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Alta Mesa ResourcesThe Oil & Gas Conference
Enercom DenverAugust 2018
Disclaimer
FORWARD-LOOKING STATEMENTSThe information in this presentation and the oral statements made in connection therewith include “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 present or historical fact included in this presentation, regarding our strategy, future operations, financial position, growth, returns, free cash flow, liquidity, budget, drilling and development plans, pipeline construction, projected costs, prospects, and objectives of management are forward-looking statements. When used in this presentation, including any oral statements made in connection therewith, the words “could,” “should,” “will,” “may,” “believe,” “anticipate,” “intend,” “estimate,” “expect,” “project,” the negative of such terms and other similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. These forward-looking statements are based on management’s current expectations and assumptions about future events and are based on currently available information as to the outcome and timing of future events. We caution 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 our control, incident to the development, production, gathering and sale of oil, natural gas and natural gas liquids. These risks include, but are not limited to, commodity price volatility, low prices for oil and/or natural gas, global economic conditions, inflation, increased operating costs, lack of availability of drilling and production equipment, supplies, services and qualified personnel, processing volumes and pipeline throughput, uncertainties related to new technologies, geographical concentration of operations of our subsidiaries Alta Mesa Holdings, LP (“Alta Mesa”) and Kingfisher Midstream, LLC (“KFM”), environmental risks, weather risks, security risks, drilling and other operating risks, regulatory changes, the uncertainty inherent in estimating oil and natural gas reserves and in projecting future rates of production, reductions in cash flow, lack of access to capital, Alta Mesa’s and KFM’s ability to satisfy future cash obligations, restrictions in existing or future debt agreements of Alta Mesa or KFM, the timing of development expenditures, managing Alta Mesa’s and KFM’s growth and integration of acquisitions, failure to realize expected value creation from property acquisitions, title defects and limited control over non-operated properties, our ability to complete an initial public offering of the KFM midstream business and the other risks described in our filings with the Securities and Exchange Commission (the “SEC”). Should one or more of the risks or uncertainties described in this presentation and the oral statements made in connection therewith occur, or should underlying assumptions prove incorrect, our actual results and plans could differ materially from those expressed in any forward-looking statements. Except as otherwise required by applicable law, we disclaim any duty to update any forward-looking statements, all of which are expressly qualified by the statements in this section, to reflect events or circumstances after the date of this presentation.
RESERVE INFORMATIONReserve engineering is a process of estimating underground accumulations of hydrocarbons that cannot be measured in an exact way. The accuracy of any reserve estimate depends on the quality of available data, the interpretation of such data and price and cost assumptions made by reserve engineers. In addition, the results of drilling, testing and production activities may justify revisions of estimates that were made previously. If significant, such revisions could impact our strategy and change the schedule of any further production and development drilling. Accordingly, reserve estimates may differ significantly from the quantities of oil and natural gas that are ultimately recovered. Estimated Ultimate Recoveries, or “EURs,” refers to estimates of the sum of total gross remaining proved reserves per well as of a given date and cumulative production prior to such given date for developed wells. These quantities do not necessarily constitute or represent reserves as defined by the SEC and are not intended to be representative of anticipated future well results of all wells drilled on our STACK acreage.
TRADEMARKS AND TRADE NAMESWe own or have rights to various trademarks, service marks and trade names we use in connection with the operation of our business. This presentation also contains trademarks, service marks and trade names of third parties, which are the property of their respective owners. The use or display of third parties’ trademarks, service marks, trade names or products in this presentation is not intended to, and does not imply, a relationship with us, or an endorsement or sponsorship by or of us. Solely for convenience, the trademarks, service marks and trade names referred to in this presentation may appear without the ®, TM or SM symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the right of the applicable licensor to these trademarks, service marks and trade names.
2
Alta Mesa Resources
Leading Developer ofSTACK Oil Window
Integrated Business Drives Value
Strong Balance Sheet with Pre-Funded Growth
Strong ManagementAlignment with Investors
Low cost, high return Meramec / Osage Drilled ~350 Hz wells, transitioned to multi-well pads Significant runway for capital efficient growth
Contiguous acreage facilitates efficient operations Midstream infrastructure enhances returns Kingfisher Midstream positioned for significant growth
Low leverage Liquidity to fund 2018 and 2019 growth Free cash flow positive by year-end 2019
Management ownership >10% Compensation tied to debt-adjusted per share metrics
3
Alta Mesa’s TrajectoryRealization of benefits of business combination
4
2018 2019 2020+
Complete business combination
Strengthen balance sheet to pre-fund growth
Production growth, driven by transition to development drilling
Execute on midstream business development
Maintain capital discipline and efficiencies
Continued delineation of position in NW STACK
Achieve peer leading capital efficient growth
Become free cash flow positive by year-end
Midstream business achieves scale for IPO or other alternatives
Preserve leadership position in the STACK
Capital efficient growth within cash flows
Relentless Pursuit of Shareholder Value Creation
5
Leading Developer in STACK Black-Oil Window350+ wells over 300+ sq. mi. area affirm robust economic opportunity
STACK Phase Windows
Schematic Cross Section
Pennsylvanian
Mississippian
Meramec/Osage True Dip 1 degree SW
Flattened on the Top of the Oswego LimeSW NE
Oswego Lime
Gas Oil
Principal STACK Resource: Osage / Meramec
Osage / Meramec progrades basin-ward providing multi-target reservoirs, gradational from siliceous, cherty carbonate to silty carbonate to limy siltstones
Osage / Meramec highly naturally-fractured in Kingfisher, Garfield, Major Counties
Oil production increases and gas decreases moving from the southwest to the northeast across the Basin
Well costs increase transitioning from the normal pressure window in the northeast to overpressure in the southwest
6
Kingfisher County Development
Mississippian HZ Wells by Year and Active RigsNew Drill HZ Permits Issued by County
Rig Count by County¹
New Wells by County
Blaine
Major
Kingfisher
Woodward
Dewey
Custer
Custer
Canadian
Grady
Caddo
WashitaPre-2015
2015
2016
2017
2018
0
100
200
300
400
500
Blaine Canadian Dewey Garfield Grady Kingfisher Major
0
10
20
30
40
50
Blaine Canadian Dewey Garfield Grady Kingfisher Major
0
50
100
150
200
250
300
350
Blaine Canadian Dewey Garfield Grady Kingfisher Major
1 Current rig count as of July 17, 2018; not annualized
Activity points to increasing confidence in STACK/SCOOP/Merge/NW STACK
Alta Mesa Resources OverviewFocused on development and consolidation in the STACK
Q2 Key Metrics
Market Capitalization1 ~$2.6bn
Enterprise Value1 ~$3.2bn
Q2 Net Production (BOE/d) 25,600
Q2 Sales % Oil / % Liquids2 48% / 72%
Q2 KFM System Gas Volume (MMCF/d) 95.6
Upstream AssetsNet STACK Surface Acres3 ~130,000
Single-well IRRs (Individual / Corporate) 4 77% / 92%
Operated STACK Hz. Wells Drilled 5 353
Current rig count 8
Kingfisher Midstream AssetsGas Processing Capacity 3506 MMCF/d
Gathering Pipelines 400+ miles
Dedicated Acreage ~300,000 gross acres
Oil Storage Capacity 50,000 BBLs
1 Equity share price as of 06/29/2018 close, the last trading day in the quarter, using aggregate Class A and Class C share count of 383,980,5812 NGL volumes increased in Q2 due to transition to ethane recovery and improved plant efficiency 3 Acreage as of 08/01/2018, not pro forma for recently announced letter agreement in Major County4 Mean IRR based on NYMEX close at 6/29/2018, calculated over economic life of wells5 Horizontal wells drilled as of 08/01/20186 Includes existing 90 MMCF/d offtake processing 7
Cushing
Kingfisher Midstream OperationsContinued expansion of business
System Volumes Increased 37% Since Closing, 3rd Party Growth of 87%1
Recent Developments
Gas Gathering & Processing
Alta Mesa delivered volumes Q1 vs. Q2 grew 10%
3rd party delivered volumes Q1 vs. Q2 grew 58%
Oil Gathering
Alta Mesa is initial customer
Targeting 3rd party expansion with Cimarron Express start up in 2019
Produced Water
Business to be transferred to KFM in 2018; not reflected in Q2 results
KFM Gas Processing Plant
8
1 Percentages calculated as July 2018 vs. February 2018 monthly volumes.
67 67 70 72 7485
14 1720
2526
27
8284
90
96101
112
0
30
60
90
120
Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18E
Syst
em V
olum
es (M
mcf
/d)
AMR Third Parties
Kingfisher Midstream Expansion OpportunitiesMeaningful growth trajectories for all 3 services
9
KFM Gas System KFM Oil System KFM Water System
Gas Base growth from Kingfisher County Expansion opportunities in NW STACK (Major, Blaine, and Dewey counties)
Oil Cimarron Express underpins near term growth Unique crude takeaway solution differentiates gathering
Water Readily scalable business Significant undedicated acreage throughout the STACK
Recent Highlights
Strong Production
Ramp Underway
Midstream Business
Expanding
NW STACK Activity
Increasing
Positioning for 2019+ Ongoing
Q2 2018 production 25,600 BOE/d Estimated July 2018 production 31,800 BOE/d Current production rates >50% higher than 2017 exit rate
Q2 2018 system gas volume 96 MMCF/d Estimated July 2018 system gas volume 112 MMCF/d Transfer of produced water business to Kingfisher Midstream initiated
Well results, geologic assessments affirm continued development of NW STACK KFM expanding to Major County with high pressure pipeline extension Signed letter agreement with private operator to to add net acreage and gain
increased operational control in eastern Major County
9th rig scheduled to move into the field in September Continuous multi-discipline efforts to define and optimize pattern drilling,
completion, and production operations Planning and development for mid-2019 completion of Cimarron Express pipeline
10
-
10,000
20,000
30,000
40,000
50,000
60,000
Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18
Gross BOPD
Gross BOEPD
Strong Production TrajectoryOngoing coordination and optimization of multi-well drilling & completion
11
Gross Operated Production, BOE/d 2018 Net Production Outlook, BOE/d
38,000
40,000
20,300
23,900
25,500
31,800
Dec 2017 Q1 '18 Q2 '18 Jul 2018E Exit 2018E
2-3 Rigs 4-6 Rigs 8 Rigs
50%+ increase in production from
2017 Exit Achieved
~85-100% increase in production from 2017 Exit Targeted
58% oil(2 stream)
Upstream Operational ExecutionCost control and coordination with increasing level of activity
Progression of Wells Drilled1
12
26
27
74
113
101 353
2013 2014 2015 2016 2017 2018YTD
Total
Well Costs Maintained
Days to First Oil2
Focused discipline on costs as activity levels in H1 2018 approached full year 2017 activity levels
Improved efficiencies in spud to rig release and completions stages per day offsetting service price pressure and materials cost increases
YTD wells have averaged $3.8mm
15 13
72
35
13
14
19
23
13
8
132
93
2017 2018 YTD
On Production to 1st Oil
Frac End to On Production
Frac Start to Frac End
RR to Frac Start
Spud to Rig Release
1 To date 2018 as of 08/01/2018 2 Days are averages for respective periods
12
Production OptimizationKey driver to maximize ROI, EBITDA and optimize reserves
Process Disciplined daily surveillance
engineer review
Lift parameters adjusted or lift method changed
Actions Systematically deploying
ESP/jet pump
KFM gathering system pressure reduced
Initial results reflect base decline rate mitigation
13
0
1,500
3,000
4,500
6,000
0
500
1,000
1,500
2,000
Apr-17 Jul-17 Oct-17 Jan-18 Apr-18 Jul-18
Oil - BOPD Water - BWPD Gas - MCFD
BOPD
Steele Well Production Example
ESP Installed
Water Hit
MC
FD / BW
PD
Optimization Overview
Development Patterns UnderwayMulti-well development pattern results continue to be favorable
21 Multi-Well Development Patterns1
Average
TypeCurve
14
74 of 86 wells drilled in 1H 2018 on multi-well pads
Methodical approach, goal to achieve maximum present value from resource with target recovery of >8% OOIP
Initial results from 21 patterns give distribution of outcomes for insight into well placement, completion design, and production methods including artificial lift
MROHansens
MROEve
MROCerny
NFXFreeman
NFXChlouber
NFXMargie
MROYost
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
0 50 100 150 200C
umul
ativ
e B
ODays on Production
1 Includes wells with at least 32 days production
0
1,000
2,000
3,000
4,000
5,000
Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18
Net
Def
erre
d B
OE
/d
Net Deferred BOE (2-stream) Net Deferred Oil
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18
Gro
ss B
OE
/d
Greene-Mackey The Trick Todd Miller
Pattern Drilling OptimizationFocus on coordination, cost control, minimizing offset production impact
YTD 2018 Estimated Deferral for Offset Activity
Example: Four Adjacent Units
Optimization Factors for Multi-Well Pad ProfitabilityQ2 Deferral
Todd Miller The Trick Mackey
Q2 Production
15
640-ac DSU 640-ac DSU 640-ac DSU
70% Oil
~3,000 BOE/Dfor 2 months
Greene
2x 320-ac DSU
Reservoir – wellbore landing interval, spatial distribution of wells, frac stage spacing, fluid volumes, infill well production profile, initial well production profile
Offset activity – east-west proximity for shut-in wells (e.g., 0.5 mi.), loading parent wells and volumes to fill, recovery times after frac hit
Drilling operations – surface locations, regulatory permitting, rig selection
Completion Operations – Water sourcing, water transfer infrastructure, offset impact scheduling, crew selection
Production operations – produced water, gas lift gas supply, gas gathering / compression, high-volume lift
KFM Infrastructure Expanding to Service Area1NW STACK Update
Drilling, specialty well logging, geologic analysis, initial well results affirm continued development of NW STACK area
Kingfisher Midstream expanding into Major County and has started construction of a new high-pressure pipeline
Signed letter agreement with a private E&P company, related to approximately 17,000 acres in Major County:
Contiguous with Alta Mesa’s existing acreage
Alta Mesa will be operator of the combined acreage position
Midstream dedication of acreage made to Kingfisher Midstream (Gas, Oil and Water)
Expansion into Northwest STACKNew agreement, positive results spurring increased activity
16
1 AMR leasehold is not pro forma for letter agreement with private E&P
Alta Mesa Resources
Leading Developer of STACK Oil Window
Integrated Business Drives Value
Strong Balance Sheet with Pre-Funded Growth
Strong Management Alignment with Investors
17
APPENDIX
18
Capitalization as of June 30, 2018 ($ mm)
Cash and Cash Equivalents $83.4
Alta Mesa Holdings RCF $0.0
Kingfisher Midstream RCF $63.5
7.875% Senior Unsecured Notes $500.0
Net Debt $563.5
Availability on Alta Mesa Holdings RCF1 $378.1
Availability on Kingfisher Midstream RCF2 $236.5
Total Liquidity $698.0
Strong Balance Sheet Pre-Funds Growth PlansSignificant liquidity in place to support activity levels
Balance Sheet Highlights
Capitalization and Liquidity
Liquidity to fund capital plan to provide positive free cash flow in Q4 2019
No near term debt maturities
Debt Maturity Profile
$700
$500
2018 2019 2020 2021 2022 2023 2024
Undrawn Alta Mesa Holdings RCFUndrawn Kingfisher Midstream RCFDrawn Kingfisher Midstream RCF7.875% Senior Unsecured Notes
1 $21.9mm of outstanding letters of credit as of 06/30/2018 against $400mm borrowing base2 $63.5mm drawn against $300mm credit facility
19
Commodities and MarketingOil and liquids drive economics, natural gas flow assurance in place
Oil and Liquids Continues to Drive Economics
Production Mix
Firm Transport and Marketing
80%
10%10%
H1 2018 Revenue Source
Oil Gas NGLs
Commodity Take Away End Markets
Natural Gas
• 100,000 Dth/d PEPL FT, 20 years• Additional 20,000 Dth/d PEPL FT
through 2019• 125,000 Dth/d OGT West FT1
through May 2023
• Panhandle Pool• OGT Pool• Cap Rock• El Paso North Plains
NGLs
• Connected to Phillips 66 Chisholm Pipeline
• 3 year contract extendable for 2 1-year terms with shipper history
• Conway, KS
Oil
• Trucking to Cushing and/or pipelines to Cushing
• Cimarron Express to provide takeaway beginning in 2019 with 90,000 Bbls/d capacity expandable to 175,000 Bbls/d
• Cushing, OK
20
50%
29%
21%
H1 2018 Commodity Sales
Oil Gas NGLs
Two stream wellhead production remained at 56% oil in H1 2018 and mix is forecast to continue as new, lower GOR wells come on production
Ethane recovery and improved plant efficiencies have increased NGL volumes and percentage of 3-stream sales since April
Q2 production mix also impacted by deferral from early life wells that have higher oil cut. Average two stream oil was ~70% for offset frac shut-ins in Q2
1 Contract at Alta Mesa Holdings, LP
Cimarron Express UpdateConstruction underway, expected in-service Mid 2019
Asset Overview
Downstream Connectivity
Pipeline RoutingKFM Ownership 50%
Length ~65 miles
Pipeline Size 16”
Capacity Initial: 90,000 BBLs/dExpandable to: 175,000 BBLs/d
Connectivity Access to regional refineries and all major Cushing downstream markets
AMR Acreage Dedication
~120,000 Net Acres in Kingfisher and Garfield Counties
KFM Share of Capex ~$45mm (Initial)
BKEPCushing north Rose Rock 20”
BKEP north manifold
BKEPCushing central
BKEPCushing south
BKEP 20”
BKEP 12”
BKEP central manifold
BKEP manifold R
BKEP manifold D
Indirect Connectivity
Seaway via Enterprise
TransCanada via Magellan or Plains
NGL via Magellan or Enterprise
Sun
oco
30”
Sun
oco
30” Spearhead 20”
Ent
erpr
ise
20”
Ent
erpr
ise
12”
Mag
ella
n 20
”
Cen
turio
n 16
”
Plains 20”
BKEP 20”
BKEP 12”
Bi-directional
Receipt only (Spearhead)
Delivery only (Enterprise 12”)
21