Forward-Looking & Other Cautionary Statements

Similar documents
Scotia Howard Weil Energy Conference March 2015

Forward-Looking & Other Cautionary Statements

Forward-Looking & Other Cautionary Statements

Forward-Looking & Other Cautionary Statements

Forward-Looking & Other Cautionary Statements

Forward-Looking & Other Cautionary Statements

Forward-Looking & Other Cautionary Statements

Investor Update Hunt Acquisition

Investor Update. June 2015

Acquisition of Assets in Anadarko Basin Conference Call. November 26, 2013

Investor Presentation January 2017

Fourth Quarter 2013 Earnings Call Presentation. March 13, 2014

U.S. Independent E&Ps

22nd Annual Credit Suisse Energy Summit

46 th Annual Scotia Howard Weil 2018 Energy Conference

Capital One Securities, Inc. 8 th Annual Energy Conference. December 12, 2013

Second Quarter 2017 Earnings Presentation

Jones Energy Pivots to the Merge July 2017

TPH Hotter N Hell Energy Conference June 18, 2014

INVESTOR PRESENTATION 3Q»2017

Corporate Presentation June 2018

Cleveland Technical Presentation September 19, 2014

Scotia Howard Weil Energy Conference. March 25-26, 2019

Enercom - The Oil and Gas Conference. August 16, 2017

Market Update IPAA CONFERENCE APRIL 21, 2016

Investor Presentation

Forward Looking Statements and Related Matters

IPAA Oil and Gas Investment Symposium

Operational Efficiency. Size Matters: Surviving a Pricing Downturn

Forward Looking Statements and Cautionary Statements

Corporate Presentation February 2018

CHESAPEAKE ENERGY: THE TRANSFORMATION AND THE FUTURE

1Q18 EARNINGS OUTSTANDING EXECUTION

Capital One 13 th Annual Energy Conference. December 5, 2018

Corporate Presentation March 2018

SM ENERGY REPORTS YEAR-END 2018 RESULTS AND 2019 OPERATING PLAN REALIZING VALUE CREATION FROM TOP TIER EXECUTION

Fourth Quarter and Year End 2015 Earnings Review. Todd Stevens President & CEO Los Angeles, CA February 29, 2016 Mark Smith Sr.

Fourth-Quarter & Full-Year 2018 Earnings Presentation

Guidance Update November 8, 2018

WELLS FARGO WEST COAST ENERGY CONFERENCE. Carrizo Oil & Gas, Inc. June 20-21, 2016

Howard Weil Energy Conference. March 23-27, 2014

EV Energy Partners, L.P. Citi MLP/Midstream Infrastructure Conference

Forward Looking Statements and Related Matters

Core Oil Delaware Basin Pure-Play. Third Quarter 2018 Earnings Presentation. November 5, 2018

THE CORDILLERA ENERGY PARTNERS III, LLC ACQUISITION

SM ENERGY REPORTS 2016 RESULTS AND 2017 OPERATING PLAN: DRIVING GROWTH FROM TOP TIER ASSETS

ENERCOM THE OIL & GAS CONFERENCE. Carrizo Oil & Gas, Inc. August 14-18, 2016

SEAPORT GLOBAL 5 TH ANNUAL SOUTHERN CALIFORNIA ENERGY 1X1 DAY. Carrizo Oil & Gas January 11, 2017

PREVIEW FundamentalEdge Report April 2018

Enable Midstream Partners, LP

Second Quarter 2018 Earnings Call Presentation AUGUST 2, 2018

@NFX YE15 Update and 2016 Outlook

FOURTH QUARTER 2017 EARNINGS CALL FEBRUARY 22, 2018

Third Quarter 2015 Earnings Review. Todd Stevens President & CEO Mark Smith Sr. EVP & CFO Los Angeles, CA November 5, 2015

INVESTOR UPDATE EP ENERGY CORPORATION SEPTEMBER 2018

Corporate Presentation December 2017

YE-17 Reserves & 2018 Budget Presentation January 2018

1 st Quarter Earnings Call and Operational Update. April 30, 2014

RBC Capital Markets Global Energy & Power Conference. June 7, 2017

Investor Presentation February 2014

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C FORM 8-K

Parsley Energy Overview

Investor Presentation. October 2017

N E W S R E L E A S E

Analyst Presentation October 22, 2015

EV Energy Partners, L.P J.P. Morgan Global High Yield and Leveraged Finance Conference

CFA Society of Houston. April 23, 2014

Third Quarter 2016 Earnings Call Presentation October 27, 2016

Q Earnings Presentation

U.S. Leader in Return on Capital Employed. Among Lowest Cost Producers in Global Oil Market. Commitment to Safety and the Environment

Energy Industry Data and Trends Supplemental Slides: The Art of the Share Buyback. October 2017

SCOOP Project SpringBoard. January 29, 2019

Forward Looking Statements

2018 UBS Global Oil and Gas Conference. Gary D. Packer Executive Vice President & COO

Investor Update May 4, 2017

Investor Presentation. July 2017

The Bakken America s Quality Oil Play!

4Q17 Earnings Conference Call FEBRUARY 1, 2018

Annual General Meeting

4Q 2017 Earnings Presentation February 27, 2018 CRZO

3Q 2017 Investor Update. Rick Muncrief, Chairman and CEO Nov. 2, 2017

Investor Update. August 2017

Investor Update. October 2018

November 5, rd Quarter Earnings Call Rick Muncrief, Chief Executive Officer

Third Quarter 2018 Earnings Call Presentation NOVEMBER 1, 2018

First Quarter 2016 Earnings Call Presentation April 28, 2016

February 22, 2018 CHESAPEAKE ENERGY 2017 Q4 EARNINGS

where we stand where we are going

Enable Midstream Partners, LP

EnerCom The Oil and Gas Conference 23

Natural Gas Liquids Update: Leading Position & Strong Fundamentals

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C FORM 8-K

EnerCom s The Oil & Gas Conference. August 15, 2012

Enable Midstream Partners, LP

Tuesday, August 7,

All the SCOOP About the STACK IPAA/TIPRO. Gary D. Packer Chief Operating Officer Newfield Exploration Company November 9, 2016

Analyst Presentation. October 24, 2013

OUR MONTNEY JOURNEY HAS BEEN SERVED WELL BY OUR GUIDING PRINCIPLES SINCE 2008

First Quarter 2018 Earnings Call Presentation APRIL 26, 2018

August Investor Presentation

Transcription:

IPAA s OGIS New York April 11, 2016

Forward-Looking & Other Cautionary Statements The following presentation includes forward -looking statements. These statements relate to future events, such as anticipated re venues, earnings, business strategies, competitive position or other aspects of our operations or operating results or the industries or markets in which we operate or participate in general, including guidance regarding the redeployment of rigs (if any), the initial 2016 capital budget and operating plan, the ability to take advantage of opportunities in the oil and gas industry, the ability to attain additional cost savings from the Company s service providers, and projections regarding total production, average daily production, the potential to repurchase additional senior unsecured notes in the future, lease operating expenses, production taxes as a percentage of revenue, cash G&A expenses, projected internal rates of return, results of our hedging program, and capital expenditure levels for 2016. Actual outcomes and results may differ materially from what is expressed or forecast in such forward -looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that may prove to be incorrect and are difficult to pred ict such as oil and gas prices; operational hazards and drilling risks; potential failure to achieve, and potential delays in achieving expec ted reserves or production levels from existing and future oil and gas development projects; unsuccessful exploratory activities; unexpected cost increases or technical difficulties in constructing, maintaining or modifying company facilities; potential liability for remedial acti ons under existing or future environmental regulations or from pending or future litigation; limited access to capital or significantly higher cost of capital related to illiquidity or uncertainty in the domestic or international financial markets; general domestic and international economic and political conditions, as well as changes in tax, environmental and other laws applicable to Jones Energy s business and other economic, business, competitive and/or regulatory factors affecting Jones Energy s business generally as set forth in Jones Energy s filings with the Securities and Exchange Commission (SEC). We caution you not to place undue reliance on our forward -looking statements, which are only as o f the date of this presentation or as otherwise indicated, and we expressly disclaim any responsibility for updating such informati on. The SEC requires oil and gas companies, in their filings with the SEC, to disclose proved reserves, which are those quantitie s of oil and gas, which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible from a given date forward, from known reservoirs, and under existing economic conditions (using unweighted average 12-month first day of the month prices), operating methods, and government regulations prior to the time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain, regardless of whether deterministic or probabilistic methods ar e used for the estimation. The SEC also permits the disclosure of separate estimates of probable or possible reserves that meet SEC definiti ons for such reserves, however, we currently do not disclose probable or possible reserves in our SEC filings. Factors affecting ultimate recovery include our ability to acquire the acreage we are targeting and the scope of our ongoing drilling program, which will be directly affected by the availability of capital, drilling and production costs, availability of drill ing services and equipment, drilling results, lease expirations, transportation constraints, regulatory approvals and other factors; and actua l drilling results, including geological and mechanical factors affecting recovery rates. Estimates of resource potential and drilling locations may change significantly as Jones Energy pursues acquisitions. In addition, our production forecasts and expectations for future periods are dependent upon many assumptions, including estimates of production decline rates from existing wells and the undertaking and outcome of future drilling activity, which may be affected by significant commodity price declines or drilling cost increases. U.S. investors are urged to consider closely the oil and gas disclosures in our Form 10 -K and other reports and filings with the SEC. Copies are available f rom the SEC and from the Jones Energy website. 2

Jones Energy Overview NYSE Ticker: JONE Share Price: $3.33 Market Cap: Enterprise Value: $205 million $925 million Western Anadarko Basin Cleveland Eastern Anadarko Basin SCOOP/STACK Arkoma Basin Woodford Total Shares Outstanding: Class A: Class B: Total: 2015 Production: 61.8 million 30.5 million 31.3 million 61.8 million 25.1 Mboe/d Austin Note: Share price as of March 31, 2016. 3

Making the Right Moves in a Low Price Environment Paused drilling program Lowered costs Improved balance sheet Prepared for market opportunities Initial 2016 capital plan of $25 MM Plan to drill a few wells to maintain XOM JDA and certain leases But have the ability to restart drilling program quickly Cleveland AFE down over 40% from YE14 LOE in 2H15 is down 30% from 1H15 2016 G&A guidance is down 25% compared to 2015 results Bought back $171 MM in bonds for $74 MM, 43% of par Reduced debt outstanding by ~$100 MM Expect to save ~$85 MM in interest over life of bonds M&A activity picking up Targeting assets in Mid-Con backyard Will leverage operational expertise 4

2015 Production Increased ~10% With Capex Down ~60% Mboe/d $ million Beat 15 production & capex guidance Even after raising production guidance twice and lowering capex guidance 26.0 25.0 2015 Production Increased ~10% Decreased Cleveland AFE by 40% Drilled wells for $2.2 MM in Fall as compared to $3.8 MM AFE as of YE14 Current Cleveland AFE of $2 MM Impressive Cleveland performance Oil uplift confirmed & gas still outperforming expectations Cleveland optimization continues 24.0 23.0 22.0 $600 $500 $400 $300 $200 $100 $0 2014 2015 2015 Capex Down ~60% 2014 2015 5

2015 Reserves Show Strength of Cleveland Well Economics MMboe $ per bbl $ per MMBtu 2015 Proved Reserves of 101.7 MMBoe 80.6 MMBoe of Cleveland Reserves 25.4 MMBbl of Oil Reserves 16% 5% 2015 PROVED RESERVES 101.7 MMBOE 79% 140 120 100 80 60 40 20 0 $100 Proved Reserves Declined Only ~10% 2014 2015 Despite a More Than 50% Decline in Pricing $10 $80 $8 CLEVELAND WOODFORD OTHER $60 $6 $40 $4 $20 $2 $0 2014 2015 Oil Gas $0 Note: SEC prices for 2015 year-end proved reserves were $50.25 per barrel for oil and $2.59 per MMBtu for gas as compared to $94.99 for oil and $4.35 for gas in 2014. 6

2016 Plan is Flexible Initial 2016 capex guidance of $25 MM Assumes no continuous drilling program Capital primarily for workovers Returns support drilling soon Ability to add rigs very quickly Expect to drill a few Cleveland wells to maintain XOM JDA & certain leases Current AFE of $2 MM or below Drilled Cleveland wells for $2.2 MM in Fall Expect additional savings with resumption of drilling program $250 $200 $150 $100 $50 $0 Initial Capex Plan Down ~90% from 2015 $200 $25 2015 2016E 7

Allocating Capital to Highest Return Opportunity $ in millions Bought back $171 MM in bonds for $74 MM $97 MM reduction in total debt outstanding $12.5 MM in expected annual interest savings; $85 MM saved over life of bonds $600 Debt Maturities Summary $500 $400 $300 $185 MM drawn on revolver* Repurchased $71 MM in 2022 notes Repurchased $100 MM in 2023 notes $200 $100 $0 2016 2017 2018 2019 2020 2021 2022 2023 Note: Revolver balance as of February 29, 2016. 8

IRR IRR Returns Support Drilling Soon 45% Cleveland Well Level IRR $1.8mm AFE 30% 15% $2.3mm AFE $2.0mm AFE 0% Spud Month Note: Incorporates forward strip pricing as of March 21, 2016. 9

Cleveland is Competitive with the Best US Plays $60 $50 WTI Breakevens ($/bbl) $40 $30 $20 $10 $0 Source: Wells Fargo Securities, LLC estimates as of February 2016 with the exception of JONE Cleveland returns. Basin breakevens represent PV-10 breakeven. JONE Cleveland breakeven assumes $2 million AFE and 20% net royalty interest. 10

Jones Has Cracked the Code with Higher Density Cleveland Wells Top wells from 2015 drilling program across JONE acreage Dick Barton 502-1H IP30: 728 Boe/d First Production: May 2015 Willis D Price 612-5H IP30: 1,601 Boe/d First Production: July 2015 Willis D Price 613-4H IP30: 997 Boe/d First Production: October 2015 Graves 530-12H IP30: 703 Boe/d First Production: March 2015 Coble 496-2H IP30: 810 Boe/d First Production: September 2015 Kelln 14-4H IP30: 676 Boe/d First Production: March 2015 Panthers 16-4H IP30: 584 Boe/d First Production: July 2015 Davis Trust 28-5H IP30: 662 Boe/d First Production: July 2015 Eagles 24-5H IP30: 482 Boe/d First Production: February 2015 Eric 144-2H IP30: 414 Boe/d First Production: August 2015 Nix 87-1H IP30: 355 Boe/d First Production: February 2015 Well Location JONE Acreage Wright 75-3HR IP30: 426 Boe/d First Production: September 2015 Marie 34-4H IP30: 451 Boe/d First Production: November 2015 Note: IP30 is calculat ed based on the peak 30 consecuti v e days of oil producti o n and g as producti on, indepe nd e nt ly, for each well. 11

MBoe Tighter Frack Spacing Improves Cleveland EURs JONE Cleveland well data shows significant EUR improvement over time Over 525 JONE Cleveland wells included in data set Data verified as part of audited 2015 reserve report 300 JONE Cleveland EUR Progression Includes 115 JONE wells 150 Includes 210 JONE wells Includes 205 JONE wells 0 Legacy Cleveland Wells Lower Density Cleveland Wells Higher Density Cleveland Wells >215 frack spacing 215 frack spacing 130 frack spacing Oil EUR Wet Gas EUR 12

Better than Expected Oil Uplift from Higher Density Wells MBbls Oil uplift largely tied to higher density of frack stages Operational optimization has further enhanced well results 120 100 Oil EUR Includes 105 JONE wells How Jones Has Optimized: Higher density frack stages Precision in geosteering Frack efficiency Artificial lift optimization 80 60 Includes 205 JONE wells 40 20 0 Lower Density Well Results Current Type Curve 215 frack spacing 130 frack spacing 13

Gas Outperformance is Unexpected Upside MMcf Higher density resulted in gas outperformance in addition to oil uplift 1,000 Wet Gas EUR 800 600 Includes 205 JONE wells Includes 115 JONE wells 400 200 0 Lower Density Well Results Higher Density Well Results 14

Peer Leading Oil Hedge Book More hedged than peers in 2016 and 2017 JONE 100% HEDGED at $100/bbl 2H16 Oil PEERS 32% HEDGED JONE 70% HEDGED at $80/bbl 2017 Oil PEERS 13% HEDGED Source: Percentages hedged according to Wells Fargo Securities, LLC. Peers include AR, APA, APC, AREX, BBG, CHK, COG, CRZO, CXO, DVN, ECR, EOG, EPE, EQT, FANG, GPOR, GST, HK, LPI, MRD, NFX, PDCE, PE, PXD, QEP, REN, REXX, RICE, RRC, SM, SWN, TPLM, UPL, and WLL. 15

Peer Leading Gas Hedge Book More hedged than peers in 2016 and 2017 JONE 97% HEDGED at $4.50/Mcf 2H16 Gas PEERS 36% HEDGED JONE 66% HEDGED at $4.30/Mcf 2017 Gas PEERS 20% HEDGED Source: Percentages hedged according to Wells Fargo Securities, LLC. Peers include AR, APA, APC, AREX, BBG, CHK, COG, CRZO, CXO, DVN, ECR, EOG, EPE, EQT, FANG, GPOR, GST, HK, LPI, MRD, NFX, PDCE, PE, PXD, QEP, REN, REXX, RICE, RRC, SM, SWN, TPLM, UPL, and WLL. 16

Hedge Gains Provide Financial Flexibility $ million Locked in ~$50 million in 2018/19 hedge gains; can be used as EBITDAX in 2016/17 Improves credit metrics and maintains debt/ebitdax below 4x into 2018 150 JONE MTM Hedge Gains of ~$260 MM as of February 29, 2016 Hedge gains shown by year 100 Locked in ~$50 million in 2018/19 hedge gains 50 0 2016 2017 2018 2019 17

Best-in-Class Operating Costs LOE declined ~30% in 2H15 driven by operational efficiencies and bid reductions $20 $15 JONE LOE represents 50% of peer average 4Q15 LOE per Boe $10 JONE: $3.73 Peer average: $7.88 $5 $0 JONE 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 N o te: P e e r s include A REX, BBG, BCEI, CRK, CRZO, CWEI, F A N G, L P I, M T D R, P E, P Q, R E N, R E X X, S G Y, a n d S N. 18

Proven Track Record as Mid-Con Consolidator z Exxon Mobil JDA Atoka, Brown Dolomite, Cleveland, Des Moines, Douglas, and Morrow BP JDA Cleveland and Morrow Shattuck acquisition Cleveland Crusader acquisition Cleveland, Tonkawa, and Marmaton Chalker acquisition Cleveland, Tonkawa, Marmaton Sabine acquisition Cleveland, Tonkawa, Marmaton 2000 2002 2003 2005 2006 2009 2011 2012 2013 2014 & 2015 ConocoPhillips JDA Brown Dolomite, Cleveland, Granite Wash, and Morrow Devon & Samson JDAs Brown Dolomite, Cleveland, Granite Wash, Morrow, and Tonkawa Southridge acquisition Woodford Vanguard JDA Woodford Leasing Cleveland, Tonkawa, Marmaton 19

We Have Been Here Before; We Have the Playbook Protect the Balance Sheet One of few E&P companies with runway into 2018 and beyond Will continue to look for additional ways to improve credit metrics Maintain Operational Excellence Quick to get costs down means quick return to the field LOE and G&A down significantly Allocate Capital to Highest Return Opportunity Treat liquidity with care Only allocate capital to opportunities that create returns today Take Advantage of Market Opportunities M&A market heating up Many opportunities in our Mid-Con backyard 20

Excellence: Strived for in All That We Do 21

APPENDIX

2016 Guidance and 1Q Production Guidance 2016E 1Q16E Total Production (MMBoe) 5.6 6.2 1.75 1.85 Average Daily Production (MBoe/d) 15.5 17.0 19.3 20.3 Crude Oil (MBbl/d) 3.6 3.9 4.6 4.9 Natural Gas (MMcf/d) 41.7 45.9 51.7 54.1 NGLs (MBbl/d) 4.9 5.4 6.1 6.4 Lease Operating Expense ($mm) $35.0 $38.0 Production Taxes (% of Unhedged Revenue)* 4.5% 5.5% Ad Valorem Taxes ($mm)* $1.5 $1.7 Cash G&A Expense ($mm) $18.0 $20.0 Total Capital Expenditures ($mm) $25.0 *Production and ad valorem taxes are included as one line item on the Company s income statement. 23

NGL Barrel Component Detail Cleveland Conway (85% of forecasted 2016 NGL production) Basket Ethane 32% Propane 37% Butane 13% Iso Butane 6% Natural Gasoline 12% Cleveland Natural Gasoline 12% Iso Butane 6% Butane 13% Propane 37% Ethane 32% Woodford Mont Belvieu (15% of forecasted 2016 NGL production) Basket Ethane* 13% Propane 46% Butane 18% Iso Butane 5% Natural Gasoline 18% *Assumes ethane rejection in the Woodford Woodford Natural Gasoline 18% Iso Butane 5% Butane 18% Propane 46% Ethane 13% 24

Corporate Structure Metalmark, Management & Other Investors Class B Common Stock 50.6% of voting power in Jones Energy, Inc. Class A Common Stock 49.4% of voting power in Jones Energy, Inc. Public Shareholders 50.6% of total economic interest of JEH LLC Jones Energy, Inc. (NYSE: JONE) Jones Energy Holdings, LLC (JEH LLC) 49.4% of total economic interest of JEH LLC JONE company ownership summary Metalmark 29% Jones Family and Management 22% JVL Advisors 10% Rubric Capital Management 4% GSO Capital Partners 4% Magnetar Capital 4% Remaining Shareholders 27% Total 100% 25