Monthly Performance update for Financial Professionals November, 2018

Transcription

1 Monthly Performance update for Financial Professionals November, 2018

2 For Financial Professional Use Only. Not For Use with s. Performance of prior partnerships is not indicative of future results. Monthly Management Commentary MDS 2014: All wells were online and continuing to produce at a regular basis for this production month. Our 33rd partnership distribution saw a modest increase in both production volumes and commodity pricing enabling us to maintain an annualized rate of 10-12% for now the past four months. MDS 2015: In this 21st partnership distribution, gas production was again hindered as the effects from pipeline limitations in our southern acreage tier were felt for the final month. Also, accounting for lessened production volumes was the continuation of our routine operational shut-in of some of our Furnace Run wells as we completed adjacent wells in our northern tier of acreage. Again, these delays in production levels will be short lived and we will see greater gas volumes in next month s distribution. Ultimately we expect to see normal production reflected in distributions in early MDS 2016: Our eighth partnership distribution remained relatively flat from the prior month as a slight decrease in gas volume was offset by a slight uptick in pricing. levels were again hindered as the effects from the pipeline limitations in our southern acreage tier were felt for the final month. Also, accounting for lessened production volumes was the continuation of our routine operational shut-in of some of our Dynamite wells as we completed adjacent wells in our northern tier of acreage. Again, these delays in production levels will be short lived and we will see greater gas volumes in next month s distribution. Ultimately we expect to see normal production reflected in distributions in early MDS 2017: This fourth partnership distribution was again powered by production from only two of our nine partnership wells. Gas volumes and commodity price remained relatively flat from the prior month which enabled us to make another monthly distribution of just under 0.5% for this month. Currently being brought online to join the two producing Kuhns pad wells are some of our longest wells drilled to date on the Nolder pad. Results are still coming in, but the initial production levels we have seen so far have been some of the best in that area at around million cubic feet per day! These four Nolder Pad wells will be online for the entirety of the production month of November, which will be reflected in February 2019 s distribution. Next on the horizon we will begin flowback operations on the remaining three wells on the Kuhns pad and expect to have all partnership wells in production by year s end. MDS 2018: This year s partnership is off to a tremendous start having raised over three times the capital than what we had in at this point last year. There still remains two months to get in this year's offering which closes out on December 31, Also, drilling operations are continuing on an eight well pad in our southern acreage tier that will potentially be included in this partnership.

3 MDS 2014-Marcellus Shale Development, LP & Earnings Statement Distribution Month of October 2018 for July Information MS Net Partnership Revenue Current $187, YeartoDate TotaltoDatee $2,162, $6,082, Net Investment $20,000 Direct & Administrative Expenses 3, , , Address of Record Cash Distribution $184, $2,092, $5,851, Distribution $ $1, $5, Other Cash Distributed to Partner $ $1, $5, Gross (Mcf) 133,539 1,348,3633 5,125,838 MDS 2014Marcellus Shale Development, LP consists of six (6) gross horizontal County, Pennsylvania 40 miles northeast of Pittsburgh. The six wells were drilled from one individual drilling pad, (the Ambrose pad) with three wells drilled towards the Northwest and three wells drilled towards the Southeast from the pad. Blended Gas Sales Price ($/Mcf) Number of Distributions $2.29 $2.45 $ Cash Return % 0.83% 9.07% 25.88% Annualized Rate of Return % 9.92% 10.88% *Tax Savings % 33.43% Total Cash Returned % + *Tax Savings % 59.31% Management Comments: All wells were online and continuing to produce at a regular basis for this production month. Our 33 rd partnership distribution saw a modest increasee in both production volumes and commodity pricing enabling us to maintain an annualized rate of 1012% for now the past four months. Two new large pipelines placed into service in October are increasing Northeastt takeaway capacity by b 1.85 billion cubic feet per day! Read more here: * Tax Savings are estimates and assume a 39.6% effective tax rate. Each investor s tax situation is different.

4 MDS 2015-Marcellus Shale Development, LP & Earnings Statement Distribution Month of October 2018 for July Information MS Net Partnership Revenue Current 157, YeartoDate $3,123, TotaltoDate $7,334, Net Investment $20,000 Direct & Administrative Expenses 4, , , Address of Record Adjustments Cash Distribution Distribution Other Cash Distributed to Partner 153, $ $ $3,083, $2, $2, $7,166, $6, $6, Gross (Mcf) 115,131 1,915,896 4,591,234 MDS 2015Marcellus Shale Development, LP consists of eight (8) gross horizontal County, Pennsylvania 40 miles northeast of Pittsburgh. The eight wells were drilled from two separate drilling pads, (the Biblical Life Institute pad and the Furnace Run pad) with four wells on each pad. Blended Gas Sales Price ($/Mcf) Number of Distributions $2.28 $ $ Cash Return % 0.73% 14.59% 33.93% Annualized Rate of Return % 8.72% 17.51% *Tax Savings* % 35.97% Total Cash Returned % + *Tax Savings % 69.90% Management Comments: In this 21 st partnership distribution, gas production was again hindered as the effects from pipeline limitations in our southern acreage tier were felt for the final month. Also, accounting for lessened production volumes was the continuation of f our routine operational shutin of some of our Furnace Run wells as we completed adjacent wells in our northernn tier of acreage. Again, these delays in production levels will be short lived and we will see greater gas volumes in next month s distribution. Ultimately we expect to see normal production reflected in distributions in early Two new large pipelines placed into service in October are increasing Northeast takeaway capacity by 1.85 billion cubic feet per day! Read more here: * Tax Savings are estimates and assume a 39.6% effective tax rate. Each investor s tax situation is different.

5 MDS 2015-Marcellus Shale Development, LP & Earnings Statement Distribution Month of October 2018 for July Information 7.5% Discount MS Net Partnership Revenue Current 157, YeartoDate $3,123, TotaltoDate $7,334, Net Investment $18,500 Direct & Administrative Expenses 4, , , Address of Record 7.5% Discount 7.5% Discount Adjustments Cash Distribution Distribution Other Cash Distributed to Partner 153, $ $ $3,083, $2, $2, $7,166, $6, $6, Gross (Mcf) 115,131 1,915,896 4,591,234 MDS 2015Marcellus Shale Development, LP consists of eight (8) gross horizontal County, Pennsylvania 40 miles northeast of Pittsburgh. The eight wells were drilled from two separate drilling pads, (the Biblical Life Institute pad and the Furnace Run pad) with four wells on each pad. Blended Gas Sales Price ($/Mcf) Number of Distributions $2.28 $ $ Cash Return % 0.79% 15.77% 36.68% Annualized Rate of Return % 9.43% 18.93% *Tax Savings* % 35.97% Total Cash Returned % + *Tax Savings % 72.65% Management Comments: In this 21 st partnership distribution, gas production was again hindered as the effects from pipeline limitations in our southern acreage tier were felt for the final month. Also, accounting for lessened production volumes was the continuation of f our routine operational shutin of some of our Furnace Run wells as we completed adjacent wells in our northernn tier of acreage. Again, these delays in production levels will be short lived and we will see greater gas volumes in next month s distribution. Ultimately we expect to see normal production reflected in distributions in early Two new large pipelines placed into service in October are increasing Northeast takeaway capacity by 1.85 billion cubic feet per day! Read more here: * Tax Savings are estimates and assume a 39.6% effective tax rate. Each investor s tax situation is different.

6 MDS 2016-Marcellus Shale Development, LP & Earnings Statement Distribution Month of October 2018 for July Information MS Net Investment $20,000 Address of Record MDS 2016Marcellus Shale Development, LP consists of eight (8) gross horizontal County, Pennsylvania 40 miles northeast of Pittsburgh. The eight wells were drilled from two separate drilling pads, (the Renshaw pad and the Dynamite pad) with four wells on each pad. Current YeartoDate TotaltoDate Net Partnership Revenue $360, $3,827, $3,827, Direct & Administrative Expenses 5, $44, $44, Adjustments Cash Distribution $355, $3,783, $3,783, Distribution $ $2, $2, Other Cash Distributed to Partner $ $2, $2, Gross (Mcf) 259,121 2,313,493 2,313,493 Blended Gas Sales Price ($/Mcf) $2.32 $2.49 $2.49 Number of Distributions 8 8 Cash Return % 1.25% 13.26% 13.26% Annualized Rate of Return % 14.94% 19.89% *Tax Savings* % 33.46% Total Cash Returned % + *Tax Savings % 46.72% Management Comments: Our eighth partnership distribution remained relatively flat from the prior month as a slight decrease in gas volume was offset by a slight uptick in pricing. levels were again hindered as the effects from the pipeline limitations in our southern acreage tier were felt for the final month. Also, accounting for lessened production volumes was the continuation of our routine operational shutin of some of our Dynamite wells as we completed adjacent wells in our northern tier of acreage. Again, these delays in production levels will be short lived and we will see greater gas volumes in next month s distribution. Ultimately we expect to see normal production reflected in distributions in early Two new large pipelines placed into service in October are increasing Northeast takeaway capacity by 1.85 billion cubic feet per day! Read more here: * Tax Savings are estimates and assume a 39.6% effective tax rate. Each investor s tax situation is different.

7 MDS 2016-Marcellus Shale Development, LP & Earnings Statement Distribution Month of October 2018 for July Information 7.5% Discount MS Net Investment $18,500 Address of Record 7.5% Discount 7.5% Discount MDS 2016Marcellus Shale Development, LP consists of eight (8) gross horizontal County, Pennsylvania 40 miles northeast of Pittsburgh. The eight wells were drilled from two separate drilling pads, (the Renshaw pad and the Dynamite pad) with four wells on each pad. Current YeartoDate TotaltoDate Net Partnership Revenue $360, $3,827, $3,827, Direct & Administrative Expenses 5, $44, $44, Adjustments Cash Distribution $355, $3,783, $3,783, Distribution $ $2, $2, Other Cash Distributed to Partner $ $2, $2, Gross (Mcf) 259,121 2,313,493 2,313,493 Blended Gas Sales Price ($/Mcf) $2.32 $2.49 $2.49 Number of Distributions 8 8 Cash Return % 1.35% 14.33% 14.33% Annualized Rate of Return % 16.15% 21.50% *Tax Savings* % 33.46% Total Cash Returned % + *Tax Savings % 47.79% Management Comments: Our eighth partnership distribution remained relatively flat from the prior month as a slight decrease in gas volume was offset by a slight uptick in pricing. levels were again hindered as the effects from the pipeline limitations in our southern acreage tier were felt for the final month. Also, accounting for lessened production volumes was the continuation of our routine operational shutin of some of our Dynamite wells as we completed adjacent wells in our northern tier of acreage. Again, these delays in production levels will be short lived and we will see greater gas volumes in next month s distribution. Ultimately we expect to see normal production reflected in distributions in early Two new large pipelines placed into service in October are increasing Northeast takeaway capacity by 1.85 billion cubic feet per day! Read more here: * Tax Savings are estimates and assume a 39.6% effective tax rate. Each investor s tax situation is different.

8 MDS 2017-Marcellus Shale Development, LP & Earnings Statement Distribution Month of October 2018 for July Information MS Net Investment $20,000 Address of Record MDS 2017Marcellus Shale Development, LP consists of nine (9) gross horizontal County, Pennsylvania 40 miles northeast of Pittsburgh. The nine wells were drilled from two separate drilling pads, the Kuhns pad containing five wells and the Nolder pad containing four wells. Current YeartoDate TotaltoDate Net Partnership Revenue $156, $798, $798, Direct & Administrative Expenses Adjustments Cash Distribution $156, $798, $798, Distribution $81.72 $ $ Other Cash Distributed to Partner $81.72 $ $ Gross (Mcf) 94, , ,611 Blended Gas Sales Price ($/Mcf) $2.46 $2.48 $2.48 Number of Distributions 4 4 Cash Return % 0.41% 2.08% 2.08% Annualized Rate of Return % 4.90% 6.25% *Tax Savings* % 31.68% Total Cash Returned % + *Tax Savings % 33.76% Management Comments: This fourth partnership distribution was again powered by production from only two of our nine partnership wells. Gas volumes and commodity price remained relatively flat from the prior month enabling us to make another monthly distribution of just under 0.5%. Currently being brought online to join the two producing Kuhns pad wells are some of our longest wells drilled to date on the Nolder pad. Results are still coming in, but the initial production levels we have seen so far have been some of the best in that area at around 1013 million cubic feet per day! These four Nolder Pad wells will be online for the entirety of the production month of November, which will be reflected in February 2019 s distribution. Next on the horizon we will begin flowback operations on the remaining three wells on the Kuhns pad and expect to have all partnership wells in production by year s end. * Tax Savings are estimates and assume a 39.6% effective tax rate. Each investor s tax situation is different.

9 MDS 2017-Marcellus Shale Development, LP & Earnings Statement Distribution Month of October 2018 for July Information 7.5% Discount MS Net Investment $18,500 Address of Record 7.5% Discount 7.5% Discount MDS 2017Marcellus Shale Development, LP consists of nine (9) gross horizontal County, Pennsylvania 40 miles northeast of Pittsburgh. The nine wells were drilled from two separate drilling pads, the Kuhns pad containing five wells and the Nolder pad containing four wells. Current YeartoDate TotaltoDate Net Partnership Revenue $156, $798, $798, Direct & Administrative Expenses Adjustments Cash Distribution $156, $798, $798, Distribution $81.72 $ $ Other Cash Distributed to Partner $81.72 $ $ Gross (Mcf) 94, , ,611 Blended Gas Sales Price ($/Mcf) $2.46 $2.48 $2.48 Number of Distributions 4 4 Cash Return % 0.44% 2.25% 2.25% Annualized Rate of Return % 5.30% 6.76% *Tax Savings* % 31.68% Total Cash Returned % + *Tax Savings % 33.93% Management Comments: This fourth partnership distribution was again powered by production from only two of our nine partnership wells. Gas volumes and commodity price remained relatively flat from the prior month enabling us to make another monthly distribution of just under 0.5%. Currently being brought online to join the two producing Kuhns pad wells are some of our longest wells drilled to date on the Nolder pad. Results are still coming in, but the initial production levels we have seen so far have been some of the best in that area at around 1013 million cubic feet per day! These four Nolder Pad wells will be online for the entirety of the production month of November, which will be reflected in February 2019 s distribution. Next on the horizon we will begin flowback operations on the remaining three wells on the Kuhns pad and expect to have all partnership wells in production by year s end. * Tax Savings are estimates and assume a 39.6% effective tax rate. Each investor s tax situation is different.

10 For Financial Professional Use Only. Not For Use with s. Performance of prior partnerships is not indicative of future results. Historical Performance of Horizontal Marcellus Shale Natural Gas Partnerships Distributions made through October, 2018 Partnership Capital Final Closing Months from Closing to Initial Distribution Months of Distributions (1) Average of Trailing Three Distributions (2) 1 st Year IDC Cumulative Tax Savings (3) Cumulative Cash Return Cumulative Cash Return and Tax Savings MDS 2014 LP $18,230,680 Dec % 72.50% 33.43% 26.06% 59.49% MDS 2015 LP $16,229,140 Dec % 80.00% 35.97% 34.88% 70.85% MDS 2016 LP $22,879,265 Dec % 80.80% 33.46% 13.61% 47.07% MDS 2017 LP $31,843,200 Dec % 80.00% 31.68% 2.16% 33.84% (1) The number of months given are consecutive; no distributions have been suspended in any MDS partnership. (2) Rate of return is based on the average distribution over the last three months. (3) This column reflects the approximate federal income tax savings that would have been paid by an investor in the highest tax bracket (e.g. 39.6%) assuming the full use of intangible drilling cost (IDC), equipment depreciation, and depletion allowance deductions available to the investor through the 2017 tax year.

11 For Financial Professional Use Only. Not For Use with s. Performance of prior partnerships is not indicative of future results. Historical Performance of Horizontal Marcellus Shale Natural Gas Partnerships Data through the October 31, 2018 distribution 400,000 Partnership Data by Month 350,000 Volume (MCF) (3) (4) 300, , , , ,000 MDS 2014 LP (2) MDS 2015 LP (2) MDS 2016 LP (2) MDS 2017 LP (2) 50, Month (1) (1) The number of months given are consecutive; no distributions have been suspended in any MDS partnership. (2) Steep declines in partnership production volumes are likely the result of routine operational shut-ins of some or all of the partnerships wells. (3) Volume refers to the total production in MCF from the net wells owned by a partnership. (4) All MDS partnership wells are produced on a restricted basis under natural post completion pressures.

12 For Financial Professional Use Only. Not For Use with s. Performance of prior partnerships is not indicative of future results. Historical Performance of Horizontal Marcellus Shale Natural Gas Partnerships Data through the October 31, 2018 distribution $4.50 Partnership Pricing Data by Month $4.00 $3.50 $3.00 $2.50 $2.00 $1.50 NYMEX DTI South MDS Average $1.00 $0.50 $- Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 (1) The number of months given are consecutive; no distributions have been suspended in any MDS partnership. (2) NYMEX is the average monthly gas price per MCF received at the Henry Hub in Lousiana as stated by the New York Mercantile Exchange. (3) DTI South is the average monthly gas price per MCF received at the Dominion Energy Transmission, Inc. south hub in Appalachia. (4) MDS Average is the average monthly gas price per MCF received for MDS horizontal partnership production.