San Juan Basin Energy Conference April 2 5 , 2 0 1 9 Farm ington, - - PowerPoint PPT Presentation

CONFIDENTIAL INFORMATION

San Juan Basin Energy Conference

April 2 5 , 2 0 1 9 Farm ington, New Mexico

• DJR Operating LLC, is a fully owned entity of DJR Energy.
• DJR Energy, LLC, is a private upstream oil and gas company

utilizing technical expertise and strong financial partnerships to develop it’s resources in the San Juan Basin.

• DJR entered the San Juan Basin in April 2017 with the acquisition of

the New Mexico portion of Elm Ridge and Beeline assets.

• DJR further enhanced our basin portfolio and position with the

acquisition of Encana’s San Juan assets in December 2018

• DJR activities in the San Juan Basin are managed by an experienced

technical and operational staff from offices in Denver, Colorado and Aztec, New Mexico.

• Current Aztec, NM based staff of 41 DJR & 17 contract employees.
• DJR Energy holds ~350,000 net acres in the San Juan Basin

CONFIDENTIAL INFORMATION

DJR Energy – Corp. History

DJ Resources w as focused in the DJ Basin from 2 0 0 4 to 2 0 1 4

• DJ Basin was the initial target
• Oily basin
• Low barrier to entry
• New technology not yet applied

DJR Energy w as form ed to target the oil rim of San Juan Basin

• Started with a Basin wide geologic evaluation

−Detailed analysis of the rocks −Review of industry frac techniques

• Gallup Formation is similar to the Turner sand in the

Powder River Basin and Codell in the DJ Basin

• Early in life of play

−~ 290 Gallup horizontal wells drilled by industry (2017)

• Robust economics, with potential for further

improvement −Longer laterals, pad drilling, improved infrastructure and further D&C cost reduction

DJR – Elm Ridge Acquisition (2017)

Current status

• ~175,000 acres
• 599 vertical wells
• ~310 miles of midstream pipeline
• Five compression stations

CONFIDENTIAL INFORMATION

DJR Energy, LLC: Elm Ridge Acquisition 2017

Key Focus to Date

• Focused restoration of six large facilities

and numerous individual well sites

• Returned 300+ wells to production
• Midstream mechanical integrity and

improved operational reliability

• Cathodic protection
• Pipeline liquids removal
• Repaired and returned inactive

pipelines to service

• Compression upgrades and repairs

Planning for development

• APDs in Bisti area (location built)
• APDs in progress in Jicarilla area

C e ntra l Bisti Unit Ya rd ( Be fo re )

C e ntra l Bisti Unit Ya rd ( A fte r)

C a rso n Ta nk Ba tte ry ( Be fo re )

C a rso n Ta nk Ba tte ry ( A fte r)

C e ntra l Bisti Unit Ta nk Ba tte ry ( Be fo re )

C e ntra l Bisti Unit Ta nk Ba tte ry ( A fte r)

BE F ORE BE F ORE AF T E R AF T E R

MART IN WHIT AKE R 57

CHACON AMI GOS 19

CONFIDENTIAL INFORMATION

Current DJR Operations Area

Acquisition of Encana San Juan Assets

• Additional ~175,000 acres
• 96 horizontal wells
• ~44 miles of gas pipeline

CONFIDENTIAL INFORMATION

December 2018 Acquisition

Our strategy going forward

• Link synergies of upstream and midstream
• Midstream with multiple pipes in corridor
• Establish strong relationships with Tribal,

State & Federal agencies

• Bias for local cost competitive contractors
• Transition to central liquids facilities
• Smaller upstream facility footprint
• Minimize trucking to move liquids
• Lower per BOE emissions

Development action

• APDs in progress for first 23 wells
• Facility near completion for 2 wells
• Pipeline RoWs to support strategy in

progress

• Drilling to begin in summer 2019

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C urre nt Fa c ility La y o ut

17

Fu tu re W e llp a d to C e n tra l Liq u id s Fa c ility

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Im p le m e nta tio n o f Stra te g y ha s b e g un… .

CONFIDENTIAL INFORMATION

Lessons Learned

After 1 5 years of independent E&P operations, DJR Energy’s m anagem ent team has learned som e key lessons

• Technology is key

− Good Geology − Good Engineering

• Good people and strong teamwork
• Alignment with capital providers
• Have a plan

− When and how to enter a basin − Development / value creation

• Change the plan when circumstances dictate
• Staying power is critical

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DJR is pr

• ud to be an industr

y par tne r in the San Juan Basin DJR is looking for war d to de ve loping the natur al r e sour c e s within our pr e mie r position in a safe , e c onomic and e nvir

• nme ntally pr

ude nt manne r

In C o nc lusio n