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Howard Weil Energy Conference – Bonanza Creek Energy, Inc.

Bonanza Creek Energy, Inc. · Mar 20, 2013 · 35 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. Howard Weil Energy Conference – Bonanza Creek Energy, Inc. – slide 1
    Investor Presentation Expanding the Runway Howard Weil Energy Conference
  2. Howard Weil Energy Conference – Bonanza Creek Energy, Inc. – slide 2
    Bonanza Creek Overview Wattenberg Field (1) Market Cap : 1.6 billion North Park Basin (Niobrara & Codell) Share Price(1): 39.29 (Niobrara) 31.9 MMBoe 1P(4) Shares Outstanding(2): 40 million (4) 0.5 MMBoe 1P 59% Oil 100% Oil…
  3. Howard Weil Energy Conference – Bonanza Creek Energy, Inc. – slide 3
    Impressive Growth Track Record Proved Reserves(1) (MBoe) Production(1) (Boe/d) +62%(2) 60,000 16,000 +21% 14,000 50,000 12,000 40,000 10,000 30,000 8,000 6,000 20,000 4,000 10,000 2,000 0 - 2007 2008 2009 2010 2011…
  4. Howard Weil Energy Conference – Bonanza Creek Energy, Inc. – slide 4
    Dramatic Year-Over-Year Increases 4Q12 as compared to 4Q11 107% Increase in Production (1) 11,994 Boe/d 136% Increase in Adj. Net Income (2) 15.7 million (0.39/sh) 138% Increase in EBITDAX (2) 54.1 million (1.35/sh)…
  5. Howard Weil Energy Conference – Bonanza Creek Energy, Inc. – slide 5
    Oil Weighted Assets Drive Strong Margins 4Q 2012 Revenue Unhedged Cash Margin / Boe(1) (3) (2) 74.0 Million 66.84 11% Nat. Gas 73% Cash Margin (48.66) 89% Oil & Liquids 10% Cash G&A 6% Prod. Taxes 11% LOE (1)…
  6. Howard Weil Energy Conference – Bonanza Creek Energy, Inc. – slide 6
    Oil Weighted Reserves & Production Reserve Mix By Commodity (MMBoe)(1) Reserve Mix By Category (MMBoe)(1) 23.8 6.5 45% 12% Wet Gas GPM: 4.0 13.2 25% 30.2 57% 3.1 6% 29.2 55% Oil Mid-Con NGLs Rockies Wet Gas Mid-Con Dry…
  7. Howard Weil Energy Conference – Bonanza Creek Energy, Inc. – slide 7
    Strong Organic Growth Inventory 250 MMBoe of resource potential(1) 9 primary opportunities in various stages of development and evaluation Wattenberg Wattenberg Niobrara B Arkansas Cotton Valley Wattenberg Niobrara C Arkansas…
  8. Howard Weil Energy Conference – Bonanza Creek Energy, Inc. – slide 8
    2013 Capex Plan(1) Wattenberg Activity Doubles Wattenberg Field: 324 million 2013 Capex: 394 million Niobrara B (4,000): 56 wells Niobrara B (9,000): 2 wells Niobrara B (40-acre test): 6 wells Niobrara C: 4 wells Codell: 4 wells…
  9. Howard Weil Energy Conference – Bonanza Creek Energy, Inc. – slide 9
    Wattenberg Niobrara a Premier Oil Resource Play Basin IRRs Futures Strip as of 1/31/2013 60% 56% 54% 53% 51% 50% 44% 43% 40% 37% 36% 36% 35% 34% 31% 31% 30% 28% 26% 23% 22% 22% 21% 19% 18% 18% 20% 17% 16% 16% 13% 12%…
  10. Howard Weil Energy Conference – Bonanza Creek Energy, Inc. – slide 10
    Wattenberg Horizontal Niobrara Oil Focused Niobrara B: 36 wells Avg. 30-day Rate: 503 Boe/d 76% oil Niobrara B: 28 wells Avg. 60-day Rate: 405 Boe/d 75% oil Wells Ranch 40-acre downspacing pilots A bench / C bench / Codell…
  11. Howard Weil Energy Conference – Bonanza Creek Energy, Inc. – slide 11
    Focused on Continual Improvement BCEI Reported Average IP30 Rates Technical improvements 510 Increased frac stages from 16 stages to 18 stages 500 Increases reservoir wellbore communication 490 480 Controlled flowback 470 Limits sand…
  12. Howard Weil Energy Conference – Bonanza Creek Energy, Inc. – slide 12
    Wattenberg Expanding Resource Recovery Niobrara C Bench Horizontal C Bench present on all Wattenberg acreage BCEI completed its first C Bench well in December 2012 IP30 rate: 444 Boe/d (79% crude oil) Codell Horizontal…
  13. Howard Weil Energy Conference – Bonanza Creek Energy, Inc. – slide 13
    Wattenberg Productive Acreage Breakdown Recent BCEI & Offset Niobrara A 30,800 Acres Operator Activity 2013E Capex Plan Industry tests during 2012 None Development starting in 2013 Niobrara B 30,800 Acres BCEI 38 horizontal…
  14. Howard Weil Energy Conference – Bonanza Creek Energy, Inc. – slide 14
    Wattenberg Hz Niobrara B Bench Economics EUR 312,000 Boe; 65% crude oil(1) Initial 30-day Rate 469 Boe/d Cost per Well 4.2 MM NPV-10 at 80/BO 4.1 MM NPV-10 at 100/BO 6.1 MM Risked Locations 321(2) net 4,000 ft B Bench BTAX…
  15. Howard Weil Energy Conference – Bonanza Creek Energy, Inc. – slide 15
    Mid-Continent Operations (Arkansas) Provides free cash flow; reallocated to Wattenberg Niobrara ERA SYSTEM SERIES GROUP FORMATION CENOZOIC EOCENE Claiborne PALEOCENE Wilcox Cotton Valley: 6,500 8,800 feet TERTIARY CRETACEOUS…
  16. Howard Weil Energy Conference – Bonanza Creek Energy, Inc. – slide 16
    Dorcheat-Macedonia Economics EUR 152,000 Boe(1) Peak 30-day Rate 103 Boe/d % Oil & Liquids 70% Cost per Well 1.8MM NPV-10 at 80/BO 1.9 MM NPV-10 at 100/BO 2.8 MM Risked Locations 111(2) BTAX IRR % at /BO WTI(3) 125% 100% 75%…
  17. Howard Weil Energy Conference – 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. Howard Weil Energy Conference – Bonanza Creek Energy, Inc. – slide 18
    Financial Overview 19
  19. Howard Weil Energy Conference – Bonanza Creek Energy, Inc. – slide 19
    Improving Operating Cost Structure High Margins Cash Costs(1) ( per Boe) Realized Price(2) & Cash Margins(1) ( per Boe) 30 80 76.68 25 65.70 67.70 66.84 5.71 60 3.45 20 3.43 8.19 3.89 15 8.98 40 7.76 6.73 10 50.74 45.06…
  20. Howard Weil Energy Conference – Bonanza Creek Energy, Inc. – slide 20
    Financial Strategy & Capitalization Target LTM Debt / EBITDAX…
  21. Howard Weil Energy Conference – Bonanza Creek Energy, Inc. – slide 21
    Hedge Positions and Strategy Approximately 2.2 MMboe hedged in 2013 and 1.5 MMboe hedged in 2014 Current volumes hedged in 2013 represent approximately 40% of estimated annual production(1) Target hedging 50% of next twelve months…
  22. Howard Weil Energy Conference – Bonanza Creek Energy, Inc. – slide 22
    Expanding the Runway True crude oil / liquids producer in Wattenberg Niobrara Rapidly growing production Large inventory of high value, drill ready locations with upside potential Dorcheat-Macedonia provides cash flows to…
  23. Howard Weil Energy Conference – Bonanza Creek Energy, Inc. – slide 23
    Corporate Information Company Headquarters Investor Relations 410 17th Street, Suite 1400 James Masters Investor Relations Manager Denver, Colorado 80202 (720) 440-6121 (720) 440-6100 Main jmastersbonanzacrk.com (720) 305-0804…
  24. Howard Weil Energy Conference – Bonanza Creek Energy, Inc. – slide 24
    Appendix 25
  25. Howard Weil Energy Conference – Bonanza Creek Energy, Inc. – slide 25
    Experienced Management Team Founder of predecessor companies Mike Starzer Prior: Executive and Engineering roles at Unocal and Berry Petroleum President & CEO B.S. in Petroleum Engineering, Colorado School of Mines; M.S. in…
  26. Howard Weil Energy Conference – Bonanza Creek Energy, Inc. – slide 26
    Experienced Management Team Joined in 2011 bringing expertise in corporate law, administration, M&A, federal Chris Humber securities laws and stock exchange rules SVP & General Counsel Prior: Kendall, Koenig and Oelsner; Hogan &…
  27. Howard Weil Energy Conference – Bonanza Creek Energy, Inc. – slide 27
    Wattenberg Horizontal Niobrara Economics(1) (Boe/d) 500 Expected Type Curve(2) 312,000 Boe EUR 400 65% crude oil; 35% rich gas 356,000 Boe EUR 300 57% crude oil; 19% NGLs; 24% dry gas 200 Field Development 85.6% WI / 69.1% NRI…
  28. Howard Weil Energy Conference – Bonanza Creek Energy, Inc. – slide 28
    DJ Basin Midstream Infrastructure Capacity Crude Pipelines and Rail Projects Operator Origination Termination Hub Timing (Bbl/d) White Cliffs Pipeline SemGroup 70,000 Platteville, CO Cushing, OK Existing White Cliffs Expansion SemGroup…
  29. Howard Weil Energy Conference – Bonanza Creek Energy, Inc. – slide 29
    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 60% of BCEI production comes from…
  30. Howard Weil Energy Conference – Bonanza Creek Energy, Inc. – slide 30
    North Park Basin Niobrara(1) EUR 211,000 Boe Initial 30-day Rate 304 Boe/d % Oil 90% Cost per Well 5.1 MM NPV-10 at 80/BO 2.1 MM NPV-10 at 100/BO 3.9 MM 2014-2015 development opportunity EVALUATING No natural gas takeaway…
  31. Howard Weil Energy Conference – Bonanza Creek Energy, Inc. – slide 31
    Dorcheat-Macedonia Field(1) (Boe/d) 120 Type Curve(2) Recompletions opening additional Cotton Valley oil pay zones up hole 152,000 Boe EUR 100 Initial 30-day rate: 67 Boe/d Peak 30-day rate: 103 Boe/d 80 Include subsequent…
  32. Howard Weil Energy Conference – Bonanza Creek Energy, Inc. – slide 32
    Mid-Continent Gas Processing Facilities General Overview Approximately 150 miles of gathering lines Nevada Processes minor quantities of third party natural gas Facilities interconnect into the CenterPoint Energy pipeline system…
  33. Howard Weil Energy Conference – Bonanza Creek Energy, Inc. – slide 33
    Reconciliation to Adjusted Net Income Adjusted net income and adjusted net income per diluted share exclude (1) unrealized gain or loss in fair value of commodity derivatives, (2) stock-based compensation expense, (3) impairment of proved…
  34. Howard Weil Energy Conference – Bonanza Creek Energy, Inc. – slide 34
    Reconciliation to EBITDAX We define EBITDAX as net income, plus (1) exploration expense, (2) depletion, depreciation and amortization expense, (3) stock-based compensation expense, (4) interest expense, (5) unrealized loss (gain) on…
  35. Howard Weil Energy Conference – Bonanza Creek Energy, Inc. – slide 35
    Reconciliation to Discontinued Operations Three Months Ended Twelve Months Ended 4Q 2012 Sales Volumes December 31, December 31, 2012 2011 2012 2011 Continuing Operations 11,950 Boe/d NET REVENUES Oil and gas sales 73,592 35,115…

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