March 2018 Forward-Looking Statements This presentation contains - PowerPoint PPT Presentation

March 2018

Forward-Looking Statements This presentation contains "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 other than statements of historical fact included in this presentation are forward-looking statements. Although PetroQuest believes that the expectations reflected in these forward-looking statements are reasonable, these statements are based upon assumptions and anticipated results that are subject to numerous uncertainties and risks. Actual results may vary significantly from those anticipated due to many factors, our ability to successfully close the previously disclosed commitment for a four-year multi-draw term loan facility or receive any proceeds from draws thereunder; the sufficiency of our current liquidity; the volatility of oil and natural gas prices and significantly depressed oil prices since the end of 2014; our indebtedness and the significant amount of cash required to service our indebtedness; our ability to improve our liquidity position and refinance or restructure our indebtedness, including our 2017 Notes and 2021 2L Notes; the potential need to sell assets or seek bankruptcy protection; our estimate of the sufficiency of our existing capital sources, including availability under our bank credit facility and the result of any borrowing base redetermination; our ability to post additional collateral to satisfy our offshore decommissioning obligations; our ability to hedge future production to reduce our exposure to price volatility in the current commodity pricing market; ceiling test write-downs resulting, and that could result in the future, from lower oil and natural gas prices; our ability to raise additional capital to fund cash requirements for future operations; limits on our growth and our ability to finance our operations, fund our capital needs; our ability to find, develop and produce oil and natural gas reserves that are economically recoverable and to replace reserves and sustain production; approximately 50% of our production being exposed to the additional risk of severe weather, including hurricanes, tropical storms and flooding, and natural disasters; losses and liabilities from uninsured or underinsured drilling and operating activities; changes in laws and governmental regulations as they relate to our operations; the operating hazards attendant to the oil and gas business; the volatility of our stock price; and our ability to meet the continued listing standards of the New York Stock Exchange with respect to our common stock or to cure any deficiency with respect thereto. In particular, careful consideration should be given to cautionary statements made in the various reports the Company has filed with the SEC. The Company undertakes no duty to update or revise these forward-looking statements. In particular, careful consideration should be given to cautionary statements made in the various reports PetroQuest has filed with the Securities and Exchange Commission. PetroQuest undertakes no duty to update or revise these forward-looking statements. Prior to 2010, the Securities and Exchange Commission generally permitted oil and gas companies, in their filings, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. Beginning with year-end reserves for 2009, the SEC permits the optional disclosure of probable and possible reserves. We have elected not to disclose our probable and possible reserves in our filings with the SEC. We use the terms “reserve inventory,” “gross unrisked reserves,” “EUR,” “inventory”, “ unrisked resource potential”, 3P reserves or other descriptions of volumes of hydrocarbons to describe volumes of resources potentiall y recoverable through additional drilling or recovery techniques that the SEC’s guidelines prohibit us from including in filings with the SEC. Estimates of re serve inventory, gross unrisked reserves EUR, inventory, unrisked 3P reserves do not reflect volumes that are demonstrated as being commercially or technically recoverable. Even if commercially or technically recoverable, a significant recovery factor would be applied to these volumes to determine estimates of volumes of proved reserves. Accordingly, these estimates are by their nature more speculative than estimates of proved reserves and accordingly are subject to substantially greater risk of being actually realized by the Company. The methodology for estimating unrisked inventory, gross unrisked reserves, EUR, or unrisked resource potential or 3P reserves may also be different than the methodology and guidelines used by the Society of Petroleum Engineers and is different from the SEC’s guid elines for estimating probable and possible reserves. 2

Recap of 2017 ▪ 2017 execution of goals led to substantial growth from 2016: ▪ Production up 17% (4Q17 vs 4Q16 up 87%) ▪ Reserves up 35% (F&D $0.70/Mcfe) ▪ PV10 up 90% ▪ 2017 EBITDA up >200% from 2016 ▪ 4Q17 annualized leverage ratio down 69% from 13X at 4Q16 ▪ Acquired low-cost position in the Austin Chalk providing opportunity for oil growth and acreage value appreciation (potential liquidity source) ▪ Sold GOM assets in early 2018 to remove Surety risk, regulatory risk and substantial P&A burden 3

2017 Production & EBITDA Growth Profiles Production (MMcfe/d) 100 94 90 81 80 69 70 60 58 50 50 40 4Q16 1Q17 2Q17 3Q17 4Q17 EBITDA ($MM) 60 53.4 50 2017E Capex (1) 40 30 17.9 20 10 0 2016 EBITDA 2017E EBITDA (2) (1) Based upon mid-point of guidance (2) Factset average analyst estimate 4

Our Properties 2017 Reserves 4Q17 Production Gulf Coast 75% Gas 16% East Texas 14% NGL 40% 11% Oil Gulf Coast 60% East Texas 84% 156 Bcfe 94 Mmcfe/d 5

Louisiana Austin Chalk Entry Rationale for PQ ▪ Familiar development story: access existing fields that had variable production success using conventional development techniques and apply the latest horizontal/completion technologies to significantly enhance recoveries ▪ Examples: Permian, Eagle Ford, Scoop/Stack, Cotton Valley, etc ▪ Hundreds of control points in the area from vintage unfracked Austin Chalk/Tuscaloosa wells ▪ Increase oil production/reserves in portfolio: Louisiana Austin Chalk production mix is approximately 80% oil ▪ Attractive leasehold position: early mover action resulted in acreage position offsetting the initial EOG test well – first 90 days of production have total approximately 80,000 bbls of oil ▪ Strong economics: base case estimate of 600,000 Bbl/well is projected to generate 60% IRR at $50 oil ▪ Liquidity building options: recent offers at $2,000+ per acre. Considering sell- down structures to recoup acquisition cost and fund initial drilling program 6

Austin Chalk Trend Regional Overview = EOG Eagles Ranch 14H Brookeland North Bayou Jack Giddings Master’s Creek Pearsall Karnes ▪ Austin Chalk trend has produced over 1.3 billion barrels of oil ▪ Several large cap companies with Austin Chalk experience in Texas have established leasehold positions in the Louisiana Austin Chalk ▪ Goal is to replicate the recent Texas Austin Chalk results in Louisiana ▪ Over 300,000 acres have been leased with additional aggressive leasing activity ongoing in 5-6 Louisiana parishes ▪ Latest horizontal fracked Austin Chalk wells in Karnes County, Texas have EURs on average (22 wells) over 600,000 BOE – 500% uplift over unfracked wells (119,000 BOE) 7

CHALK COMPARISON: TEXAS – LOUISIANA Avoyelles Parish, LA Karnes County, TX = EOG Eagles Ranch 14H MBOE MBOE = Austin Chalk Wells = Austin Chalk Wells Avg. pre-fracked Horizontal Oil 104 Avg. pre-fracked Horizontal Oil CUM 119 CUM ( Pre-2013 ) Estimated Fracked Horizontal Oil EUR 732 EOG: Avg. Fracked Horizontal Oil 632 ( based on % increase in 22 sample EUR ( 2016 – Current ) EOG wells in Karnes County ) Percent increase 508% Estimated Percent Increase 508% 8 8

LOUISIANA ACREAGE MAP (>500,000 acres) 9

EAGLES RANCH 14H: Directional survey N S APC Dominique 27#1 EOG Eagles Ranch 14H Pilot Hole Pilot Hole KB = 66’ KB = 106’ Anadarko Dominique 27#1 APC Dominique 27#1 Pilot Hole 5” Bulk Density Log Upper Perf: 16,477’ Lower perf: 20,411’ 80 MBO 79 MMCF 9/11/2017 – 12/31/2017 Upper Perf: 15,805' Lower perf: 22,293' 14 MBO 1.7 MMCF 17 MBW 9/2011 - 5/2015 10

HYDRAULIC FRACTURE UPLIFT Fracked Horizontals • Chalk production primarily from Matrix porosity, with permeability created by hydraulic fracturing, with natural fracture upside Unfracked Horizontals • Chalk production primarily from natural fractures in contact with the wellbore, with some production coming from pore space Top of Chalk Unfracked Verticals • Chalk production entirely from natural fractures Top of LLAC Top of Chalk Natural fractures Matrix porosity Hydraulic fracks Top of Chalk Top of LLAC Matrix porosity Top of LLAC Natural fractures Natural fracture 11