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June 2017 Company Update – PDC Energy, Inc.

PDC Energy, Inc. · Jun 5, 2017 · 39 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. June 2017 Company Update – PDC Energy, Inc. – slide 1
    COMPANY UPDATE June 5, 2017
  2. June 2017 Company Update – PDC Energy, Inc. – slide 2
    PDC Energy Strategic Overview Strategic Overview Top-Tier Growth Profile 30+% 2,600 4-year Production CAGR Drilling Inventory Capital Efficient Drilling (2016-2020) Technical Innovations 2020 80+% Long-Term Weighted Avg.…
  3. June 2017 Company Update – PDC Energy, Inc. – slide 3
    PDC Energy Premier Assets Provide Top-Tier Growth Core Wattenberg 3.3B Market Cap(1) 95,500 net acres 1,800 identified locations(2) 305 MMBoe proved reserves 4.4B Enterprise Value(1) Utica Shale Delaware Basin 62,500 net…
  4. June 2017 Company Update – PDC Energy, Inc. – slide 4
    PDC Energy Track Record of Delivering Value Operating Costs (/Boe) Gross Margin(1) Oil Production (MMBbls) LOE per BOE TG&P Production Taxes G&A 100% Gross Margin NYMEX Oil 100 25 15 80% 80 20 NYMEX Oil (/Bbl) Gross Margin (%)…
  5. June 2017 Company Update – PDC Energy, Inc. – slide 5
    PDC Energy First Quarter Results 73,866 2017 First Quarter Highlights Continued Wattenberg execution drives strong production growth (Boe/d) 64,285 Boe/d; 40 TILs (28 in March); 29 spuds Recently updated Wattenberg MRL and XRL…
  6. June 2017 Company Update – PDC Energy, Inc. – slide 6
    PDC Energy 2017 Production & Capital Guidance Wattenberg 2017e Production Mix 2017e Production (MMBoe) 4th rig arrived in May Anticipate Top Third of Range 30% annual production growth 139 Spuds 139 TILs with 6,800 avg. lateral…
  7. June 2017 Company Update – PDC Energy, Inc. – slide 7
    PDC Energy 2017 Capital Investment Program and Financial Guidance Capital Investment Details 2017e Capital Investments 2017e Capital Investment Anticipate capital investment program (millions) in the top half of range Wattenberg:…
  8. June 2017 Company Update – PDC Energy, Inc. – slide 8
    PDC Energy Balance Sheet Strength and Liquidity As of March 31, 2017 Leverage and Liquidity 1,000 946 million liquidity Debt Maturity Schedule (millions) 258 million combined cash balance & short-term investments 750 Leverage…
  9. June 2017 Company Update – PDC Energy, Inc. – slide 9
    ASSET OVERVIEW
  10. June 2017 Company Update – PDC Energy, Inc. – slide 10
    Core Wattenberg Asset Overview 2016 Strategic Acreage Trade Located in Kersey Area (2) 2017e TIL Breakdown Net Acres Outer Core Kersey XRL Middle Core Area SRL 36% 35% Inner Core Acreage HBP MRL 29% Horizontal…
  11. June 2017 Company Update – PDC Energy, Inc. – slide 11
    Core Wattenberg Kersey Area Performance Tracking Updated Type Curves Type Well Profile Comparison(1) LDS Project (MRL) AD2016 SRL Type Curve AD2017 MRL Type Curve Pad Average (Older Style Completion) 490 MBoePre-Trade SRL Type Curve…
  12. June 2017 Company Update – PDC Energy, Inc. – slide 12
    Core Wattenberg Continued Type Curve Improvements Type curve EUR increases reflect new completion design and flowback techniques XRL 30% increase to 1,100 MBoe (from 850 MBoe) MRL 15% increase to 800 MBoe (from 685 MBoe) EUR…
  13. June 2017 Company Update – PDC Energy, Inc. – slide 13
    Core Wattenberg Growing Oil Volumes Based on Previous Analyst Day Type Curves Oil volumes per well continue to grow Oil Volume per Well(1) 350 GOR typically stabilizes after 18-36 months (MBbls) 305 MRL and XRL wells represent…
  14. June 2017 Company Update – PDC Energy, Inc. – slide 14
    Core Wattenberg Base Case Economic Summary SRL Performance MRL Performance XRL Performance 490 MBoe SRL Type Curve 800 MBoe MRL Type Curve 1,100 MBoe XRL Type Curve Older PDC Operated Wells Updated Completion & Flowback Type…
  15. June 2017 Company Update – PDC Energy, Inc. – slide 15
    Core Wattenberg Midstream Overview Additional Capacity Enables Future Growth Objectives NATURAL GAS Multiple midstream providers (DCP and Aka-APC) DCP expected to gather and process 72% of 2017e gas volumes DCP current capacity 850…
  16. June 2017 Company Update – PDC Energy, Inc. – slide 16
    Delaware Basin Asset Overview Western Central Net Acres Western Central Eastern Net Acres 16,000 28,900 17,600 Eastern EUR (MBoe) 1,200 1,000 1,400 750 1,000 Average Working Interest Locations(1) 40 335 410 Working Int.…
  17. June 2017 Company Update – PDC Energy, Inc. – slide 17
    Delaware Basin 2017 Planned Activity Western Central PDC/Fortuna HSS State Budgeted Well Costs (millions) 225 million D&C budget Wolfcamp A (DUC) 7,500 laterals Lateral Length 2/28/17 PDC Phillips State Spud 31 wells Wolfcamp A…
  18. June 2017 Company Update – PDC Energy, Inc. – slide 18
    Delaware Basin Encouraging Recent Well Results Eastern Area Wolfcamp A Central Area Wolfcamp A/B Early production from recent completions performing Multiple wells currently on flowback (yet to reach above acquisition type curve peak…
  19. June 2017 Company Update – PDC Energy, Inc. – slide 19
    Marketing & Midstream Gas Throughput and Processing Overview Gas delivered to both El Paso and Waha markets Added 40 MMBtu/d firm transportation basin to Waha through 2020 3rd Party Midstream Western Central Central Delivery Points…
  20. June 2017 Company Update – PDC Energy, Inc. – slide 20
    Long-Term Delaware Midstream Vision Roadmap to Incremental Value Creation Key Objectives Create separate fee structures for in-field midstream services Build out PDC midstream assets & infrastructure to support development plans…
  21. June 2017 Company Update – PDC Energy, Inc. – slide 21
    PDC Energy 2020 Vision Strategic Overview Top-Tier Growth Profile 30+% 2,600 4-year Production CAGR Drilling Inventory Capital Efficient Drilling (2016-2020) Technical Innovations 2020 80+% Long-Term Weighted Avg.…
  22. June 2017 Company Update – PDC Energy, Inc. – slide 22
    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,…
  23. June 2017 Company Update – PDC Energy, Inc. – slide 23
    APPENDIX
  24. June 2017 Company Update – PDC Energy, Inc. – slide 24
    PDC Energy 2020 Vision Base Case 4/20/17 Base Case Range Production (MMBOE) Adj. Cash Flow (MM) 75 1,800 200 50 1,500 1,200 MBoe/d Exit Rate in 2020 900 1.5B+ 25 600 YE Rig Count (Watt./Del.) 300 4/3 5/5 5/6 5/7 0 0…
  25. June 2017 Company Update – PDC Energy, Inc. – slide 25
    2020 Vision Key Outlook Factors Key Considerations Utilizes Delaware Basin acquisition type curves Potential for Wattenberg SRL type curve improvement from completion enhancements Variability of timing on first production…
  26. June 2017 Company Update – PDC Energy, Inc. – slide 26
    PDC Energy 2020 Vision Resilient Case 4/20/17 Resilient Case Range Production (MMBOE) Adj. Cash Flow (MM) 21% 75 1,800 1,500 4-Year Production CAGR 50 1,200 900 90% 25 YE Rig Count (Watt./Del.) 600 300 2020 Liquidity…
  27. June 2017 Company Update – PDC Energy, Inc. – slide 27
    Wattenberg Kersey Area XRL Type Curve Increasing 30% to 1,100 MBoe Increased Type Curve from 850 MBoe Approximately 210 currently identified Middle Core (1) locations Base Case Type Well Details Increased inventory driven by 2016…
  28. June 2017 Company Update – PDC Energy, Inc. – slide 28
    Wattenberg Kersey Area MRL Type Curve Increasing 15% to 800 MBoe Increased Type Curve from 685 MBoe Recently completed wells are outperforming type curve (1) Base Case Type Well Details Over 380 currently identified Middle Core…
  29. June 2017 Company Update – PDC Energy, Inc. – slide 29
    Wattenberg Kersey Area SRL Type Curve of 490 MBoe Type Curve Remains 490 MBoe Most recent SRL wells completed in 1H16 using (1) historical completion design and flowback techniques Base Case Type Well Details Potential upside due to…
  30. June 2017 Company Update – PDC Energy, Inc. – slide 30
    Reserves Continued Core Wattenberg Consistency 2,700 Inner Core Represents 1,900 Middle Core Hz Niobrara wells Outer Core CO DJ Niobrara Represents 800 Outside Core Hz Niobrara wells Wells Included in Study 2.7 Average…
  31. June 2017 Company Update – PDC Energy, Inc. – slide 31
    PDC Energy Delaware Basin Inventory Detail 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…
  32. June 2017 Company Update – PDC Energy, Inc. – slide 32
    Eastern Area Wolfcamp A Outperformance Provides Upside Early production from recent completions performing (1) above acquisition type curve Base Case Development Type Well Details 3 wells trending 25% above acquisition type curve 11…
  33. June 2017 Company Update – PDC Energy, Inc. – slide 33
    Eastern Area Wolfcamp B Delivers Strong Early Results First Wolfcamp B test in Eastern area trending above (1) acquisition type curve of 750 MBoe Base Case Development Type Well Details PDCs Triangle well currently outperforming…
  34. June 2017 Company Update – PDC Energy, Inc. – slide 34
    Central Area Encouraging Initial Results Multiple wells currently on flowback (yet to reach (1) peak production) Base Case Development Type Well Details Liam State XRL Wolfcamp B 3-Phase EUR: 1,050 MBoe Capital Cost: 6.0MM HSS…
  35. June 2017 Company Update – PDC Energy, Inc. – slide 35
    Western Area Acquisition Economic Summary Drill and complete two Wolfcamp A wells by 2Q17 (1) Using 2017 completion design Base Case Development Type Well Details Will hold entire block through 2018 3-Phase EUR: 1,200 MBoe Capital…
  36. June 2017 Company Update – PDC Energy, Inc. – slide 36
    Bond Trading History Notes due 2022 and 2024 PDC Senior Notes due 2022 and 2024 remain priced well above notes in similar tenor issued by peers Notes due 2022 Trading History Notes due 2024 Trading History Price Price 120 110 110…
  37. June 2017 Company Update – PDC Energy, Inc. – slide 37
    Robust Hedge Position Insulates Capital Program Hedges in Place as of 3/31/17 Plus Hedges Entered Into prior to May 31, 2017 CRUDE OIL NATURAL GAS 2Q17 - 4Q17 2018 2Q17 - 4Q17 2018 Volumes (MMBbls) Volumes (BBtu) Collar 1.8 1.5…
  38. June 2017 Company Update – PDC Energy, Inc. – slide 38
    Reconciliation of Non-U.S. GAAP Financial Measures Three Months Ended Net income (loss) to adjusted EBITDAX March 31, 2017 2016 Net income (loss) 46.1 (71.5) Gain on commodity derivative instruments (80.7) (11.1) Net settlements…
  39. June 2017 Company Update – PDC Energy, Inc. – slide 39
    Reconciliation of Non-U.S. GAAP Financial Measures Three Months Ended Net income (loss) to adjusted net income (loss) March 31, 2017 2016 Net income (loss) 46.1 (71.5) Gain on commodity derivative instruments (80.7) (11.1) Net…

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