2017 ANALYST DAY PRESENTATION February 8, 2017 NYSE: ECR
2017 Analyst Day Agenda Benjamin W. Hulburt Corporate and Strategic Overview Chairman, President and CEO Target multi-year production and EBITDAX growth based on improved returns from enhanced development Thomas S. Liberatore…
2017 Analyst Day Todays Speakers Benjamin W. Hulburt Co-founded Eclipse Resources in January 2011 and has served as Chief Executive Office, President and Chairman, President Chairman of board since inception and Chief Executive…
C ORPORATE & S TRATEGIC O VERVIEW Benjamin Hulburt Chairman, President and Chief Executive Officer
2017 Analyst Day Eclipse Past and Present 310 MMcfe/d2 229 208 MMcfe/d1 MMcfe/d 73 MMcfe/d 2011 - 2013 2014 2015 2016 2017E Formed by senior Commenced multi-rig Reduced drilling activity Focus shifted to science…
2017 Analyst Day Eclipse Current Profile 4Q16: 255 MMcfe/d 2016 Annual: 229 MMcfe/d (27% liquids) Production1 Sequential quarterly growth: 15% 112,000 net effective acres Acreage2 Recent leasing has already replaced non-core…
2017 Analyst Day Eclipse Business Highlights Premier Utica and Marcellus Assets 112,000 net effective acres1 in the core of the Utica Shale and the liquids rich Marcellus Shale Innovative Operational Team Enhancing well…
2017 Analyst Day Elevation of Utica Type Curves1 Eclipse is increasing its Utica Condensate and Utica Rich Gas type curves reserves following the success of recent completion designs and pressure management techniques and in the…
2017 Analyst Day Premier Utica and Marcellus Assets1 Eclipse has a substantial core asset base with a 16 year drilling inventory, with all type curve areas generating 65% returns at strip pricing2 Returns by 2017 Type Curve Acreage…
2017 Analyst Day Innovative Operational Team Super Laterals Eclipse has revolutionized the cost structure and returns profile of the Utica through its Super Lateral program Reduce cost per lateral foot Cost per lateral foot 44%…
2017 Analyst Day Innovative Operational Team Completions Design Eclipse was the first to implement the Generation 3 completion design, generating higher EURs and returns; Generation 4 design to be tested in 2017 Increase proppant…
2017 Analyst Day Marketing Strategy Diversified marketing strategy provides flexibility and enhanced pricing dynamics ET Rover Mariner East II In-service in 1Q18 In-service in 4Q17 1. Flow Assurance Term: 15 years Significant…
2017 Analyst Day 2016 Reserves and Finding & Development Costs1 Eclipse continues to increase reserves through the drill-bit lower F&D costs and increase PV-10 500 Reserves (Bcfe) SEC Pricing 1400 Reserves (Bcfe) Strip Pricing…
2017 Analyst Day 2017 Growth Plan1 Eclipse has a fully funded 300 million capital budget supporting 35% production growth in 2017 Capital Budget Highlights Key Growth Metrics 2017 capital expenditures budget of 300 million…
2017 Analyst Day Multi-Year Growth Strategy1 Eclipse has the balance sheet to support a compounded annual production growth rate of at least 25% over the next three years at its planned 2017 pace of development 3-Year Plan Average…
2017 Analyst Day Superior Investment Value Eclipse is generating competitive returns through technical innovation, maintains a strong track record of executing to plan, and appears highly under-valued, creating potential for a…
G EOLOGY Thomas Liberatore EVP, Corporate Development and Geosciences
2017 Analyst Day Utica Shale Play Evolution 1. Early Utica leasing and development commences in middle portion of the play Buell well drilled in Harrison County High condensate rate attractive during low gas price period 2011…
2017 Analyst Day Utica Shale IP Heat Map1 The core of the play is well established. Eclipses acreage is in some of the highest gas in place areas of the liquids area and most economic area of the dry gas area (depth vs. GIP)…
2017 Analyst Day Identification of Point Pleasant Core Area Eclipse Resources was the first to identify the southern core of the play through recognition of the decrease in porosities in the Utica, making it an effective frac…
2017 Analyst Day Core Results 6 cores allowed Eclipse to calibrate its database of over 150 well logs to refine its geologic model Miley 5H Herrick 3H The Point Pleasant is an organic rich calcareous black shale. Average…
2017 Analyst Day Key Geological Maps Combination of high gas in place, manageable depths, and an over pressure reservoir gives Eclipse a highly economic position in the play Point Pleasant Thickness Point Pleasant Avg. Gas-Filled…
2017 Analyst Day Expanding Understanding of the Play Every shale play is different mineralogically; a large database of logs has allowed for an in-depth petrophysical study of the Point Pleasant Play Point Pleasant Core…
2017 Analyst Day Facies Cross Section C-C Moving south to north, the Point Pleasant becomes more carbonate rich; it transitions from being predominately a mixed mudstone facies to a mixed carbonate mudstone facies C C UTCA…
2017 Analyst Day Point Pleasant Facies Basinal Facies Eclipse has constructed a facies model to better understand the areas with the highest potential Basinal depositional facies of the Point Pleasant represents the core of…
2017 Analyst Day Expanding Understanding of the Core Area Shroyer 2H Geo-steering Cross Section VE = 20x The Shroyer 2H geo-steering cross section demonstrates that the Point Pleasant has very little dip (less than one…
2017 Analyst Day Marcellus Gas in Place Approximately 14,000 acres situated in highly rich Marcellus Condensate area Ranges from 80-110 Bcf / Section in our Marcellus project area Tippens in Eastern Monroe County Ormet…
2017 Analyst Day Marcellus Cross Section Index Map (A-A) Planning two operated Marcellus Condensate wells in 2017 to validate type curve assumptions and highly economic returns Ranges from -4,500 to -5,300 in eastern Monroe County…
O PERATIONS Oleg Tolmachev EVP and Chief Operating Officer
2017 Analyst Day Drilling and Completions Philosophy Eclipse has a differentiated structure and philosophy that drives innovation and returns improvements Most experienced Developed specialized Appalachian drillers Hire Top…
2017 Analyst Day Innovation Driving EUR and Return Improvement Eclipse is constantly working to become more efficient and technologically advanced to improve well returns Decrease drilling days Drill longer laterals COST…
2017 Analyst Day Drilling and Completion Evolution Eclipse continues to push the boundaries on key well parameters Average Proppant Loading1 Average Stage Spacing1 2014 2016 3,500 Max: 2014 2016 3,000 3,000 Max: 245…
2017 Analyst Day Drilling & Completions Evolution (cont.) Eclipse has significantly reduced costs since 2014 and anticipates minimal service cost increases in 2017 D&C Cost Progression (/ft)1 Utica Wet Gas Wells Utica Dry Gas…
2017 Analyst Day Increasing Returns with Longer Laterals Lower D&C cost per foot driven by longer laterals creates a step-change in play economics Summary Super Lateral Benefits Decreasing Costs with Increasing Laterals1 D&C per…
2017 Analyst Day Slickwater Completions Benefits and Results Slickwater completions create a more complex network of induced fractures within the reservoir, resulting in higher stimulated reservoir volume and increased EURs…
2017 Analyst Day Improving EURs with Increased Proppant and Decreased Stage Spacing Eclipse was the first to combine tighter stages (150 feet) with high proppant concentrations (2,300 lbs/ft average in wet gas 2,800 lbs/ft average…
2017 Analyst Day Pressure Management Benefits Strong correlation between managing pressure declines and well performance Aggressive Pressure Management Benefits Productivity Index1 of Pressure Management 100 Minimize…
2017 Analyst Day Enhancing Productivity During Well Life Eclipse maintains focus on well productivity enhancements to further improve EURs after wells are turned to sales 2016 / 2017 Initiatives Blowcase & Plunger Lift on…
2017 Analyst Day Generation 3 Utica Condensate Well Performance Generation 3 condensate wells are outperforming vintage completion designs and the 2016 Utica Condensate type curve Change in Pressure Daily Gas Production1 200…
2017 Analyst Day Gen 1 vs Gen 3 Case Study Condensate Area An analysis of Gen 1 vs Gen 3 offset wells highlights the benefits of Eclipses new completion designs, holding Eclipse has 318 risked future locations with over 70% in type…
2017 Analyst Day Rich Gas Well Results Strong with Generation 2 Generation 3 completions have yet to be implemented in Utica Rich Gas; Generation 2 results substantially above prior type curve and vintage Generation 1 wells Change…
2017 Analyst Day Initial Dry Gas Generation 3 Wells Results Promising Evaluation of Gen 3 Utica Dry Gas wells continues, but initial results vs Gen 1 completion designs and current type curve are demonstrating similar outperformance…
T YPE CURVE E VOLUTION
2017 Analyst Day 2017 Type Curves Eclipse is increasing its Utica Condensate and Utica Rich Gas type curves following the success of recent completion designs and pressure management techniques and will continue to evaluate Utica…
2017 Analyst Day Utica Condensate Type Curve1 Condensate type curves have been revised to include Gen 3 completions configurations and results 2017 Type Curve 2016 Type Curve Daily Gas Production2 150 stage spacing 150 stage…
2017 Analyst Day Utica Rich Gas Type Curve1 While Gen 3 wells have not yet been drilled in this area, Gen 2 results are consistent with the revised Utica Rich Gas type curve; Gen 3 completions could provide further improvement…
2017 Analyst Day Utica Dry Gas Type Curve1 Although initial performance of the first Dry Gas Gen 3 pad shows similar outperformance as the condensate pads, no change is being made to the Utica Dry Gas type curve until additional…
2017 Analyst Day 2016 Marcellus Condensate Type Curve1 Results from peer operated Marcellus Condensate wells show strong performance relative to the type curve; Eclipse to drill and evaluate two Marcellus Condensate wells in 2017…
T EN MINUTE BREAK
M IDSTREAM & M ARKETING Dana Bryant SVP, Midstream and Marketing
2017 Analyst Day Marketing Strategy Diversified marketing strategy provides flexibility and enhanced pricing dynamics ET Rover Mariner East II In-service in 1Q18 In-service in 4Q17 1. Flow Assurance Term: 15 years Significant…
2017 Analyst Day Utica Dry Gas Midstream Summary Provider Eureka Midstream Service Firm wellhead gathering Eureka lays pipe to each well pad Eclipse responsible for pad level dehydration Commitment Acreage dedication…
2017 Analyst Day Utica Condensate Midstream Summary Blue Racer Provider Blue Racer Midstream (BRM) Service Firm gathering and processing Commitment Acreage dedication limited to Utica rights only based on BTU Plants…
2017 Analyst Day Utica Condensate Gathering & Processing Summary - EnLink Provider EnLink Midstream Service Natural gas compression and dehydration Condensate stabilization and marketing Produced water and NGL storage and…
2017 Analyst Day Marcellus Condensate Midstream Summary Pilot Testing 2 wells in 2017 with an interim midstream solution in place to handle all products Full Development Eclipse has scoped potential midstream solutions and…
2017 Analyst Day Appalachian Marketing Overview Appalachian basis differentials narrow as transportation capacity exceeds production and projects come online Northeast Production vs Pipeline Takeaway1 Appalachian Basis…
2017 Analyst Day Firm Transport Portfolio Eclipses diverse firm gas transportation portfolio provides optionality to various end markets, with right-sized positions to maximize revenue April 2017 December 2018 Further…
2017 Analyst Day 2017 Differentials & How We Get There Eclipse creates optionality by maintaining access to multiple markets from any drilling location in order to enhance flow assurance and improve pricing 2017 Agenda 2017E…
2017 Analyst Day Enhancing Natural Gas Price Eclipses marketing team consistently monitors short and long term market dynamics, adjusting strategies to enhance price Marketing Process and Analysis Communicate Review Options…
2017 Analyst Day NGL Market Outlook Eclipse markets its NGLs1 via numerous outlets in order to maximize price and optionality In 2016, Eclipse continued to diversify market outlets and enhance pricing with the addition of access…
2017 Analyst Day Condensate Market Outlook Eclipse has seen condensate markets tighten substantially during the recent downturn, while local demand has strengthened due to local projects coming online Primary markets are refineries…
F INANCIAL O VERVIEW Matthew DeNezza EVP and Chief Financial Officer
2017 Analyst Day Core Competencies Ability to deliver multi-year growth Focus on long-term shareholder value Value Highly experienced management team Creation Long-term growth-strategy focus Corporate Product mix flexibility…
2017 Analyst Day Managing the Commodity Downturn Eclipse prudently managed the downturn keeping the borrowing base undrawn, achieving 40 million of debt reduction, and exiting 2016 with cash on hand and 342 million of liquidity to…
2017 Analyst Day 2017 Planned Activity The recent commodity price recovery has allowed Eclipse to resume its growth oriented strategy with a continued focus on maintaining a sound balance sheet Overview Production Forecast…
2017 Analyst Day Three Year Development Plan Eclipses 3-year development plan allows for 25% production CAGR with a 300 million annual budget; projected leverage ratios provide ability to fund development plan1 3-year annual…
2017 Analyst Day 2017 Guidance Eclipse has consistently provided reliable guidance and worked to under-promise and over-deliver; meeting or exceeding production and operating expense guidance every period since IPO 2017 Guidance…
2017 Analyst Day Hedging Review Eclipse continues to actively hedge expected production to provide predictable cash flows and limit capital plan funding risk Summary of Current Hedges Natural Gas (MMBtu/d) 2017 Commodity Hedges…
2017 Analyst Day Trading Metric Comparison Eclipse trades at a significant discount relative to Appalachian peers despite similar leverage metrics and the ability to generate economic returns comparable to other basins TEV/ 2017…
2017 Analyst Day Future Net Locations Eclipse has 317 risked future locations with over 60% in type curve areas achieving an 80%+ IRR Summary Areas . Dry Gas Rich Gas Condensate Marcellus Detailed Areas . Dry Gas Dry Gas Dry Gas…
2017 Analyst Day 2017 Type Curve and Cost Assumption Details Marcellus Summary Areas . Utica Dry Gas Utica Rich Gas Utica Condensate Indicates detailed curve Condensate presented in summary area Lean Very Rich Detailed Areas .…
2017 Analyst Day 2017 Type Curve Summary at 10K, 13K and 15K Marcellus Summary Areas . Utica Dry Gas Utica Rich Gas Utica Condensate Indicates detailed curve Condensate presented in summary area Lean Very Rich Detailed Areas . Dry…
2017 Analyst Day Pressure Decline Analysis and Well Performance Pressure decline analysis is vital to assessing well performance in a choke managed environment SRV Ac PI Stimulated Linear Flow Productivity Reservoir…
Loading...
