
Proven Senior Leadership and Sponsor Mr. Papa brings 45 years of operating experience, most recently Riverstone is the largest private equity firm dedicated solely to as Chairman, Director and CEO of EOG Resources (1) the energy…
Transaction Summary Mark Papa and Riverstone raised 500 million in the form of a Special Purpose Acquisition Company (SPAC) in February 2016, called Silver Run Acquisition Corporation (Silver Run) Silver Run was established to take…
Agenda Delivering on Investment Criteria Delivering on Investor Returns Centennial Highlights Path to Value Creation Centennial Overview Financial Overview Transaction Overview Appendix 6
Delivering on Investment Criteria Centennial Meets the Criteria Discussed in February 2016 Oil-weighted assets vs. gas Located in 1 of 5 target North American oil shale plays Capital injection will deliver production growth with low…
Delivering on Investor Returns Macro Forecast: Improved crude oil supply-demand fundamentals Objective: Best equity performance of any U.S. Small Cap E&P thru 2020 10-Step Game Plan: 2016 Maintain conservative balance sheet 2016…
Centennial Highlights Unique Delaware Pure-Play Opportunity 3,000 ft oil column in the deep, high pressured oily core of the Southern Delaware Basin Oil-Rich Delaware Core 42,500 net acres 32.5 MMBoe 1P reserves (1) Producing…
Path to Value Creation Seek to Replicate EOG Operating and Execution Excellence and Expand Position Begin Manufacturing Mode Deliver Operational Efficiencies Aggressively deploy drilling rigs to bring future value Improve footage…
Centennial Overview 11
Core Delaware Basin Pure-Play Large, contiguous core position in Southern Delaware Basin Acreage in the Oily Southern Delaware Core 42,500 net acres; 80% operated 84% WI in operated acreage Net Acres by County: 6/30/16 Reeves 35,800…
Permian Basin Only Growing Oil Shale Play Since 2015 30% 25% Permian Basin Percent Change in Daily Production Since 2015 20% 15% 10% 5% (5%) Bakken Shale (10%) (15%) (20%) (25%) Eagle Ford Shale (30%)…
Activity Ramping Up in Delaware Basin US Total Hz Rig Count Top 5 Oil Basins 85 83 35 32 27 Midland Delaware Eagle Ford Cana Woodford Williston US Total Hz Rig Count Top 15 Oil Counties 32 24 19 14 13 12 11 10…
Centennial Acreage in Geological Sweetspot Optimum Conditions for Strong and Repeatable Results Basin Bottom Location with Simple Structure Thickest Part of Wolfcamp Depth to Wolfcamp 10,500 ft on average Deposition in deep and distal…
Delaware Oil Productivity and GOR Convergence of High Productivity and High Oil Content Oil Productivity: 3 Mo Avg. Daily Oil per 1,000 ft (1) Reservoir Fluid Trend: Gas-Oil Ratio (2) Condensate-Rich Trend Gas-Rich…
Stacked Pay Provides Extensive Resource Potential Centennial Producing from Five Unique Zones with Upside for Seven More World-class petroleum system in the Avalon, Bone Multiple Stacked Pay Zones Spring and Wolfcamp GR RES POR KER Sw…
Stratigraphic Cross Section Consistent and Delineated Across Acreage Position Arroyo Toyah Big Chief and Kimsey N S 3rd BS Shale 3rd BS Sand WC A Centennial PDP Operated Hz Non-Op Hz 1,100 ft Locator Map WC B…
Undeveloped Location Inventory 12 Years of Operated Inventory with 5 rigs Current Inventory Summary (6/30/16) Inventory Locator Map Lateral Length (ft) 4,500 7,500 9,500 Total Operated Inventory 5 Zones No Current Upper Wolfcamp A 106…
Large Resource Base Large Resource Potential with Future Potential Upside from Additional Zones (1) (2) (3) Net Resources (MBoe) PV-10 (M) (2) PD / PDNP PUD Unproven Total NYMEX 65/Bbl 75/Bbl Horizontal Target Zones Upper…
Net Operated Production Maintained Flat Production for 20+ Months Spending Effectively Within Cash Flow 100,000 12 Centennial Assumes Operations Two Section Lateral Upper & Lower WC A (9,400ft) Net Daily Operated 3 Stream…
Proven Track Record of Performance Operational Improvements Driving Well Performance IP30 Boe/d/1,000 Lateral (3-Stream) Delivering best-in-class performance 400 4,500ft Wolfcamp A Wells (Kimsey Wells Excluded) 350 30-Day…
Recent Well Results Extend Core Southward Well Performance Continues to Improve Oil Production Centennial Wells Since 2015 (1) (2) Locator Map Centennial Wells Since 2015 (1) Arroyo Wells Centennial Acreage 150 Arroyo Wells…
Driving Operational Improvements Efficiency Gains Driving Costs Lower Spud-to-Rig Release per 4,500 ft Lateral (Days) CAPEX per 4,500 ft Lateral (MM) 60 12.0 11.7 55 Facilities & Artificial Lift Avg Lateral Length (ft) 11.0 4,800…
Advantaged Midstream Infrastructure Oil, Gas and Water Piped Efficient Access to Market Oil Oryx Midstream Services Gas EagleClaw Water Centennial Wellhead to Midland system being constructed and operated Gas Infrastructure by Oryx;…
Single Well Returns Lower D&C Costs and Extended Laterals Drive Superior Economics Single Well Statistics IRR Sensitivities SEC Assumptions (1) Current Assumptions (1) NSAI Avg Gibson L NSAI Avg Gibson L NSAI Avg PUD (4,500 ft): EUR…
Centennial Horizontal Development Plan Shifting to Extended Laterals and Pad Development Prospect Areas Near-term development planned across three project areas 40/60 split between 4,500-ft and extended laterals Wolfcamp A is primary…
Financial Overview 28
Disciplined Financial Management Strong Liquidity and Modest Financial Leverage Judicious Capital Allocation Flexibility through the cycle IRR-driven investment decisions No debt and 100 million of cash at close Adjust capital plan to…
Sources & Uses and Pro Forma Capitalization Capitalization as of 6/30/16 Acquisition entirely funded with equity Actual Transaction Pro forma results in debt free balance sheet and ( in millions, unless specified) 6/30/16 Adjustments…
Capital Budget Overview 2015 and 2016 planning focused on capital preservation & discipline, maintaining liquidity, retaining acreage and acquisitions Maintained flat production with a one rig program over the past 20 months…
Transaction Overview On July 6th, certain funds controlled by Riverstone entered into an agreement to acquire an approximate 89% controlling interest in Centennial(1) Riverstone and certain affiliates(2) will contribute approximately…
Valuation Benchmarking (Production) Superior Production Growth EV / 2017E Production (1) EV / 2018E Production (1) 141,052 135,534 130,737 128,393 121,495 119,565 110,724 110,553 110,110 104,758 93,070 71,880 PE RSPP…
Centennial Well Performance vs Peers Best-in-Class Results Comparable to Top Midland Basin Operators 250 * Normalized Lateral Length: 7,500 ft 250 * Normalized Lateral Length: 7,500 ft Cumulative Production (MBoe) Cumulative…
Delaware Basin Activity by Zone and Area Numerous Zones Delineated by Multiple Operators Pecos County Reeves County Ward County Northern Delaware (1) Avalon Shale 1st Bone Spring 2nd Bone Spring 3rd Bone Spring Upper…
Production Expenses & Leverage Benchmarking Competitive Cost Structure Despite Smallest Production Base 1H 2016 Production Expenses (/Boe) Centennial vs Public Permian Pure Play Companies (1) (2) 15 200 14 13.08 12.90 Production…
Wolfcamp A Activity Normalized 4,500 ft Hundreds of Hz Producers in Southern Reeves; Centennial Results Best-In-Class Recent Well Results (3-Stream) Centennial Normalized Daily Oil Production (1) (2) Stingray Upper WC A OXY Peck…
Active Development Across Multiple Zones WC B&C and 3rd BS Sand Development Activity to Increase Over Time Wolfcamp B Wolfcamp C 3rd BS Sand 20% of operated undeveloped locations 18% of operated undeveloped locations 6% of operated…
WC B&C and 3rd BS Sand vs Avg NSAI PUD Future Development Expected to Meet or Exceed Avg NSAI PUD Type Curve Normalized Wolfcamp B Results (1) (2) WC B is the most extensively developed secondary 1,200 zone with results meeting the…
Confirmation of Wolfcamp A Spacing Model Stacked-and-Staggered Geometry CH Knight 2H and 3H Flowback CH Knight 2H and 3H sequenced drilling and 1,400 Daily Oil Production (Bo/d) CH Knight 2H Oil completion 1,200 CH Knight 3H Oil…
Gibson-Faudree DSU 9,500 ft vs 4,500 ft Long Lateral Performing up to Expectations Equivalent completions for all three wells in 1,280 acre DSU Gibson-Faudree DSU First 120 Day Oil Production (1) Gibson L 3RH Upper WC A Lateral:…
Delaware to Midland Stratigraphic Correlation Third Bone Spring Shale Stratigraphically Equivalent to Lower Spraberry Shale W Delaware Basin Midland Basin E Avalon First Bone Spring Leonard Shale Second Bone Spring Upper…
Production Expenses Consistent Improvement Despite Small Production Base Historical Production Expenses (1) (/Boe) 26 Lease Operating Expenses Transportation, Gathering and Processing Production Taxes G&A Expense 24 22 21.20 20…
EBITDAX Reconciliation Six months ended June 30, Years ended December 31, ( in thousands) 2016 2015 2015 2014 Net (loss) income (30,594) (28,608) (38,325) 17,790 Interest expense 3,439 3,274 6,266 2,475 Income tax (benefit)…
NSAI Year End 2015 Proved Reserves (1) Net Proved Reserves Oil Gas NGL Total PV-10 (MBbls) (MMcf) (MBbls) (MBoe) (MM) Reserve Category Proved Developed Producing (PDP) 9,347 12,711 1,603 13,069 141,416 Proved Undeveloped (PUD)…
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