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INVESTOR PRESENTATION – Chesapeake Energy Corp

Chesapeake Energy Corp · Jun 25, 2014 · 43 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. INVESTOR PRESENTATION – Chesapeake Energy Corp – slide 1
    INVESTOR PRESENTATION LAST UPDATED JUNE 25, 2014
  2. INVESTOR PRESENTATION – Chesapeake Energy Corp – slide 2
    REALIZING THE VALUE IN CHESAPEAKE 3 I INVESTOR PRESENTATION JUNE 25, 2014
  3. INVESTOR PRESENTATION – Chesapeake Energy Corp – slide 3
    TRANSFORMING OUR BUSINESS Organizational structure Portfolio management and capital allocation process Decision rights Corporate budget process and plan Focus on capital efficiency Performance measurement and Cash cost…
  4. INVESTOR PRESENTATION – Chesapeake Energy Corp – slide 4
    APPLYING OUR BUSINESS STRATEGIES Balance capital expenditures with Develop world-class inventory cash flow from operations Target top-quartile operating and Divest noncore assets and financial metrics noncore affiliates Pursue…
  5. INVESTOR PRESENTATION – Chesapeake Energy Corp – slide 5
    REALIZING IMPACT OF STRATEGIC SHIFT 2012 2013 1Q14 15% 54% 30% 46% 70% 85% HBP Focus Pad Drilling Focus Value and Right-sized Maximization Drilling Program Focus Positive PV-10 Negative PV-10 Data provided above…
  6. INVESTOR PRESENTATION – Chesapeake Energy Corp – slide 6
    FOUNDATIONAL ELEMENTS FOR VALUE CREATION CHK 7 I INVESTOR PRESENTATION JUNE 25, 2014
  7. INVESTOR PRESENTATION – Chesapeake Energy Corp – slide 7
    CAPITAL EFFICIENCY IN N. MARCELLUS Value Creation, M 1 million 2014 savings reinvested into completions optimization 55% ROR on reinvested capital 16,000 Gross Daily Production Rates 14,000 12,000 10,000 Gas…
  8. INVESTOR PRESENTATION – Chesapeake Energy Corp – slide 8
    CAPITAL EFFICIENCY IN UTICA Spud to Spud Cycle Times (days) Avg. Well Cost ( in mm) 1.4 mm in reinvested capital E 2.3 miles 80% Record for longest useable lateral drilled ROR on incremental 1.4 mm by CHK (12,327 in…
  9. INVESTOR PRESENTATION – Chesapeake Energy Corp – slide 9
    MOST EFFICIENT OPERATOR IN UTICA Drill Days (Spud to TD) Days Avg. Capex per Lateral Ft. 11.8 mm/well M / Lateral Ft 6.7 mm/well 7.4 mm/well Rate of Return % CHK Operated Non-Operated CHK Leasehold ROR % Oil…
  10. INVESTOR PRESENTATION – Chesapeake Energy Corp – slide 10
    FOUNDATIONAL ELEMENTS FOR VALUE CREATION CHK 11 I INVESTOR PRESENTATION JUNE 25, 2014
  11. INVESTOR PRESENTATION – Chesapeake Energy Corp – slide 11
    CASH FLOW GROWTH IN UTICA 400% 300% 30 - 60% YOY Production Growth YOY Production Growth YOY Production Growth (2012 to 2013) (2013 to 2014E) (2014E to 2015E) 120 Key 2014 Milestones NGL 100 1Q14 Avg. Production 50,000 boe/d…
  12. INVESTOR PRESENTATION – Chesapeake Energy Corp – slide 12
    CASH FLOW GROWTH IN PRB Gross Operated Powder River Basin Recoverable Resources Fort Union 49% 51% Lance Niobrara Upper Cretaceous / Frontier Fox Hills Teckla Teapot Parkman 1.3 billion boe Gross recoverable…
  13. INVESTOR PRESENTATION – Chesapeake Energy Corp – slide 13
    FOUNDATIONAL ELEMENTS FOR VALUE CREATION CHK 14 I INVESTOR PRESENTATION JUNE 25, 2014
  14. INVESTOR PRESENTATION – Chesapeake Energy Corp – slide 14
    CORE EXPANSION IN N. MARCELLUS Capital Efficiency Improved EURs Pad Drilling Reservoir Characterization Peake Drilling Targeting and steering 24/7 Ops Center Optimized Completions Supply Chain 15 I INVESTOR PRESENTATION JUNE…
  15. INVESTOR PRESENTATION – Chesapeake Energy Corp – slide 15
    CORE EXPANSION IN UTICA: UNLOCKING THE OIL WINDOW 500 barrels oil Recent oil IPs (old completion design) Oil Window Test Area 1,000 boe/d Recent full-stream IPs (old completion design) Leveraging proprietary Reservoir…
  16. INVESTOR PRESENTATION – Chesapeake Energy Corp – slide 16
    CORE EXPANSION IN UTICA: DRY GAS OPPORTUNITY 6.7 Mmcf/d 6.1 Mmcf/d 5.1 Mmcf/d 7.1 Mmcf/d 330,000 acres 5.1 Q2Mmcf/d 12 Net, dry gas acres in Jefferson County, OH and W. Virginia 5.9 Mmcf/d 5.9 Mmcf/d Q1 12 6.9 Mmcf/d 6.9…
  17. INVESTOR PRESENTATION – Chesapeake Energy Corp – slide 17
    FOUNDATIONAL ELEMENTS FOR VALUE CREATION CHK 18 I INVESTOR PRESENTATION JUNE 25, 2014
  18. INVESTOR PRESENTATION – Chesapeake Energy Corp – slide 18
    REDUCING LEVERAGE (mm) 12/31/12 12/31/14E Total Debt 13,084 11,825 10% VPPs 3,187 1,720 Operating & Finance Leases 1,255 182 Subsidiary Preferred 2,500 1,060 Corporate Preferred 1,531 1,531 Cash (287) (1,200) Total Adjusted…
  19. INVESTOR PRESENTATION – Chesapeake Energy Corp – slide 19
    REDUCING COMPLEXITY: COS SPIN CHK Board has approved a 100% spin-off of Seventy Seven Energy Inc. (SSE) Timing: When-issued trading: June 17, 2014 Record date: June 19, 2014 Distribution to CHK shareholders: June 30, 2014…
  20. INVESTOR PRESENTATION – Chesapeake Energy Corp – slide 20
    DELIVERING ON 2014 PROMISES Production growth 9 12% Cash flow 5,550 5,750 MM Capital 5,000 5,400 MM (Excluding Cap Interest) Cash costs LOE, G&A and interest expense Leverage Reduce leverage by 20% YE 2014 21 I…
  21. INVESTOR PRESENTATION – Chesapeake Energy Corp – slide 21
    DEPLOYING CAPITAL EFFICIENTLY (1) CHK Production Growth and Capex based on midpoint of company Outlook issued on 5/16/2014. Total CHK Capex includes capitalized interest. Peer group in alphabetical order includes: Anadarko, Apache,…
  22. INVESTOR PRESENTATION – Chesapeake Energy Corp – slide 22
    FOCUSED ON VALUE DELIVERING GROWTH 1 MILLION BOE/DAY (1) Growth ranges based on midpoint of company Outlook issued on 5/16/2014. 23 I INVESTOR PRESENTATION JUNE 25, 2014
  23. INVESTOR PRESENTATION – Chesapeake Energy Corp – slide 23
    REALIZING THE VALUE IN CHESAPEAKE 24 I INVESTOR PRESENTATION JUNE 25, 2014
  24. INVESTOR PRESENTATION – Chesapeake Energy Corp – slide 24
    APPENDIX 25 I INVESTOR PRESENTATION JUNE 25, 2014
  25. INVESTOR PRESENTATION – Chesapeake Energy Corp – slide 25
    UTICA ASSET OVERVIEW Over 1 million net acres 250,000+ net acres in wet gas window 300,000+ net acres in oil window (1) 540,000+ net acres in dry gas window 66% avg. WI, 53% avg. NRI CHK/TOT JV Outline 4+ bboe of net…
  26. INVESTOR PRESENTATION – Chesapeake Energy Corp – slide 26
    NORTHERN MARCELLUS ASSET OVERVIEW 9 tcfe of net recoverable resources 230,000+ net acres(1) 39% avg. WI, 34% avg. NRI Net production of 910 mmcfe/d(2) 5 - 7 operated rigs in 2014 10 bcfe gross EUR per well 85% ROR(3) CHK Operated…
  27. INVESTOR PRESENTATION – Chesapeake Energy Corp – slide 27
    SOUTHERN MARCELLUS ASSET OVERVIEW 2.7 bboe of net recoverable resources 250,000+ net acres 68% avg. WI, 57% avg. NRI Net production of 55 mboe/d(1) 1 - 2 operated rigs in 2014 CHK Operated Rigs Industry Rigs CHK Leasehold…
  28. INVESTOR PRESENTATION – Chesapeake Energy Corp – slide 28
    POWDER RIVER BASIN NIOBRARA ASSET OVERVIEW 450 mmboe of net recoverable resources 320,000+ net acres 38% avg. WI, 30% avg. NRI Net production of 9 mboe/d(1) Three operated rigs in 2014 Buckinghorse Plant (4Q'14) to add 120…
  29. INVESTOR PRESENTATION – Chesapeake Energy Corp – slide 29
    EAGLE FORD ASSET OVERVIEW 449,000 net acres 1.2 bboe of net recoverable resources 61% avg. WI, 46% avg. NRI Current net production of 95 mboe/d 15 - 20 operated rigs in 2014 35% of 2014 estimated E&P capex 610 mboe gross EUR per…
  30. INVESTOR PRESENTATION – Chesapeake Energy Corp – slide 30
    HAYNESVILLE ASSET OVERVIEW 10 tcfe of net recoverable resources 387,000 net acres 71% avg. WI, 57% avg. NRI Net production of 495 mmcfe/d(1) 7 - 9 operated rigs in 2014 7.5 mm well cost target achieved in 1Q14 Best well to date = 6.9…
  31. INVESTOR PRESENTATION – Chesapeake Energy Corp – slide 31
    HAYNESVILLE ECONOMICS Rate of Return(1) 100% Unburdened ROR in Haynesville Cost control measures and improving natural gas prices drive stronger returns ROR exceeds 100% when considering minimum volume commitment (MVC) and…
  32. INVESTOR PRESENTATION – Chesapeake Energy Corp – slide 32
    MID-CONTINENT ASSET OVERVIEW 286,000 net acres actively being developed in aggregate 195,000 net acres Mississippian Lime 44% avg. WI, 36% avg. NRI More than 500 mmboe of net recoverable resources 91,000 net acres Granite Wash…
  33. INVESTOR PRESENTATION – Chesapeake Energy Corp – slide 33
    BARNETT SHALE ASSET OVERVIEW 215,000 net acres 6 tcfe of net recoverable resources 68% avg. WI, 52% avg. NRI Net production of 429 mmcfe/d(1) 1 - 2 operated rigs in…
  34. INVESTOR PRESENTATION – Chesapeake Energy Corp – slide 34
    BARNETT SHALE CONTINUOUS IMPROVEMENT Avg. Well Cost ( in mm) Targeting year-end D&C cost/well of 2.0 mm Targeting spud to TIL cycle time improvement of 50% Spud to spud cycle time avg. 11 days in 2014E Current avg. drilled…
  35. INVESTOR PRESENTATION – Chesapeake Energy Corp – slide 35
    SENIOR NOTE PROFILE Convertibles 12/31/2013 WACD 5.9% Notes Issued April 2014 2,305 WACD pro forma for 4/14 issuance 5.1% Other Senior Notes 115 mm in annual cash savings As of 3/31/2014 pro forma for April 2014 refinancing ( in…
  36. INVESTOR PRESENTATION – Chesapeake Energy Corp – slide 36
    CHKS HEDGING STRATEGY INCREASES CASH FLOW CERTAINTY IN 2014 Natural Gas Oil 64% 70% 40% Swaps 4.08/mcf NYMEX 22% 94.32/bbl Three-way NYMEX Collars 4.51-5.25/mcf NYMEX 4.10 - 4.38/mcf NYMEX % of Total 2014 Northeast…
  37. INVESTOR PRESENTATION – Chesapeake Energy Corp – slide 37
    NE MARCELLUS SALES POINTS AND BASIS HEDGES Estimated April - Oct 14 NE Sales Points 1Q14A April - Oct 14 April - Oct 14 Hedged Volumes Diff. to HH Basis Hedges (mmcf/d) 9% Tetco M3/TCO z6 (NYC) Tetco M3/Transco z6 NYC 3.25 (0.62)…
  38. INVESTOR PRESENTATION – Chesapeake Energy Corp – slide 38
    UTICA AND SOUTHERN MARCELLUS SALES POINTS Estimated April - Oct 14 Sales Points Estimated 2015 Sales Points 6% TGP Zn1 500L (Gulf Coast) 8% TGP Zn1 500L (Gulf Coast) 10% 13% 30% Dominion South Point Tetco WLA (Gulf Coast) 6%…
  39. INVESTOR PRESENTATION – Chesapeake Energy Corp – slide 39
    ADJUSTED PRODUCTION GROWTH Asset Sale Adjustments (mmboe) 239 - 246 244 (13.1) (12.3) 219 2013 2013 E&P 2014 E&P 2013 2014E Reported Sales Sales Adjusted Adjusted Production Production Production 2014E 2013 2013…
  40. INVESTOR PRESENTATION – Chesapeake Energy Corp – slide 40
    REDUCING OBLIGATIONS AND COMPLEXITY (mm) 12/31/12 12/31/13 3/31/14(1) 12/31/14E(2) Senior Note Refinancing Term Loan 2,000 2,000 0 0 (3) completed in April and May 2014 Long-Term Bonds 10,666 10,838 12,475 11,825 Credit Facility…
  41. INVESTOR PRESENTATION – Chesapeake Energy Corp – slide 41
    RECONCILIATION ( in mm, except per share data) Three Months Ended: 3/31/2014 3/31/2013 Net income available to common stockholders 374 15 Adjustments, net of tax: Unrealized losses on derivatives 80 94 Restructuring and other…
  42. INVESTOR PRESENTATION – Chesapeake Energy Corp – slide 42
    RECONCILIATION ( in mm) Three Months Ended: 3/31/2014 3/31/2013 Cash provided by operating activities 1,291 924 Changes in assets and liabilities 323 255 (1) Operating cash flow 1,614 1,179 Net income 466 102 Interest expense…
  43. INVESTOR PRESENTATION – Chesapeake Energy Corp – slide 43
    CORPORATE INFORMATION CHESAPEAKE HEADQUARTERS PUBLICLY TRADED SECURITIES CUSIP TICKER 9.5% Senior Notes due 2015 165167CD7 CHK15K 6100 N. Western Avenue 3.25% Senior Notes due 2016 165167CJ4 CHK16 Oklahoma City, OK 73118 6.25%…

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