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2Q 2018 Update Presentation – Chesapeake Energy Corp

Chesapeake Energy Corp · Aug 1, 2018 · 41 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. 2Q 2018 Update Presentation – Chesapeake Energy Corp – slide 1
    AUGUST 2018 UPDATE
  2. 2Q 2018 Update Presentation – Chesapeake Energy Corp – slide 2
    BUSINESS STRATEGIES Our strategy remains unchanged resilient to commodity price volatility Financial discipline Profitable and efficient growth STRATEGIC GOALS from captured resources Exploration 1 Net debt to EBITDA of 2X…
  3. 2Q 2018 Update Presentation – Chesapeake Energy Corp – slide 3
    RESTORING OUR BALANCE SHEET Intend to apply 1.9 billion net proceeds from Utica transaction to debt reduction Anticipate targeting secured and near-term maturities Up to 150 million in cash interest savings projected for 2019…
  4. 2Q 2018 Update Presentation – Chesapeake Energy Corp – slide 4
    DIVERSE AND STRONG PORTFOLIO (1) CORE POSITION ACROSS FIVE BASINS APPALACHIA NORTH 3 Rigs, 1 Frac Crew 1.80 2.20/mcf Breakeven POWDER RIVER BASIN 552,000 Net Acres (86% HBP) 5 Rigs, 1 Frac Crew 25 35/bbl Breakeven 256,000 Net…
  5. 2Q 2018 Update Presentation – Chesapeake Energy Corp – slide 5
    POWDER RIVER BASIN OIL GROWTH ENGINE Production Ramp Ahead of Schedule Turner Leads the Way 2.6 bboe Stacked Future, Hotspot Advantage Gross resource size 1.7 bboe net (1) Production Mix 44% 17% 39% Oil NGL Natural…
  6. 2Q 2018 Update Presentation – Chesapeake Energy Corp – slide 6
    PRODUCTION GROWING RAPIDLY (1) 90% OIL GROWTH YTD, 100% EXPECTED IN 2019 80 70 32 mboe/d Current field rate(2) 60 Net Production (mboe/d) 50 40 30 20 10 0 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018…
  7. 2Q 2018 Update Presentation – Chesapeake Energy Corp – slide 7
    TURNER LEADING THE WAY THE PREMIER PRB OPPORTUNITY Current Rig Location Turner Producing Well Progress to date Planned TIL 2018 Future Well De-risking acreage Turner 18 Turner producers to date TIL pace accelerating Testing…
  8. 2Q 2018 Update Presentation – Chesapeake Energy Corp – slide 8
    TURNER SPACING TEST UPDATE Current Rig Location Turner Producing Well 100-day production analysis yielding Planned TIL 2018 Future Well positive results Turner Continue monitoring for 250+ days Potential to expand inventory 80…
  9. 2Q 2018 Update Presentation – Chesapeake Energy Corp – slide 9
    IMPROVING EFFICIENCIES, ENHANCING RETURNS Turner Well Costs 2,500 2,000 Gross / lateral foot 1,500 1,000 500 0 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018E Includes pre-drill, drilling,…
  10. 2Q 2018 Update Presentation – Chesapeake Energy Corp – slide 10
    STACKED FUTURE, HOTSPOT ADVANTAGE Peer Positions Chesapeake Core Area North South Teapot Parkman A Parkman Dp Sussex Niobrara Source Rock Niobrara Source Rock Frontier Heat Northern Hot Spot…
  11. 2Q 2018 Update Presentation – Chesapeake Energy Corp – slide 11
    FIELD DEVELOPMENT PLANNING Infrastructure enhancements Leveraging Bucking Horse expansion Building central production facilities Installing crude oil and water gathering systems Environmental stewardship Developing multi-well…
  12. 2Q 2018 Update Presentation – Chesapeake Energy Corp – slide 12
    POWDER RIVER BASIN OIL GROWTH ENGINE Production ramp ahead of schedule Turner leads the way Stacked future, hotspot advantage PATH FORWARD 100% expected oil growth (1) within cash flow in 2019 Move to additional zone…
  13. 2Q 2018 Update Presentation – Chesapeake Energy Corp – slide 13
    SOUTH TEXAS FOUNDATIONAL ASSET Consistent High-Margin EBITDA Delivery (1) 475 Million FCF in 2018 1.3 bboe Multi-Zone Growth Potential Net resource size (2) (3) Production Mix 58% 18% 24% Oil NGL Natural Gas…
  14. 2Q 2018 Update Presentation – Chesapeake Energy Corp – slide 14
    OPTIMIZING SOUTH TEXAS DELIVERING MORE WITH LESS (3) 500 Average First Year Gross Oil Rate / Well (bo/d) 450 Increased lateral length, spacing 400 and completions design results in: 350 300 45% increase in initial well 250…
  15. 2Q 2018 Update Presentation – Chesapeake Energy Corp – slide 15
    FOUNDATIONAL ASSET GENERATING SIGNIFICANT FREE CASH FLOW 2,000 (1) 1,500 475 million in FCF Projected for 2018 Field level business unit EBITDA 1,000 Field level business unit capex Field level business unit free cash…
  16. 2Q 2018 Update Presentation – Chesapeake Energy Corp – slide 16
    CONTINUOUS IMPROVEMENT IN A MATURE BASIN (1) Feet Drilled / Day Gross Well Costs / Foot 1,855 1,772 1,668 1,011 866 1,147 1,013 652 569 463 2014 2015 2016 2017 2018E 2014 2015 2016 2017 2018E Completed Lateral Feet /…
  17. 2Q 2018 Update Presentation – Chesapeake Energy Corp – slide 17
    FUTURE GROWTH OPPORTUNITIES Austin Chalk Upper Eagle Ford 2017 Initial co-development 2016 and 2017 Initial infill testing testing with encouraging results and successful co-development testing 2018 Data analysis and program 2018…
  18. 2Q 2018 Update Presentation – Chesapeake Energy Corp – slide 18
    IMPROVED OIL RECOVERY MAXIMIZING VALUE THROUGH TECHNOLOGY 1.3 1.7x potential improvement in oil recovery Proven technology Multiple in-basin pilots and up-scaled projects Potential CHK IOR Project Industry IOR Project Oil 3,500…
  19. 2Q 2018 Update Presentation – Chesapeake Energy Corp – slide 19
    SOUTH TEXAS FOUNDATIONAL ASSET Consistent high-margin EBITDA delivery 475 million FCF(1) in 2018 Multi-zone growth potential PATH FORWARD Continue to deliver low-cost, high-margin barrels Generate incremental value through…
  20. 2Q 2018 Update Presentation – Chesapeake Energy Corp – slide 20
    MID-CONTINENT REINVENTING A LEGACY ASSET Well-Positioned Acreage Appraising Liquid-Rich Opportunities 550 mmboe Efficient Oil Volumes Net resource size (1) Production Mix 38% 20% 46% Oil NGL Natural Gas (1)…
  21. 2Q 2018 Update Presentation – Chesapeake Energy Corp – slide 21
    OSWEGO: EFFICIENT OIL VOLUMES 50% PROGRAM ROR(1) Oswego Gross Volume (mboe/d) 18 Lateral length up 90% and 16 well cost per lateral foot 14 down 25% YOY 12 10 8 4.5 million average 2018 6 gross well cost 4 2 Avg. IP30 900…
  22. 2Q 2018 Update Presentation – Chesapeake Energy Corp – slide 22
    REINVENTING THE MID-CONTINENT Current Rig Location 783,000 (96% HBP) of Producing Well multi-zone stacked potential Wedge Planned TIL Oswego Targeting liquid-rich opportunities Appraising six formations in 2018 Reopening…
  23. 2Q 2018 Update Presentation – Chesapeake Energy Corp – slide 23
    MID-CONTINENT REINVENTING A LEGACY ASSET Well-positioned acreage Appraising liquid-rich opportunities Efficient oil volumes PATH FORWARD Expand the Oswego program Appraise the Wedge Explore new concepts August 2018…
  24. 2Q 2018 Update Presentation – Chesapeake Energy Corp – slide 24
    GULF COAST CONSISTENT PERFORMANCE, SIGNIFICANT RUNNING ROOM Completion and Drilling Excellence Redefines Play Expansive Inventory 15 tcf Access to Premium Markets Net resource size (1) Production Mix 100% Natural…
  25. 2Q 2018 Update Presentation – Chesapeake Energy Corp – slide 25
    A DECADE LATER, DELIVERING MORE VALUE MORE VALUE, FEWER RIGS Technological Core Development Breakthrough 2.00 40 Reservoir modeling, longer laterals, 1.80 enhanced completions 35 1.60 30 Gross Operated Production…
  26. 2Q 2018 Update Presentation – Chesapeake Energy Corp – slide 26
    FIRST MOVER, INNOVATION LEADER 12 15K Fairway Average Gross Cumulative Gas / Well (bcf) 15,000 LL 9 10,000 LL 6 7,500 LL 3 4,500 LL 10K Fairway 0 0 3 6 9 12 Month Substantial portfolio of extended reach laterals(1) Driving capital…
  27. 2Q 2018 Update Presentation – Chesapeake Energy Corp – slide 27
    INNOVATION LEADS TO VALUE Production Profile Comparison Strong economics and large inventory 50 Gross Daily Production (mmcf/d) 45 Fast rate of progress 40 35 First to use enhanced completions 30 Haynesville 15k First to…
  28. 2Q 2018 Update Presentation – Chesapeake Energy Corp – slide 28
    BOSSIER SHALE THE NEXT HORIZON 5.4 tcf net recoverable resource 140,000 acres legacy HBP leasehold position 730 locations remaining Bossier Fairway 6 Nabors 1HC Industry Bossier Wells Cumulative Gross Gas (bcf) 5…
  29. 2Q 2018 Update Presentation – Chesapeake Energy Corp – slide 29
    PREMIUM ASSET, PREMIUM LOCATION Premium market optionality Existing and future coastal LNG market Significant takeaway capacity System capacity of 1.8 bcf/day Current rates average 1.2 bcf/day Gas pipeline Magnolia LNG 1.1…
  30. 2Q 2018 Update Presentation – Chesapeake Energy Corp – slide 30
    GULF COAST CONSISTENT PERFORMANCE, SIGNIFICANT RUNNING ROOM Completion and drilling excellence redefines play Expansive inventory PATH FORWARD Access to premium markets Continue to drive operational efficiency Improve…
  31. 2Q 2018 Update Presentation – Chesapeake Energy Corp – slide 31
    APPALACHIA NORTH LEADING THE INDUSTRY Low Cost, High Value Premier Position 12.6 tcf Expanding Inventory Net resource size (1) Production Mix 100% Natural Gas (1) Represents average for 2Q 2018 August 2018…
  32. 2Q 2018 Update Presentation – Chesapeake Energy Corp – slide 32
    CAPITAL EFFICIENCY DEFINED Low maintenance capital with optionality to grow production 2.50 25 2.00 20 Gross Operated Production (bcf/d) 1.50 15 Rig Count 1.00 10 0.50 5 0.00 0 2008 2009 2010 2011 2012 2013…
  33. 2Q 2018 Update Presentation – Chesapeake Energy Corp – slide 33
    DOMINANT POSITION SIGNIFICANT POTENTIAL REMAINING Optimum spacing driving better Co-development with stacked plays performance Opportunity to capture in-basin Existing well density primed for price increases extended lateral…
  34. 2Q 2018 Update Presentation – Chesapeake Energy Corp – slide 34
    LEADING THE COMPETITION Production outpacing competitors IP30 (Scaled to 10,000 LL) IP30: Gross Gas Rate (mmcf/d) 70 Median Range Breaking news 60 50 13,380 lateral successfully drilled 40 14,500 lateral currently drilling 30 20 10 12…
  35. 2Q 2018 Update Presentation – Chesapeake Energy Corp – slide 35
    EXPANDING OUR CORE Enhanced completions and extended laterals expand core Four wells in expanded core planned in 2H18-1H19 300 locations in Lower Marcellus core expansion opportunity Industry Production in Core Expansion Lower…
  36. 2Q 2018 Update Presentation – Chesapeake Energy Corp – slide 36
    PENNSYLVANIA UTICA HORIZON ADDITIONAL GROWTH OPPORTUNITY Industry established play fairway Collected 450 of core Utica Fairway (1) DFIT completed in 2Q18 Path forward Analyzing data and updating models to assess play…
  37. 2Q 2018 Update Presentation – Chesapeake Energy Corp – slide 37
    APPALACHIA NORTH LEADING THE INDUSTRY Low cost, high value Premier position Expanding inventory PATH FORWARD (1) 300 million in FCF expected in 2018 Continue optimizing drilling, completions and spacing Expanding the…
  38. 2Q 2018 Update Presentation – Chesapeake Energy Corp – slide 38
    APPENDIX August 2018 Update 39
  39. 2Q 2018 Update Presentation – Chesapeake Energy Corp – slide 39
    HEDGING POSITION AS OF 7/24/18 Natural Gas Oil NGL 2018 2018 2018 33% 6% Collars 6% Collars Swaps 3.00/3.25/mcf 39.15/47/55/bbl HH WTI 63% Swaps 84% Swaps 2.97/mcf 54.09/bbl HH WTI 19% Propane Swaps 0.79/gal 36% Ethane…
  40. 2Q 2018 Update Presentation – Chesapeake Energy Corp – slide 40
    DEBT MATURITY PROFILE 2018 OUTLOOK (1) 9.2 billion 7.10% 506 million Senior Notes and Term Loan WACD Revolving Credit Facility 3,000 Revolving Credit Facility Secured 2,500 Unsecured 2,047 Convertibles 2,000 1,868 1,500…
  41. 2Q 2018 Update Presentation – Chesapeake Energy Corp – slide 41
    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:…

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