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1Q 2018 Earnings Presentation – Silverbow Resources

Silverbow Resources · May 8, 2018 · 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. 1Q 2018 Earnings Presentation – Silverbow Resources – slide 1
    SilverBow Resources Corporate Presentation May 2018
  2. 1Q 2018 Earnings Presentation – Silverbow Resources – slide 2
    Company Overview NYSE Symbol: SBOW Market Cap(1): 358 million Enterprise Value(1): 611 million 12/31/17 PV-10 Value(2): 731 million Production 1Q18(3): 154 MMcfe/d Production Mix(4): 83% Gas Proved Reserves(2): 994 Bcfe % Proved…
  3. 1Q 2018 Earnings Presentation – Silverbow Resources – slide 3
    Key Accomplishments 2017 New executive team in place Rebranded the Company to SilverBow Resources, Inc. Commercial Re-listed on the NYSE as ticker SBOW Streamlined operations with non-core Eagle Ford divestitures 40% production…
  4. 1Q 2018 Earnings Presentation – Silverbow Resources – slide 4
    Key Objectives 2018 Continue leasing program Low cost inventory adds Commercial Be opportunistic on active Eagle Ford acquisitions environment Continue proactive hedging program Estimated production growth of 22% 37% Drive capital…
  5. 1Q 2018 Earnings Presentation – Silverbow Resources – slide 5
    Executing on Strategy (1) Daily Production LOE (Mmcfepd) (mm) (/Mcfe) 0.47 210 195 7.0 0.50 0.41 180 6.0 0.36 0.34 0.34 0.40 150 175 5.0 0.28 120 4.0 0.30 90 168 3.0 5.8 5.8 5.5 0.25 0.20 148 154 4.8 5.0 60 123 134 2.0…
  6. 1Q 2018 Earnings Presentation – Silverbow Resources – slide 6
    Management Overview YEARS IN EXECUTIVE TEAM INDUSTRY PREVIOUS EXPERIENCE Sean Woolverton Chief Executive Officer Former COO Samson Resources 25 Former VP at Chesapeake Also held leadership roles at Encana and Burlington Steve…
  7. 1Q 2018 Earnings Presentation – Silverbow Resources – slide 7
    Underexploited Eagle Ford Gas Fairway New Eagle Ford Gas Wells Per Annum(1) 1,400 1,171 1,200 1,087 965 1,000 818 800 557 600 391 400 228 Uno Mas 200 129 0 AWP 2010 2011 2012 2013 2014 2015 2016 2017* Average CLAT…
  8. 1Q 2018 Earnings Presentation – Silverbow Resources – slide 8
    Best Gas Take-Away Market in the US SilverBow Gas Differential to Henry Hub ( / Mcf) Sources of Demand Growth(1) 0.00 (0.02) (0.04) (0.06) (0.05) +3-4 Bcf/d (0.08) (0.07) (0.08) (0.10) (0.10) (0.12) 2014 2015 2016 2017…
  9. 1Q 2018 Earnings Presentation – Silverbow Resources – slide 9
    Top Tier Gas Well Performance First Twelve-Months Cumulative Gas Production (Mmcf) 4,500 SilverBow Other Top 50 Average 4,000 Benchmarks 3,500 Top 10% Average 3,000 Top Quartile Average 2,500 2,000 2nd…
  10. 1Q 2018 Earnings Presentation – Silverbow Resources – slide 10
    Portfolio Overview Gross Net Undrilled % Prod Area (% Avg WI) Acres Locations(1) Gas Wells(2) Uno Mas Fasken Area 7,721 (64% - 100%) AWP Lower EF Gas 19 100% 68 Upper EF Gas 71 100% 6 La Salle Austin Chalk Gas 60 100% 0 Dimmit…
  11. 1Q 2018 Earnings Presentation – Silverbow Resources – slide 11
    Type Curves Indicate Strong Returns in Current Price Environment IRRs Across SilverBows Portfolio (3.00 gas / 50.00 oil)(1) 124% 94% 60% 43% 41% 41% Fasken Artesia North Oro Grande AWP South Uno Mas Fasken Lower EF LEF Cond.…
  12. 1Q 2018 Earnings Presentation – Silverbow Resources – slide 12
    Fasken Lower & Upper Eagle Ford 2017 & 2018 Net Activity Cumulative vs. Lower EF Type Curve 3,500 FASKEN STATE 52H FASKEN STATE 53H FASKEN STATE 54H FASKEN STATE 55H FASKEN STATE 56H FASKEN STATE 57H 3,000 Prop Stage Cluster…
  13. 1Q 2018 Earnings Presentation – Silverbow Resources – slide 13
    Southern Eagle Ford Gas Oro Grande, Uno Mas, & AWP Cumulative vs. Type Curve 4,000 BRACKEN JV 21H BRACKEN JV 22H 2017 & 2018 Net Activity 3,500 NMC EF 1H (Oro Grande) NMC EF 2H (Oro Grande) TC Oro Grande 14 Bcfe EUR BRACKEN JV…
  14. 1Q 2018 Earnings Presentation – Silverbow Resources – slide 14
    Top Quartile Operating Expenses Total Operating Expenses 2017 4th Quarter (Pre-G&A, / Mcfe) 2.50 2.00 1.50 Peer Group Avg. (excl. SBOW) : 1.38 1.00 0.50 - Peer A Peer B Peer C Peer D Peer E Peer F Peer G Peer H…
  15. 1Q 2018 Earnings Presentation – Silverbow Resources – slide 15
    Maintaining Safety While Driving Down Costs CORPORATE TOTAL RECORDABLE INCIDENT RATE(1) SOUTH TEXAS LEASE OPERATING COSTS (/MCFE) 2.0 1.00 0.96 1.8 0.91 1.8 1.6 0.90 1.6 1.4 0.80 1.2 0.67 1.0 1.0 0.70 1.0 0.8 0.60 0.6 0.6…
  16. 1Q 2018 Earnings Presentation – Silverbow Resources – slide 16
    Culture of Continuous Capital Cost Optimization Drilling Cost Per Well(1)(2) Average Drilling Cost Per Lateral Foot(1) (000) ( / foot) 6,000 58% Decline 1,000 67% Decline 4,560 788 4,000 750 3,085 2,317 500 435 1,776 1,933 326…
  17. 1Q 2018 Earnings Presentation – Silverbow Resources – slide 17
    Capital Budget 2018 2018 Capital Budget Activity by Area Net Wells Drilled 2017 2018 Fasken LEF & UEF 5.8 13.2 AWP - 13% AWP 2 7 Oro Grande - 16% Oro Grande 2 5 Uno Mas 1 3 Fasken UEF - 18% Artesia 7 4 Uno Mas, 5% 70% Total…
  18. 1Q 2018 Earnings Presentation – Silverbow Resources – slide 18
    Guidance 2018 ACTUAL GUIDANCE 2Q17 3Q17 4Q17 FY17 1Q18 2Q18 FY18 Production Volumes: Oil (bbls/d) 1,532 1,852 2,486 1,876 1,968 1,350 1,450 1,600 1,800 NGL (bbls/d) 2,505 2,900 3,796 2,866 2,759 2,275 2,375 2,575 2,900 Gas (MMcf/d)…
  19. 1Q 2018 Earnings Presentation – Silverbow Resources – slide 19
    Financial Summary CORPORATE PRESENTATION PAGE 20 5/8/2018
  20. 1Q 2018 Earnings Presentation – Silverbow Resources – slide 20
    Financial Discipline is Integral to Strategy Preserve financial flexibility Maintain strong liquidity position Active hedge program to protect cash flows Patient capital structure Relentless focus on driving down costs Monetize…
  21. 1Q 2018 Earnings Presentation – Silverbow Resources – slide 21
    Strong Liquidity Provides Financial Flexibility Significant Liquidity of 274 million(1) NYSE Symbol SBOW Share Price (5/1/18) 30.75 No Near-Term Maturities Shares Outstanding (5/1/18) 11.653 Revolving Credit Facility (due 2022)…
  22. 1Q 2018 Earnings Presentation – Silverbow Resources – slide 22
    Hedging Summary(1) SilverBow actively hedges expected to protect project returns and support planned capital expenditures Bias towards swaps and collars Hedge volumes for balance of 2018 cover 65% of 2018 production guidance midpoint…
  23. 1Q 2018 Earnings Presentation – Silverbow Resources – slide 23
    Conclusion CORPORATE PRESENTATION PAGE 24 5/8/2018
  24. 1Q 2018 Earnings Presentation – Silverbow Resources – slide 24
    Why Invest in SilverBow Resources Pure Play Eagle Ford Operator with Premier Record of Drilling Gas Wells Best Gas Take-Away Market in USA Strong Balance Sheet, Low Cost Structure, and Favorable Midstream Contracts Positioned as Low…
  25. 1Q 2018 Earnings Presentation – Silverbow Resources – slide 25
    Compelling Potential Valuation Acquisitions Leasing Probable Southern Reserves Uno AWP Oro Mas Grande UEF Fasken 731 Current Enterprise Value: 611 million (1) Strip PV10 Value and Growth Investment Opportunity…
  26. 1Q 2018 Earnings Presentation – Silverbow Resources – slide 26
    Appendix CORPORATE PRESENTATION PAGE 27 5/8/2018
  27. 1Q 2018 Earnings Presentation – Silverbow Resources – slide 27
    Summary Terms: Second Lien Notes Borrower SilverBow Resources, Inc. All existing or future direct or indirect wholly-owned U.S. Guarantors subsidiaries of the Borrower Facility 200 million Senior Secured Second Lien Notes Maturity…
  28. 1Q 2018 Earnings Presentation – Silverbow Resources – slide 28
    Pro Forma Production for Non-Core Asset Sales SilverBow Resources 2016 2017 2018 Summary Pro Forma Production Q4 Q1 Q2 Q3 Q4 Q1 As Reported Oil (MBbls) 240 146 139 170 229 177 Gas (Mmcf) 9,551 10,104 11,078 11,723 12,847 11,917…
  29. 1Q 2018 Earnings Presentation – Silverbow Resources – slide 29
    Adjusted EBITDA Reconciliation ( thousands) 2017 2018 Q2 Q3 Q4 Q1 Net Income 16,241 12,884 25,137 8,466 Adjustments to EBITDA DD&A 10,828 11,832 14,558 13,131 Accretion of ARO 576 582 600 159 Interest, net 4,642 2,868…
  30. 1Q 2018 Earnings Presentation – Silverbow Resources – slide 30
    Reconciliation of PV-10 to Standardized Measure Estimates of future net revenues from our proved reserves, Standardized Measure and PV-10 (PV-10 is a non-GAAP measure defined below), as of December 31, 2017 is made in accordance with…
  31. 1Q 2018 Earnings Presentation – Silverbow Resources – slide 31
    Type Curves CORPORATE PRESENTATION PAGE 32 5/8/2018
  32. 1Q 2018 Earnings Presentation – Silverbow Resources – slide 32
    Fasken Lower Eagle Ford Gas Single Well Economics Type Curve(1) Summary Drilling Locations 19 20,000 Target D&C (mm) (2) 4.7 NPV 10 (mm) 6.3 15,000 Restricted Rate IRR (%) 124% Mcfe/D 10,000 14 BCFE Type Curve Type Well…
  33. 1Q 2018 Earnings Presentation – Silverbow Resources – slide 33
    Fasken Upper Eagle Ford Gas Single Well Economics Type Curve(1) Summary 15,000 Drilling Locations 71 Pressure Managed Target D&C (mm) (2) 4.7 12 BCFE Type Curve NPV 10 (mm) 2.5 3.2 10,000 Mcfe/D IRR (%) 41% 53% Type Well…
  34. 1Q 2018 Earnings Presentation – Silverbow Resources – slide 34
    Artesia Eagle Ford North Condensate Single Well Economics Type Curve(1) Summary Pressure Managed Drilling Locations 22 Target D&C (mm) (2) 5.0 1,612 MBOE (376 MBO) NPV 10 (mm) 8.2 9.6 Type Curve IRR (%) 94% 115% Type Well…
  35. 1Q 2018 Earnings Presentation – Silverbow Resources – slide 35
    Oro Grande Eagle Ford Gas Single Well Economics Type Curve(1) Summary 20,000 Drilling Locations 104 Target D&C (mm) (2) 7.9 15,000 16 BCFE Type Curve NPV 10 (mm) 6.9 11.4 Pressure Managed 60% 90% Mcfe/D IRR (%) 10,000 Type Well…
  36. 1Q 2018 Earnings Presentation – Silverbow Resources – slide 36
    AWP South Lower Eagle Ford Gas Single Well Economics Type Curve(1) Summary Pressure Managed Drilling Locations 169 11.1 BCFE (10 BCF) Type Curve Target D&C (mm) (2) 6.0 - NGL Yield = 36 bbl/mmcf NPV 10 (mm) 5.4 5.6 IRR (%) 43% 43% Type…
  37. 1Q 2018 Earnings Presentation – Silverbow Resources – slide 37
    Uno Mas Lower Eagle Ford Gas Single Well Economics Type Curve(1) Summary Drilling Locations 60 Target D&C (mm) (2) 7.9 Pressure Managed NPV 10 (mm) 4.7 7.0 IRR (%) 41% 61% 12 BCFE (12 BCF) Type Curve Type Well Assumptions Completed…
  38. 1Q 2018 Earnings Presentation – Silverbow Resources – slide 38
    Corporate Information CORPORATE HEADQUARTERS SilverBow Resources, Inc. 575 North Dairy Ashford, Suite 1200 Houston, Texas 77079 (281) 874-2700 or (800) 777-2412 www.sbow.com CONTACT INFORMATION Doug Atkinson, CFA Senior Manager…

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