Fourth Quarter 2013 Earnings Call Presentation. March 13, 2014

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Britton Daniels
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1 Fourth Quarter 2013 Earnings Call Presentation March 13, 2014

2 Forward-Looking & Other Cautionary Statements This presentation contains 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, other than statements of historical facts, included in this press release that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are forward-looking statements. Without limiting the generality of the foregoing, forward-looking statements contained in this press release specifically include the expectations of plans, strategies, objectives and anticipated financial and operating results of the Company, including guidance regarding the timing and location of additional rigs, results of the Company's drilling program, 2014 capital budget, ability to fulfill minimum drilling requirements under our partnerships with Vanguard Natural Resources and BP by the end of the third quarter, projections regarding our average AFE, projections regarding total production, average daily production, percentage liquids, operating expenses, production taxes as a percentage of revenue, G&A expenses and capital expenditure levels for 2014, as well as production guidance for the first quarter of These statements are based on certain assumptions made by the Company based on management's experience and perception of historical trends, current conditions, anticipated future developments and other factors believed to be appropriate. 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 expressed by the forward-looking statements. These include, but are not limited to, changes in oil and natural gas prices, weather and environmental conditions, the timing of planned capital expenditures, availability of acquisitions, uncertainties in estimating proved reserves and forecasting production results, operational factors affecting the commencement or maintenance of producing wells, customers elections to reject ethane and include it as part of the natural gas stream for the remainder of 2014, the condition of the capital markets generally, as well as the Company's ability to access them, the proximity to and capacity of transportation facilities, and uncertainties regarding environmental regulations or litigation and other legal or regulatory developments affecting the Company's business and other important factors that could cause actual results to differ materially from those projected as described in the Company's reports filed with the SEC. Any forward-looking statement speaks only as of the date on which such statement is made and the Company undertakes no obligation to correct or update any forwardlooking statement, whether as a result of new information, future events or otherwise, except as required by applicable law. 1

3 2013 Highlights Rig Ramp More than tripled rig count from 3 rigs just over a year ago to 10 rigs at year-end 2013 (8 Cleveland; 2 Woodford) Production Growth Grew production 28% to 17.0 MBoe/d from 13.3 MBoe/d in 2012 Oil Contribution Increased oil contribution to 25% of production in 2013 from 15% of production in 2012 Cleveland Reserves Growth Cleveland proved reserves increased 42% from year-end 2012 to 57.5 MMBoe; additions replaced production by 558% (307% through the drill-bit) Accretive Acquisition Acquired Sabine Anadarko assets in core Cleveland area; 1.0 MBoe/d impact to December production (2.2 MBoe/d net to Jones in December for 14 day ownership period) New Partnerships Closed Woodford JV with Vanguard to drill 350+ wells and closed 6 th agreement with BP to drill Woodford wells Production (MBoe/d) EBITDAX ($mm) Proved Reserves (MMBoe) [1] A A $250.0 $200.0 $150.0 $100.0 Note: [1] 69.8 MMBoe represents actual 2012 reserves of 85.3 MMBoe less 15.5 MMBoe of reserves related to Southridge that the Company let expire in $ $ A $ A A 2013A

4 2014 Development Plan 2014 Development Plan 2014 D&C CapEx by Area - $310 million 2014E 2014E Area Rigs Gross Wells Net Wells Cleveland Woodford Total Operated Other / Non-Op Total % 3% 81% Cleveland Woodford Other $310 million of drilling and completion capital generates ~30% production growth over 2013 and will be funded primarily through cash flow 3

5 Jones Operated Historical Data Cleveland IP 30 Historical Data ( ) [1] 30 3-Year IP30 Average: 504 Boe/d 25 Well Count (106) Cleveland Well Costs Historical Data ( ) [2] IP 30 (Boe/d) 3-Year Well Cost Average: $3.24mm Well Count (102) $2.25-$2.50 $2.50-$2.75 $2.75-$3.00 $3.00-$3.25 $3.25-$3.50 $3.50-$3.75 $3.75-$4.00 $4.00+ Notes: [1] No ERD wells. Excludes wells in the enhanced frack trial. [2] No ERD or Pilot wells. Excludes wells in the enhanced frack trial. Well Costs ($mm) 4

6 2014 Blended Production Profile Cleveland Single Well Profile [1] % Liquids 67% % Oil 35% Gas Shrink 31% NGL Yield (Bbls / MMcf) 114 Nymex Differential (Oil / Gas) ($5.66 / $0.55) NGL as % of Crude 33.5% Bbl/m 10,000 1,000 Oil Wet Gas Total [2] IP Bbl/D Mcf/D Boe/D 30 Day IP Day IP Cum. Production MBbl MMcf MBoe 1 Year Year Year ,000 10,000 Mcf/m Fixed OpEx ($ / Month / Well) $2,520 Gross Well Cost ($mm) $3.1 Severance Tax - Oil 4.6% Severance Tax - Gas / NGL 7.6% Ad Valorem Tax 2.4% 100 Oil NGL Gas Months 1,000 Woodford Single Well Profile [1][3] 10, ,000 % Liquids 26% % Oil 0% Gas Shrink 15% 1,000 NGL Yield (Bbls / MMcf) 49 Nymex Differential (Oil / Gas) ($3.02 / $0.81) NGL as % of Crude 43.0% Fixed OpEx ($ / Month / Well) $2,761 Gross Well Cost ($mm) $4.2 Severance Tax - Oil 1.1% Bbl/m 100 Oil NGL Gas Oil Wet Gas Total [2] IP Bbl/D Mcf/D Boe/D 30 Day IP 7 3, Day IP 6 3, Cum. Production MBbl MMcf MBoe 1 Year Year 2 1, Year 2 1, ,000 Mcf/m Severance Tax - Gas / NGL 1.1% Ad Valorem Tax Months 1,000 Notes: [1] Jones production profiles based on actual historical results in each area [2] Includes oil, dry gas and NGL components. [3] Assumes ethane rejection. 5

7 Appendix

8 EBITDAX Reconciliation Fiscal Year End 12/31/ Quarter End 12/31/ $ in '000s Net Income (Loss) $22,405 ($3,079) ($9,077) ($20,678) Interest Expense (excluding Amortization of Deferred Financing Costs) 28,097 21,748 6,674 6,124 Exploration Expense 1, Income Taxes (71) Amortization of Deferred Financing Costs 2,677 3, Depreciation and Depletion 114,136 80,709 31,584 22,458 Impairment of Oil and Natural Gas Properties 14,415 18,821 14,415 18,760 Accretion Expense Other Non-Cash Charges (148) 69 Stock Compensation Expense 10, Other Compensation Expense 2, Net (Gain) Loss on Derivative Contracts 2,566 (16,684) 7,010 3,438 Current Period Settlements of Matured Derivative Contracts 5,209 29,783 (53) 6,118 Amortization of Deferred Revenue (469) - (355) - Loss (Gain) on Sales of Assets 78 (1,162) EBITDAX $204,997 $135,741 $51,815 $38,070 7

Forward-Looking & Other Cautionary Statements

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