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4Q & Full Year 2014 Results – Rice Energy

Rice Energy · Mar 12, 2015 · 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. 4Q & Full Year 2014 Results – Rice Energy – slide 1
    Investor Presentation March 2015
  2. 4Q & Full Year 2014 Results – Rice Energy – slide 2
    Rice Energy Strategy Allocate 100% of Capital to Core Assets with Low Break-Even Returns Convert Acreage into Cash Flow in a Low-Risk Manner Protect Returns through FT Portfolio and Systematic Hedging Promote Operational…
  3. 4Q & Full Year 2014 Results – Rice Energy – slide 3
    Concentrated, Core Assets COMPANY TOTAL CORE ASSETS Highly concentrated position of 141,000 net acres in the Legend RMP Gathering Pipeline cores of the lowest breakeven gas shale plays in the U.S. RMP Gathering Pipeline to be…
  4. 4Q & Full Year 2014 Results – Rice Energy – slide 4
    Deep Inventory of High Returning Projects Low breakevens between 2.35-3.05/MMBtu = profitable returns throughout the commodity price cycle Inventory and Returns Summary IRR 200% 175% 171% 168% 150% 124% 125% 121% 132% 100%…
  5. 4Q & Full Year 2014 Results – Rice Energy – slide 5
    Firm Transportation De-Risks Production Growth RICE was early in identifying and securing its attractive portfolio of firm capacity Firm capacity covers 100% of 2015 and a significant portion of RICEs volumes in 2016-2018 Firm…
  6. 4Q & Full Year 2014 Results – Rice Energy – slide 6
    Ample Liquidity and Financial Flexibility RICE is capable of funding 100% of 2015 capital plan with liquidity on-hand Favorable credit metrics & covenants ensure flexibility Cash & Revolver Capacity MM 800 712 700 600 229 (1)…
  7. 4Q & Full Year 2014 Results – Rice Energy – slide 7
    Efficient Capital Allocation Drives Strong 2015 Growth 2015E E&P Guidance D&C & Land Capital Expenditures Net Wells Turned to Sales Average Net Daily Production MM Wells MMcfe/d 900 830 50 500 460 43 800 680 40 36 400 700 7 545 250…
  8. 4Q & Full Year 2014 Results – Rice Energy – slide 8
    Breaking Down 2015 D&C Capex: Investing in Growth Minimal capital required to maintain flat YE14 production due to shallow production declines and rapid payback. In 2015, 335 million of our D&C capital budget will fund accelerated…
  9. 4Q & Full Year 2014 Results – Rice Energy – slide 9
    Industry Activity Underscores Rices Core Position Appalachia Rig Activity (1) March 2015 Rig Counts By County 14 12 OH 10 8 PA 6 4 County Activity Levels 2 10+ Rigs Rice Acreage 0 6-10 Rigs ELK SUSQUEHANNA…
  10. 4Q & Full Year 2014 Results – Rice Energy – slide 10
    Pennsylvania Assets 10 www.riceenergy.com
  11. 4Q & Full Year 2014 Results – Rice Energy – slide 11
    Strong Execution Drives Consistent Results Highlights Marcellus Development Map Proven, De-Risked Asset: Turned 71 net Marcellus (3 net Upper Devonian) wells into sales at year-end 2014 Additionally, acquired 7 net wells in 2014…
  12. 4Q & Full Year 2014 Results – Rice Energy – slide 12
    Marcellus Single Well Economics Type Well Versus Historical Production (Normalized for 7,000 Lateral) (1) 16.0 Restricted Rate Cumulative Production 14.0 1 year 3.8 Bcf 12.0 2 years 5.6 Bcf 10.0 5 years 8.2 Bcf MMcf/d 8.0…
  13. 4Q & Full Year 2014 Results – Rice Energy – slide 13
    Deep Utica Potential in Pennsylvania OH WV PA County Fairfield Muskingum Guernsey Belmont Ohio/Marshall Washington / Greene Depth 5000 6000 7500 9500 10,500 12,000 13,000 West East Porosity 12% Point Pleasant Core 6% 0%…
  14. 4Q & Full Year 2014 Results – Rice Energy – slide 14
    Ohio Assets 14 www.riceenergy.com
  15. 4Q & Full Year 2014 Results – Rice Energy – slide 15
    Utica: Dry-Gas Core Established, Significant Growth Ahead Operational Highlights Utica Development Map Concentrated Core Position: 55,000 net acres concentrated in the heart of Belmont County Harrison Strategic JV with Proven…
  16. 4Q & Full Year 2014 Results – Rice Energy – slide 16
    Utica Single Well Economics Utica DRY Type Well Versus Historical Production (Normalized for 8,000 Lateral) Restricted Rate 16.0 Cumulative Production 14.0 1 year 5.2 Bcf 12.0 2 years 7.8 Bcf 10.0 5 years 11.3 Bcf MMcf/d…
  17. 4Q & Full Year 2014 Results – Rice Energy – slide 17
    Utica Production and Pressure Update Bigfoot stabilized at a flat rate of 15-16 MMcf/d and expect flat production for 390-460 days 2 Blue Thunders stabilized at a flat rate of 16 MMcf/d and expect flat production for 300-375 days 2…
  18. 4Q & Full Year 2014 Results – Rice Energy – slide 18
    Midstream Assets 18 www.riceenergy.com
  19. 4Q & Full Year 2014 Results – Rice Energy – slide 19
    Strategic Midstream Assets in Appalachia Overview SYSTEM MAP Legend Complete build-out of infrastructure by YE RMP Gathering Pipeline RMP Gathering Pipeline 2015 to be Constructed Hancock RICE Gathering Pipeline 6.7 MMDth/d…
  20. 4Q & Full Year 2014 Results – Rice Energy – slide 20
    Rice Midstream Partners MLP Overview Marcellus Gathering and Compression SYSTEM MAP Initial assets consist of gas gathering system Legend RMP Gathering Pipeline Beaver with expected capacity of 4.1MMDth/d by YE15 RMP Gathering…
  21. 4Q & Full Year 2014 Results – Rice Energy – slide 21
    RICE Midstream Holdings Retained Midstream Overview Overview of Assets Assets include OH gas gathering and PA/OH Legend RICE Gathering Pipeline water sourcing and distribution RICE Gathering Pipeline to be Constructed Hancock RICE…
  22. 4Q & Full Year 2014 Results – Rice Energy – slide 22
    Finance and Marketing 22 www.riceenergy.com
  23. 4Q & Full Year 2014 Results – Rice Energy – slide 23
    Diverse Market Exposure FT portfolio includes 1.3 MMDth/d (1.2 Bcf/d) of firm capacity to premium North American markets, including recently added 320 MDth/d on TETCOs Access South project with firm path to the Gulf Coast and estimated…
  24. 4Q & Full Year 2014 Results – Rice Energy – slide 24
    Basis Exposure and Realized Pricing Basis Exposure and Basis Differential /mmbtu 100% Expect Appalachian basis exposure 19% 15% (M2 + DOM) to decrease throughout 90% 22% 30% 32% 23% 24% (0.10) 8% the year as firm…
  25. 4Q & Full Year 2014 Results – Rice Energy – slide 25
    Hedging Summary Hedging and Basis Exposure 2015 2016 2017 RICEs gas will be marketed into 4 areas (1) Appalachia (M2, Dominion) Hedged M2 / Dominion Volumes (BBtu/d) 133 52 (2) TCO Wtd Avg Floor Price (/MMBtu) 2.80 2.91 (3) Gulf…
  26. 4Q & Full Year 2014 Results – Rice Energy – slide 26
    Hedging Philosophy We employ financial instruments (primarily swaps and costless collars) to mitigate commodity price risk Assures a base level of cash flow to reinvest in growth Typically target hedging 50% of forecasted production…
  27. 4Q & Full Year 2014 Results – Rice Energy – slide 27
    Rice Market Snapshot Rice Energy Inc Rice Midstream Partners LP (NYSE: RICE) (NYSE: RMP) millions, except per share data, as of 3/6/15 millions, except per unit data, as of 3/6/15 Management Ownership 30% Common Units 29 Subordinated…
  28. 4Q & Full Year 2014 Results – Rice Energy – slide 28
    Why Invest in Rice 100% of Leasehold in Core of Marcellus and Utica Differentiated Technical Approach Has Led to Industry Leading Well Results Owned and Operated Gathering and Water Midstream Infrastructure Supports Our Upstream…
  29. 4Q & Full Year 2014 Results – Rice Energy – slide 29
    2015 RICE Guidance E&P GUIDANCE (1) Net Wells Spud Guidance Production Guidance Pennsylvania 39 T otal Net Production (MMcfe/d) 450 470 Operated Utica(2) 13 % Natural gas 100% Non-operated Utica 9 % Marcellus 78% Ohio(2) 22 %…
  30. 4Q & Full Year 2014 Results – Rice Energy – slide 30
    2015 RMP Guidance 2015 GUIDANCE(1) 2015 Capital Budget (in millions) Guidance Gas Gathering 85 Adjusted EBITDA (in millions) 55 60 Compression 90 % Third Party 20% Total Expansion Capex 175 Distributable Cash Flow (in millions)…
  31. 4Q & Full Year 2014 Results – Rice Energy – slide 31
    Economic Assumptions Summary Marcellus W. Greene Utica Dry Utica Wet Type Well Assumptions Lateral Length 7,000 7,000 8,000 8,000 EUR (Bcf/1,000') 2.0 2.0 2.5 2.2 4 NYMEX and 40/bbl NGLs NGL Yield (bbls/mmcf) 40 Gas Shrink 15%…
  32. 4Q & Full Year 2014 Results – Rice Energy – slide 32
    Efficient Production Growth Demonstrates Production Our peer-leading production growth is driven by a focus on well quality, not quantity Potential RICE reached 500 MMcfe/d of gross operated Marcellus production with fewer wells than…
  33. 4Q & Full Year 2014 Results – Rice Energy – slide 33
    Differentiated Long-Term Production per Well Our drilling and completion techniques have yielded greater production profile per well than our peers Washington and Greene County Historical Production(1) Utica and Susquehanna, PA…
  34. 4Q & Full Year 2014 Results – Rice Energy – slide 34
    Post-MLP Organizational and Credit Structure Rice Energy Inc. 550 mm Credit Facility NYSE: RICE DE Rice E&P Rice Midstream 300 mm Credit Facility Subsidiaries Holdings LLC IDRs Rice Midstream & LP OH Gathering PA Water…
  35. 4Q & Full Year 2014 Results – Rice Energy – slide 35
    Midstream System Statistics Marcellus (PA) Utica (OH) Gathering and Compression Statistics Gathering and Compression Statistics YE14 YE15 YE14 YE15 Gathering and Compression Statistics Gas Gathering Pipeline Mileage (miles) 81 111 Gas…
  36. 4Q & Full Year 2014 Results – Rice Energy – slide 36
    2014 Adjusted EBITDA Reconciliation Three Months Ended Year Ended ( in thousands) December 31, 2014 December 31, 2014 Adjusted EBITDAX reconciliation to net income (loss): Net income (loss) 104,362 219,035 Net income attributable to…

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