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Capital One Securities 11th Annual Energy Conference – PDC Energy, Inc.

PDC Energy, Inc. · Dec 7, 2016 · 38 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. Capital One Securities 11th Annual Energy Conference – PDC Energy, Inc. – slide 1
    CAPITAL ONE SECURITIES ENERGY CONFERENCE December 7, 2016
  2. Capital One Securities 11th Annual Energy Conference – PDC Energy, Inc. – slide 2
    PDC Energy Pro Forma Company Overview Delaware Acquisition Expected to Close in December 2016 Pro Forma Acquisition Closing Core Wattenberg 96,000 net acres 5.5 Est. Enterprise Value (Billions) 2.2x YE16e…
  3. Capital One Securities 11th Annual Energy Conference – PDC Energy, Inc. – slide 3
    PDC Energy 2016 Results and Outlook Results Do Not Include Delaware Basin Acquisition Expected to Close in December 2016 3Q16 Results FullYear 2016 Highlights Production range of 21 22 MMBoe 65,263 Production (Boe/d) 40% increase…
  4. Capital One Securities 11th Annual Energy Conference – PDC Energy, Inc. – slide 4
    PDC Energy 2017e Production & Capital Guidance 2017e PRODUCTION GUIDANCE 2017e Commodity Mix 1.8x YE17e Debt to EBITDAX(1) 30.0 33.0 MMBoe 82,200 90,400 Boe/d (66% Liquids) 97,000 Boe/d Dec. 2017 exit rate NGL 40+% production…
  5. Capital One Securities 11th Annual Energy Conference – PDC Energy, Inc. – slide 5
    PDC Energy Debt and Liquidity Overview As of 9/30/16 Issued 9.1 million shares of equity for net 1,000 Debt Maturity Schedule proceeds of 560 million (millions) Debt Maturities Current Borrowing Base 750 700 million 700 million…
  6. Capital One Securities 11th Annual Energy Conference – PDC Energy, Inc. – slide 6
    PDC Energy Hedge Position Summary Hedges in place as of September 30, 2016 plus hedges entered prior to October 31, 2016 Oct Dec 1.4 MMBbls of crude oil volumes at weighted average floor price of 73.92/Bbl 2016 8.7 Bcf of natural gas…
  7. Capital One Securities 11th Annual Energy Conference – PDC Energy, Inc. – slide 7
    Transformative Core Delaware Basin Acquisition Expected to Close in December 2016 PDC Acreage Acquisition Attributes Largescale acquisition of operated core NEW MEXICO acreage in toptier Delaware basin Significant inventory of…
  8. Capital One Securities 11th Annual Energy Conference – PDC Energy, Inc. – slide 8
    Key Delaware Basin Acquisition Highlights Expected to Close in December 2016 PDC Acreage Deal Overview 1.5 billion purchase price privately negotiated with Kimmeridge Energy Management Company Culberson Loving 590 million…
  9. Capital One Securities 11th Annual Energy Conference – PDC Energy, Inc. – slide 9
    Premier Portfolio Scalability in Two Top-Tier Basins Pro Forma Core Wattenberg & Core Delaware Basins Portfolio (Upon Expected December 2016 Closing) Multiple years of highly economic drilling in Core Wattenberg and Core Delaware…
  10. Capital One Securities 11th Annual Energy Conference – PDC Energy, Inc. – slide 10
    Competitive Returns Provide Portfolio Optionality Pro Forma Acquisition Portfolio (Upon Expected December 2016 Closing) 2,860 highly economic identified locations(1) Competitive returns across portfolio provides optionality…
  11. Capital One Securities 11th Annual Energy Conference – PDC Energy, Inc. – slide 11
    Core Delaware Acreage Overview PDC Acreage (Upon Expected December 2016 Closing) 93% NM TX Average WI Western Central Central Basin Midland Loving Platform 100% Basin Delaware Basin Approximate Operated Position…
  12. Capital One Securities 11th Annual Energy Conference – PDC Energy, Inc. – slide 12
    Core Delaware Highly Productive Acreage PDC Acreage Acquired Well (Upon Expected December 2016 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…
  13. Capital One Securities 11th Annual Energy Conference – PDC Energy, Inc. – slide 13
    Eastern Acreage Block: 17,500 Net Acres PDC Acreage Existing Well Acquired Well (Upon Expected December 2016 Closing) Wolfcamp A Area Highlights Silverback Folk Rowling Cumulative BOE per 5,000 of Lateral 17,500 net acres Wolfcamp A…
  14. Capital One Securities 11th Annual Energy Conference – PDC Energy, Inc. – slide 14
    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% Commodity Mix…
  15. Capital One Securities 11th Annual Energy Conference – PDC Energy, Inc. – slide 15
    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…
  16. Capital One Securities 11th Annual Energy Conference – PDC Energy, Inc. – slide 16
    Delaware Basin Current Projects Rig Location Waiting-on-Completion PDC Acreage (Upon Expected December 2016 Closing) 2016 Initiatives Two rigs currently operated by seller One rig in both Eastern and Central acreage 7,500 Boe/d…
  17. Capital One Securities 11th Annual Energy Conference – PDC Energy, Inc. – slide 17
    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…
  18. Capital One Securities 11th Annual Energy Conference – PDC Energy, Inc. – slide 18
    CURRENT ASSET OVERVIEW 20
  19. Capital One Securities 11th Annual Energy Conference – PDC Energy, Inc. – slide 19
    Core Wattenberg Asset Summary PDC Acreage Wattenberg 2P Inventory(1) 96,000 Inner Middle Net Acres Outer 100% 2016e TIL Breakdown SRLs Acreage HBP MRLs XRLs 128/140 Spuds TILs 2,150 2P Hz Locations (4,700 avg.…
  20. Capital One Securities 11th Annual Energy Conference – PDC Energy, Inc. – slide 20
    Core Wattenberg Completed Strategic Acreage Trade Trade with Noble Energy Closed September 28, 2016 PDC Acreage Middle Core net acreage increased to 70,300 from 60,000 Adds incremental value through increased working interests,…
  21. Capital One Securities 11th Annual Energy Conference – PDC Energy, Inc. – slide 21
    Positive Results Near Recently Consolidated Acreage Strategic Acreage Trade Closed 9/28/16 PDC Acreage LDS Project OUTER CORE 10 well pad 20 wells/section MRL Design TIL: 2Q16 Tighter stage spacing MIDDLE CORE Choke mgmt. 15…
  22. Capital One Securities 11th Annual Energy Conference – PDC Energy, Inc. – slide 22
    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,…
  23. Capital One Securities 11th Annual Energy Conference – PDC Energy, Inc. – slide 23
    Utica Update PDC Acreage 65,000 net acres; 50% HBP 27MM capital plan in 2016 Neff well: May TIL o 10,000 lateral testing efficiency improvements o Best PDC Utica results per lateral foot todate Mason pad: June TIL o 6,000…
  24. Capital One Securities 11th Annual Energy Conference – PDC Energy, Inc. – slide 24
    PDC Energy Vision and Strategy Delivering Value Delivering Value Added Growth Corporate Development Longterm/Multiyear Focus Operational Execution Technical Initiatives Financial Discipline Balance Sheet Focus TopTier Assets…
  25. Capital One Securities 11th Annual Energy Conference – PDC Energy, Inc. – slide 25
    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,…
  26. Capital One Securities 11th Annual Energy Conference – PDC Energy, Inc. – slide 26
    APPENDIX 28
  27. Capital One Securities 11th Annual Energy Conference – PDC Energy, Inc. – slide 27
    Low Costs Continue to Drive Margins Source: Wells Fargo Securities, LLC 50% decrease in allin cash operating costs since 2014 (including interest expense) Substantial production increase drives reduced per Boe metrics Strong…
  28. Capital One Securities 11th Annual Energy Conference – PDC Energy, Inc. – slide 28
    Established Acquisition Strategy Originally Presented at April 2016 Analyst Day TopTier Expanded Portfolio Corporate Assets Inventory Optionality Accretion Must compete with Wattenberg Existing base production Provides new core…
  29. Capital One Securities 11th Annual Energy Conference – PDC Energy, Inc. – slide 29
    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 Ava State Oil: 30 50%…
  30. Capital One Securities 11th Annual Energy Conference – PDC Energy, Inc. – slide 30
    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…
  31. Capital One Securities 11th Annual Energy Conference – PDC Energy, Inc. – slide 31
    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…
  32. Capital One Securities 11th Annual Energy Conference – PDC Energy, Inc. – slide 32
    Pro Forma 3-Year Outlook Organic Base Case Range Pro Forma Acquisition Range 55 Production (MMBOE) 100 3Year CAGR Stand Alone 20% 45 Pro Forma 31% Est. Combined 2018 Daily Production (Mboe/d) 35 40% 25 Est. Pro…
  33. Capital One Securities 11th Annual Energy Conference – PDC Energy, Inc. – slide 33
    Updated 2016 Core Wattenberg EUR Analysis Based on Evaluation of Public Production Data PDC Acreage 2,500 Wells Included in Study 2016 EUR ANALYSIS 2.63.6 EUR Variability Ratio Range for Inner Core Middle Core Outer Core…
  34. Capital One Securities 11th Annual Energy Conference – 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. Capital One Securities 11th Annual Energy Conference – PDC Energy, Inc. – slide 35
    Monobore Drilling Gains To-Date Current Implementation Monobore drilling saves 1 day in spudtospud times 50100k savings per well realized todate All wells expected to be drilled using monobore technology 95/8 casing cemented to…
  36. Capital One Securities 11th Annual Energy Conference – 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. Capital One Securities 11th Annual Energy Conference – PDC Energy, Inc. – slide 37
    Reconciliation of Non-US GAAP Financial Measures In millions, except per share data Three Months Ended Nine Months Ended Adjusted EBITDA from net income (loss): Sept 30, Sept 30, 2016 2015 2016 2015 Net loss (23.3) (41.5) (190.3)…
  38. Capital One Securities 11th Annual Energy Conference – PDC Energy, Inc. – slide 38
    Reconciliation of Non-US GAAP Financial Measures In millions, except per share data Three Months Ended Nine Months Ended Adjusted net income (loss) from net income (loss): Sept 30, Sept 30, 2016 2015 2016 2015 Net loss (23.3)…

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