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Jefferies Energy Conference – Rice Energy

Rice Energy · Nov 29, 2016 · 44 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. Jefferies Energy Conference – Rice Energy – slide 1
    Jefferies Energy Conference November 29, 2016
  2. Jefferies Energy Conference – Rice Energy – slide 2
    Rice Energy Strategy Allocate 100% of Capital to Core Assets with Attractive Returns Maintain a Strong Balance Sheet Protect Returns and Balance Sheet through FT Portfolio and Systematic Hedging Strategically Position Midstream…
  3. Jefferies Energy Conference – Rice Energy – slide 3
    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…
  4. Jefferies Energy Conference – Rice Energy – slide 4
    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)…
  5. Jefferies Energy Conference – Rice Energy – slide 5
    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…
  6. Jefferies Energy Conference – Rice Energy – slide 6
    Concentrated Core Upstream Assets Premier E&P Company in the Lowest Cost Gas Shale Plays 100% of assets located in the cores of the Marcellus and Utica Valuable production base of 747 MMcfe/d (1.2B PD + Hedge PV10)(1) 110% single well…
  7. Jefferies Energy Conference – Rice Energy – slide 7
    Best-In-Class Production Per Well Our industry-leading well results are evident in 1-3 year cumulative production per well. 100% of our expected future Appalachian activity is focused within our concentrated, core acreage position in the…
  8. Jefferies Energy Conference – Rice Energy – slide 8
    Strategic Midstream Assets RICE MIDSTREAM HOLDINGS RICE MIDSTREAM PARTNERS (RMH) (RMP) OH PA 148,000 dedicated acres in the core 201,000 acres dedicated in core of WV of dry gas Utica dry gas Marcellus(1) WEST VIRGINIA Washington…
  9. Jefferies Energy Conference – Rice Energy – slide 9
    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…
  10. Jefferies Energy Conference – 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. Jefferies Energy Conference – Rice Energy – slide 11
    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%…
  12. Jefferies Energy Conference – Rice Energy – slide 12
    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…
  13. Jefferies Energy Conference – Rice Energy – slide 13
    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…
  14. Jefferies Energy Conference – Rice Energy – slide 14
    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…
  15. Jefferies Energy Conference – Rice Energy – slide 15
    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…
  16. Jefferies Energy Conference – Rice Energy – slide 16
    Right-Sized Firm Transport Portfolio Growing Exposure to an Improving Local Basis Market Right-Sized: FT covers 70% of 2016 takeaway volumes. FT coverage decreases to 40% in 2020. Right Exposure: 30% of 2016 gas exposed to local…
  17. Jefferies Energy Conference – Rice Energy – slide 17
    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…
  18. Jefferies Energy Conference – Rice Energy – slide 18
    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…
  19. Jefferies Energy Conference – Rice Energy – slide 19
    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…
  20. Jefferies Energy Conference – Rice Energy – slide 20
    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…
  21. Jefferies Energy Conference – Rice Energy – slide 21
    Why Invest in Rice 100% of Leasehold in Core of Marcellus and Utica Differentiated Technical Approach Has Led to Industry Leading Well Results Create Significant Midstream Value through RICE and 3rd Party Core Dedications Firm…
  22. Jefferies Energy Conference – Rice Energy – slide 22
    Appendix 22 www.riceenergy.com
  23. Jefferies Energy Conference – Rice Energy – slide 23
    RICE and RMP Organizational Structure 1B Borrowing Base EIG Managed Funds 100% Series A Common Equity 100% Series B Preferred Equity DE (375MM invested) Rice Midstream 300MM Credit Facility + 8.25% common Holdings LLC 100MM…
  24. Jefferies Energy Conference – Rice Energy – slide 24
    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…
  25. Jefferies Energy Conference – Rice Energy – slide 25
    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…
  26. Jefferies Energy Conference – Rice Energy – slide 26
    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)…
  27. Jefferies Energy Conference – Rice Energy – slide 27
    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…
  28. Jefferies Energy Conference – Rice Energy – slide 28
    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…
  29. Jefferies Energy Conference – Rice Energy – slide 29
    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,…
  30. Jefferies Energy Conference – Rice Energy – slide 30
    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…
  31. Jefferies Energy Conference – Rice Energy – slide 31
    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…
  32. Jefferies Energy Conference – Rice Energy – slide 32
    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…
  33. Jefferies Energy Conference – Rice Energy – slide 33
    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…
  34. Jefferies Energy Conference – Rice Energy – slide 34
    Diverse Market Exposure FT portfolio includes 1.2 MMDth/d (1.1 Bcf/d) of firm capacity to premium North American markets(1) CANADA (MDTH/D) Canadian 2016 2017 2018 Markets 25 42 125 Appalachian Markets MIDWEST (MDTH/D) NORTHEAST…
  35. Jefferies Energy Conference – Rice Energy – slide 35
    Marcellus and Utica Single Well Type Curves MARCELLUS SINGLE WELL TYPE CURVE Restricted Rate Marcellus 12.0 EUR (Bcf / 1,000') 2.16 10.0 Lateral Length 7,000 EUR (Bcf) 15.1 8.0 Interwell Spacing (ft) 750 MMcf/d Choke (MMcf/d…
  36. Jefferies Energy Conference – Rice Energy – slide 36
    Economics PV10 & IRRS (1) ECONOMIC ASSUMPTIONS Economics Adjusted for Gathering Ownership at 3.50 HHUB Marcellus Utica Dry Utica Wet and 27/bbl NGLs Type Well Assumptions 90% 16.0 Spacing 750 1,000 1,000 Lateral Length 7,000 9,000…
  37. Jefferies Energy Conference – Rice Energy – slide 37
    RMP: High Growth MLP in Prolific Appalachian Basin COMPANY OVERVIEW Top-tier gathering, compression PA PA OH OH and water services assets in WV WV Washington Appalachian core Washington WEST VIRGINIA WEST VIRGINIA 100% of cash…
  38. Jefferies Energy Conference – Rice Energy – slide 38
    Integrated Water Services Business WATER SERVICES OVERVIEW WATER SERVICES AGREEMENTS OVERVIEW Delivery systems provide fresh water to support Marcellus and Assumptions Pennsylvania Ohio Utica completion operations Fresh Water Usage…
  39. Jefferies Energy Conference – Rice Energy – slide 39
    Attractive Drop Down Potential Ohio Utica LARGE SCALE GATHERING SYSTEMS TO SUPPORT UTICA DEVELOPMENT PA OH 148,000 dedicated core gross acres in Belmont and Monroe Belmont 75% 3rd party acreage dedications WV Attractive drop down…
  40. Jefferies Energy Conference – Rice Energy – slide 40
    Midstream System Statistics Pennsylvania Ohio RMP Gathering and Compression Statistics Gathering and Compression Statistics Assets Design Gathering Capacity (MMDth/d) 4.0 Design Gathering Capacity (MMDth/d) 2.0 YE15 YE16 YE15 YE16…
  41. Jefferies Energy Conference – Rice Energy – slide 41
    Significant Unrealized Midstream Value Embedded Within RICE Track record of crystallizing midstream value Significant value creation on the horizon MM RMH Current and Future Value ( in millions) 2016E 2018E 3,000 Growth in value…
  42. Jefferies Energy Conference – Rice Energy – slide 42
    Non-GAAP Financial Measures Adjusted EBITDAX and Further Adjusted EBITDAX Adjusted EBITDAX and Further Adjusted EBITDAX are supplemental non-GAAP financial measures that are used by management and external users of RICEs consolidated…
  43. Jefferies Energy Conference – Rice Energy – slide 43
    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…
  44. Jefferies Energy Conference – Rice Energy – slide 44
    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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