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November 2018 Update – Chesapeake Energy Corp

Chesapeake Energy Corp · Nov 9, 2018 · 36 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. November 2018 Update – Chesapeake Energy Corp – slide 1
    NOVEMBER 2018 UPDATE
  2. November 2018 Update – Chesapeake Energy Corp – slide 2
    ACCELERATES CHESAPEAKES STRATEGIC PLAN Acquisition of WildHorse Margin Enhancement Increases margins from high-value oil production Free Cash Flow Accelerates transition to positive free cash flow Long Term Net Debt /…
  3. November 2018 Update – Chesapeake Energy Corp – slide 3
    TRANSACTION OVERVIEW 3.977 billion transaction value At the election of WildHorse shareholders, 5.989 shares of Chesapeake common Consideration stock per WildHorse share of common stock or 5.336 shares of Chesapeake common stock…
  4. November 2018 Update – Chesapeake Energy Corp – slide 4
    STRATEGIC PORTFOLIO ADDITION POSITIONS CHK FOR ADDITIONAL VALUE CREATION ACREAGE POSITION Adds significant premier Eagle Ford asset at an attractive valuation Accelerates cash flow generation with profitable oil growth…
  5. November 2018 Update – Chesapeake Energy Corp – slide 5
    ACCELERATING VALUE, (1) DELIVERING ON OUR PROMISES 170 160165 30 130 125130 Enhances Improves 19 25 80 oil mix percentage bbls/d % oil oil production approximately approximately 2x by 2020 (2) CHK18E PF19E…
  6. November 2018 Update – Chesapeake Energy Corp – slide 6
    COST SAVINGS CREATE SIGNIFICANT SHAREHOLDER VALUE ANNUAL SAVINGS Operational Efficiencies 50 80 million Capital Efficiencies 150 200 million Total 200 280 million Five Year Total Savings(1) 1.0 1.0 1.5 billion 1.5 billion…
  7. November 2018 Update – Chesapeake Energy Corp – slide 7
    OPPORTUNITIES TO CAPTURE ADDITIONAL MARKETING SYNERGIES Significant synergies available by leveraging Chesapeakes existing crude transportation options Cooks Point Terminal Large, contiguous Eagle Ford oil position Abundant…
  8. November 2018 Update – Chesapeake Energy Corp – slide 8
    CREATING AN EAGLE FORD POWERHOUSE ACREAGE POSITION Well understood geology similar to existing CHK position WildHorse Leasehold B CHK Leasehold High on the learning curve Eagle Ford Play Learnings from more than 2,000 Eagle Ford…
  9. November 2018 Update – Chesapeake Energy Corp – slide 9
    THE CHESAPEAKE ADVANTAGE (1) Eagle Ford Lateral Length (mean) Operations Support Center 12,000 10,000 Reservoir Technology Center 8,000 6,000 Drilling and completion leadership 4,000 2,000 Eagle Ford wells to date 2,000…
  10. November 2018 Update – Chesapeake Energy Corp – slide 10
    CHK TODAY: DIVERSE & STRONG PORTFOLIO CORE POSITIONS ACROSS MULTIPLE BASINS Powder River Basin: Oil-growth Engine Marcellus: Leading the Industry Oil production will more than double in 2019 Generating 350 million in free cash…
  11. November 2018 Update – Chesapeake Energy Corp – slide 11
    ACQUISITION CREATES PREMIER DIVERSIFIED INDEPENDENT WITH SIGNIFICANT HIGH-MARGIN OIL-GROWTH RUNWAY Targeting 80% + of future drilling and completion activity focused on high-margin oil-growth assets High-margin Oil-growth…
  12. November 2018 Update – Chesapeake Energy Corp – slide 12
    ACCELERATES CHKS STRATEGIC AND FINANCIAL PLAN Adds significant premier Eagle Ford asset at attractive valuation Increases cash flow generation with profitable oil growth Materially improves margins and financial profile…
  13. November 2018 Update – Chesapeake Energy Corp – slide 13
    WildHorse Technical Review November 2018 Update 14
  14. November 2018 Update – Chesapeake Energy Corp – slide 14
    EASTERN EAGLE FORD EVALUATION INITIATED IN 2012 Chesapeake valuation of Eastern Eagle Ford based on bottoms-up internal regional knowledge and expertise 2012 2017: CHK Woodbine team evaluates emerging Eastern Eagle Ford play Play…
  15. November 2018 Update – Chesapeake Energy Corp – slide 15
    CHESAPEAKES EVALUATION FOUNDATION Eastern Eagle Ford Data Map Extensive review of WRDs Eagle Ford position conducted 3D seismic Dense log prior to receipt of proprietary data footprint coverage Existing subsurface and commercial…
  16. November 2018 Update – Chesapeake Energy Corp – slide 16
    THE WILDHORSE ROCK ADVANTAGE WELL CONSTRAINED RESERVOIR CHARACTERISTICS Eastern Eagle Ford Type Log Organic-rich calcareous mudstone Gamma ray Resistivity Outer shelf depositional setting Similar to South Texas Eagle Ford Top…
  17. November 2018 Update – Chesapeake Energy Corp – slide 17
    WildHorse acreage THE WILDHORSE LOCATION ADVANTAGE A POSITIONED IN THE CORE OF THE PLAY Controlling the sweet spot Optimal thickness, organic content, maturity and clay content A 20 miles Gross thickness c.i. = 100' Eastern…
  18. November 2018 Update – Chesapeake Energy Corp – slide 18
    THE WILDHORSE RESERVOIR ADVANTAGE SIGNIFICANT OIL WINDOW EXPOSURE Overlying Austin Chalk GOR aligns with Eagle Ford maturity trends Validated with Eagle Ford production data Eastern Eagle Ford Maturity and Austin Chalk GOR (1)…
  19. November 2018 Update – Chesapeake Energy Corp – slide 19
    SUBSURFACE CONFIDENCE, REDUCING UNCERTAINTY History of Eastern Eagle Ford Activity Extensive knowledge Deep regional knowledge of Eastern Eagle Ford Well defined, low-risk subsurface elements Production aligns with mapped subsurface…
  20. November 2018 Update – Chesapeake Energy Corp – slide 20
    CHKS D&C PERFORMANCE ADVANTAGE Operations Support Center provides 24/7 D&C Cost Per Lateral Foot drilling support Continuous monitoring of drilling performance 1,250(1) Improved geosteering = higher percentage in zone Drilling…
  21. November 2018 Update – Chesapeake Energy Corp – slide 21
    PROVEN TRACK RECORD Eagle Ford Appalachia South Appalachia North 21% 41% 36% reduction D&C Cost/ft (/ft) reduction reduction 2014 2015 2016 2017 2014 2015 2016 2017 2014 2015 2016 2017 TIL Year TIL Year TIL Year…
  22. November 2018 Update – Chesapeake Energy Corp – slide 22
    EXTENDED LATERALS DRIVE VALUE Existing WRD Opportunity to increase NPV with extended laterals Short Laterals Largely undeveloped, contiguous position Unparalleled extended lateral experience Proven performance across all assets…
  23. November 2018 Update – Chesapeake Energy Corp – slide 23
    SUBOPTIMAL SPACING DEGRADES 2018 WILDHORSE WELL PERFORMANCE WRD TIL Composition Nearly half of 2018 WRD TILs are 100% 90% Austin Chalk or downspaced Eagle Ford 80% 70% Versus 20% in 2017 60% 50% 40% 2018 WRD Eagle Ford…
  24. November 2018 Update – Chesapeake Energy Corp – slide 24
    OPTIMIZING WELL SPACING CHK model spacing assumption currently Well Spacing Comparison(1) 1,000' and 10,000' lateral length 180 750' spacing probable over most fluid windows 160 500' spacing potential with additional evaluation…
  25. November 2018 Update – Chesapeake Energy Corp – slide 25
    REDUCING DOWNTIME, IMPROVING BASE PRODUCTION Opportunity to reduce downtime Operate by intention 35% downtime reduction since 2015 in CHK STX Eagle Ford WellTender mobile app Improved artificial lift designs reduce base…
  26. November 2018 Update – Chesapeake Energy Corp – slide 26
    CHESAPEAKES VALUE OPPORTUNITY Technical and Operational Excellence Improved Capital NAV Drives Value Recovery Efficiency Impact Drilling and Completions Optimization Reduced costs through improved performance and execution…
  27. November 2018 Update – Chesapeake Energy Corp – slide 27
    CHKS CURRENT WRD EAGLE FORD ASSUMPTIONS CHKs WRD Eagle Ford Model Assumptions CHKs WRD Eagle Ford Type Curve(2) 1,200 Avg. Lateral Length 10,000' Locations 1,000 1,400 1,000 Avg. Daily Rate (boe/d) WI / NRI 84 / 66% 800 EUR 600…
  28. November 2018 Update – Chesapeake Energy Corp – slide 28
    PREMIER DIVERSIFIED INDEPENDENT WITH SIGNIFICANT HIGH-MARGIN OIL-GROWTH RUNWAY Targeting 80% + of future drilling and completion activity focused on high-margin oil-growth assets High-margin Oil-growth Assets(1) Powder River…
  29. November 2018 Update – Chesapeake Energy Corp – slide 29
    POWDER RIVER BASIN OIL-GROWTH ENGINE Production Ramp Click to edit Ahead of Schedule takeaway Turner Leads Click to edit the Way takeaway 2.6 bboe Stacked Click toFuture, Hotspot Advantage edit takeaway Gross resource…
  30. November 2018 Update – Chesapeake Energy Corp – slide 30
    ACCELERATING THE TURNER Delineated BB 1 18H Turner Producing 2,725 Max boe/d Exceptional productivity (86% oil) Planned TIL Planned 2019 Well SFU 19 23H 24 Chesapeake TILs to date 1,479 Max boe/d (84% oil) Turner High GOR…
  31. November 2018 Update – Chesapeake Energy Corp – slide 31
    TURNER SPACING TEST UPDATE Delineated Turner Producing Field test yielding positive initial Planned TIL Planned 2019 Well results through 190 days Turner High GOR Optimal spacing drives maximum field development value Two…
  32. November 2018 Update – Chesapeake Energy Corp – slide 32
    PRB PREMIER GROWTH OPPORTUNITY Progress to date Moved to Development phase of the Turner More than 5,000' of oil-rich, stacked pay opportunities Continue to appraise new formations 2018 2019 2020+ Turner spacing tests Turner…
  33. November 2018 Update – Chesapeake Energy Corp – slide 33
    SOUTH TEXAS FOUNDATIONAL ASSET Consistent High-Margin EBITDA Delivery 560 Million FCF(1) in 2018 1.3 bboe Multi-Zone Growth Potential Net resource size (2) Production Mix (3) 58% 22% 20% Oil NGL Natural Gas (1)…
  34. November 2018 Update – Chesapeake Energy Corp – slide 34
    OPTIMIZING SOUTH TEXAS DELIVERING MORE WITH LESS Expected to generate 560 million Range of Capex Estimates (/Lateral Foot)(3) free cash flow(1) in 2018 1.10 1,100 RSEG WoodMac 1,000 1.00 D&C/Lateral Foot Increased lateral…
  35. November 2018 Update – Chesapeake Energy Corp – slide 35
    IMPROVED OIL RECOVERY PUSHING THE ENVELOPE Oil-window opportunity 1.3 1.7x potential improvement in oil recovery Proven technology Multiple in-basin pilots and up-scaled projects Expected benefits Adds value to existing well…
  36. November 2018 Update – Chesapeake Energy Corp – slide 36
    FAITH RANCH PROJECT BATCH DEVELOPMENT YIELDS CONTINUED SUCCESS Faith Ranch 21,300 net acres Faith Ranch Phase 1 283 producing wells 2018 Development Phase 2 33/bbl breakeven(1) 16 Wells Faith-San Pedro Faith Toro 80% ROR…

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