EnerCom The Oil and Gas Conference 20

Transcription

1 EnerCom The Oil and Gas Conference 20 August 20, 2015

2 Forward Looking Statements This presentation includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements in this presentation, other than statements of historical fact, including statements regarding the business, strategy, financial position, prospects, plans, objectives, forecasts, and projections of Jonah Energy LLC are forward-looking statements. The words anticipate, assume, believe, budget, could, estimate, expect, forecast, intend, plan, project, projection, should, will, would, and similar expressions are intended to identify forward-looking statements. The forward-looking statements contained herein are based on management s current expectations and beliefs concerning future events and their potential effect on the Company and involve known and unknown risks, uncertainties and assumptions, which may cause actual results to differ materially from results expressed or implied by the forward-looking statements. These risks include factors such as the imprecise nature of estimating oil and gas reserves; the availability of additional economically attractive exploration, development and acquisition opportunities for future growth; unexpected drilling conditions and results; unsuccessful drilling results; the ability to achieve estimated cost savings; the availability of drilling, completion and operating equipment and services; and the risks associated with commodity pricing and the Company s price risk management strategy. The forward-looking statements contained herein speak only as of the date of this presentation. Although Jonah Energy may from time to time voluntarily update its prior forward-looking statements, it disclaims any commitment to do so. This presentation may also include market data and other statistical information from third-party sources, including independent industry publications, government publications or other published independent sources. Although Jonah Energy believes these third-party sources are reliable as of their respective dates, Jonah Energy has not independently verified the accuracy or completeness of this information. Some data are also based on Jonah Energy s good faith estimates, which are derived from its review of internal sources as well as the third-party sources described above. 1

3 Sponsorship and Strategy Financial Sponsors Lead investor Co-investor Management and Private Investors Co-investor Board is Comprised of Management Representatives, Investor Representatives, and Independent Members Formation and Strategy Formation of Jonah was a deliberate and patient process focused on the right partners, locating and acquiring a high quality foundational asset and assembling a team of experienced professionals to lead the Company 2

4 Position in the Industry TOP 100 PRIVATE GAS PRODUCERS (1) Rank Company Gas (Mcf) 1 Hilcorp Energy Co. 209,369,650 2 Samson Investment Co. 206,964,997 3 Chief Oil & Gas LLC 197,346,610 4 Merit Energy Co. 115,085,032 5 Mewbourne Oil Co. 88,638,323 6 WildHorse Resources LLC 83,142,446 7 Yates Petroleum Corp. 68,548,613 8 J-W Operating Co. 57,921,638 Jonah Energy LLC has Established a Strong Position in the Industry Jonah Energy LLC pro forma 2014 gas production of ~100 Bcf Ranks 5 th on the list of private gas producers (1) 9 LLOG Exploration Co. LLC 56,689, Templar Energy LLC 51,655,780 Jonah is Set up to Deliver a Rare Combination of: Rational and Flexible Production Growth Continuing Capital Investment Free Cash Flow Generation (1) Source: Independent research firm IHS via Oil & Gas Finance Journal article on July 8,

5 Jonah Energy Executive Management Thomas M. Hart III Chief Executive Officer Partner in Jonah Energy LLC at inception in May 2014 Former SVP Corporate/Business Development of El Paso Corporation & El Paso E&P Company (Formerly NYSE:EP) Former Director of Oiltanking Partners LP (NYSE:OILT) L. Craig Manaugh President & Chief Operating Officer Partner in Jonah Energy LLC at inception in May 2014 Former VP of Operations, Northern Division of Chesapeake Energy (NYSE:CHK); President and CEO of Dominion Exploration Canada Ltd. (NYSE:D); and VP at Louis Dreyfus Group David W. Honeyfield Vice President & Chief Financial Officer C. Mark Brannum Vice President, General Counsel & Secretary Partner in Jonah Energy LLC, joined in August 2014 Former President & CFO of Intrepid Potash, Inc. (NYSE:IPI); SVP and CFO of SM Energy Company (NYSE:SM); and Controller and CAO of Cimarex Energy Company (NYSE:XEC) Partner in Jonah Energy LLC, joined in August 2014 Former Deputy General Counsel and Corporate Secretary of SM Energy Company (NYSE:SM); and VP, General Counsel & Corporate Secretary of Magellan Petroleum Corporation (NASDAQ:MPET) Rory O Byrne Vice President & Chief Human Resource Officer Partner in Jonah Energy LLC, joined in August 2014 Former SVP and CHRO of MRC Global Inc. (NYSE:MRC) and Director of Human Resources and Organizational Development for BG Group s Americas and Global LNG business (LSE:BG.L) Mike Park Vice President of Operations Partner in Jonah Energy LLC, joined in December 2014 Former District Manager Operations for Chesapeake Energy Corporation (NYSE:CHK) 4

6 Strategic Thesis for Jonah Energy LLC Acquire and operate high quality assets that were out of favor with the large independent / integrated public companies Create Exceptional Value by Acquiring Oil and Gas Fields with Under- Managed Potential, then Mobilize the Capital and Talent Necessary to Fully Realize that Potential Assemble a team with technical expertise to develop and exploit the asset Initiate base production enhancement strategies on PDP assets to mitigate the natural decline Implement a development plan with the ability to organically grow production from significant undeveloped inventory De-risk and protect EBITDAX and Cash Flow through robust and ongoing hedging program with hedges in place through 2019 Business development to leverage growth platform: High quality assets Established PDP reserve profile Meaningful future development opportunities Scale and concentration of operations to apply management systems and operating performance tools 5

7 First 15 Month Achievements & Ongoing Integration Creation of Jonah Energy LLC Creation of partnership with TPG as lead investor Successful carve out from Encana Established Jonah stand-alone systems and processes Staffing of a fully functional organization Integration of entirely new team that came from diverse energy backgrounds Operational Efficiencies Captured efficiency gains in D&C activities through operational improvements resulting in lower per-well costs Continuous re-optimization of drilling inventory Successful cost reduction program over all operations and drilling activity Achieved LOE below expectations Operational Achievements Delivered on anticipated production targets in first 15 months Reversed decline of Jonah field and leveled the production profile Implemented and expanding base management and operations strategies that are right sized for Jonah Energy LLC Drilled highest IP well in Jonah field history in Q

8 Overview of Jonah Energy LLC Headquartered in Denver, CO Field office in Pinedale, WY Reserve profile: 2P Reserves (1) (as of 12/31/14) Number of 2P Locations (1) (Gross) Undeveloped 61% Undeveloped 40% 1.9 Tcfe 2P Reserves ~2,800 2P Locations Developed 39% Developed 60% Asset Base Sublette County, Wyoming 2015 Capex ~$180MM Current Net Acreage Summary Total: ~117,000 Jonah field: ~11,200 (100% HPB) NPL Area: ~106,000 (1) Per NSAI-engineered Reserve Report as of December 31, 2014 using SEC pricing. 7

9 Jonah Field Overview Jonah field is the foundational asset for Jonah Energy LLC Jonah field is located in the northwestern portion of the Green River Basin Upper Cretaceous Lance formation produces from fluvial channel sandstone deposits The Lance Pool is the geologic section that produces at Jonah field Depth to base of Lance Pool varies from 11,000 to 14,000 TVD Asset Locator Map Regional Stratigraphy 8

10 Jonah Field - Stratigraphy Lance Pool consists of multiple formation with typical gross thickness of 3,200 to 5,500 Unnamed tertiary Lance Upper Mesaverde Sand body dimensions typically 5 to 40 acres in size Discontinuous lenticular sand bodies are over-pressured and distributed vertically; productive interval covers a significant portion of the vertical section Due to reservoir characteristics and presence of multiple, stacked sands vertical wells have been the primary method for development of the field Stratigraphic Cross Section Stacked Pay Diagram Well A Infill well Well B 9

11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 MMcf/d Impact of Focused Management in Jonah Field Historical Gross Gas Production Jonah Energy Takes Over Operations Jonah Energy Stems Field Production Decline 2014 Base 2014 Wedge 2015 Wedge Current gross production is >100 MMcf/d higher than it would have been without Jonah Energy s intervention 10

12 In A Nutshell Large, high quality base of reserves and highly predictable production profile Low cost operator through concentration of assets and operating leverage Highly efficient and predictable, low-risk reserve replacement opportunity set Multi-year inventory of undeveloped locations Long-lived, stable and predictable cash flow offers economic flexibility protected by active and ongoing hedge program Dedicated and experienced management and sponsorship teams 11

13 Jonah Energy LLC 707 Seventeenth Street, Suite 2700 Denver, Colorado (720) Website: