Contango Oil & Gas — 23rd Annual OGIS Conference (April 2017)
24 slides from Contango Oil & Gas's conference presentation, Apr 3, 2017
Slide 1: 23rd annual OGIS conference April 3, 2017
23rd annual OGIS conference April 3, 2017
Slide 2: Forward Looking Statements
2 Forward Looking Statements COMPANY CONTACTS Allan D. Keel President, Chief Executive Officer and Director E. Joseph Grady Senior Vice President and Chief Financial Officer Investor Relations: Email: [email protected] Web Site: www.contango.com Company Headquarters Contango Oil & Gas C
Slide 3: Why Invest in Contango NOW?
3 Why Invest in Contango NOW? ~67 locations in the Wolfcamp A, B and Bone Springs, each based on 10,000’ lateral length. Based on SEC pricing at 12/31/2016. Includes 36.2 Bcfe of non-operated reserves attributable to our 37% unconsolidated equity interest in Exaro. See Adjusted EBITDA reconciliation
Slide 4: Company Overview
4 Legacy Texas Rockies Gulf Coast and Rocky Mountain Operator Gulf of Mexico Company Overview 2016 Production (Mmcfe/d) Note: Enterprise Value is not reduced for Investment in Unconsolidated Affiliates attributable to Exaro. Excludes Contango’s net share of EBITDA and production attributable to Exar
Slide 5: 2017 Investment philosophy and strategy
5 2017 Investment philosophy and strategy ~ 67 locations in the Wolfcamp A, B and Bone Springs, each based on 10,000’ lateral length. Manage capex to preserve balance sheet and liquidity Hedged approximately 50% of our forecasted PDP oil and natural gas production for 2017 Year-end debt of $54.4 mil
Slide 6: Company Upside Potential
6 Company Upside Potential (1) Based on internal company estimates. See the Disclaimer included in the Appendix to this presentation. Based on 3 benches on 1,000 foot spacing and average lateral lengths of 10,000 feet. Strip pricing as of 12/31/16. Average oil ($/bbl.) and gas ($/mcf.) prices: 2016:
Slide 7: Growth Potential NAV Estimate
Growth Potential NAV Estimate Company estimates based on NYMEX Strip pricing as of 12/31/16. Net obligations include long-term debt, asset retirement obligations and working capital deficit at 12/31/16. Represent risked PV10 amounts based on internal estimates of EURs and costs, per type curves for
Slide 8: 2017 Capital program
8 2017 Capital program Development Strategy 2017 Estimated Capital Expenditures Focus primarily on Southern Delaware Basin Well/Facility capital expenditures generally within internally generated cash flow (i.e. ~ $10MM overspend) 2017 Activity - $57.5 million; 10 gross wells, 4.5 net (complete 2 20
Slide 9: Delaware Basin Acquisition Investment Highlights
9 DELAWARE basin Acquisition Investment Highlights Financial Strength and Flexibility Creates Permian Presence Offers a foothold in one of the most prolific and economic plays in the country Multi-year inventory across a stacked pay basin Provides inventory diversification with compelling economics
Slide 10: Southern Delaware Basin Recent relevant acquisitions
Parsley Concho Diamondback Halcon Oxy Noble Jagged Peak Centennial Resource Development Oxy Oxy Diamondback southern delaware basin Recent relevant acquisitions Upper Wolfcamp OOIP Map Diamondback Acquisition of Luxe Metrics: 19,000 Acres $27K/undeveloped acre Centennial Res. Dev. Combination of Sil
Slide 11: Asset Type Curve
11 Asset Type Curve The 20 closest wells (all within 3 - 4 miles) with lateral lengths greater than 6000’ (7,300’ average) were used to develop the type curve Reeves Pecos Contango Acreage and Offset Wells Contango Acreage Contango Well Horizontal Well Vertical Well Lonestar Gunfighter Ripper State
Slide 12: Southern Delaware Basin Wolfcamp and Bone Springs Type Log
AVALON SHALE 1ST BONE SPRINGS 2ND BONESPRINGS- MOST ACTIVE 3RD BONE SPRINGS SOUTHERN delaware basin WOLFCAMP and Bone Springs TYPE LOG * TYPE LOG IS LOCATED ON PROJECT ACREAGE WOLFCAMP A – MOST ACTIVE WOLFCAMP B – DIRECT OFFSET MIDDLE WOLFCAMP LOWER WOLFCAMP Conventional Production 0 0.2 2000 LLD 0
Slide 13: Stable Production Base & Cash Flow
13 Stable Production Base & Cash Flow Mature Resource Play Early Stage Resource Play Offshore Gulf of Mexico Texas Onshore Rockies Three shallow water platforms Cib Op formation - Predictable depletion drive reservoir 11 producing wells 2016 A.D.P.: 48.0 Mmcfe/d 2016 1P Res.: 92.2 Bcfe 100% proved d
Slide 14: Offshore – Stable cashflow generator
Offshore – Stable cashflow generator 14 (1) Offshore reserves based on William M. Cobb & Associates proved reserve report as of 12/31/2016 at SEC pricing.. Producing Platforms and Prospects Other Assets Net Proved Reserves (12/31/2016)(1) Natural Gas (Mmcf) Oil and Condensate (Mmbbls) NGL (Mmbbls) E
Slide 15: Offshore – Stable cashflow generator (Cont.)
15 Offshore – Stable cashflow generator (Cont.) Dutch #1 Discovery Eugene Island Field Cib Op Structure Map Compact, concentrated position Depletion drive reservoir with predictable, low decline Cumulative Production for Entire Field of 427 Bcf + 7.5 MMBO(1) (1) As of 4/1/2016.
Slide 16: Core Onshore Texas
16 Core Onshore Texas South Texas Acreage & Inventory Total Net Acres 76,800 / 7,900 prospective for Buda and Eagle Ford Avg. Working Int. 54% Locations 25 Well Play Information – Eagle Ford & Buda EURs (1) 350-450 Mboe Net Proved Reserves 1.9 Mmboe Well Costs $4.5-5.5 million % liquids 77% Southeas
Slide 17: Wyoming – North Cheyenne Project Overview
Wyoming – north cheyenne project Overview 17 Weston Crook Niobrara Converse Campbell MCF N. Cheyenne Project Clareton Field Crook Weston Campbell Sheridan Johnson Natrona Converse Niobrara Fiddler CreekField Acreage & Inventory Total Net Acres 35,000 (no significant near-term expirations) Muddy Sand
Slide 18: Strong Financial Position
Peers include AXAS, BBG, ESTE, JONE, REI, SN, SYRG. Debt and LTM EBITDA reported as of 12/31/16. See adjusted EBITDA reconciliation for MCF. Commodity price derivatives based on Henry Hub NYMEX and natural gas prices. 18 Strong Financial Position Low Leverage and Strong Coverage vs. Peers 2017 Hedge
Slide 19: Why Invest in Contango?
19 Why Invest in Contango? Proven Developed Asset Base Experienced Management Team Significant Onshore Development Potential with Focus on Permian Conservative Debt Profile with Ample Liquidity Well positioned to develop asset base and opportunistically pursue strategic acquisitions in current commo
Slide 20: Appendix
CONTA oO IL & GAS COMPANY he APPENDIX
Slide 21: Management
21 Management Current Position and Past Experience President, Chief Executive Officer and Director President / CEO, Contango Oil & Gas Company (since 2005 through merger with Crimson) VP / GM, Westport Resources President / COO, Mariner Energy & Woodside Energy Senior Vice President and Chief Financ
Slide 22: Reserves at 12/31/16
RESERVES AT 12/31/16 22 Reserve Category Net Oil, Mb Net NGL, Mb Net Gas, Mb Net Mmcfe SEC PW 10, $M 12/31/16 SEC Price Offshore PDP 454 2,241 76,018 92,190 112,677 Onshore PDP 1,534 719 10,089 23,608 28,806 Onshore PNP 169 549 9,289 13,602 12,524 Onshore PUD 1,265 850 9,658 22,351 12,222 Total 12/3
Slide 23: EBITDAX reconciliation
23 EBITDAX represents net income (loss) before interest expense, taxes, and depreciation, depletion and amortization, and oil & gas expenses. Adjusted EBITDAX represents EBITDAX further adjusted to reflect the items in the table below, all of which are required in determining our compliance with fin
Slide 24: Hydrocarbon quantities & drilling locations
Hydrocarbon quantities & drilling locations 24 This presentation includes certain estimates of proved reserves that have not been prepared in accordance with SEC pricing guidelines. Other estimates of hydrocarbon quantities and type curve metrics included herein (including average type curve metrics
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