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Analyst Day: New York – PDC Energy, Inc.

PDC Energy, Inc. · Apr 17, 2014 · 94 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. Analyst Day: New York – PDC Energy, Inc. – slide 1
    ANALYST DAY: NEW YORK APRIL 17, 2014 NASDAQ:PDCE
  2. Analyst Day: New York – PDC Energy, Inc. – slide 2
    Welcome to 2014 Analyst Day James Trimble Chief Executive Officer & President 4/17/2014 3
  3. Analyst Day: New York – PDC Energy, Inc. – slide 3
    PDC Energy Asset History Former Assets Current Portfolio Bakken Michigan New York Wyoming NECO OH-Utica Piceance Shallow Upper Devonian CO-Wattenberg WV-Marcellus Tennessee Barnett Permian 4/17/2014 4
  4. Analyst Day: New York – PDC Energy, Inc. – slide 4
    PDC Energy Asset History Former Assets Current Portfolio OH-Utica CO-Wattenberg WV-Marcellus 4/17/2014 5
  5. Analyst Day: New York – PDC Energy, Inc. – slide 5
    What You Will Hear Today Wattenberg Technical advancements in field Utica Continued downspacing success Continued downspacing De-risking of leaseholds Marcellus Type curve results Operations update Type curves by area Future…
  6. Analyst Day: New York – PDC Energy, Inc. – slide 6
    Analyst Day Agenda Wattenberg Operations, Scott Reasoner Reserves, James Lillo Marketing and Midstream, George Courcier Utica Operations, Scott Reasoner Marketing and Midstream, George Courcier PDCM Marcellus, Dewey Gerdom…
  7. Analyst Day: New York – PDC Energy, Inc. – slide 7
    Wattenberg Operations Scott Reasoner Vice President Western Operations 4/17/2014 8
  8. Analyst Day: New York – PDC Energy, Inc. – slide 8
    Wattenberg Operations Technical Summary Delivering long-term growth Established and consistent core Niobrara and Codell development Waste Management Findings Well performance Completion design Downspacing 2014 and Beyond…
  9. Analyst Day: New York – PDC Energy, Inc. – slide 9
    Horizontal Program DJ Basin PDCs Core Wattenberg Field Position Regional Horizontal Development Overview(1) 97,000 net acres, 97% HBP Third largest leaseholder and producer Strong repeatable lower risk projects 2,000 horizontal…
  10. Analyst Day: New York – PDC Energy, Inc. – slide 10
    Wattenberg: Delivering Long-Term Growth 2014 Capital Budget Allocation Investing 467 million (72% of 2014 budget) 80% of PDCs total proved and 3P reserves 45% year-over-year increase in 3P reserves in Utica Wattenberg Field…
  11. Analyst Day: New York – PDC Energy, Inc. – slide 11
    Three Established Core Wattenberg Areas Continued Development Supporting Horizontal Niobrara Type Curve Boundaries Inner Core Type Well Summary 3-Phase EUR: 500 Mboe Net Acres: 5,500 Gross 3P Locations: 90 IRR(1): 125% PV10:…
  12. Analyst Day: New York – PDC Energy, Inc. – slide 12
    Consistency Across Niobrara Benches Middle Core Outer Core B & C Bench Performance B & C Bench Performance Consistency across benches in the Middle Core More recent C-bench wells showing better Both benches performing at 400 MBoe…
  13. Analyst Day: New York – PDC Energy, Inc. – slide 13
    Among Leaders in Hz Codell Development Strong Codell results across entire PDC acreage position PDC second in horizontal Codell development Provides second tier of upside complementing Niobrara PDC plans for continued Codell…
  14. Analyst Day: New York – PDC Energy, Inc. – slide 14
    Codell Hz Results Comparable to Niobrara Hz Codell Hz Type Well 3-Phase EUR: 370 MBoe Net acres: 97,000 Gross 3P Locations: 822 IRR(1): 73% PV10: 4.7MM Undiscounted Payout: 17 months Niobrara Avg Hz Type Well 3-Phase EUR: 370…
  15. Analyst Day: New York – PDC Energy, Inc. – slide 15
    Wattenberg Operations Technical Summary Delivering long-term growth Established and consistent core Niobrara and Codell development Waste Management Findings Well performance Completion design Downspacing Waste Management…
  16. Analyst Day: New York – PDC Energy, Inc. – slide 16
    Comparison of Well Performance Waste Management Section 16 Well Downspacing Project N 5280 Middle Core Type Well 3-Phase EUR: 400 MBoe Well Capital: 4.2MM IRR(1): 75% PV10: 4.2MM Undiscounted Payout: 16 months…
  17. Analyst Day: New York – PDC Energy, Inc. – slide 17
    Increased Stage Density Adding Reserves Waste Management Section 16 Well Downspacing Project N 5,280 Middle Core Type Well 3-Phase EUR: 400 MBoe Well Capital: 4.2MM IRR(1): 75% PV10: 4.2MM Undiscounted Payout: 16…
  18. Analyst Day: New York – PDC Energy, Inc. – slide 18
    Microseismic Showing Effective Stimulation Waste Management Section 16 Well Downspacing Project N 5,280 5,280 Results collected demonstrate most events contained to Niobrara and Codell zones Listening devices only hear…
  19. Analyst Day: New York – PDC Energy, Inc. – slide 19
    Driving Enhanced Value Through Downspacing Waste Management Section 16 Well Downspacing Project 2012 Downspacing Project Used downspacing projects to increase Riteaway Pad Layout development plans from 8 to 16 wells per section…
  20. Analyst Day: New York – PDC Energy, Inc. – slide 20
    Wattenberg Operations Technical Summary Delivering long-term growth Established and consistent core Niobrara and Codell development Waste Management Findings Well performance Completion design Downspacing 2014 and Beyond…
  21. Analyst Day: New York – PDC Energy, Inc. – slide 21
    Core Wattenberg 2014 Development Map highlights pad locations Fully implementing downspacing on majority of 2014 program 2014 development (115 spuds) Inner Core: 17% (20 wells) Middle Core: 43% (49 wells) Outer Core: 40% (46…
  22. Analyst Day: New York – PDC Energy, Inc. – slide 22
    Transition from Spud to TIL Counts Large pad sizes causing significant spread between spud dates and TIL dates Transitioning guidance to turn-in-lines (TILs) to better align with production growth profile Capital spending for 5th…
  23. Analyst Day: New York – PDC Energy, Inc. – slide 23
    Pursuing Extended Laterals Continue to evaluate industry performance of extended laterals Potential for improved efficiencies per lateral-foot Based on this data, PDC is planning approximately 20 extended laterals Not all of PDC…
  24. Analyst Day: New York – PDC Energy, Inc. – slide 24
    Key PDC Projects Testing Tighter Downspacing PDC aggressively testing downspacing in multiple areas of Core Wattenberg Evaluating resource potential beyond current 3P inventory spacing Planned Wells per Section Equivalent 2014…
  25. Analyst Day: New York – PDC Energy, Inc. – slide 25
    Growth in Non-Operated Activity Dramatic increase in non-operated production Wattenberg Capital Program Breakdown (MM) Quantity of wells drilled and timing can be issue 2011 2014E regarding TIL planning Capital/production can shift…
  26. Analyst Day: New York – PDC Energy, Inc. – slide 26
    Core Wattenberg: Keys to Execution Operational Excellence Accelerated development Subsurface Cost control Continued downspacing Larger pad size 20 wells per section New completion technology 26 wells per section Infrastructure…
  27. Analyst Day: New York – PDC Energy, Inc. – slide 27
    Wattenberg Operations Outlook Crude Oil Natural Gas NGLs 2013 2014E 2015E Total Capital (MM) 269 467 560 Rig Count 2 4 4 5 5 6 Operated Spuds 70 115 135 Operated TILs 61 92 135 4/17/2014 28
  28. Analyst Day: New York – PDC Energy, Inc. – slide 28
    Wattenberg Reserves James Lillo Vice President Engineering and Technology 4/17/2014 29
  29. Analyst Day: New York – PDC Energy, Inc. – slide 29
    What Sets PDC Apart: Core Wattenberg CO DJ Niobrara Outside Core Three identified producing areas PREMIER Consistent rock & fluid properties ASSET Multiple producing horizons Statistically-large well dataset PROVEN…
  30. Analyst Day: New York – PDC Energy, Inc. – slide 30
    Quantifying Consistency in Core Wattenberg EUR Variability Ratio Inner Core Represents 650+ ( P10 / P90 ) Middle Core Hz Niobrara wells Outer Core Calculated EURs on 800 industry Hz Niobrara CO DJ Niobrara Represents 150+ wells…
  31. Analyst Day: New York – PDC Energy, Inc. – slide 31
    Horizontal Codell: Establishing Consistency Hz Codell Activity Map Represents 70+ Hz Codell Hz Codell industry wells Core Wattenberg Boundary (1) PDC Hz Codell (1) Industry Hz Codell EUR Variability Type Well Type Well…
  32. Analyst Day: New York – PDC Energy, Inc. – slide 32
    Continued Inventory Growth Core Wattenberg YE2012 Summary YE2013 Summary Proved Locations 3P Locations Proved Locations 3P Locations (4 wells/section) (16 wells/section) (8 wells/section) (22 wells/section) 5,280 5,280 Proved…
  33. Analyst Day: New York – PDC Energy, Inc. – slide 33
    Niobrara Downspacing in Core Wattenberg MIDDLE CORE OUTER CORE Represents 300+ Hz Niobrara industry wells Represents 175+ Hz Niobrara industry wells Spacing Unit Performance Spacing Unit Performance 320 160 80 40 320 160 80 40…
  34. Analyst Day: New York – PDC Energy, Inc. – slide 34
    Evaluating Niobrara Recovery Factors 1P Recovery 2P Recovery 3P Recovery 6 wells 10 wells 16 wells 10% Recovery Factors(1) 8% 6% 4% 9.0% 5.4% 2% 3.3% - Low Niobrara recovery even at 3P downspacing of 16 wells per…
  35. Analyst Day: New York – PDC Energy, Inc. – slide 35
    Core Wattenberg: Long-Term Growth Engine Demonstrated consistency in well costs, performance and economics High degree of confidence in predicting future well results Provides PDC with long-term, low-risk growth potential…
  36. Analyst Day: New York – PDC Energy, Inc. – slide 36
    Wattenberg Marketing and Midstream George Courcier Vice President Marketing and Midstream 4/17/2014 37
  37. Analyst Day: New York – PDC Energy, Inc. – slide 37
    Wattenberg Marketing & Midstream DCP Gas Gathering & Processing System Expansion Plans Current DCP Capacity (including OConnor Expansion): 570 MMcfd 2015 Lucerne Plant: +230 MMcfd 2015 DCP Capacity: 800 MMcfd 2016 Plant 10: +230…
  38. Analyst Day: New York – PDC Energy, Inc. – slide 38
    Visible Relief of High Line Pressures DCP OConnor Plant relieving line pressure across Wattenberg Field OConnor Plant Online Recent average pressures 50+ psi lower than 2013 averages Improved production from legacy vertical wells…
  39. Analyst Day: New York – PDC Energy, Inc. – slide 39
    Sufficient Growth in Gas Processing Capacity Working with additional midstream provider to secure processing for Inner and Middle Core development plans for 2014 through 2016 Aka Midstream working to provide PDC with sufficient…
  40. Analyst Day: New York – PDC Energy, Inc. – slide 40
    New Crude Oil Takeaway Recent Expansion Announcements Tampa Rail Expansion Multiple delivery points 70,000 Bbl/d On-line in late Dec 2013 Delivery to Cushing, OK White Cliffs Pipeline Pony Express NE Colorado Lateral Delivers…
  41. Analyst Day: New York – PDC Energy, Inc. – slide 41
    Wattenberg Marketing & Pricing Summary CRUDE OIL NGLs NATURAL GAS Key Highlights Key Highlights Key Highlights Sold at wellhead to multiple Sold at tailgate of processing Sold at tailgate of processing purchasers plants plants…
  42. Analyst Day: New York – PDC Energy, Inc. – slide 42
    Utica Operations Scott Reasoner Vice President Western Operations 4/17/2014 43
  43. Analyst Day: New York – PDC Energy, Inc. – slide 43
    Utica: Building a Core Asset PDCs Liquid-Rich Utica Position Currently Producing Wells 54,000 net acres Ohio Recently added 6,000 net acres (1) Commissioners 14-25H - 3,950 lateral PA 46% HBP, 98% WI, 16% royalty Commissioners…
  44. Analyst Day: New York – PDC Energy, Inc. – slide 44
    Flowback Management Enhancing Results New Well Average Production Rate Old Well Average Production Rate Commissioners Pad Detweiler Pad Old Wells New Wells Commissioners 2H Onega Commissioners 14-25H Commissioners 3H…
  45. Analyst Day: New York – PDC Energy, Inc. – slide 45
    Neill 1H Learnings: Landing Zone is Critical Utica Type Log Landed Neill 1H out of Pt. Pleasant target zone Analysis shows lateral permeability orders of 7,150 magnitude lower than other PDC Utica wells Palmer wells drilled to the…
  46. Analyst Day: New York – PDC Energy, Inc. – slide 46
    Well Results Driving Refined Type Curve Windows Wet Gas Window Summary New Type Curve Areas CONDENSATE WET GAS PDC Position WINDOW WINDOW Commissioners 14-25H - 3,950 lateral 3-Phase EUR(1): 1,200 MBoe Commissioners 2H - 4,300…
  47. Analyst Day: New York – PDC Energy, Inc. – slide 47
    Current Type Curve Estimates Condensate Window Estimates Wet Gas Window Estimates Average Production Rate Average Production Rate Type Curve Estimate Type Curve Estimate Condensate Estimated Economics Wet Gas - Estimated…
  48. Analyst Day: New York – PDC Energy, Inc. – slide 48
    Detweiler Pad: 700 Downspacing Results Two wells testing 700 lateral spacing 700 Wells offset original Detweiler 42-3H Completed using 25+ stages per well Utilized flowback management techniques to enhance production profiles…
  49. Analyst Day: New York – PDC Energy, Inc. – slide 49
    Early Garvin Pad Performance Very pleased with early performance of Garvin Pad Strong initial test results from long (6,800) Garvin 3H lateral Third party pipeline issues delaying full production from 3-well Garvin Pad Pipeline…
  50. Analyst Day: New York – PDC Energy, Inc. – slide 50
    2014 Development Plan 2014 Pad Location 2014 development (18 spuds) Wet Gas: 30% (5 wells) CONDENSATE WET GAS WINDOW WINDOW Condensate: 70% (13 wells) Increasing lateral length in 2014 2013 average: 4,700 Cole 2014 est. average:…
  51. Analyst Day: New York – PDC Energy, Inc. – slide 51
    Miley Acreage: Increasing Pad Size 7-well layout with 700 lateral spacing 4,200 Projected 6,500 lateral lengths Currently shooting 2D seismic First well spud November 2014 Expect first sales in mid-2015 Evaluating potential for…
  52. Analyst Day: New York – PDC Energy, Inc. – slide 52
    Utica: Keys to Execution Operational Efficiency 2 rig schedule Asset Delineation Frac schedules Service agreements Lateral placement Subsurface Water hauling Fluid regime windows Flowback methods Pad drilling Completion design…
  53. Analyst Day: New York – PDC Energy, Inc. – slide 53
    Utica Operations Outlook Crude Oil Natural Gas NGLs 2013 2014E 2015E Total Capital (1) (1) (MM) 101 162 185 Rig Count 1 1 2 2 Operated Spuds 11 18 22 Operated TILs 9 12 20 (1) 2014 capital includes approximately 30…
  54. Analyst Day: New York – PDC Energy, Inc. – slide 54
    Utica Marketing and Midstream George Courcier Vice President Marketing and Midstream 4/17/2014 55
  55. Analyst Day: New York – PDC Energy, Inc. – slide 55
    Midstream Options MarkWest (MWE) MWE PDC volumes flow to Seneca Plant Cadiz Plant MWE has current capacity of 585 MMcf/d with MWE Hopedale planned expansion to 1.0+ Bcf/d by 2015 Fractionator Access to all major NGL takeaway…
  56. Analyst Day: New York – PDC Energy, Inc. – slide 56
    Utica Marketing & Pricing Summary CRUDE OIL NGLs NATURAL GAS Key Highlights Key Highlights Key Highlights Condensate sold at wellhead to NGLs recovered in cryogenic Gathered and processed at local single purchaser plants cryogenic…
  57. Analyst Day: New York – PDC Energy, Inc. – slide 57
    PDCM Marcellus Dewey Gerdom Chief Executive Officer PDC Mountaineer, LLC 4/17/2014 58
  58. Analyst Day: New York – PDC Energy, Inc. – slide 58
    PDCM Summary Large acreage position 2013 Marcellus Activity in PDCM Focus Area 131,000 net acres; 92% HBP O.E.S 95% in WV; 5% in PA 3-well pad 100% operated Delineated focus area Armstrong/Reynolds 4-well pad Harrison, Taylor and…
  59. Analyst Day: New York – PDC Energy, Inc. – slide 59
    Encouraging Results on Recent Wells Marcellus Well Production Normalized to 5,000 Lateral Keys to Successful Execution Optimizing well spacing in all areas (700 1,000); achieving delineation across focus area Tighter stage…
  60. Analyst Day: New York – PDC Energy, Inc. – slide 60
    PDCM Operations Outlook All Numbers Net to PDCE, Natural Gas 2013 2014E 2015E Total Capital (MM) 51 16 15 Rig Count 1 0 0 0 1 Operated Spuds 14 - 8 Operated TILs 10 4 - 4/17/2014 61
  61. Analyst Day: New York – PDC Energy, Inc. – slide 61
    2014 Financial Outlook Gysle Shellum Chief Financial Officer 4/17/2014 62
  62. Analyst Day: New York – PDC Energy, Inc. – slide 62
    2014 Capital Budget Summary 97% of capital allocated to liquid-rich projects 89% of capital allocated to development projects PDCMs (50/50 Joint Venture) capital budget assumes JV is funded by cash flow and borrowings under the JVs…
  63. Analyst Day: New York – PDC Energy, Inc. – slide 63
    2014 Net Production Guidance 28% - 35% projected increase in production from continuing operations (9.5 10.0 MMBoe in 2014 versus 7.4 MMBoe in 2013) 2014 Quarter Comments Q1 2014 Strong Dec13 exit rate; over-performance of Waste…
  64. Analyst Day: New York – PDC Energy, Inc. – slide 64
    2014 Consolidated Financial Guidance (from continuing operations) In Millions, Except for Per Share Data YE 2013 2014 Guidance (3) Actual Low High Production (MMBoe) 7.4 (1) 9.5 10.0 Crude oil, natural gas and NGLs sales 359 458…
  65. Analyst Day: New York – PDC Energy, Inc. – slide 65
    2014 Additional Guidance Average Sales Price 2013 2014 Guidance (excluding net settlements on derivatives) Crude oil equivalent (per Boe) 48.37 48.18 - 49.50 Per Unit Cost Metrics Measure (/Boe) 2013 2014 Guidance Average lifting…
  66. Analyst Day: New York – PDC Energy, Inc. – slide 66
    Debt Maturity Schedule in Millions 115 million 3.25% convertible Debt Maturity Schedule debentures mature in May 2016 600 3.25% Convertible Notes due 2016 PDCM: 53 million revolver matures in April 2017; 15 million second lien…
  67. Analyst Day: New York – PDC Energy, Inc. – slide 67
    2014 Debt and Liquidity Analysis 2013 Actual 2014 Estimate 2014 Estimate 2014 Estimate Consolidated PDC Only PDCM (2) Consolidated Beginning Debt (MM) (Credit Facility) 75 0 52 52 - Adjusted cash flow from ops (209) (260) - (285)…
  68. Analyst Day: New York – PDC Energy, Inc. – slide 68
    Crude Oil and Natural Gas Hedges Hedges in Place as of January 31, 2014 Crude Oil (includes NGL) FY2014 FY2015 FY2016 NYMEX Average (1) 98.84 90.18 84.63 Weighted-Average Hedge Price With Ceilings 94.15 89.35 N/A…
  69. Analyst Day: New York – PDC Energy, Inc. – slide 69
    Weighted Average Cost of Capital (WACC) Analysis As of December 31, 2012 2013 Cost of equity 14.8% 15.8% Equity % 60.0% 60.0% After-tax cost of debt 4.7% 4.0% Debt % 40.0% 40.0% WACC 10.7% 11.1% (1) PDC Energy 7.75% Notes…
  70. Analyst Day: New York – PDC Energy, Inc. – slide 70
    3-Year Corporate Outlook Lance Lauck Senior Vice President Corporate Development 4/17/2014 71
  71. Analyst Day: New York – PDC Energy, Inc. – slide 71
    Significant Reserve & Value Growth Successful Transition to Liquid-Rich Portfolio Proved Reserves Growth 300 266 Proved Reserves (MMBoe) Marcellus Utica Wattenberg 240 180 193 169 120 144 120 60 0 YE2009 YE2010…
  72. Analyst Day: New York – PDC Energy, Inc. – slide 72
    Strategic Milestones Since 2009 Acquire, explore, develop business model over 1.0 billion in transactions KEY BUSINESS ACQUISITIONS DIVESTITURES Barnett INITIATIVES Merit Energy - Permian Michigan Antrim Horizontal drilling &…
  73. Analyst Day: New York – PDC Energy, Inc. – slide 73
    Organic Growth: 2014 - 2016 Business Strategy Continue to grow long-term shareholder value Objectives Accelerate production, cash flow & EPS growth Grow into mid-cap sized E&P company 15-20 year liquid-rich horizontal inventory…
  74. Analyst Day: New York – PDC Energy, Inc. – slide 74
    Strong Long-Term Production Growth Net Production Outlook 2014 thru 2016 60,000 Guidance/Outlook Range 3-Year Commodity Mix 62% 50,000 Liquids Gas Oil 38% 47% 40,000 NGL 15% Boe/d 30,000 HZ Wells Turned-in-Line…
  75. Analyst Day: New York – PDC Energy, Inc. – slide 75
    Accelerated Capital Deployment in Liquid-Rich Assets Capital Spending Outlook 2014 thru 2016 1,200 70% Year-End Debt to Book Cap Guidance/Outlook Range 60% 50% 44% 48% 46% 1,000 40% 30% 800 20% 10% CAPEX MM 0% 2014G…
  76. Analyst Day: New York – PDC Energy, Inc. – slide 76
    Strong Cash Flow Outlook Adjusted Cash Flow per Share Outlook 2014 thru 2016 18.00 700 Cash Flow (MM) Guidance/Outlook Range 600 16.00 500 400 14.00 300 200 Cash Flow /Share(1) 12.00 100 0 10.00 2014G 2015E 2016E 2015…
  77. Analyst Day: New York – PDC Energy, Inc. – slide 77
    Solid Exposure to High-Return Plays PDC positioned in two of the top PDC Horizontal Inventory As of 4/17/14 3,700 three basins in U.S. onshore Locations Wattenberg Focused on liquid-rich shale plays 2,800 locations Marcellus…
  78. Analyst Day: New York – PDC Energy, Inc. – slide 78
    Program Recap Barton Brookman Executive Vice President and Chief Operating Officer 4/17/2014 79
  79. Analyst Day: New York – PDC Energy, Inc. – slide 79
    PDCs Transition to Horizontal Drilling Potential Vertical Locations Potential HZ Locations 2,000 4,000 3,600 1,800 3,500 1,600 2,800 1,430 1,354 3,000 1,400 1,200 2,500 1,000 2,000 800 1,500 600 966 400 1,000 189 131 200…
  80. Analyst Day: New York – PDC Energy, Inc. – slide 80
    Operational Efficiency Operating and G&A Metrics (/Boe) 25 Loe G&A Production Tax Well Ops 20 /Boe 15 10 5 0 2012 2013 2014E 2015E % of Oil, NGL and Gas Sales (excludes hedging) 2012 2013 2014E 2015E 11% 6% 10%…
  81. Analyst Day: New York – PDC Energy, Inc. – slide 81
    Sustainability Giving Back to Community Donated to Red Cross & Weld County non-profits following 2013 Colorado flood PDC has been dedicated to AHA by financially supporting and actively participating Donated 500K to multiple…
  82. Analyst Day: New York – PDC Energy, Inc. – slide 82
    Talent Management Our Goal Recruit, cultivate and retain a skilled workforce in support of an agile, high-performing organization with an ongoing entrepreneurial spirit. 2013 company voluntary attrition rate of 7.49% vs 9.52% for…
  83. Analyst Day: New York – PDC Energy, Inc. – slide 83
    Questions & Answers 4/17/2014 85
  84. Analyst Day: New York – PDC Energy, Inc. – slide 84
    Investor Relations Mike Edwards, Senior Director Investor Relations michael.edwardspdce.com Marti Dowling, Manager Investor Relations marti.dowlingpdce.com Corporate Headquarters PDC Energy, Inc. 1775 Sherman Street Suite 3000…
  85. Analyst Day: New York – PDC Energy, Inc. – slide 85
    Appendix 4/17/2014 87
  86. Analyst Day: New York – PDC Energy, Inc. – slide 86
    PDCE + PDCM = PDC Consolidated In Millions Except For Per Share Data PDC Year Ended 12/31/2013 PDCE Net PDCM Consolidated Statement of Operations (1) Natural gas, NGL and Crude oil sales 334 25 359 Commodity price risk management…
  87. Analyst Day: New York – PDC Energy, Inc. – slide 87
    2013 Discontinued Operations Piceance and NECO basins have been 2013 Production reflected as discontinued operations: Production from continuing operations 7.4 MMBoe The sale completed in June 2013 Production from discontinued…
  88. Analyst Day: New York – PDC Energy, Inc. – slide 88
    PDC Energys cost of capital as of 12/31/2013 Cost of Equity Cost of Debt Capital asset pricing model (CAPM) 4.0% = 6.5% x (1 38%) 15.8% = 2.8% + (2.00 x 6.5%) Risk-Free Equity Risk After-Tax Cost Pre-Tax Cost Marginal Tax…
  89. Analyst Day: New York – PDC Energy, Inc. – slide 89
    PDC Energys Cost of Capital as of 12/31/2012 Cost of Equity Cost of Debt Capital asset pricing model (CAPM) 4.7% = 7.2% x (10.35) 14.8% = 1.8% + (1.63 x 8.0%) Risk-Free Equity Risk After-Tax Cost Pre-Tax Cost Marginal Tax…
  90. Analyst Day: New York – PDC Energy, Inc. – slide 90
    2013 Metrics Capital Spending (MM) Avg. Sales Price excludes net settlements on derivative (/Boe) (1) 800 50.00 48.18 - 49.50 48.37 48.37 647 627 48.00 600 480 428 46.00 400 44.00 43.42 200 42.00 - 40.00 2011 2012 2013…
  91. Analyst Day: New York – PDC Energy, Inc. – slide 91
    2013 Credit Ratios PDC has Maintained Relatively Low Leverage and Strong Liquidity Conservative Leverage Strong Liquidity (MM) (1) 4.0x 60% 700 631 50% 45% 44% - 45% 50% 600 3.0x 41% 3.1x 500 40% 384 2.8x 2.7x 2.5x - 2.8x 400…
  92. Analyst Day: New York – PDC Energy, Inc. – slide 92
    Reconciliation of Non-GAAP Financial Measures in millions, except share and per share data Year Ended December 31 Adjusted net income (loss) from net income (loss): 2011 2012 2013 Net income (loss) 13.4 (130.7) (22.3) (Gain) loss on…
  93. Analyst Day: New York – PDC Energy, Inc. – slide 93
    Reconciliation of Non-GAAP Financial Measures in millions, except share and per share data Year Ended December 31 Adjusted EBITDA from net income (loss): 2011 2012 2013 Net income (loss) 13.4 (130.7) (22.3) (Gain) loss on commodity…
  94. Analyst Day: New York – PDC Energy, Inc. – slide 94
    Reconciliation of Non-GAAP Financial Measures in millions, except share and per share data Year Ended December 31 Adjusted EBITDAX from net income (loss): 2011 2012 2013 Net income (loss) 13.4 (130.7) (22.3) (Gain) loss on…

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