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July 2014 INVESTOR PRESENTATION – Bonanza Creek Energy, Inc.

Bonanza Creek Energy, Inc. · Jul 8, 2014 · 32 slides

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Slides

  1. July 2014 INVESTOR PRESENTATION – Bonanza Creek Energy, Inc. – slide 1
    Integrity Teamwork Transparency July 2014 Investor Presentation
  2. July 2014 INVESTOR PRESENTATION – Bonanza Creek Energy, Inc. – slide 2
    Bonanza Creek Overview Wattenberg Field (Niobrara & Codell) Market Cap(1): 2.3 billion North Park Basin (Niobrara) Enterprise Value(1): 2.8 billion 49 MMBoe 1P(2) (2) 0.3 MMBoe 1P 66% Oil Public Float: 78% 100% Oil Rapidly…
  3. July 2014 INVESTOR PRESENTATION – Bonanza Creek Energy, Inc. – slide 3
    Strong Growth and Cash Flow Track Record Proved Reserves(1) (MBoe) Production(1) (Boe/d) 70,000 20,000 18,000 60,000 16,000 50,000 14,000 40,000 Oil & NGLs 12,000 Natural Gas 10,000 30,000 8,000 20,000 6,000 4,000 10,000 2,000 0…
  4. July 2014 INVESTOR PRESENTATION – Bonanza Creek Energy, Inc. – slide 4
    Strong Organic Growth Inventory 25 years of Wattenberg 3P inventory (3,500 gross locations) at current drilling pace First test wells in Niobrara A Bench and North Park Basin in 2014 Wattenberg Wattenberg Niobrara B Arkansas Cotton…
  5. July 2014 INVESTOR PRESENTATION – Bonanza Creek Energy, Inc. – slide 5
    Wattenberg Niobrara a Premier Oil Resource Play Basin IRRs 80% 74% 73% 69% 70% 63% 62% 60% 57% 53% 48% 48% 46% 50% 38% 36% 40% 35% 33% 30% 30% 30% 30% 27% 27% 26% 25% 24% 24% 22% 22% 20% 10% 0% Futures Strip as of…
  6. July 2014 INVESTOR PRESENTATION – Bonanza Creek Energy, Inc. – slide 6
    2014 CapEx Accelerating Wattenberg Value Wattenberg Field HZ Wells Drilled 2014 Capex (MM): 575 625(1) 140 2014 Drilling Program 121 Operated Wells Non-Operated 120 19 Non-Operated Wells 14% Niobrara A 100 80 ERL 9% 60 Codell…
  7. July 2014 INVESTOR PRESENTATION – Bonanza Creek Energy, Inc. – slide 7
    2014 Completion Schedule & Annual Guidance Wattenberg HZ Well First Production Schedule(1) Q1 Production on plan: 19,701 Boe/d 40 35 30 Steady completions schedule in Q2 Q4 25 promotes linear growth 20 15 Annual guidance…
  8. July 2014 INVESTOR PRESENTATION – Bonanza Creek Energy, Inc. – slide 8
    Wattenberg Field BCEI 70,000 net acres(1) in Extension Area 60% crude oil; liquids-rich natural gas Contiguous acreage attractive for long laterals Preliminary analysis shows limited exposure to potential drilling setback rules…
  9. July 2014 INVESTOR PRESENTATION – Bonanza Creek Energy, Inc. – slide 9
    Pending Acquisition Doubles Acreage Acquisition Highlights 34,600 net acres 23,000 net acres avg. WI 60% Adds 700 net drilling locations(1) Post-Transaction 126,400 gross (70,100 net) acres North Area: 25,700 net Middle…
  10. July 2014 INVESTOR PRESENTATION – Bonanza Creek Energy, Inc. – slide 10
    Super-Section Downspacing & Stacking Test 1 Initial Technical Observations 3 Multi-bench patterns outperform single bench Niobrara C Bench rates consistent with B Bench 20 wells per section is minimum 36 wells per section is…
  11. July 2014 INVESTOR PRESENTATION – Bonanza Creek Energy, Inc. – slide 11
    Improving IP Rates for 40-acre Spaced Wells 18/28 stage 40-Acre Pad Comparison Cum BOE Production 500 fracs 18-stage fracs 20,000 450 481 477 313 MBOE Type Curve 400 18,000 418 16,000 Boe/d 350 374 343 14,000 300 250…
  12. July 2014 INVESTOR PRESENTATION – Bonanza Creek Energy, Inc. – slide 12
    Wattenberg Risked 3P Reserves & Inventory (1) 308 MMBoe Net HZ Risked 3P Reserves 30% Increase in 3P Reserves over 2012 No 3P reserves currently associated with pending acquisition Inventory life of 25 years at current pace…
  13. July 2014 INVESTOR PRESENTATION – Bonanza Creek Energy, Inc. – slide 13
    Wattenberg Hz Niobrara B Target Type Well Type Well Economics EUR 313 MBoe; 62% crude oil(1) Initial 30-day Rate 458 Boe/d Cost per Well 4.2 MM NPV-10 at 90/BO 4.2 MM Payout 1.5 years ROR Sensitivity to Oil Price(2) (1) EUR…
  14. July 2014 INVESTOR PRESENTATION – Bonanza Creek Energy, Inc. – slide 14
    Niobrara B Bench Tracking 313 Mboe Type Curve 15
  15. July 2014 INVESTOR PRESENTATION – Bonanza Creek Energy, Inc. – slide 15
    Mid-Continent Operations (Arkansas) Provides free cash flow; allocated to Wattenberg ERA SYSTEM SERIES GROUP FORMATION CENOZOIC EOCENE Claiborne PALEOCENE Wilcox Cotton Valley: 6,500 8,800 feet TERTIARY CRETACEOUS GULFIAN Midway…
  16. July 2014 INVESTOR PRESENTATION – Bonanza Creek Energy, Inc. – slide 16
    Dorcheat-Macedonia Economics Type Well Economics 10-acre 5-acre EUR(1) 148 MBoe 118 MBoe % Oil & Liquids 65% 65% Cost per Well 1.8MM 1.8MM NPV-10 1.8MM 1.3MM Payout 1.6 years 1.8 years Risked Locations 110 gross(2) 262 gross(2)…
  17. July 2014 INVESTOR PRESENTATION – Bonanza Creek Energy, Inc. – slide 17
    Cotton Valley Lenticular Oil Sands Pin-Point Fracture Technology Focused completion technology Improved recovery of OOIP Highly repeatable Dorcheat Unit 37 25-30 sand/shale sequences Each zone individually pressured Potential…
  18. July 2014 INVESTOR PRESENTATION – Bonanza Creek Energy, Inc. – slide 18
    Financial Overview 19
  19. July 2014 INVESTOR PRESENTATION – Bonanza Creek Energy, Inc. – slide 19
    Oil Weighted Production Result in High Margins Unit Cash Operating Costs (/Boe) Unit Revenue & Cash Margins (/Boe) 25 80 77.54 4.34 70.70 71.85 20 4.35 6.06 68.93 68.47 60 4.98 15 8.63 7.93 4.61 7.51 40 6.87 10 6.34 57.74…
  20. July 2014 INVESTOR PRESENTATION – Bonanza Creek Energy, Inc. – slide 20
    Current Hedge Positions 2014 2015 2016 Crude Oil 11,400 Bbl/d 90.65 10,000 Bbl/d 88.21 5,500 Bbl/d 85.00 Natural Gas 28,000 Mcf/d 4.19 15,000 Mcf/d 4.00 Oil Hedging: Fixed Price Swaps Oil Hedging: Collars Gas Hedging: Collars…
  21. July 2014 INVESTOR PRESENTATION – Bonanza Creek Energy, Inc. – slide 21
    BCEI vs Basin Focused Peers Unit EBITDAX 2014 Production Growth 70 60% EBITDAX / Boe (MRQ) Consensus Production 60 50% Peer Group Peer Group 50 Avg: 40% Avg: 37.89 27% 30% Growth 40 30 20% 10% 20 0% 10 -10% 0…
  22. July 2014 INVESTOR PRESENTATION – Bonanza Creek Energy, Inc. – slide 22
    Financial Summary Simplicity & Transparency = Successful Outcomes Balanced approach to capital allocation Achieve best-in-class growth via an expanding Wattenberg development program Fund oily growth with oily cash flow and prudent…
  23. July 2014 INVESTOR PRESENTATION – Bonanza Creek Energy, Inc. – slide 23
    Investment Recap 25 years of drilling inventory in Wattenberg Field Peer leading production growth rates Accelerating development with increasing activity levels Ability to fund acceleration while maintaining a strong balance…
  24. July 2014 INVESTOR PRESENTATION – Bonanza Creek Energy, Inc. – slide 24
    Corporate Information Company Headquarters Investor Relations 410 17th Street, Suite 1400 James Masters Denver, Colorado 80202 Investor Relations Manager (720) 440-6100 Main (720) 440-6121 jmastersbonanzacrk.com (720) 305-0804…
  25. July 2014 INVESTOR PRESENTATION – Bonanza Creek Energy, Inc. – slide 25
    Appendix 26
  26. July 2014 INVESTOR PRESENTATION – Bonanza Creek Energy, Inc. – slide 26
    Wattenberg Horizontal Niobrara Economics(1) Target 313 MBoe Type Curve 600 30-day Avg: 458 boepd 550 60-day Avg: 400 boepd 90-day Avg: 355 boepd 500 450 400 350 Boe/d 300 250 200 150 100 50 0 0 12 24 36 48 60…
  27. July 2014 INVESTOR PRESENTATION – Bonanza Creek Energy, Inc. – slide 27
    BCEI Acreage Correlation to Wells Ranch Niobrara A Bench Thinner and resistivity less developed A Niobrara B Bench Similar thickness and resistivity A Niobrara C Bench Slightly thinner lower chalk bench; similar resistivity…
  28. July 2014 INVESTOR PRESENTATION – Bonanza Creek Energy, Inc. – slide 28
    Testing New Completion Design: 28 stage fracs 18 Stage Frac 80 Acre Spacing 18 Stage Frac Used on over 100 Niobrara/Codell wells Sliding sleeve delivery system Designed for maximum frac extension away from the Unstimulated Reservoir…
  29. July 2014 INVESTOR PRESENTATION – Bonanza Creek Energy, Inc. – slide 29
    DJ Basin Midstream Infrastructure Capacity Crude Pipelines and Rail Projects Operator Origination Termination Hub Timing (Bbl/d) White Cliffs Pipeline SemGroup 75,000 Platteville, CO Cushing, OK Existing White Cliffs Expansion SemGroup…
  30. July 2014 INVESTOR PRESENTATION – Bonanza Creek Energy, Inc. – slide 30
    Easing High Line Pressures in Wattenberg BCEI Considerations High line pressures caused by constrained gas processing capacity Legacy vertical wells impacted more than newer horizontal wells 95% of BCEI production in Q1 2014 came…
  31. July 2014 INVESTOR PRESENTATION – Bonanza Creek Energy, Inc. – slide 31
    Dorcheat-Macedonia Type Curve(1)(2) 120 Recompletions opening additional Cotton Valley oil pay zones up hole 100 80 Boe/d 60 40 20 0 0 12 24 36 48 60 Months 10-acre 5-acre (1) The type curve shows the…
  32. July 2014 INVESTOR PRESENTATION – Bonanza Creek Energy, Inc. – slide 32
    Reconciliation to Adjusted EBITDAX Adjusted EBITDAX is a supplemental non-GAAP financial measure that is used by management and external users of the Companys consolidated financial statements, such as industry analysts, investors,…

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