SCOOP Project SpringBoard. January 29, 2019

Transcription

1 SCOOP Project SpringBoard January 29, 2019

2 Forward-Looking Information Cautionary Statement for the Purpose of the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995 This presentation includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of All statements included in this presentation other than statements of historical fact, including, but not limited to, forecasts or expectations regarding the Company s business and statements or information concerning the Company s future operations, performance, financial condition, production and reserves, schedules, plans, timing of development, rates of return, budgets, costs, business strategy, objectives, and cash flows, are forward-looking statements. When used in this presentation, the words could, may, believe, anticipate, intend, estimate, expect, project, budget, plan, continue, potential, guidance, strategy, and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. Forward-looking statements are based on the Company s current expectations and assumptions about future events and currently available information as to the outcome and timing of future events. Although the Company believes these assumptions and expectations are reasonable, they are inherently subject to numerous business, economic, competitive, regulatory and other risks and uncertainties, most of which are difficult to predict and many of which are beyond the Company s control. No assurance can be given that such expectations will be correct or achieved or the assumptions are accurate. The risks and uncertainties include, but are not limited to, commodity price volatility; the geographic concentration of our operations; financial, market and economic volatility; the inability to access needed capital; the risks and potential liabilities inherent in crude oil and natural gas exploration, drilling and production and the availability of insurance to cover any losses resulting therefrom; difficulties in estimating proved reserves and other revenue-based measures; declines in the values of our crude oil and natural gas properties resulting in impairment charges; our ability to replace proved reserves and sustain production; the availability or cost of equipment and oilfield services; leasehold terms expiring on undeveloped acreage before production can be established; our ability to project future production, achieve targeted results in drilling and well operations and predict the amount and timing of development expenditures; the availability and cost of transportation, processing and refining facilities; legislative and regulatory changes adversely affecting our industry and our business, including initiatives related to hydraulic fracturing; increased market and industry competition, including from alternative fuels and other energy sources; and the other risks described under Part I, Item 1A Risk Factors and elsewhere in the Company s Annual Report on Form 10-K for the year ended December 31, 2017, registration statements and other reports filed from time to time with the SEC, and other announcements the Company makes from time to time. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date on which such statement is made. Should one or more of the risks or uncertainties described in this presentation occur, or should underlying assumptions prove incorrect, the Company s actual results and plans could differ materially from those expressed in any forward-looking statements. All forward-looking statements are expressly qualified in their entirety by this cautionary statement. Except as expressly stated above or otherwise required by applicable law, the Company undertakes no obligation to publicly correct or update any forward-looking statement whether as a result of new information, future events or circumstances after the date of this presentation, or otherwise. Readers are cautioned that initial production rates are subject to decline over time and should not be regarded as reflective of sustained production levels. In particular, production from horizontal drilling in shale oil and natural gas resource plays and tight natural gas plays that are stimulated with extensive pressure fracturing are typically characterized by significant early declines in production rates. We use the term "EUR" or "estimated ultimate recovery" to describe potentially recoverable oil and natural gas hydrocarbon quantities. We include these estimates to demonstrate what we believe to be the potential for future drilling and production on our properties. These estimates are by their nature much more speculative than estimates of proved reserves and require substantial capital spending to implement recovery. Actual locations drilled and quantities that may be ultimately recovered from our properties will differ substantially. EUR data included herein remain subject to change as more well data is analyzed. 2

3 Project SpringBoard Progress Update Project SpringBoard Alone is on Pace to Grow CLR s Net Oil Production 10% from 3Q18 to 3Q19 (1) Springer: Row 1 completed and results are in line with expectations Upgraded development plan Saves ~$125 million in projected net Capex Uplifts average EUR per well to 1.3 MMBoe Increases lateral length from 7,500 to 9,800 7 rigs drilling Rows 2 and 3; 16 wells waiting on completion Woodford/Sycamore: 5 rigs drilling, 17 wells waiting on completion 1. Guidance provided during 3Q18 earnings conference call. 3

4 SCOOP Project SpringBoard Overview 400 MMBoe Resource Potential (1) High Impact CLR-Operated Oil Project 73-square miles of contiguous leasehold ~47,000 gross acres (~35,000 net) ~75% avg. CLR working interest ~17% minerals ownership (2) 9+ Miles Row 1 Row 2 Row 3 Row 4 Row 5 Row Development Maximizing Operational Efficiencies 3 Reservoirs: Springer, Sycamore, Woodford Springer (80-85% Oil) 31 total operated units (3) 85 wells (4) Complete YE 2020 (5) SpringBoard Status: CLR-Operated Developed Drilling Completing Woodford/Sycamore (70% Oil) 31 total operated units Up to 250 wells (4) Co-developing both reservoirs 1. Gross unrisked resource potential. 2. Minerals strategic relationship owns 17% of minerals underlying CLR s net acre SpringBoard position. 3. Excludes 2015 Hartley unit. 4. Excludes parent wells. 5. At current pace of development. 4

5 SpringBoard Geology: Springer, Sycamore And Woodford Reservoirs Row 1 Row 2 Row 3 N N Row 5 N Row 1 Row 2 Row 3 Row 4 S N Row 5 S Row 4 S S Map View Cross Section Springer Thick 3-4 Wells/Unit Sycamore Thick 2-4 Wells/Unit 500-1,500 11,000 Woodford Thick 5-6 Wells/Unit 14,000 5

6 Springer Results To Date New 9,800 Lateral 1.3 MMBoe Type Curve Springer # Wells IP per Well (1) (Boepd) Combined IP (Boepd) Row Row Row Row Row ,292 23,255 Triple H 4 1,516 6, Program 22 1,333 29,320 Row Thicker Reservoir Thinner Reservoir 10,000 New 9,800' Lateral 1.3 MMBoe Springer Type Curve SpringBoard Range of Well Outcomes 2018 Average Springer Results (2) 1.3 MMBoe Springer Type Curve 1.3 MMBoe Type Curve Represents Avg. Reservoir Thickness Boepd 1, (22 Wells) 1. Note: Row 1 IP s per well are not high-day aligned Springer wells that have IP ed to date Days 6

7 New Springer 9,800 Lateral 1.3 MMBoe Economic Model Updated Development Plan Saves ~$125 MM in Projected Net Capex Lateral Length: Increases 30% from 7,500 to 9,800 Updated Springer Development Well Economics (1) Lateral Length 9,800 Capex $10 MM EUR 1,300 MBoe Finding Cost $9.62 per Boe (2) Well Cost: Increases 5% from $9.5 MM to $10 MM IP ROR 1,430 Boepd 60-90% at $50-$60 WTI Cost per Lateral Foot: Reduced 20% EUR per Well: Increases 8% from 1.2 MMBoe to 1.3 MMBoe Finding Cost: Reduced 3% ROR 125% 100% 75% 50% Target EUR: 1,300 MBOE Avg. Lateral: 9,800 Springer Oil 60% ROR 25% $16.58/$0.99 PV0 Breakeven $10.0MM Budget 2019 $25.22/$1.51 PV10 Breakeven 0% $40 $45 $50 $55 $60 $65 $70 WTI Oil Price, $/BBL 1. Compared to former Springer IR curve released in 4Q Assumes 80% NRI. 7

8 Operational Efficiencies Driving Down Costs Achieved 10% Reduction in Springer Completed Well Costs Drilling: Cost reduced by 18% Cycle time reduced by 24% Completion: Stages per day up 45% Targeting Addl. 6-8% Reduction in Springer CWC in 2019 Springer CWC ($/Lateral Ft) $1,400 $1,200 $1,000 $800 $600 $400 $200 $0 Springer $1,213 $1,104 $1,020 $515 $530 $530 $698 $574 $ Row Row Target Drilling Completions 15% reduction in drilling cost 15% reduction in drilling cycle time Completion costs remain flat while increasing proppant loading by 30% Spud to TD (Days) Row 1 (18 Wells) Row 2 (16 Wells) Target 8

9 SpringBoard s Low Cost, Market Advantaged Barrel Operational Efficiencies High Quality Project in Our Own Backyard! 95% of oil, gas and water in Row 1 on pipe Infrastructure allows for uninterrupted flow back and produced water handling through CLR operated recycling facility Project SpringBoard CLR Headquarters Cushing, OK Basin Crude Pipeline (100 mi) Marketing Advantages Crude oil differentials below $2.00/barrel Direct pipeline connectivity to Cushing & local refinery Access to N. TX premium gas markets 400 MMcfd firm transportation on Wildcat Pipeline Water Recycling Facility N. TX Premium Markets Enable Crude Pipeline (50 mi) CVR Refinery Oklahoma Texas Wildcat Gas Pipeline (200 mi) 40 miles 9

10 CLR s Project SpringBoard: Translating Assets Into Shareholder Value Assets Value 400 MMBoe Resource Potential (1) 3 SCOOP Reservoirs 70% - 85% Crude Oil 73-Square Miles; ~35,000 Net Acres ~75% Average Working Interest ~17% Minerals Ownership (2) On Track to Grow CLR Net Oil Production 10% from 3Q18 to 3Q19 (3) Up to 335 Potential CLR-Operated Locations ~31 Operated Springer Units (4) ; 85 Wells (5) ~31 Operated Woodford/Sycamore Units; up to 250 Wells (5) Expect ~20 Wells/Quarter Turned to Production (Springer, Woodford & Sycamore) 2018 Springer Wells Completing and in Line with Expectations Cost Savings from Row 1 to Row 2: Drilling Cost Reduced by 18% Drilling Cycle Time Reduced by 24% Completed Stages per Day up 45% 1,333 Avg. Boepd per Well (81% Oil) Optimized Springer Development Plan Utilizing 9,800 vs. Prior 7,500 Lateral Avg. EUR Uplifted to 1.3 MMBoe per Well ~$125 Million in Projected Net Capex Savings 1. Gross unrisked resource potential. 2. Minerals strategic relationship owns 17% of minerals underlying CLR s net acre SpringBoard position. 3. Guidance provided during 3Q18 earnings conference call. 4. Excludes 2015 Hartley unit. 5. Excludes parent wells. 10