Rice Midstream Partners Second Quarter 2015 Supplemental Slides - - PowerPoint PPT Presentation

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Rice Midstream Partners Second Quarter 2015 Supplemental Slides - - PowerPoint PPT Presentation

Rice Midstream Partners Second Quarter 2015 Supplemental Slides August 6, 2015 1 RMP: High Growth MLP in Prolific Appalachian Basin S YSTEM M AP Marcellus Gathering and Compression PA gas gathering system of 4.1 MMDth/d Legend Beaver RMP


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Rice Midstream Partners

Second Quarter 2015 Supplemental Slides

August 6, 2015

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RMP: High Growth MLP in Prolific Appalachian Basin

Gathering System Information

12/31/14 Dedicated Gross Acreage 2Q 2015 Throughput (MDth/d) 2015E EBITDA ($MM) 2015E Capex ($MM) PA Gathering 86,000 655 $ 55 – 60 $ 180

Marcellus Gathering and Compression

  • PA gas gathering system of 4.1 MMDth/d

capacity by YE15

  • 2Q 2015 throughput of 655 MDth/d
  • 15% 3rd Party
  • Gathering throughput driven by SW PA technical

leaders

  • ~85% of 2015E estimated throughput from

RICE operated volumes, ~15% from 3rd party, primarily EQT

  • RMP will spend $90MM to install compression in

2015 that will start generating revenue in 2016

  • Installing compression for RICE in 2H 2015
  • RMP will spend $85MM to build ~30 miles of

gathering pipeline in 2015

  • Substantially all of RICE’s drilling locations will be

within 2 miles of gathering pipeline by YE 2015

  • RMP received favorable PLR from the IRS that

constitutes water services as qualifying income

SYSTEM MAP

Greene Washington Marshall

Fayette Ohio Brooke Beaver

PENNSYLVANIA OHIO WEST VIRGINIA

Legend

RMP Gathering Pipeline to be Constructed RICE Acreage RMP Gathering Pipeline 3rd Party Dedicated to RMP RICE Acreage Dedicated to 3rd Party Wetzel

Beaver Jefferson Brooke

Concentrated, Prolific Position to Drive Targeted 20% Distribution Growth

OH PA WV

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RMP Second Quarter 2015 Financial Summary

  • Second quarter average daily throughput of 655 MDth/d
  • 18% increase from 1Q average throughput
  • Adjusted EBITDA of $16.7MM
  • Distributable Cash Flow of $15.1MM
  • DCF coverage Ratio of 1.38x

Distributions Financial Summary

Solid second quarter results supported by strong throughput growth, well capitalized balance sheet and ample liquidity

  • $30MM drawn under our revolving credit facility

Liquidity as of June 30, 2015 Operating Metrics

Three Months Ended ($ in millions, except per unit data) June 30, 2015 Affiliate gathering volumes (MDth/d) 555 Third-party gathering volumes (MDth/d) 100 Total gathering volumes (MDth/d) 655 Total operating revenues $19.7 Total operating expenses $6.8 Total operating income $12.9 Adjusted EBITDA $16.7 Distributable cash flow $15.1 DCF / unit $0.2624 Distribution declared $11.0 Distribution / unit $0.1905 DCF coverage ratio 1.38x Three Months Ended ($ in millions) June 30, 2015 Revolver capacity 450 $ Less: Borrowings

30

Plus: Cash and cash equivalents

Liquidity 420 $

  • Increased distribution to $0.1905 / unit for 2Q15
  • $0.003 / unit increase
  • Expect to increase distributions by $0.003 / unit in 3Q &

4Q with targeted 4Q15 distribution of $0.1965 / unit

  • 5% increase above MQD of $0.1875 / unit
  • 20% distribution growth target in 2016
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RMP Financial Overview

CAPITALIZATION AND LIQUIDITY AT 6/30/15 2015 GUIDANCE (1)

$ in millions, except per share data, as of 6/30/15 Common Units 29 Subordinated Units 29 Total Units Outstanding (MM) 58 Price as of 6/30/15 17.36 $ Market Capitalization 998 $ Cash

  • Revolving credit facility

30 Debt

  • Enterprise Value

1,028 $ Leverage Statistics Debt / EBITDA 0.5x EBITDA / Interest nm Debt to EBITDA Covenant 4.75 Liquidity Summary Revolving credit facility 450 $ Less: amount drawn 30 Availability under RCF 420 $ Plus: cash on hand

  • Liquidity as of 6/30/15

420 $

2015 Capital Budget (in millions) Gas Gathering 85 $ Compression 90 $ Total Expansion Capex 175 $ Maintenance Capex 5 $ Total Capital Expenditures 180 $ Guidance Adjusted EBITDA (in millions) $55 $60 % Third Party 20% Distributable Cash Flow (in millions) $48 $53 Average DCF Coverage Ratio 1.1x 1.2x Annualized Distribution(2) ($ per unit) $0.7680 RMP Units Owned % of RMP Units - Public 50% % of RMP Units - RICE 50% % of RMP IDRs - RICE 100%

__________________________ 1. As of February 17, 2015, unless otherwise stated. 2. As of August 6, 2015.

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Industry-Leading Throughput Growth

2Q 2015 throughput of ~887 MDth/d through RICE and RMP midstream systems (21% 3rd Party), 33% increase from 1Q15 throughput

  • RMP System: 655 MDth/d (15% 3rd Party)
  • RICE OH System: 232 MDth/d (38% 3rd Party)

RMP and RICE OH Midstream Historical Throughput

200,000 400,000 600,000 800,000 1,000,000 Dth/d RMP - Rice Operated (PA) RMP - 3rd Party (PA) RICE - Rice Operated (OH) RICE - 3rd Party (OH) Average Throughput (MDth/d) 2010 2011 2012 2013 2014 1Q 2015 2Q 2015 Throughput 4 18 61 176 409 668 887 QoQ / YoY Growth 405% 238% 188% 133% 13% 33%

(1) __________________________ 1. PA 3rd party volumes as of April 2014 close of Momentum asset acquisition.

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Valuable Drop Down Opportunities

Overview Overview of Assets

  • Assets include OH gas gathering and PA/OH

water services

  • OH Gathering 2Q15 throughput of 232 MDth/d
  • 38% 3rd Party
  • Gathering throughput driven by SE OH technical

leaders

  • ~75% of 2015E estimated throughput from

RICE operated volumes, ~25% from GPOR

  • Build-out is currently ahead of schedule
  • OH trunkline completed as designed in 2Q

with 2.6 MMDth/d of capacity

  • PA water system fully operational providing

access to 9.2 MMGPD

  • OH water system expected to be fully in-

service by YE2015, providing 14.7 MMGPD

  • RMP received favorable PLR from the IRS that

constitutes water services as qualifying income Gathering System Information

12/31/14 Dedicated Gross Acreage 2Q 2015 Throughput (MDth/d) 2015E EBITDA ($MM)(1) 2015E Capex ($MM)(1) RICE Retained Midstream 57,000 232 $ 35 – 40 $ 210

Greene Washington Belmont Marshall

Fayette Ohio Brooke Beaver Hancock Jefferson Harrison Monroe

PENNSYLVANIA OHIO WEST VIRGINIA

Legend

RICE Acreage RICE Ohio Gathering Pipeline RICE Ohio Gathering Pipeline to be Constructed 3rd Party Dedicated to RICE RICE Acreage Dedicated to 3rd Party RICE Water Pipeline RICE Water Pipeline to be Constructed RICE Water Interconnects Wetzel

Building Significant Drop Down Potential

__________________________ 1. Calculations include water and gathering throughput in EBITDA and Capex.

3rd Party Dedicated to RMP

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RICE Overview

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Concentrated, Core Assets

CORE ASSETS

Monroe Harrison

Greene Washington Belmont

Fayette Monongalia

Utica Core Marcellus Core

COMPANY TOTAL OHIO PENNSYLVANIA

Highly concentrated position of ~144,000 net acres in the cores of the lowest breakeven gas shale plays in the U.S.

  • ~1,230 net undeveloped locations(1)
  • 529 MMcfe/d net 2Q15 production from 114 net wells
  • Breakeven NYMEX PV-10 of $2.35-$3.05 / MMBTU
  • 465 BBtu/d hedged in 2H15 at $3.72 / MMBtu

~55,500 net Utica acres, <5% developed

  • 356 net undeveloped Utica locations(1)
  • 16 net (10 net operated) producing Utica wells

RICE FT & MIDSTREAM

~88,600 net Marcellus acres, <10% developed

  • 495 net undeveloped Marcellus locations(1)
  • 382 net undeveloped Upper Devonian locations(1)
  • 98 net producing wells (95 Marcellus, 3 Upper Devonian)
  • Completed first Pennsylvania Utica well
  • FT: 1.3 MMDth/d of firm capacity: 73% to Gulf Coast/TCO/

Midwest markets in 2015  80% by Q4’17

  • RMP Midstream by YE2015: 4.1 MMDth/d gas gathering

capacity

  • RICE Midstream by YE2015: 2.6 MMDth/d gas gathering

capacity and ~24 MMGPD of water distribution

RMP Gathering Pipeline RMP Gathering Pipeline to be Constructed RICE OHIO Gathering Pipeline RICE OHIO Gathering Pipeline to be Constructed RICE Acreage

Legend Marshall Wetzel

Fayette Ohio Brooke Beaver Hancock Jefferson Harrison Monroe

Utica Stack Potential __________________________ 1. Net undeveloped locations as of 12/31/14. Approximately 77,000 net acres in the Marcellus Shale is also prospective for the Geneseo (Upper Devonian) Shale. The Upper Devonian and the Marcellus Shale are stacked formations within the same geographic acreage and footprint. See slide entitled “Additional Disclosures” on detail regarding RICE’s methodology for the calculation of locations.

OH PA WV

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  • 2Q15 net production of 529 MMcfe/d; 20% increase from 1Q15
  • 61% of 2Q15 production sold to premium, non-Appalachian mkts.
  • Record adjusted EBITDAX of $97MM; 93% increase from 2Q14
  • Record opex of $0.62 / Mcfe, a 10% decrease from 1Q15

Second Quarter 2015 Financial Summary

Financial Summary

Solid second quarter results supported by well-capitalized balance sheet and ample liquidity

Financial & Operating Statistics

6/30/2015 Total production (MMcfe/d) 529 % Gas 99% % Operated 90% % Marcellus 77% Actual ($MM) $ / Mcfe NYMEX Henry Hub price ($/MMBtu) 2.72 $ Average basis impact ($/MMBtu) (0.61) Firm transportation fuel & variables ($/MMBtu) (0.13) Btu uplift (MMBtu/Mcf) 0.10 Pre-hedge realized price ($/Mcf) 2.08 Realized hedging gain ($/Mcf) 0.89 Post-hedge realized price ($/Mcf) 2.97 Net firm transportation sales 0.01 Adjusted realized price ($/Mcf) 2.98 $ Lease operating 11 $ 0.23 Gathering, compression and transportation 17 0.35 Production taxes and impact fees 2 0.04 General and administrative 20 0.42 Depletion, depreciation and amortization 76 1.58 Adjusted EBITDAX 97 $ ($ in millions) 6/30/2015 Cash Rice Energy 251 $ Rice Midstream Holdings 6 Rice Midstream Partners

  • Total consolidated cash

257 $ Long-term debt Rice Energy E&P credit facility

  • $

6.25% Senior notes due 2022 900 7.25% Senior notes due 2023 397 Total Rice Energy debt 1,297 Rice Midstream Holdings revolver 97 Rice Midstream Partners revolver 30 Total consolidated debt 1,424 $ Net debt 1,167 Shareholders equity 1,954 $ Total capitalization 3,378 $

Capitalization at 6/30/2015

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$545 $203 $420 $251 $796 $209 $420 – $200 $400 $600 $800 $1,000 Rice Energy Rice Midstream Holdings Rice Midstream Partners Cash Available Revolver

Ample Liquidity and Financial Flexibility

RICE is capable of funding 100% of 2015 capital plan with liquidity on-hand

  • Favorable credit metrics & covenants ensure flexibility

Cash & Revolver Capacity – 6/30/15

Debt/EBITDA Covenant NONE 4.25x 4.75x 2Q15 Debt/RR EBITDA 3.2x 1.8x 0.5x EBITDA/Interest Covenant 2.5x 2.5x 2.5x LTM EBITDA/Interest 4.5x NM NM

(E&P)

(1) __________________________ (1) E&P segment cash balance.

$MM Leverage Metrics as of 06/30/15

~$1B liquidity (excl. CFFO) v. remaining 2015 capex of ~$320MM $420MM liquidity (excl. CFFO) v. remaining 2015 capex of ~$105MM

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RMP Market Snapshot

Rice Midstream Partners LP (NYSE: RMP) Rice Energy Inc. (NYSE: RICE)

__________________________ 1. As of June 30, 2015.

$ millions, except per share data, as of 07/31/15 Common Units 29 Subordinated Units 29 Total Units Outstanding (MM) 58 Price as of 07/31/2015 $16.67 Market Capitalization $959 Cash (1) – Revolving credit facility (1) 30 Debt – Enterprise Value $989 Distribution / Unit $0.1905 Yield 4.57% 52 Week Price Range High $17.94 Low $13.16 RMP Units Owned % of RMP Units - Public 50% % of RMP Units - RICE 50% % of RMP IDRs - RICE 100% Website: www.ricemidstream.com Investor Contact: Julie Danvers Julie.Danvers@RiceMidstream.com

$ millions, except per share data, as of 07/31/15 Management Ownership 30% Shares Outstanding (MM) 136 Price as of 07/31/2015 $18.05 Market Capitalization $2,460 Cash(1) $257 Revolving credit facilities(1) 97 6.25% Senior notes due 2022 900 7.25% Senior notes due 2023 397 Enterprise Value $3,597 52 Week Price Range High $30.10 Low $16.57 Website: www.riceenergy.com Investor Contact: Julie Danvers Julie.Danvers@RiceEnergy.com

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Appendix

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2Q 2015 Adjusted EBITDA Reconciliation

__________________________

Note: Adjusted EBITDA is a supplemental non-GAAP financial measure that is used by management and external users of our consolidated financial statements, such as industry analysts, investors, lenders and rating agencies. We define Adjusted EBITDA as net income (loss) attributable to us before non-controlling interest, interest expense or interest income; income taxes; write-down of abandoned leases; depreciation, depletion and amortization; amortization of deferred financing costs; amortization of intangible assets; equity in (income) loss of our joint ventures; derivative fair value (gain) loss, excluding net cash receipts on settled derivative instruments; non-cash stock compensation expense; (gain) loss from sale of interest in gas properties; (gain) loss on acquisition; acquisition expense; (gain) loss on extinguishment of debt; write-off of deferred financing costs; and exploration expenses. Adjusted EBITDA is not a measure of net income as determined by United States generally accepted accounting principles, or GAAP.

Three Months Ended Six Months Ended ($ in thousands) June 30, 2015 June 30, 2015 Adjusted EBITDA reconciliation to loss from continuing operations: Net income 12,330 $ 21,400 $ Interest expense 457 851 Depreciation expense 1,486 2,934 Amortization of intangible assets 408 816 Non-cash stock compensation expense 1,003 1,999 Amortization of deferred financing costs 144 288 Other expense 839 839 Adjusted EBITDA 16,667 $ 29,127 $ Cash interest expense

(457) (851)

Estimated maintenance capital expenditures

(1,120) (2,240)

Distributable cash flow 15,090 $ 26,036 $ Reconciliation of Adjusted EBITDA to Cash used in operating activities: Adjusted EBITDA 16,667 $ 29,127 $ Interest expense (457) $ (851) $ Other expense (839) $ (839) $ Changes in operating assets and liabilities which provided cash

(13,133) (25,268)

Net cash used in operating activities 2,238 $ 2,169 $

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Disclaimer

FORWARD-LOOKING STATEMENTS This presentation and the oral statements made in connection therewith may contain “forward looking statements” within the meaning of the securities laws. All statements, other than statements of historical fact, regarding Rice Midstream’s strategy, future

  • perations, financial position, estimated revenues and losses, projected costs, prospects, plans and objectives of management are

forward-looking statements. These statements often include the words “could,” “believe,” “anticipate,” “intend,” “estimate,” “expect,” “project” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. Without limiting the generality of the foregoing, forward-looking statements contained in this presentation specifically include expectations of plans, strategies, objectives, and anticipated financial and operating results of Rice Midstream and RICE. These forward-looking statements are based on Rice Midstream's current expectations and assumptions about future events and are based on currently available information as to the outcome and timing of future events. Rice Midstream assumes no obligation to and does not intend to update any forward looking statements included herein. When considering forward-looking statements, you should keep in mind the risk factors and other cautionary statements described under the heading “Risk Factors” included in the prospectus. These forward-looking statements are based on Rice Midstream’s current belief, based on currently available information, as to the outcome and timing of future events. Rice Midstream cautions you that these forward-looking statements are subject to all of the risks and uncertainties, most of which are difficult to predict and many of which are beyond their control, incident to the exploration for and development, production, gathering and sale of natural gas, natural gas liquids and oil. These risks include, but are not limited to, commodity price volatility, inflation, lack of availability of drilling and production equipment and services, environmental risks, drilling and other operating risks, regulatory changes, the uncertainty inherent in estimating natural gas reserves and in projecting future rates of production, cash flow and access to capital, the timing of development expenditures, and the other risks described under “Risk Factors” in Rice Midstream’s most recent Form 10-K, Form 10-Q and other filings with the Securities and Exchange Commission. Should one or more of these risks or uncertainties occur, or should underlying assumptions prove incorrect, Rice Midstream’s actual results and plans could differ materially from those expressed in any forward-looking statements. This presentation has been prepared by Rice Midstream and includes market data and other statistical information from sources believed by Rice Midstream to be reliable, including independent industry publications, government publications or other published independent sources. Some data are also based on Rice Midstream’s good faith estimates, which are derived from its review of internal sources as well as the independent sources described above. Although Rice Midstream believes these sources are reliable, it has not independently verified the information and cannot guarantee its accuracy and completeness.

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Determination of Identified Drilling Locations as of December 31, 2014 Net undeveloped locations are calculated by taking RICE’s total net acreage and multiplying such amount by a risking factor which is then divided by RICE’s expected well spacing. RICE then subtracts net producing wells to arrive at undeveloped net drilling locations Undeveloped Net Marcellus Locations: RICE assume these locations have 7,000 foot laterals and 750 foot spacing between wells which yields approximately 121 acre spacing. In the Marcellus, we apply a 20% risking factor to its net acreage to account for inefficient unitization and the risk associated with its inability to force pool in Pennsylvania. As of 12/31/14, RICE had 64,355 net acres in the Marcellus which results in 356 undeveloped net locations Undeveloped Net Western Greene County Locations: RICE assumes these locations have 7,000 foot laterals and 750 foot spacing between wells which yields approximately 121 acre spacing. In Western Greene County, RICE applies a 20% risking factor to its net acreage to account for inefficient unitization and the risk associated with its inability to force pool in Pennsylvania. As of 12/31/14, RICE had 22,000 net acres in Western Greene County which results in 139 undeveloped net locations Undeveloped Net Upper Devonian Locations: RICE assumes these locations have 7,000 foot laterals and 1,000 foot spacing between wells which yields approximately 161 acre spacing. In the Upper Devonian, we apply a 20% risking factor to its net acreage to account for inefficient unitization and the risk associated with its inability to force pool in Pennsylvania. As of 12/31/14, RICE had 77,242 net acres prospective for the Upper Devonian which results in 382 undeveloped net locations Undeveloped Net Utica Locations: RICE assumes these locations have 8,000 foot laterals and 750 foot spacing between wells which yields approximately 138 acre spacing. In the Utica, RICE applies a 10% risking factor to its net acreage to account for inefficient unitization. As of 12/31/14, RICE had 55,000 net acres prospective for the Utica in Ohio which results in 356 undeveloped net locations. This excludes ~2,500 net acres in Guernsey and Harrison Counties in Ohio

Additional Disclosures