Samson Resources II, LLC Investor Presentation II December 2018
Disclaimer Forward-Looking Statements and Risk Factors This presentation contains certain matters that may be considered “forward - looking” statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, including statements regarding the intent, belief or current expectations and projections of Samson Resources II, LLC (the “Company”) and its management. These statements can be identified by the use of forward-looking terminology, including “plan”, “intend”, “will”, “expect”, “anticipate”, “project”, “should”, “could” or other similar words. You are cautioned that any such forward-looking statements are not guarantees of future performance and are subject to a number of assumptions, risks and uncertainties many of which are beyond the control of the Company, its subsidiaries, or its and their management, representatives and advisors, that could materially and adversely affect actual results. These include risks relating to our financial performance and results, our ability to improve our financial results and profitability following emergence from bankruptcy, our ability to complete pending asset sales, availability of sufficient cash flow to execute our business plan, continued low or further declining commodity prices and demand for oil, natural gas and natural gas liquids, our ability to hedge future production, our ability to replace reserves and efficiently develop current reserves, and the regulatory environment and other important factors that could cause actual results to differ materially from those anticipated or implied in the forward-looking statements and none of the Company, its subsidiaries, or its and their representatives and advisors undertake any obligation to update any such statements. Reserve Estimates The SEC permits oil and natural gas companies, in their filings with the SEC, to disclose only proved, probable and possible reserves that meet the SEC’s definitions for such term. The Company may use terms in this presentation that the SEC’s guidelines strictly prohibit in SEC filings, such as “estimated ultimate recovery” or “EUR,” “resources,” “net resources,” “total resource potential” and similar terms to estimate oil and natural gas that may ultimately be recovered. These estimates are by their nature more speculative than estimates of proved, probable and possible reserves as used in SEC filings and, accordingly, are subject to substantially greater uncertainty of being actually realized. These estimates have not been fully risked by management. Actual quantities that may be ultimately recovered will likely differ substantially from these estimates. Factors affecting ultimate recovery include the scope of the Company’s actual drilling program, which will be directly affected by the availability of capital, drilling and production costs, commodity prices, availability of drilling services and equipment, lease expirations, transportation constraints, regulatory approvals, field spacing rules, actual drilling results and recoveries of oil and natural gas in place, and other factors. These estimates may change significantly as the development of properties provides additional data. These estimates may not be reflective of the Company’s current view of reserves. PV-10 PV-10 represents the present value, discounted at 10% per year, of estimated future net cash flows. The Company’s calculation of PV-10 herein differs from the standardized measure of discounted future net cash flows determined in accordance with the rules and regulations of the SEC in that it is calculated before income taxes, rather than after income taxes. The Company’s calculation of PV-10 should not be considered as an alternative to the standardized measure of discounted future net cash flows determined in accordance with the rules and regulations of the SEC. 2 II
Samson Today
Samson Today Samson is focused on delivering shareholder return with a balanced and lower risk growth strategy........... ▪ Strategically Repositioned… ➢ Pure play Wyoming focused E&P Operator. ➢ Company has ~200,000 net acres in the Powder River Basin (PRB) and the Greater Green River (GGR) Basin of Wyoming. • Total drilling inventory of ~2,620 (1) gross development locations. • ~6,450 Boe/d current production (75% liquids / 25% natural gas). • Proved Reserves 09/30/2018 of ~74.8 MMBoe (using Q3 2018 SEC prices) and 3P Reserves of 962.0 MMBoe. (2)(3) • Proved PV-10 of ~$392.5 MM. (2)(3) • Debt-free with a strong Balance Sheet and liquidity position • Actively drilling and developing its asset base in the PRB and GGR (1) Flat Price Gas / Oil: $3.00 / $65.00 (2) Q3 2018 SEC Pricing Natural Gas / Oil : $2.913 / $63.37. (3) Includes PDP, PDNP and SEC PUDs, plus PUDs developed within 5 years. 4 II
Current Liquidity Summary Samson Resources II – 2017 was a busy year……… 2018 Focus . ➢ Focused on oil production and reserve growth in the PRB and GGR in Wyoming. ▪ 2018 Capital program of ~$150 - $160 MM (includes ~$20 MM in acquisitions) ▪ Project drilling 17 – 20 gross operated wells in Wyoming in 2018 • Running 3 operated rigs in Wyoming ▪ Anticipate growing production from the current 6,450 Boe/d to between 10,000 – 12,000 Boe/d in early 2019 ▪ The capital program funded from operating cash flows, cash on – hand and non-core asset sales ➢ Focus on executing a delineation drilling program in both the PRB and GGR: ▪ Delineate acreage for conventional and unconventional targets in the PRB ▪ Establish low cost, efficient, repeatable and highly economic drilling program in the GGR ▪ Continue to monetize non-core assets to strengthen balance sheet. • Sold ~$86 MM of non-core assets YTD ➢ Well hedged commodity exposure for Proved volumes at strong prices. ▪ $57.19 (2018), $56.19 (2019), and $61.52 (2020)/ Bbl crude ▪ $3.02 (2018) & $3.00 (2019) / Mcf natural gas 5 II
Samson Resources II – 2017 was a busy year……… Samson’s Liquidity ▪ Overview of RBL Credit Facility • Scheduled redetermination on 10/05/2018 resulted in ~50% increase in borrowing base from $106.5 MM to $160.0 MM, of which $0 is currently drawn • Facility matures on 11/01/2020 • No other debt ▪ Solid balance sheet and liquidity to drive strong returns from the drill bit Liquidity Build-Up 11/30/2018 RBL Borrowing Base $ 160 Less: RBL Balance - RBL Availability $ 160 Plus: Cash 61 Total Liquidity $ 221 6 II
Hedge Portfolio as of 11/30/2018 Oil Hedge Positions (1)(2) ◼ 12/2018 Hedge Positions 2.5 $67.00 Volume (MBbl/d) ─ Oil Volumes: 2.0 MBbl/d 2.1 2.0 2.0 ─ Oil Weighted Avg. Price: $57.19 Price ($/Bbl) $64.00 1.6 $61.52 1.5 ─ Gas Volumes: 8.9 MMcf/d $61.00 1.0 ─ Gas Weighted Avg. Price: $3.02 $57.19 $58.00 $56.19 ─ NGL Volumes: 49.9 MGal/day 0.5 ─ NGL Weighted Avg. Price: $0.58 - $55.00 2018 2019 2020 ─ Proved % Hedged: Oil (88%), Gas (74%), NGL (80%) Natural Gas Hedge Positions (3) ◼ FY 2019 Hedge Positions 12.0 $3.50 10.3 ─ Oil Volumes: 1.6 MBbl/d Volume (MMcf/d) 8.9 Price ($/Mcf) ─ Oil Weighted Avg. Price: $56.19 9.0 $3.02 $3.00 ─ Gas Volumes: 10.3 MMcf/d 6.0 $3.00 ─ Gas Weighted Avg. Price: $3.00 3.0 ─ NGL Volumes: 43.7 MGal/day ─ NGL Weighted Avg. Price: $0.59 - $2.50 ─ Proved % Hedged: Oil (71%), Gas (41%), NGL (18%) 2018 2019 2020 ◼ FY 2020 Hedge Positions Natural Gas Liquids Hedge Positions ─ Oil Volumes (Jan-Feb): 2.1 MBbl/d 60.0 $0.80 49.9 Volume (MGal/d) 43.7 ─ Oil Weighted Avg. Price: $61.52 Price ($/Gal) 40.0 $0.70 ─ Gas Volumes: 0 MMcf/d ─ Gas Weighted Avg. Price: N/A $0.59 $0.58 20.0 $0.60 ─ NGL Volumes: 0 MGal/day ─ NGL Weighted Avg. Price: N/A - $0.50 ─ Proved % Hedged: Oil (65%), Gas (0%), NGL (0%) 2018 2019 2020 (1) Oil hedges do not incorporate NGL volumes or pricing. (2) Hedged oil volumes for 2019 include swaps and costless collars, but the hedged oil pricing only reflects swap agreements. 7 II (3) BTU factor of 1.028 utilized in calculation of Natural Gas volumes and pricing.
3Q 2018 Samson Reserves (1) Technical PUDs represent PUDs that are accounted for after the 5-year SEC rule. 8 (2) SEC price for 9/30/2018 is $63.37 per Bbl and $2.913 per MMBtu.
Samson Proved Reserves PV10 Waterfall 9
2019 Preliminary View (1) ▪ Projected 2019 net CAPEX of approximately $240 - $260 MM for operated and non- operated drilling and completion activities ▪ Anticipate running 2 operated rigs by May 2019 in the PRB and 1 operated rig in the GGR by June 2019 ▪ Average daily production rates increase 100% - 150% over 2018 ▪ Meaningful increase to EBITDA ▪ Maintain focus on capital discipline and a Leverage ratio < 1.5X ▪ Continue to look for strategic optionality with assets (1) Reflects management’s current expectations. The 2019 budget and business plan has not been finalized. 10 II
Asset Overview
Powder River Basin ◼ Net Acres: ~150,000 (83% HBP) ◼ Current Prod: 3,500 Boe/d (94% liquids) ◼ Op Producing: ~120 gross ◼ Locations: 2,083 (1) gross ◼ Current 2018 Drilling Program: Average GWI 90% Average NRI 74% 8/8 th NRI 82% - 85% ◼ Economic stacked-pay oil resource with significant industry momentum applying modern completion and drilling designs. 12 II (1) Flat Price Gas / Oil: $3.00 / $65.00
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