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JP Morgan High Yield and Leveraged Finance Conference – Chaparral Energy

Chaparral Energy · Feb 25, 2019 · 37 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. JP Morgan High Yield and Leveraged Finance Conference – Chaparral Energy – slide 1
    J.P. Morgan High Yield & Leveraged Finance Conference February 2019 NYSE: CHAP NYSE:CHAP 0
  2. JP Morgan High Yield and Leveraged Finance Conference – Chaparral Energy – slide 2
    Company Overview NYSE: CHAP 2
  3. JP Morgan High Yield and Leveraged Finance Conference – Chaparral Energy – slide 3
    Chaparral Story High-growth, pure-play STACK/Merge oil company 16.6 MBoe/d Q4 2018 estimated STACK production 21.7 MBoe/d Q4 2018 estimated total production 52% estimated full year 2018 STACK production growth Premier, contiguous…
  4. JP Morgan High Yield and Leveraged Finance Conference – Chaparral Energy – slide 4
    2018 Chaparral Highlights Issued 300mm in senior notes and increased undrawn borrowing base from 265mm to 325mm Recorded STACK production growth of: 6% Q3 2018 to Estimated Q4 2018 60% Q4 2017 to Estimated Q4 2018 Grew STACK…
  5. JP Morgan High Yield and Leveraged Finance Conference – Chaparral Energy – slide 5
    2019 Strategy PURE-PLAY Accelerate development in Canadian County Merge STACK/MERGE Define optimal spacing across de-risked acreage COMPANY Continue delineation and de-risking of Garfield acreage RETURNS Focus exclusively on…
  6. JP Morgan High Yield and Leveraged Finance Conference – Chaparral Energy – slide 6
    2019 Guidance 2019 Guidance Highlights 2019 Guidance Ranges from 2018 Production (MBoe/d) Maintain capital discipline in volatile commodity Guidance environment Total Company 25.0 - 27.0 Reducing operated rigs from 4 to 3 in Q2…
  7. JP Morgan High Yield and Leveraged Finance Conference – Chaparral Energy – slide 7
    Operational Overview NYSE: CHAP 7
  8. JP Morgan High Yield and Leveraged Finance Conference – Chaparral Energy – slide 8
    STACK/Merge Attributes World-class Woodford source rock Favorable Geology +700 feet of saturated hydrocarbon column Multiple reservoir development opportunities Robust service sector support Extensive Infrastructure Numerous…
  9. JP Morgan High Yield and Leveraged Finance Conference – Chaparral Energy – slide 9
    Continuous Petroleum System STACK/Merge Attributes N Stacked reservoirs proximal to the world-class Woodford source rock STACK Efficient hydrocarbon stratigraphic trap creates a continuous petroleum system Play attributes are…
  10. JP Morgan High Yield and Leveraged Finance Conference – Chaparral Energy – slide 10
    STACK Break-Even Economics Oil Economics WTI Basin Breakeven Estimates1 45 40 35 30 25 Delaware STACK Midland SCOOP Eagle Ford Bakken Niobrara Oil Economics Chaparral Counties of Focus1 45 35 25 15 Canadian…
  11. JP Morgan High Yield and Leveraged Finance Conference – Chaparral Energy – slide 11
    Meramec Well Performance Excellent recent operated well performance for Merge and STACK Meramec type curve areas Actual oil results are in-line or exceeding current type curve expectations Type curve rates-of-return: 45% to 55%1…
  12. JP Morgan High Yield and Leveraged Finance Conference – Chaparral Energy – slide 12
    Osage Well Performance Strong recent operated well performance for Upper and Lower Osage type curve areas Actual oil results are in-line or exceeding current type curve expectations Type curve rates-of-return: 30% to 50%1 Upper…
  13. JP Morgan High Yield and Leveraged Finance Conference – Chaparral Energy – slide 13
    Operational Excellence Drilling and Completions Strong, Effective Focus on Cost Control Chaparral Osage and Meramec D&C represents best-in-class in normal pressure STACK Low well cost and consistent production results produce…
  14. JP Morgan High Yield and Leveraged Finance Conference – Chaparral Energy – slide 14
    STACK/Merge Overview STACK/Merge Production 25 23.0 20 21.0 16.5 15 15.5 MBoe/d 14.5 10 9.5 5 7.3 0 2016 2017 FY 2018E FY 2019E STACK Production Guidance Range Q1 2019 Guidance (Low) Q1 2019 Guidance (High)…
  15. JP Morgan High Yield and Leveraged Finance Conference – Chaparral Energy – slide 15
    Strong Culture of Continuous Learning Science and technology driven collaborative approach Process of continuous improvement drives results Science Learnings Technology Results Execution Key Spacing Principals…
  16. JP Morgan High Yield and Leveraged Finance Conference – Chaparral Energy – slide 16
    Systematic Approach to Spacing Development Canadian Kingfisher Denali King Koopa Meramec partial spacing test Meramec/Osage partial spacing test Minimal inter-well communication Minimal inter-well communication Parent at pre-infill…
  17. JP Morgan High Yield and Leveraged Finance Conference – Chaparral Energy – slide 17
    Financial Overview NYSE: CHAP 17
  18. JP Morgan High Yield and Leveraged Finance Conference – Chaparral Energy – slide 18
    Financial Strategy Maintain balance sheet strength Target net debt to adjusted EBITDA ratio of approximately 2.5x or less Supplement cash flow with proceeds from non-core asset sales Development plan funding available due to ample…
  19. JP Morgan High Yield and Leveraged Finance Conference – Chaparral Energy – slide 19
    Financial Position and Liquidity Highlights Chaparral Liquidity Closed on a 300 million senior ( in Millions) Q3 2018 unsecured notes offering on June 29, Actual Actual 2018 Cash and Cash Equivalents 49 Paid down all outstanding…
  20. JP Morgan High Yield and Leveraged Finance Conference – Chaparral Energy – slide 20
    Why Chaparral Strong Balance Sheet Experienced Execution-focused, Management with Pure-play STACK Excellent Track Operations Record Deep Inventory of High-return Drilling Prospects NYSE: CHAP 20
  21. JP Morgan High Yield and Leveraged Finance Conference – Chaparral Energy – slide 21
    Appendix NYSE: CHAP 21
  22. JP Morgan High Yield and Leveraged Finance Conference – Chaparral Energy – slide 22
    Crude Oil Marketing Crude Oil Acreage in close proximity to Cushing and in-state refineries Premium price due to gravity and quality of barrel Substantial capacity to market via truck or existing pipeline Evaluating pipeline…
  23. JP Morgan High Yield and Leveraged Finance Conference – Chaparral Energy – slide 23
    Natural Gas & NGL Marketing Natural Gas and NGL Midstream super system, with multiple plants and residue outlets Two Bcf of incremental capacity to North Texas, eastern and southeastern U.S. and Gulf Coast markets (mid-year 2018 and…
  24. JP Morgan High Yield and Leveraged Finance Conference – Chaparral Energy – slide 24
    Commodity Realizations Crude Oil Differentials Oil & NGL Realizations as % of WTI Proximity to numerous markets provides better CHAP 97% 95% 93% 96% 99% 100 100% net back as compared to other basins WTI Average Daily Settle 90…
  25. JP Morgan High Yield and Leveraged Finance Conference – Chaparral Energy – slide 25
    Hedging Summary Hedge Positions1 2019 2020 2021 Crude Oil Swaps Hedge Volume (BBL) 2,428,200 2,007,000 689,300 Average Price (/BBL) 56.17 50.56 46.24 Crude Oil Roll Hedge Volume (BBL) 530,000 410,000 150,000 Average Ceiling Price…
  26. JP Morgan High Yield and Leveraged Finance Conference – Chaparral Energy – slide 26
    Core STACK & Merge Type Curve Overview STACK Osage, Meramec & Merge Miss North South Lower Upper Meramec Merge Woodford Woodford Osage Osage Lateral Length (ft.) 4,800 4,800 4,800 4,800 4,800 4,800 Well Cost (mm) 4.0 4.5 4.4 4.4…
  27. JP Morgan High Yield and Leveraged Finance Conference – Chaparral Energy – slide 27
    STACK Type Curve Assumptions STACK Meramec Lower Osage Upper Osage North Woodford South Woodford Merge Miss Well Cost Assumptions Well Costs (mm) 4.0 3.9 4.1 4.4 4.4 4.5 Well Costs (/ft) 833 813 854 917 917 938 Type Curve…
  28. JP Morgan High Yield and Leveraged Finance Conference – Chaparral Energy – slide 28
    Highly Profitable Breakeven Acreage 11 2 Recent Operated Performance 10 No. Well Name Spud Date IP-30 Boe/d Liquids 9 8 3 1 1 BARBEE 2105 1LMH-4 12/17/2017 1,122 69% 5 2 GLOCK 2205 1LMH-15 2/9/2018 913 61% 4 3 DOGWOOD 2205…
  29. JP Morgan High Yield and Leveraged Finance Conference – Chaparral Energy – slide 29
    STACK Meramec and Merge Miss Overview Spud Peak IP-301 Liquids1 Lateral Lease Operator Date Boe/d % Length 1 SLIMER 1707 1UMH-23 CHAPARRAL 9/5/2017 713 85% 4,839 2 HIGH VALLEY 1807 1UMH-36 CHAPARRAL 8/19/2017 682 77% 4,588 3 BIG…
  30. JP Morgan High Yield and Leveraged Finance Conference – Chaparral Energy – slide 30
    STACK Osage Type Curves Overview Spud Peak IP-301 Liquids1 Lateral Lease Operator Date Boe/d % Length 1 PEAR 2106 1LMH-23 CHAPARRAL 5/6/2018 1,326 87% 4,892 2 DOGWOOD 2205 1LMH-28 CHAPARRAL 3/15/2018 1,182 54% 4,844 3 COTTONWOOD…
  31. JP Morgan High Yield and Leveraged Finance Conference – Chaparral Energy – slide 31
    STACK Woodford Type Curves Overview Spud Peak IP-301 Liquids1 Lateral Lease Operator Date Boe/d % Length 1 CUTTHROAT 1307 1WH-13 CHAPARRAL 2/11/2017 588 76% 4,225 2 GLACIER 11-14-12-6 1HX JONES 12/31/2017 463 63% 9,890 3 ACADIA…
  32. JP Morgan High Yield and Leveraged Finance Conference – Chaparral Energy – slide 32
    Non-Core Legacy Asset Overview Mature legacy fields Low-maintenance capital Provides free cash flow to fuel STACK growth Potential strategic alternatives Net Production1 Gross Margin1 Net Proved Reserves Area Boe/d % Oil…
  33. JP Morgan High Yield and Leveraged Finance Conference – Chaparral Energy – slide 33
    Year-End 2017 Proved Reserves Grew STACK year-end 2017 reserves by 58% Replaced 604% of 2017 STACK production at 7.26/Boe F&D cost 76.3 MMBoe of Reserves1 39% Oil, 63% Liquids Reserves by Area 24% 25.6 39% 26.9 49.4 1.1 49.7…
  34. JP Morgan High Yield and Leveraged Finance Conference – Chaparral Energy – slide 34
    STACK Drilling Joint Venture Joint venture between Chaparral and Bayou City Energy (BCE) Accelerate development of 127,000 STACK acres 20 wells drilled and producing as of Q3 2018 Key driver in de-risking Garfield 50% and…
  35. JP Morgan High Yield and Leveraged Finance Conference – Chaparral Energy – slide 35
    Reconciliations Successor Three Months Three Months Ended Ended (in thousands) Sept 30, 2018 Sept 30, 2017 Net (loss) income (12,068) (19,115) Interest expense 4,205 5,283 Income tax expense 37 Depreciation, depletion, and…
  36. JP Morgan High Yield and Leveraged Finance Conference – Chaparral Energy – slide 36
    Reconciliations STACK F&D and Reserve Replacement 2017 Metrics Calculation STACK Production (MBoe) 3,464 (A) Proved Reserves (MBoe) STACK Extensions and Discoveries 20,927 (B) STACK Revisions 597 (C) (excluding price revisions)…
  37. JP Morgan High Yield and Leveraged Finance Conference – Chaparral Energy – slide 37
    Contact Information Chaparral Energy, Inc. 701 Cedar Lake Boulevard Oklahoma City, OK 73114 Investors Media Al Petrie Brandi Wessel Al Petrie Advisors Manager Communications alalpetrie.com brandi.wesselchaparralenergy.com…

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