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Howard Weil Energy Conference – Chesapeake Energy Corp

Chesapeake Energy Corp · Mar 27, 2018 · 34 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. Howard Weil Energy Conference – Chesapeake Energy Corp – slide 1
    SCOTIA HOWARD WEIL 2018 ENERGY CONFERENCE New Orleans, Louisiana March 2018 Doug Lawler President and Chief Executive Officer
  2. Howard Weil Energy Conference – Chesapeake Energy Corp – slide 2
    UPDATE ON RECENT PROGRESS Cash proceeds from divestitures 500 million in asset sales signed in late-2017 and 2018; expected to close in 1H 2018 Represents an EBITDA multiple of 7.1x 74 million in net proceeds from sale of FTSI…
  3. Howard Weil Energy Conference – Chesapeake Energy Corp – slide 3
    WHATS THE IMPACT Sold 23,000 boe/d (25% oil) while maintaining flat 2018 adjusted production YOY Cost structure reduced by 0.14/boe(1) Interest expense may be reduced by up to 50 million Overhead reduction of 70 million through…
  4. Howard Weil Energy Conference – Chesapeake Energy Corp – slide 4
    2018 GUIDANCE HIGHLIGHTS 515 550 mboe/d 3% adjusted growth 5% adjusted oil growth Decreases 12% YOY (1) Excluding capitalized interest Scotia Howard Weil 2018 Energy Conference 5
  5. Howard Weil Energy Conference – Chesapeake Energy Corp – slide 5
    OIL ASSETS IN OUR PORTFOLIO High-quality assets Accelerate Turner development Maximize free cash flow in South Texas Test new plays in Mid-Continent 2018 Plan Maximize value of every dollar Grow cash flow Production from Oil…
  6. Howard Weil Energy Conference – Chesapeake Energy Corp – slide 6
    WY POWDER RIVER GROWING TO A CORE ASSET Oil growth engine Equivalent Net Volume (mboe/d) 40 Ramping up activity 40% oil, 58% liquids 35 Fourth rig in April Evaluating fifth rig 30 25 Stacked pay opportunities 20 275,000…
  7. Howard Weil Energy Conference – Chesapeake Energy Corp – slide 7
    WY TURNER CONTINUOUS IMPROVEMENT Turner Avg Drilling Cost Per Foot Drilling improvements 320 308 Extending laterals 267 Batch drilling 206 Slim hole casing design Drilling days from 60+ to 21 Completion improvements Q1 2017…
  8. Howard Weil Energy Conference – Chesapeake Energy Corp – slide 8
    WY POWDER RIVER BASIN OPPORTUNITY Location Inventory Above 40% ROR(1) Parkman 600 205 mmboe resource base 425+ undrilled locations 1,980' spacing 500 Sussex 67 mmboe resource base 400 72 undrilled locations 1,980' spacing…
  9. Howard Weil Energy Conference – Chesapeake Energy Corp – slide 9
    GAS ASSETS IN OUR PORTFOLIO Competitive returns Marcellus is strongest investment in portfolio, 75% ROR at 2.75/mcf 40% ROR at 2.75/mcf for Haynesville and Utica Well-hedged at 3.10/mcf in 2018 2018 Plan Maximize value of every…
  10. Howard Weil Energy Conference – Chesapeake Energy Corp – slide 10
    MARCELLUS FREE CASH FLOW ENGINE PA Powerhouse shale gas asset Equivalent Net Volume (mboe/d) Technology driving greater value 150 Working additional market opportunities 125 Growth potential and portfolio flexibility 2,040…
  11. Howard Weil Energy Conference – Chesapeake Energy Corp – slide 11
    LOWER MARCELLUS DRIVING MORE VALUE PA Average Cumulative Gas per Well 5.0 Average Cumulative Gas per Well (bcf) 4.5 16 4.0 15 17 3.5 14 3.0 2.5 13 < 13 2.0 1.5 1.0 0.5 0.0 0 2 4 6 8 10 12 Month Game…
  12. Howard Weil Energy Conference – Chesapeake Energy Corp – slide 12
    UPPER MARCELLUS FUTURE POTENTIAL PA New Completions vs. Expectations 35,000 30,000 Gas Flowrate (MCFD) 25,000 20,000 15,000 10,000 5,000 0 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90…
  13. Howard Weil Energy Conference – Chesapeake Energy Corp – slide 13
    GULF COAST DEEP HIGH-QUALITY INVENTORY LA Acreage position is 100% HBP, Equivalent Net Volume (mboe/d) 25% developed ideal for long lateral 180 development 160 Completions breakthrough is scalable 140 across entire acreage…
  14. Howard Weil Energy Conference – Chesapeake Energy Corp – slide 14
    GULF COAST IMPROVEMENT CONTINUES LA Significant running room 30+ years of Haynesville and Bossier drilling Large refrac potential 23.3 tcf gross Recoverable resource potential 15.2 tcf net Average Cumulative Gas per Well…
  15. Howard Weil Energy Conference – Chesapeake Energy Corp – slide 15
    PREMIER, DIVERSIFIED ASSET BASE APPALACHIA NORTH POWDER RIVER BASIN Maximize free cash flow Grow oil production Advance new concepts APPALACHIA SOUTH Maximize free cash flow MID-CONTINENT Develop new plays Execute…
  16. Howard Weil Energy Conference – Chesapeake Energy Corp – slide 16
    STRATEGY AND GOALS Our strategy remains unchanged resilient to commodity price volatility Financial discipline STRATEGIC GOALS Profitable and efficient growth from captured resources 1 Debt reduction Exploration of 2 3 billion…
  17. Howard Weil Energy Conference – Chesapeake Energy Corp – slide 17
    CASH COST LEADERSHIP Production Expense + G&A(1) 2,000 8.00 Cash Cost (PE + G&A) 1,800 / boe 7.00 1,600 6.00 1,400 5.00 Costs, millions 1,200 Costs, /boe 1,000 4.00 800 3.00 600 2.00 400 1.00 200 0…
  18. Howard Weil Energy Conference – Chesapeake Energy Corp – slide 18
    APPROACHING FREE CASH FLOW NEUTRALITY Free Cash Flow 5,600 3,000 5,000 Excluding Asset Sales 2,000 Including Asset Sales 1,000 millions 2012 2013 2014 2015 2016 2017 2018E 0 -1,000 -2,000 -11,000…
  19. Howard Weil Energy Conference – Chesapeake Energy Corp – slide 19
    CAPITAL EFFICIENCY 800 16,000 700 14,000 600 12,000 Equivalent Net Volume (mboe/d) 2018 MIDPOINT 500 10,000 Capex ( billions) 400 8,000 300 6,000 200 4,000 100 2,000 0 0 2012 2013 2014 2015 2016…
  20. Howard Weil Energy Conference – Chesapeake Energy Corp – slide 20
    RETURN ON CAPITAL 25% 120 OIL NYMEX Oil 100 20% (1) Return onDebt+Equity OCF/Net Capital 80 Return on Capital (%) 15% /bbl 60 10% 40 5% 20 0% 0 2012 2013 2014 2015 2016 2017 2018E (1) Return…
  21. Howard Weil Energy Conference – Chesapeake Energy Corp – slide 21
    CHESAPEAKE ENERGY: THE UNCONVENTIONAL LEADER A Transformed Company Leadership attributes Capital efficiency Operational excellence Portfolio depth Technology EH&S excellence Undervalued currency Scotia Howard Weil 2018…
  22. Howard Weil Energy Conference – Chesapeake Energy Corp – slide 22
    Appendix Scotia Howard Weil 2018 Energy Conference 23
  23. Howard Weil Energy Conference – Chesapeake Energy Corp – slide 23
    BEST-IN-CLASS EH&S PERFORMANCE PROTECTING THE PROTECTING OUR REGULATORY ENVIRONMENT EMPLOYEES COMPLIANCE LEADER Reportable Spills Total Recordable Notice of Regulatory Violations Incident Rate Incident Count (1) 1.47 304 1,929…
  24. Howard Weil Energy Conference – Chesapeake Energy Corp – slide 24
    HEDGING POSITION AS OF 3/21/18 (1) Natural Gas Oil NGL 2018 2018 2018 47 bcf 1.8 mmbbls 4% Collars Collars 3.00/3.25/mcf 39.15/47/55/bbl HH WTI 68% 80% 532 bcf 24 mmbbls Swaps Swaps 3.11/mcf 52.87/bbl HH WTI 365 mbbls…
  25. Howard Weil Energy Conference – Chesapeake Energy Corp – slide 25
    DEBT MATURITY PROFILE 2018 OUTLOOK (1) 9.2 billion 7.10% 338 million Senior Notes & Term Loan WACD Revolving Credit Facility 3,000 2,500 Revolving Credit Facility Secured 2,047 2,000 Unsecured 1,868 Convertibles 1,500…
  26. Howard Weil Energy Conference – Chesapeake Energy Corp – slide 26
    SOUTH TEXAS CONTINUES TO DELIVER TX Improved oil recovery Equivalent Net Volume (mboe/d) Proven technology 140 Evaluating multiple pilot opportunities 120 Stacked pay potential 100 Upper Eagle Ford and Austin Chalk 80…
  27. Howard Weil Energy Conference – Chesapeake Energy Corp – slide 27
    SOUTH TEXAS DRIVING FOR VALUE TX 16 N McMullen Fit-for-purpose completions and targeting are Cumulative Oil/ft (bbl/ft) 14 12 +58% improving well results 10 8 Right-sized spacing 6 4 2 Producing Days Longer laterals…
  28. Howard Weil Energy Conference – Chesapeake Energy Corp – slide 28
    SOUTH TEXAS MULTI-ZONE POTENTIAL TX Blakeway 3 D DIM 2H Upper Eagle Ford 2,000 1,800 SERIES2 PRE-DRILL EXPECTATIONS Daily Production (boe/d) 1,600 BLAKEWAY 3 D DIM 2H 1,400 1,200 1,000 800 600 400 200 0 0 50 100 150…
  29. Howard Weil Energy Conference – Chesapeake Energy Corp – slide 29
    WY POWDER RIVER BASIN TURNER Cumulative boe vs. Producing Months Industry Turner Offsets 400,000 CHK Turner Producers Cumulative boe 300,000 200,000 100,000 Condensate 0 0 2 4 6 8 10 Producing Months 1,600…
  30. Howard Weil Energy Conference – Chesapeake Energy Corp – slide 30
    POWDER RIVER BASIN WY 17 PROSPECTIVE FORMATIONS Scotia Howard Weil 2018 Energy Conference 31
  31. Howard Weil Energy Conference – Chesapeake Energy Corp – slide 31
    UTICA IMPROVEMENT CONTINUES OH Optimizing dry gas design 60% improvement in 180-day cumulative production Continuing to test economic bounds Enhancing wet gas completions 40 100% improvement in 100-day cumulative production…
  32. Howard Weil Energy Conference – Chesapeake Energy Corp – slide 32
    MID-CON STACKED PAY POTENTIAL OK Oil growth potential Oswego provides low-cost, high-return oil Chester and Hunton delineation provides near-term growth options Equivalent Net Volume (mboe/d) 70 60 50 40 28%30oil, 46%…
  33. Howard Weil Energy Conference – Chesapeake Energy Corp – slide 33
    RECONCILIATION OF FREE CASH FLOW In Millions of USD except Per Share FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018E 12 Months Ending 12/31/2012 12/31/2013 12/31/2014 12/31/2015 12/31/2016 12/31/2017 12/31/2018 Cash flow…
  34. Howard Weil Energy Conference – Chesapeake Energy Corp – slide 34
    CORPORATE INFORMATION HEADQUARTERS PUBLICLY TRADED SECURITIES CUSIP TICKER 7.25% Senior Notes due 2018 165167CC9 CHK18A 6100 N. Western Avenue Oklahoma City, OK 73118 3mL + 3.25% Senior Notes due 2019 165167CM7 CHK19 WEBSITE: www.chk.com…

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