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A&D Market Update Presentation – RBC Capital Markets

RBC Capital Markets · Jun 28, 2016 · 21 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. A&D Market Update Presentation – RBC Capital Markets – slide 1
    IPAA A&D Market Update June 28, 2016 STRICTLY PRIVATE AND CONFIDENTIAL Craig Lande Craig.Landerbccm.com 713-585-3335 www.rbcrichardsonbarr.com
  2. A&D Market Update Presentation – RBC Capital Markets – slide 2
    How Did We Get Here WTI Oil Price 2000 to Present 175 Aug 2008 May 2016 10.0 Sep 2001 Global financial crisis 3 Mar 2012 U.S. Production 150 9/11 terrorist Economic Starts to Roll 9.0 attacks Slowdown Aug 2006 4 5 U.S.…
  3. A&D Market Update Presentation – RBC Capital Markets – slide 3
    Where Are We Headed Annual U.S. E&P Onshore A&D Activity (B) (1) Oil Resource Play Gas Resource Play Conventional Oil Conventional Gas 62 60 56 56 8 17 18 5 19 43 4 7 9 Failed Deals 5 13 20 7 30 8 23 RBC Est. 8…
  4. A&D Market Update Presentation – RBC Capital Markets – slide 4
    Public Company Value Destruction (Q3 2014 Q4 2015) 19% 30% Q3 2014 Q4 2014 Q3 2015 Q4 2015 20% 4% 3% 10% 0% (2%) (10%) (3%) (4%) (5%) (6%) (6%) (6%) (7%) (8%) (10%) (10%) (11%) (11%)…
  5. A&D Market Update Presentation – RBC Capital Markets – slide 5
    Publics Have Issued Equity, Sold Assets And Cut Dividends Tools enlisted to protect and/or enhance capital structure expected to remain prevalent during 2H 2016 Equity Offerings Asset Sales Dividend Cuts Key Points Key Points…
  6. A&D Market Update Presentation – RBC Capital Markets – slide 6
    But For Many E&Ps, It Was Not Enough To Avoid Bankruptcy WTI Crude Oil 2015 2016 Performance vs Reported Bankruptcies / Bbl 70 Debt: 194mm Bakken Debt: 402mm California AIX Debt: 35mm Debt: 2,045mm Louisiana Oklahoma WBH Energy…
  7. A&D Market Update Presentation – RBC Capital Markets – slide 7
    Private Equity Filling The Void Left By Ailing Publics Annual U.S. E&P Onshore A&D Demand RBC Commentary Private Equity becoming increasingly acquisitive Private Equity / Private Publics during the present downturn Prior to 2015,…
  8. A&D Market Update Presentation – RBC Capital Markets – slide 8
    Publics Now On The Way Back Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 40% 50% 30% 19% 18% 10% 10% 25% 6% 6% 4% 4% 0% (2%) (4%) (4%) (4%) (5%) (5%) (6%) (6%) (7%)…
  9. A&D Market Update Presentation – RBC Capital Markets – slide 9
    Equity Markets Continue To Be Open For E&Ps... shown as billions Acquisitions 32 offerings 15.5 billion CapEx Repay Debt 5.4 4.9 4.3 4.0 0.8 0.8 Petroleum Corporation 0.2 Permian Diversified Appalachia Mid-Continent…
  10. A&D Market Update Presentation – RBC Capital Markets – slide 10
    As A Result, Publics Focused on Strategic Core Acquisitions Overview of Public Acquisitions YTD ( MM) (1) Recent improvement in equity Acquisition 1 1,000 performance allowing healthy publics to make sizeable resource play…
  11. A&D Market Update Presentation – RBC Capital Markets – slide 11
    Service Costs Have Decreased Dramatically Service Costs Have Come Down OFS Global Margins (%) 25% 20% 15% 10% 5% RBC estimates 70% of current D&C cost savings are cyclical 0% 2008 2009 2010 2011 2012 2013 2014…
  12. A&D Market Update Presentation – RBC Capital Markets – slide 12
    And Companies Have Become More Efficient Production Rates Increasing Over Time EURs Increasing Over Time 2,100 1,500 1,900 1,300 1,700 1,500 1,100 IP30 (Boepd) EUR (MBoe) 1,300 900 1,100 700 900 700 500 Type Curve 1…
  13. A&D Market Update Presentation – RBC Capital Markets – slide 13
    Conventional Valuations Supported By Private Equity Demand Conventional Gas Metrics Conventional Oil Metrics 40,000 60,000 6% 8% / Boepd 8.0x 10.0x 3,000 5,000 8% 10% 6.0x 8.0x / Mcfepd PDP Discount Rate Production Multiple…
  14. A&D Market Update Presentation – RBC Capital Markets – slide 14
    Its All About The Benches Midland Basin Delaware Basin SCOOP / STACK Eagle Ford DJ Basin Bakken Formation Formation Formation Formation Formation Formation Yates Rustler Osw ego Escondido Pierre Kibbey Seven Rivers Salado Atoka…
  15. A&D Market Update Presentation – RBC Capital Markets – slide 15
    How Does That Translate Into Core Acreage Values 58,500 / Acre Midland Basin 25,000 35,000+ / Acre Delaware Basin 20,000 25,000+ / Acre SCOOP / STACK 15,000 20,000+ / Acre DJ Basin 10,000 15,000+ / Acre SW PA Marcellus…
  16. A&D Market Update Presentation – RBC Capital Markets – slide 16
    Net Asset Value Is The Driver Northern Midland Basin Example NAV 2016 NAV Summary Locations Implied Valuation at Various Discount Rates Category per DSU PV8 PV10 PV12 PV15 PV20 PV25 PV30 PV35 PDP - PDNP - Wolfcamp B Locations 8…
  17. A&D Market Update Presentation – RBC Capital Markets – slide 17
    How Are Oil Prices Affecting Deal Making WTI Oil Price 120 Buyers underwriting using Consensus price decks strip, run upside versus the strip have sensitivities with long-term allowed publics to still bid 100 price uplift to…
  18. A&D Market Update Presentation – RBC Capital Markets – slide 18
    Attractive Arbitrage In IPO Market vs A&D In Midland Basin Comparable A&D Deals 46,000 IPO 41,000 Core Acreage Metric ( / Acre) 33,000 25,000 - 25,000 - 30,000 30,000+ 20,000 - 25,000 22,000 10,000 - 15,000 Oct-12…
  19. A&D Market Update Presentation – RBC Capital Markets – slide 19
    Numerous IPO Candidates Over Next 12 Months Appalachia PE Team 1 DJ Basin SCOOP/ STACK PE Team 1 PE Team 2 PE Team 1 Ark-La-Tex PE Team 1 Delaware Basin PE Team 2 PE Team 3 Minerals / Royalties PE Team 4 PE Team 5…
  20. A&D Market Update Presentation – RBC Capital Markets – slide 20
    What To Expect During 2H 2016 1 Activity to accelerate Public conventional & opportunistic PE selling 2 Publics coming off sidelines and aggressively pursuing core-of-core 3 Compelling valuations for high-quality assets in…
  21. A&D Market Update Presentation – RBC Capital Markets – slide 21
    Select RBC Richardson Barr Transactions 500+ Million 100 500 Million Private Seller has divested multiple oil and gas has divested certain oil and gas has divested certain oil and gas has acquired certain oil and gas have divested…

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