Johnson Rice Energy Conference. September 2017

Transcription

1 Johnson Rice Energy Conference September 2017

2 Forward-Looking Statements and Risk Factors Forward-Looking Statements and Risk Factors Statements made in these presentation slides and by representatives of Chaparral Energy ( Chaparral or the company ) during the course of this presentation that are not historical facts are forward-looking statements. These statements are based on certain assumptions and expectations made by the company, which reflect management s experience, estimates and perception of historical trends, current conditions and anticipated future developments. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the company, which may cause actual results to differ materially from those implied or anticipated in the forward-looking statements. These include risks relating to financial performance and results, ability to improve our financial results and profitability following emergence from bankruptcy, availability of sufficient cash flow to execute our business plan, continued low or further declining commodity prices and demand for oil, natural gas and natural gas liquids, ability to hedge future production, ability to replace reserves and efficiently develop current reserves and the regulatory environment and other important factors that could cause actual results to differ materially from those anticipated or implied in the forward-looking statements. These and other important factors could cause actual results to differ materially from those anticipated or implied in the forward-looking statements. Please read risk factors in the company s annual reports on form 10-K, quarterly reports on form 10-Q and other public filings. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information or future events. 1

3 General Overview

4 The New Chaparral Transforming into a premier pure-play STACK company Approximately 110,000 net acres Strong pipeline of economic opportunities Solid operating margins and returns, even in a volatile commodity price environment Keys to superior performance Strong assets focused STACK player Low-cost structure Operational excellence Prioritizing environmental, health and safety Premier operating team Strong foundation capable of excelling in a $40 - $60 per barrel environment Strong Assets, Low Cost Structure and Experienced Leadership with a Vision for Success 3

5 Recent Achievements Emerged from restructuring with a strong balance sheet Equitized $1.2 billion in debt and reduced annual interest expense by $110 million Enterprise Value of approximately $1.2 billion Post Emergence Debt/Adjusted LTM EBITDA of approximately 1.4x Recruited new, independent board with extensive industry experience Achieved total net production of 23.9 MBoe/d Q % oil, 16% NGLs and 27% natural gas 17% year-over-year increase in STACK production Maintained industry leading cost reductions in 2017 LOE/Boe of $3.87/Boe in Q in the STACK Significant G&A cost reductions Currently marketing EOR assets and other minor non-core assets Stock trading on the OTCQB market under the symbol CHPE Continued Operational Excellence During Restructuring 4

6 2017 Strategy Transition Chaparral to a Pure-Play STACK Company STACK position provides significant growth potential Pursue strategic alternatives to monetize Enhanced Oil Recovery (EOR) assets Retained CIBC Griffis & Small to market EOR Capital and Financial Discipline Focus on oil-weighted, high-return STACK investments Live within cash flow supplemented by asset sales proceeds Efficient and Effective Operations Safely deliver repeatable results Continue focus on driving down costs Evaluate Portfolio and Growth Opportunities Expand premier STACK position Allocate capital to Garfield County STACK and Merge acreage Evaluate strategic alternatives for other non-stack assets 5

7 Asset Overview

8 STACK Overview Asset Overview WOODS ALFAFA Approximately 110,000 acres 9.1 MBoe/d in Q ~80 operated horizontal wells WOODWARD MAJOR GARFIELD Attributes/Characteristics Chaparral acreage is primarily in the black oil, normal pressure window Lower well costs Lower GOR Excellent rates of return (1) : 29-69% Significant experience and exposure to all targeted reservoirs within the play Meramec, Osage, Oswego and Woodford Ability to accelerate development with short cycle times and low drilling costs CUSTER DEWEY WASHITA STACK CADDO KINGFISHER CANADIAN County Acreage HBP %OP (2) OP WI Average Chaparral Acreage NONOP WI Average (1) Based on $50 per barrel of oil and $3 per MMBTU flat price deck (2) Percent operated calculated as the sum of net acres in operated section divided by the total net acres in the county Kingfisher ~25,000 ~90% 64% 64% 13% Canadian ~23,000 ~99% 71% 61% 8% Garfield ~40,000 ~23% 74% 60% 16% Major ~7,000 ~67% 59% 52% 10% Other ~15,000 ~99% 56% 50% 7% 7

9 STACK Drilling Joint Venture Joint Venture between Chaparral Energy, L.L.C. and Bayou City Energy (BCE) Fund further development of Chaparral s 110,000 acre STACK position WOODS ALFAFA GARFIELD Bayou City Energy will fund 100% of the drilling and completion cost WOODWARD MAJOR Approximately $100 million maximum investment, associated with 30 joint venture STACK wells DEWEY STACK 17 wells in Canadian and 13 wells in Garfield KINGFISHER BCE will receive 85% WI in each well until the program reaches 14% rate of return (ROR) CUSTER CANADIAN Once 14% ROR is reached, Chaparral will own 75% WI and BCE will retain 25% WI Chaparral will retain all acreage and resources outside the wellbore WASHITA CADDO Chaparral Acres Joint Venture 8

10 One Petroleum System STACK Attributes Stacked reservoirs proximal to the worldclass Woodford source rock Efficient hydrocarbon stratigraphic trap creates a continuous petroleum system Areas where a thick Woodford is adjacent to the horizontal targets enhances hydrocarbon charge Economic success realized throughout hydrocarbon column MERGE represents intersection of historical SCOOP/STACK play outlines Play attributes are identical only rock thickness and GOR vary 180 N REGIONAL STACK CROSS SECTION 60 MILES STACK GARFIELD COUNTY KINGFISHER COUNTY CANADIAN COUNTY OSWEGO Datum Break S MERGE GRADY COUNTY 110 N MERAMEC 700 STACK OSAGE 350 MERGE S WOODFORD SOURCE 9

11 STACK Kingfisher County Overview Kingfisher Overview Approximately 25,000 acres 5.7 MBoe/d in Q operated producing wells TRIFECTA 2OH Spud Date: 10/14/14 Peak IP-30: 938 Boe/d Oil: 92% Lateral Length: 5,367 MARAL H (Chisholm) Spud Date: 10/31/16 Peak IP-30: 507 Boe/d Oil: 79% Lateral Length: 4,722 BUGABAGO MH (Alta Mesa) Spud Date: 3/5/17 Peak IP-30: 347 Boe/d Oil: 100% Lateral Length: 5,054 LOW VALLEY 1LMH-36 Spud Date: 4/18/2017 Peak IP-30: 1,174 Boe/d Oil: 73% Lateral Length: 4,925 MORRIS H (Chesapeake) Spud Date: 11/9/2016 Peak IP-30: 849 Boe/d Oil: 91% Lateral Length: 5,309 Characteristics OOID 1OH-24 Spud Date: 6/24/13 Peak IP-30: 1,417 Boe/d Oil: 92% Lateral Length: 5,728 SCHILDE MH (Alta Mesa) Spud Date: 4/9/15 Peak IP-30: 831 Boe/d Oil: 80% Lateral Length: 4,966 Proved productive reservoir for the Meramec, Osage and Oswego Potential of multiple target intervals per reservoir Large blocked up position of operated, HBP d acreage BIGHORN H (Staghorn) Spud Date: 7/11/16 Peak IP-30: 894 Boe/d Oil: 61% Lateral Length: 4,524 HUGHES TRUST H (Chesapeake) Spud Date: 12/17/2014 Peak IP-30: 1,326 Boe/d Oil: 95% Lateral Length: 4,233 BORELLI MH (Alta Mesa) Spud Date: 2/10/15 Peak IP-30: 1,200 Boe/d Oil: 72% Lateral Length: 4,845 HOSKINS MH (Alta Mesa) Spud Date: 9/15/15 Peak IP-30: 828 Boe/d Oil: 89% Lateral Length: 4,893 County Unrisked Drilling Locations, Gross Total OP Non-OP CORNER POCKET UMH-25 Spud Date: 4/7/16 Peak IP-30: 748 Boe/d Oil: 72% Lateral Length: 4,176 ASH MH (Alta Mesa) Spud Date: 1/14/15 Peak IP-30: 799 Boe/d Oil: 73% Lateral Length: 4,810 Kingfisher 2, ,348 Meramec ICEMAN UMH-33 Spud Date: 4/25/16 Peak IP-30: 621 Boe/d Oil: 63% Lateral Length: 4,484 LUIGI UMH-19 Spud Date: 12/26/16 Peak IP-30: 537 Boe/d Oil: 74% Lateral Length: 4,751 Osage Oswego JESTER UMH-3 Spud Date: 3/22/17 Peak IP-30: 755 Boe/d Oil: 82% Lateral Length: 3,869 GOOSE LHM-3 Spud Date: 3/7/17 Peak IP-30: 474 Boe/d Oil: 82% Lateral Length: 3,888 BOWSER UMH-9 Spud Date: 6/2/16 Peak IP-30: 953 Boe/d Oil: 71% Lateral Length: 4,433 LANKARD MH (Alta Mesa) Spud Date: 4/4/16 Peak IP-30: 1,585 Boe/d Oil: 69% Lateral Length: 4,879 10

12 STACK Canadian County Overview Canadian Overview Approximately 23,000 acres 2.2 MBoe/d in Q operated producing wells Characteristics Also known as the MERGE, it is bounded by the CANA Woodford play to the west and the SCOOP to the south HRDY 1-11MH (Marathon) Spud Date: 7/26/16 Peak IP-30: 1,487 Boe/d Oil: 31% Lateral Length: 4,935 SIEGRIST WH (Marathon) Spud Date: 7/29/15 Peak IP-30: 961 Boe/d Oil: 76% Lateral Length: 4,761 CUTBOW UMH-26 Spud Date: 3/29/17 Peak IP-30: 1,112 Boe/d Oil: 55% Lateral Length: 4,672 BIG TIMBER UMH-2 Spud Date: 6/4/2017 Peak IP-30: 696 Boe/d Oil: 71% Lateral Length: 4,623 STILES H (Marathon) Spud Date: 2/17/14 Peak IP-30: 710 Boe/d Oil: 86% Lateral Length: 4,587 CANADIAN ALFRED MH (Marathon) Spud Date: 11/20/16 Peak IP-30: 741 Boe/d Oil: 82% Lateral Length: 4,523 DIVIDE-CLARK N- 6W 1HX (Devon) Spud Date: 7/4/16 Peak IP-30: 962 Boe/d Oil: 61% Lateral Length: 10,100 CUTTHROAT WH-13 Spud Date: 2/11/17 Peak IP-30: 456 Boe/d Oil: 62% Lateral Length: 4,569 MCNEFF H (Linn) Spud Date: 9/26/16 Peak IP-30: 961 Boe/d Oil: 44% Lateral Length: 4,391 Productive reservoirs in the Meramec, Osage and Woodford Principally HBP acreage County Unrisked Drilling Locations, Gross Total OP Non-OP Canadian 2, ,596 OPPEL 1H-9 (Citizen) Spud Date: 8/4/16 Peak IP-30: 896 Boe/d Oil: 35% Lateral Length: 4,813 OPPEL 1H (Citizen) Spud Date: 7/20/16 Peak IP-30: 1,148 Boe/d Oil: 62% Lateral Length: 7,750 HARDESTY 1H (Citizen) Spud Date: 11/28/15 Peak IP-30: 898 Boe/d Oil: 17% Lateral Length: 7,465 BRAUM XH (Linn) Spud Date: 8/25/16 Peak IP-30: 1,445 Boe/d Oil: 13% Lateral Length: 10,206 ROSEMARY 1H-1-36 (Citizen) Spud Date: 1/23/16 Peak IP-30: 1,863 Boe/d Oil: 68% Lateral Length: 7,600 JACKSON XH (Linn) Spud Date: 11/19/16 Peak IP-30: 1,533 Boe/d Oil: 50% Lateral Length: 9,769 ANDERSON WH (Payrock) Spud Date: 12/9/15 Peak IP-30: 696 Boe/d Oil: 72% Lateral Length: 4,920 DREAM COOLER XH (Linn) Spud Date: 1/16/17 Peak IP-30: 1,210 Boe/d Oil: 22% Lateral Length: 9,637 RIKELLA 2H-16-9 (Citizen) Spud Date: 4/20/16 Peak IP-30: 829 Boe/d Oil: 65% Lateral Length: 6,179 Meramec Osage Woodford 11

13 STACK Garfield County Overview LEE 1MH-1 Spud Date: 12/31/13 Peak IP-30: 883 Boe/d Oil: 35% Lateral Length: 4,242 Garfield Overview Approximately 40,000 acres 0.8 MBoe/d in Q operated producing wells WHITE OAK 1UMH-36 Spud Date: 5/7/17 Peak IP-30: 665 Boe/d Oil: 14% Lateral Length: 4,743 HEDGES 7-21N-5W (White Star) Spud Date: 10/4/14 Peak IP-30: 512 Boe/d Oil: 50% Lateral Length: 4,404 Characteristics Greater than 100 of Woodford source rock beneath most of CHPE acreage Large contiguous acreage position Multiple targets in the Osage and Meramec HEDGES W 1MH (White Star) Spud Date: 9/15/14 Peak IP-30: 347 Boe/d Oil: 46% DIETERICH 2MH-10 Lateral Length: 4,5959/13/13 Spud Date: Peak IP-30: 402 Boe/d Oil: 58% Lateral Length: 4,239 Unrisked Drilling Locations, Gross County Garfield REDWOOD MH-3 Spud Date: 11/18/15 Peak IP-30: 850 Boe/d Oil: 69% Lateral Length: 4,388 Total OP Non-OP 3,070 1,410 1,660 DIETERICH 1MH-10 Spud Date: 4/26/13 Peak IP-30: 685 Boe/d Oil: 55% Lateral Length: 4,262 FARBER 1MH-6 Spud Date: 12/12/15 Peak IP-30: 760 Boe/d Oil: 66% Lateral Length: 4,177 MCGEE 29-1H (Gastar) Spud Date: 6/20/16 Peak IP-30: 345 Boe/d Oil: 79% Lateral Length: 4,801 BUGABAGO 2006 (Alta Mesa) Spud Date: 3/5/17 Peak IP-30: 345 Boe/d Oil: 99% Lateral Length: 5,054 BETTY 29#MH (Alta Mesa) Spud Date: 9/11/15 Peak IP-30: 312 Boe/d Oil: 77% Lateral Length: 4,804 Meramec Osage 12

14 Currently Identified Drilling Inventory by Play Extensive operated drilling inventory 174-rig years Kingfisher County Osage, Meramec and Oswego essentially de-risked 33-rig years Exciting upside exists in Garfield County and Merge Legend/Definitions/Assumptions Spacing assumptions, gross horizontal wells per section Oswego: 3 Osage: 6-12 Meramec: 6-12 Woodford: 3-6 STACK Operated Drilling Inventory STACK Operated Drilling Inventory by Type 4, rigs 3 rigs 4 rigs 5 rigs 6 rigs 3, ,000 2,500 2,000 1,500 3,458 3,398 3,318 3,218 3,098 1, /31/ /31/ /31/ /31/ /31/2021 Remaining Inventory Cumulative Drilled Operated assumptions For Kingfisher County: >45% working interest in section All other counties >30% working interest in section Note: Assumes drilling 20 wells/rig/year Play Net Surface Acres Working Interest Unrisked Drilling Locations, Gross Net 3P Reserves STACK OP Non-OP Total OP Non-OP Unrisked Total (MMBoe) Kingfisher ~25,000 64% 14% 2, , Canadian ~23,000 61% 8% 2, , Garfield ~40,000 60% 16% 3,070 1,410 1, Other ~22,000 52% 8% 1, , Total STACK ~110,000 60% 11% 9,334 3,477 5,857 1,132 Multi-Year Inventory Across Multiple Horizons 13

15 Chaparral Well Performance in STACK Enhanced Completion Tests in the STACK Initiated enhanced completion program in Q to test increased proppant loading in the normal pressured oil window of the STACK Currently 15 wells on production with increased proppant loading Demonstrated Performance Over Last 12 Months Increased proppant loading continues to support current type curve First operated Meramec test in Canadian County (Merge) exceeding type curve by approximately 40% STACK Meramec Cumulative Oil Production 3, Wells 100 Enhanced Completions 16 2, MBO EUR (Oil Component of 578 MBOE Type Cuve) Well Count Proppant / Ft 2,000 1,500 MBO Well Count 1, Spud Year Days 14

16 Operational Excellence Drilling and Completions Strong, Effective Focus on Cost Reduction/Control Demonstrated D&C cost improvements Average D&C cost of ~$3.5 million from Q to Q average Meramec D&C cost of ~$3.7 million, despite service cost inflation Gross D&C Cost Quarterly Average $MM Average D&C Cost by Operator STACK Meramec One-Mile Laterals $6,000 $5,000 Avg D&C Cost D&C Cost (M$) $4,000 $3,000 $2, $1, $0 Q1 '13 Q1 '14 Q1 '15 Q1 '16 Q2 ' CHPE Peers Strong and Effective D&C Cost Focus 15

17 Financial Overview

18 Strong Financial Position and Liquidity Strong financial position to support accelerated STACK drilling program No near-term debt maturities until 2021 Current debt/total capitalization of ~25% Eliminated approximately $1,382 million of debt through restructuring program Post emergence debt/adjusted LTM EBITDA of ~1.4x Proceeds from non-core asset sales will provide additional cash to fund capital plan Chaparral Capitalization and Liquidity ($ in Millions) As Reported 6/30/2017 Cash and Cash Equivalents $17 Revolving Credit Facility due March 2021 (1) $138 Term Loan due March Other 25 Total Debt $313 Stockholder s Equity $951 Total Capitalization $1,264 Total Debt / Total Capitalization 25% Liquidity (1) $103 Chaparral Debt Maturity Schedule $500 $400 $300 $200 $100 $0 ($ in Millions) $86 No maturities until 2021 $139 $ Term Loan Revolver - Drawn Revolver - Availability (1) Liquidity defined as revolver availability based on current commitments plus unrestricted cash less letters of credit 17

19 Why Chaparral? Why Chaparral? Peer Leading Balance Sheet Strong Management Team with Excellent Track Record Execution-focused STACK Player Deep Inventory of High-return Drilling Prospects 18

20 ENERGIZING America s Heartland