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Johnson Rice Energy Conference October 1 2014 – Jones Energy Inc.

Jones Energy Inc. · Oct 1, 2014 · 31 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. Johnson Rice Energy Conference October 1 2014 – Jones Energy Inc. – slide 1
    Johnson Rice Energy Conference October 1, 2014
  2. Johnson Rice Energy Conference October 1 2014 – Jones Energy Inc. – slide 2
    Jones Energy Overview (NYSE: JONE) NYSE Ticker: JONE Share Price: 19.00 Anadarko Basin Market Key Formations: Cleveland & Tonkawa 940 million Cleveland Daily Production: 16.8 MBoe/d Capitalization: Arkoma Basin Key Formation:…
  3. Johnson Rice Energy Conference October 1 2014 – Jones Energy Inc. – slide 3
    2014 Mid-Year Highlights Year over Year growth: EBITDAX up 45% Crude oil production up 59% Total production up 41% Cleveland production up 74% Successful Cleveland frack trial outcome Increased 2014 capex budget to 460…
  4. Johnson Rice Energy Conference October 1 2014 – Jones Energy Inc. – slide 4
    All Signs Point to Growth Through Expanded Oil Production Total Daily Production Daily Oil Production 25.0 8.0 23.0 Frack Trial Frack Trial 7.0 21.0 19.0 6.0 MBopd MBoepd 17.0 5.0 15.0 13.0 4.0 11.0 3.0 9.0 7.0…
  5. Johnson Rice Energy Conference October 1 2014 – Jones Energy Inc. – slide 5
    2014 Updated Development Plan Capital spending outlook increasing Total Capex - 460mm Cleveland enhanced frack technique 5% 3% 3% EFT accounts for 45 million Tonkawa well count up from 3 to 6 11% (10 million additional)…
  6. Johnson Rice Energy Conference October 1 2014 – Jones Energy Inc. – slide 6
    Jones Commodity Price Realizations - Steady and Predictable Steady, Predictable Differentials Ample midstream takeaway options in the Mid-Continent region Realizations Compare Favorably to Infrastructure Constrained Regions Jones…
  7. Johnson Rice Energy Conference October 1 2014 – Jones Energy Inc. – slide 7
    The Anadarko Basin Prolific History with Stacked Pay Potential Stacked pay zones within concentrated footprint provide significant development opportunities Marmaton Current Target 3.2 million acres Formations Tonkawa Sandstone…
  8. Johnson Rice Energy Conference October 1 2014 – Jones Energy Inc. – slide 8
    Extensive Experience Focused on the Mid-Continent Drilling History by Formation 140 120 Brown Dolomite 700% growth in activity over the past Tonkawa 100 Nearly 400 15 years horizontal wells in the Cleveland alone Cleveland…
  9. Johnson Rice Energy Conference October 1 2014 – Jones Energy Inc. – slide 9
    Cleveland Play Evolution: More Frack Stages = More Oil JOHN B DOYLE 6H JOHN B DOYLE 703-15H IP30: 948 BOE/D IP30: 1,103 BOE/D OIL IP30: 138 BO/D OIL IP30: 645 BO/D JONES TRUST 189-1H PARNELL RANCH 165-1H IP30: 167 BOE/D IP30:…
  10. Johnson Rice Energy Conference October 1 2014 – Jones Energy Inc. – slide 10
    Cleveland Frack Trial Results Relative Decline Curves Comparison of Oil Decline Curves 11 stage open-hole vs. 20 stage open-hole vs. 20x3 Perf & Plug (frack trial method) 500 Oil decline curves through 230 days Production in…
  11. Johnson Rice Energy Conference October 1 2014 – Jones Energy Inc. – slide 11
    Cleveland Frack Trial Results Oil Uplift From Additional Frack Stages Comparison of Average Cumulative Oil Production & Oil Decline Curve 60 Incremental oil production 500 Comparable cumulative production continues to grow through…
  12. Johnson Rice Energy Conference October 1 2014 – Jones Energy Inc. – slide 12
    Cleveland Frack Trial Results Gas Production Remains the Same Comparison of Natural Gas Decline Curves and Cumulative Production 10,000 Gas decline curves and cumulative production through 230 days 1,000 MCF/Day 100…
  13. Johnson Rice Energy Conference October 1 2014 – Jones Energy Inc. – slide 13
    Evolution of Jones Anadarko Completion Techniques 20 Stage Open Hole Jones standard completion method prior to Cleveland frack trial Unverifiable isolation Open-hole packers and sleeves Limits long-term wellbore optionality Max stages…
  14. Johnson Rice Energy Conference October 1 2014 – Jones Energy Inc. – slide 14
    NCS Sliding Sleeve Deployment Process Frac ports Locator recess Inner barrel Casing sleeve Coiled tubing Resettable Sleeve Pressure bridge plug locator recorder Frac-isolation assembly NCS Sliding Sleeve Active Video…
  15. Johnson Rice Energy Conference October 1 2014 – Jones Energy Inc. – slide 15
    Jones Energy Sliding Sleeve Progress Cemented sliding sleeves utilized in all current Anadarko completions Includes planned Tonkawa wells Current costs in-line with budgeted expectations 4.3 million to drill and complete using new…
  16. Johnson Rice Energy Conference October 1 2014 – Jones Energy Inc. – slide 16
    Continuing To Build Scale Via Multiple Avenues Cleveland Drilling Inventory Growth 800 700 2012 Acquisition of 600 Chalker Energy 2014 Jones Leasing 500 Program 2009 Acquisition of Crusader Energy 400 2004 2013 300…
  17. Johnson Rice Energy Conference October 1 2014 – Jones Energy Inc. – slide 17
    Cleveland Leasing Update Over 10,000 net acres added during first six months of 2014 for 11 million Replaced 107% of budgeted Cleveland wells for 2014 in only 6 months of leasing (78 net locations) Acreage prospective for Marmaton and…
  18. Johnson Rice Energy Conference October 1 2014 – Jones Energy Inc. – slide 18
    Tonkawa Provides Opportunities for Significant Additional Oil Production Drilling program underway Increased 2014 program to 5 6 wells Tonkawa 2.9 million acres 1st wells will employ 20 stage cemented sliding sleeve completion…
  19. Johnson Rice Energy Conference October 1 2014 – Jones Energy Inc. – slide 19
    Marmaton Shows Promise As Others Drill Ahead Marmaton lies just below the Marmaton Lime 1.0 million acres Cleveland formation Majority of Jones Anadarko acreage lies within the Marmaton fairway Results by other operators…
  20. Johnson Rice Energy Conference October 1 2014 – Jones Energy Inc. – slide 20
    Jones Energy A Growing Presence in the Mid-Continent Mid-Continent Focus History of success & reputation as a partner of choice Expertise creates opportunities to acquire at favorable prices Stacked Pay Zones Multiple horizons on…
  21. Johnson Rice Energy Conference October 1 2014 – Jones Energy Inc. – slide 21
    APPENDIX
  22. Johnson Rice Energy Conference October 1 2014 – Jones Energy Inc. – slide 22
    2014 Updated Full Year Guidance and Q3 Production Guidance Updated Previous Full Year Total Production (MMBoe)[1] 8.4 - 8.8 8.0 - 8.4 Full Year Average Daily Production (MBoe/d)[1] 23.0 - 24.0 22.0 - 23.0 Third Quarter Total…
  23. Johnson Rice Energy Conference October 1 2014 – Jones Energy Inc. – slide 23
    20 Stage Open Hole Method Versus Cemented Liner w/Sliding Sleeve Open Hole Completion System Cemented Liner w/Sliding Sleeves 100 SPACING Open Hole Completion System Cemented Liner w/Sliding Sleeves Multiple Stages: 20 43…
  24. Johnson Rice Energy Conference October 1 2014 – Jones Energy Inc. – slide 24
    How Jones Creates Unmatched Value in the Cleveland IRR 60% Emphasis on Cycle Time 60% Focus on efficiency from spud to first production These five elements Vendor Management 50% create nearly 1 million Competition from multiple…
  25. Johnson Rice Energy Conference October 1 2014 – Jones Energy Inc. – slide 25
    Hedge Volumes 2014 2015 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Oil and Gas Swaps Crude Oil (Mbbl) 469 426 399 359 327 301 284 Natural Gas (MMcf) 3,890 4,020 3,530 3,152 2,945 2,750 2,556 Conway NGLs (Mbbl) Ethane 128 109 106 60 55 51 46 Propane…
  26. Johnson Rice Energy Conference October 1 2014 – Jones Energy Inc. – slide 26
    Hedge Pricing 2014 2015 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Oil and Gas Swaps Crude Oil ( / Bbl) 91.04 91.10 91.14 88.82 88.84 89.76 89.81 Natural Gas ( / Mcf) 4.84 4.88 4.89 4.84 4.84 4.87 4.89 Conway NGLs ( / Gal) Ethane 0.18 0.18 0.18 0.20…
  27. Johnson Rice Energy Conference October 1 2014 – Jones Energy Inc. – slide 27
    Corporate Structure Metalmark, Management Public & Other Investors Shareholders Class B Common Stock Class A Common Stock 74.7% of voting power in 25.3% of voting power in Jones Energy, Inc. Jones Energy, Inc. 74.7% of total…
  28. Johnson Rice Energy Conference October 1 2014 – Jones Energy Inc. – slide 28
    Up-C Structure Overview JONE went public using an Up-C structure Other recent energy IPOs with Up-C structure include: Athlon Energy Inc. Franks International N.V. Parsley Energy, Inc. Due to the Up-C structure, on its financial…
  29. Johnson Rice Energy Conference October 1 2014 – Jones Energy Inc. – slide 29
    Forecasting JONE EPS The simplest way to forecast JONE EPS is on a 100% basis: Income before income tax - Income tax provision (36.5% of pre-tax income*) Net income Total Class A and B shares outstanding of 49,362,913 Net…
  30. Johnson Rice Energy Conference October 1 2014 – Jones Energy Inc. – slide 30
    Forecasting JONE EPS Alternatively, EPS can be calculated using net income attributable to controlling interests and Class A shares outstanding: Income before income tax on 100% basis - Pre-tax income attributable to non-controlling…
  31. Johnson Rice Energy Conference October 1 2014 – Jones Energy Inc. – slide 31
    Understanding JONE EPS Calculation on Reported Financial Statements Breakdown of JONE Income Tax Calculation ( in millions, except per share data) JONE Q2 2014 Income Statement Income before income tax ( in thousands, except per share…

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