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DUG HaynesvilleVine Energy Inc.
VINE. PURE. FOCUSED. 2
Disclaimer This Presentation (“Presentation”) contains selected
information about Vine Energy Inc. and its consolidated
subsidiaries, (“we”, “us”, the “Company” or “Vine”). Neither the
Company nor any of its subsidiaries or affiliates have any
obligation to update this Presentation.
Information contained in this Presentation concerning our industry
and the markets in which we operate, including our general
expectations and market position, market opportunity and market
size, is based on information from our management’s estimates and
research, as well as from industry and general publications and
research, surveys and studies conducted by third parties. In some
cases, we do not expressly refer to the sources from which this
information is derived. Management estimates are derived from
publicly available information, our knowledge of our industry and
assumptions based on such information and knowledge, which we
believe to be reasonable. These and other factors could cause our
future performance to differ materially from our assumptions and
estimates.
This Presentation contains certain “forward-looking statements.”
All statements, other than statements of historical facts, included
in this Presentation that address activities, events, future
strategy, other intentions or developments that the Company
expects, believes or anticipates will or may occur in the future
are forward-looking statements. Forward-looking statements can be
identified by, among other things, the use of forward-looking
language, such as “believes,” “expects,” “estimates,” “may,”
“will,” “should,” “could,” “seeks,” “plans,” “intends,”
“anticipates,” “projects” or “scheduled to,” or other variations of
such terms or comparable language. Without limiting the generality
of the foregoing, forward-looking statements contained in this
Presentation specifically include the expectations of plans,
strategies, objectives and anticipated financial and operating
results of the Company, including the Company’s drilling program,
production, derivative instruments, capital expenditure levels and
other guidance included in this Presentation. These statements are
based on certain assumptions made by the Company based on
management’s experience and perception of historical trends,
current conditions, anticipated future developments, the impact of
the COVID-19 pandemic and other factors believed to be appropriate.
Such statements are subject to a number of assumptions, risks and
uncertainties, many of which are beyond the control of the Company,
which may cause actual results to differ materially from those
implied or expressed by the forward-looking statements. These
include, but are not limited to, changes in oil and natural gas
prices, weather and environmental conditions, the timing of planned
capital expenditures, uncertainties in estimating proved reserves
and forecasting production results, operational factors affecting
the commencement or maintenance of producing wells, legal or
regulatory developments affecting the Company’s business and other
important factors that could cause actual results to differ
materially from those described herein. As a result, you are
cautioned not to place undue reliance on these forward-looking
statements. Any forward-looking statement speaks only as of the
date on which such statement is made, and the Company undertakes no
obligation to correct or update any forward-looking statement,
whether as a result of new information, future events or
otherwise.
This Presentation has been prepared at a time of increased
volatility in the global economy due to the COVID-19 pandemic. The
Company cannot anticipate all the ways in which the current global
health crisis and resulting financial market conditions could
impact the Company's business. Consequently, certain
forward-looking statements, data and assumptions in this
Presentation continue to be evaluated and refined on an ongoing
basis and are subject to material change.
This Presentation provides disclosure of the Company’s proved,
probable and possible reserves, which are those quantities of oil
and gas, which can be estimated with reasonable certainty to be
economically producible—from a given date forward, from known
reservoirs, and under existing economic conditions, operating
methods and government regulations—prior to the time at which
contracts providing the right to operate expire, unless evidence
indicates that renewal is reasonably certain, regardless of whether
deterministic or probabilistic methods are used for the estimation.
The reserve estimates presented in this Presentation are based on
reports prepared by W.D. Von Gonten & Co., the Company’s
independent reserve engineers. We may use the terms “reserve
potential” and “EUR per well” to describe estimates of potentially
recoverable hydrocarbons. These are the Company’s internal
estimates of hydrocarbon quantities that may be potentially
discovered through exploratory drilling or recovered with
additional drilling or recovery techniques. These quantities may
not constitute “reserves” within the meaning of the Society of
Petroleum Engineer’s Petroleum Resource Management System or SEC
rules and do not include any proved reserves. EUR estimates and
drilling locations have not been risked by Company management.
Actual locations drilled and quantities that may be ultimately
recovered from the Company’s interests will differ substantially.
There is no commitment by the Company to drill all of the locations
that have been attributed to these quantities. Factors affecting
ultimate recovery include the scope of our ongoing drilling
program, which will be directly affected by the availability of
capital, drilling and production costs, availability of drilling
services and equipment, drilling results, lease expirations,
transportation constraints, regulatory approvals and other factors;
and actual drilling results, including geological and mechanical
factors affecting recovery rates. Estimates of EUR per well and
reserve potential may change significantly as development of the
Company’s oil and gas assets provides additional data. Our
production forecasts and expectations for future periods are
dependent upon many assumptions, including estimates of production
decline rates from existing wells and the undertaking and outcome
of future drilling activity, which may be affected by significant
commodity price declines or drilling cost increases.
The historical and projected financial information in this
Presentation includes financial information that is not presented
in accordance with generally accepted accounting principles
(“GAAP”), such as LQA Adj. EBITDAX, Adj. EBITDAX Margin, and free
cash flow. The Company's management uses this information in its
internal analysis of results and believes that this information may
be informative to investors in gauging the quality of the Company’s
financial performance, identifying trends in our results and
providing meaningful period-to-period comparisons. Non-GAAP
financial measures should not be used as substitutes for the
corresponding GAAP measures. Non-GAAP measures in this Presentation
may be calculated in a way that is not comparable to similarly
titled measures reported by other companies.
VINE. PURE. FOCUSED. 3
Vine Energy at a Glance: A Top-Tier Natural Gas Player
Industry Leading Economic Profile
$82MM
72% Top-tier industry margin
878 / 25 3.2Tcf (SEC)
(1) Adjusted EBITDAX is a non-GAAP financial measure. We define
Adjusted EBITDAX as our net income before interest expense, income
taxes, depreciation, depletion and amortization, exploration
expense, strategic expense, impairment of oil and gas properties,
unrealized earnings on derivatives and other non-cash operating
items. Refer to the appendix for a reconciliation to the nearest
GAAP measure.
(2) Adj. EBITDAX Margin is a non-GAAP financial measure, which we
calculate by dividing Adjusted EBITDAX by revenue (excluding
unrealized gain/loss on derivatives). (3) Adjusted Free Cash Flow
is a non-GAAP financial measure which we define as Adjusted EBITDAX
less the sum of cash interest, capital incurred and cash tax
payments and distributions. Refer to the appendix
for a reconciliation to the nearest GAAP measure.
Note: Refer to Appendix for footnotes 4-7
VINE. PURE. FOCUSED. 4
Intersection of Historical Activity Includes Significant Unproven
Acreage Core of The Core for Two Reservoirs
VINE. PURE. FOCUSED.
Mid-Bossier Gas-In-PlaceHaynesville Production Heat Map
Eastern portion of play has highest productivity in the basin
Highest reservoir pressure drives deliverability High porosity and
permeability consistent across leasehold High TOC and low clay
content yield superior resource quality High original gas-in-place
supports 4-6 wells / section development
Consistency of reservoir drives predictable performance across
acreage
Haynesville Vine leads industry in knowledge and development of
Mid-Bossier
Vine acreage overlies the highest reservoir pressure and original
gas- in-place in the basin
Thick reservoir averaging over 250’ of net pay Vine has drilled
over 55 Mid-Bossier wells since 2015 with results
comparable to best Haynesville wells Mid-Bossier is a primary
target on large part of acreage
Mid-Bossier
Haynesville TGIP Over Absolute Pressure Mid-Bossier TGIP Over
Absolute Pressure
Thickness 135’ avg
Pressure 0.89 psi/ft.
Thickness 250’ avg
Pressure 0.89 psi/ft.
Gas in Place 132 Bcf/sec
Vine Assets Overlay the Core of Both Plays: Stacked Haynesville and
Mid-Bossier Reservoirs
5
Assets Located in Over Pressured Core of Both Haynesville and
Mid-Bossier Fairways
PSI PSIPSI
Vine’s assets lie within the area of highest well
deliverability in the play
Haynesville
VINE. PURE. FOCUSED. 6
Select Operators Notably Target the Mid Bossier Mid-Bossier
Comprises 6%-48% of Total Operator Activ ity Spud After
7/1/2016
0 5
10 15 20 25 30 35 40 45 50 55
VEI Indigo XOM BP Aethon GeoSouthern CRK
Re co
rd C
ou nt
Mid-Bossier Total Producing Completed Drilled Drilling Permitted
Play Total MB % of Total
VEI 52 49 1 2 - - 105 31%
Indigo 49 38 1 5 1 4 134 23%
XOM 38 32 1 5 - - 36 48%
BP 34 25 1 8 - - 70 27%
GeoSouthern 22 21 0 1 - - 90 19%
Aethon 32 14 5 10 1 2 162 10%
CRK 16 13 2 1 - - 247 6%
Source: Haynesville Play Fundamentals | Stacked Pay Primer |
ENVERUS.COM
VINE. PURE. FOCUSED.
Producing Days
Cu m
P ro
du ct
io n/
10 00
Note: Wells > 6000’
IRR @ $2.50 Flat Price
ALERION 14-23HC-02 ALT 7473 $1,303 1.9 73% BLACKSTONE 34-3HC-01 ALT
7583 $1,137 2.1 194% BLACKSTONE 34-3HC-02 ALT 7419 $1,325 2.2 109%
MCKISSACK 34-3HC-01 ALT 7418 $1,140 2.1 184% MCKISSACK 34-3HC-02
ALT 7414 $1,069 2.1 213% MCKISSACK 34-3HC-03 ALT 7416 $1,096 2.1
161% CHAMBERLIN 14-23HC-01 ALT 10070 $1,360 2.2 48% CLARK
24-13HC-02 7313 $1,139 2.3 160% CREST 30-19HC-01 ALT 7611 $1,141
1.8 64% CREST 30-19HC-02 ALT 7315 $1,434 1.9 42% DESOTO FAM
15-22HC-01 ALT 9281 $1,246 2.4 121% DESOTO FAM 16-21HC-01 ALT 7505
$1,208 2.2 77% DESOTO FAM 16-21HC-02 ALT 7503 $1,172 2.3 145% LA
MINERALS 28-33HC-03 ALT 7974 $1,244 1.8 50% QUDO 2-11HC-01 ALT 7094
$1,124 2.4 159% QUDO 2-11HC-02 ALT 7225 $1,107 2.4 168% QUDO
2-11HC-03 ALT 7310 $1,129 2.4 156% QUDO 2-35HC-01 ALT 7544 $1,154
2.4 168% Haynesville Average 7693 $1,196 2.2 127%
7,500' Type Curve Economics 7500 $1,227 2.2 83%
BRUSHY 32-5HC-05 ALT 7496 $1,236 2.0 81% BRUSHY 32-5HC-06 ALT 7441
$1,307 2.0 70% GALLASPY 32-5HC-03 ALT 7500 $1,221 2.0 74% GALLASPY
32-5HC-04 ALT 7541 $1,382 2.0 50% CLARK 24-13HC-01 9489 $1,144 2.0
105% LA MINERALS 28-33HC-01 ALT 9188 $1,166 1.9 80% LA MINERALS
28-33HC-02 ALT 9809 $1,166 2.1 164% MONDELLO 51HC-01 ALT 8844
$1,612 2.4 66% SAN PATRICIO 12-13HC-02 ALT 9991 $1,056 1.8 104% SAN
PATRICIO 12-13HC-03 ALT 9901 $1,184 1.8 39% Mid-Bossier Average
8720 $1,247 2.0 83%
7,500' Type Curve Economics 7500 $1,227 2.0 71%
10 11 12
Marcellus Dry Gas Core(2)
8
Top Tier Well Results Haynesville 7,500’ Well Performance(1)
Relative to Peers
SW Marcellus P10/P90 = 2.3x
NE Marcellus P10/P90 = 3.1x
• Higher P10/P90 variance exhibits more variability
Vine Haynesville P10/P90 = 1.4x
• Low P10/P90 variance exhibits low variability
Vine Mid-Bossier P10/P90 = 1.6x
Source: Enverus as of 11/24/2020. (1) Wells turned-in-line since
2017 normalized to 7,500’ lateral. (2) Wells turned-in-line since
2017; Vine Core includes Burgundy & Red Haynesville and Blue
& Green Mid-Bossier trend areas, Marcellus Core includes
Enverus-defined Core and Tier 1 Dry Gas sub-plays.
With Lower Variability
Cu m
ul at
ive G
as (M
m cf/
1, 00
Cu m
ul at
ive G
as (M
M cf
/1 ,0
• Robust economics
Productivity and Single Well Economics @ $2.75/MMBtu
Vine HV Vine MB NW HV
IRR @ $2.75 Flat, % 110% 97% 47%
PV10, $MM $8.2 $5.9 $8.0
Payback, Years 1.0 1.0 1.7
EUR, Bcf/1,000 ft 2.3 2.0 2.0
Well Cost, $/ft $1,227 $1,227 $1,283
Notes: 1) Normalized to 7,500 ft lateral 2) Economics based on 100%
WI and 80% NRI
0
5,000
10,000
15,000
20,000
25,000
0 5 10 15 20 25 30 35 40 45 50
Ga s P
0
5,000
10,000
15,000
20,000
25,000
0 5 10 15 20 25 30 35 40 45 50
Ga s P
2015 2016 2017 2018 2019 2020 2021
Drilling Days Historical Performance
Q121 AVG: 5.39
2020 AVG: 4.87
Q121 AVG: 15.12
2020 AVG: 14.60
Q121 AVG: 858
2020 AVG: 746
• 2nd best quarter (Q120 – 1st, 15.3) • New quarterly record (Q120
– 2nd, 816) • 2nd best quarter (Q120 – 1st, 5.64)
536
619
746
720
896
970
819
769
2018
2019
2020
Clark
Qudo
Sabine
2018
2019
2020
Clark
Qudo
Sabine
2018
2019
2020
Clark
Qudo
Sabine
15%4% 11% 13%
VINE. PURE. FOCUSED. 12
$1,659
$1,424
Av g.
La te
13Source: EPA Facility Level Information on Greenhouse Gases
Tool.
3.5 4.0 4.7 5.8 5.7 5.7 6.1 6.3 6.7 6.8 6.8
8.6 8.7 9.6 11.0 11.6 12.5
20.9
8.25
20.28
15.23
3.20
23.35
Permian
HS&E Efforts
*6-YEAR TRIR SAFETY RECORD: 0.0 EMPLOYEE 0.33 CONTRACTOR
*Industry Bureau of Labor Rate = 0.6 TRIR – Total Recordable
Incident Rate
Governance & Social Impacts
Peers include: Aethon, BP, Cabot, Chesapeake, Chevron, Cimarex,
Concho, Comstock, Continental, Devon, Diamondback, Equinor,
Gulfport, Oxy, Pioneer, Range, Shell
• 62% reduction in CH4/MBoe since 2017 • 35% reduction in C02e/MBoe
since 2017 • All drilling rigs utilize bi-fuel engines
25% of pressure pumping equipment utilizing bi-fuel • Early
adoption of intermittent-bleed control valves
Currently converting to zero-bleed controls significantly reducing
methane emissions
• 100% non-potable water used in all operations • 100% green
completions • 100% of wellsite electricity provided by solar
power
• $1.4B of economic contributions (CY’17 – CY’19) Local property
and production taxes Royalties, wages & benefits and capital
expenditures
• Diverse work force is a key strength ~40% of senior executive
team is female ~30% of workforce is female vs. ~15% industry
average
• Vine Cares program targets donations to local communities First
responders in our field areas (Police, Fire & EMS)
Under-resourced local school districts (LA Parishes) Children’s
wellness (JDF, St. Jude, Children’s Advocacy Center)
Appendix
VINE. PURE. FOCUSED. 16
The Haynesville Basin Offers Two Viable Intervals Haynesvi l le
Accounts for 87% of Activ ity Spuds After 7/1/2016, Middle Bossier
13%
Total Producing Completed Drilled Drilling Permitted
Haynesville 1,598 1,139 144 180 41 94
Mid-Bossier 247 195 12 32 2 6
Haynesville % Total Wells (%) 87% 85% 92% 85% 95% 94%
Haynesville % Total Wells (%) 13% 15% 8% 15% 5% 6%
Note: Middle Bossier permits based on stacked or tightly spaced
directional surveys, may not include all Mid-Bossier permits.
Source: Haynesville Play Fundamentals | Stacked Pay Primer |
ENVERUS.COM
VINE. PURE. FOCUSED. 17
Adjusted EBITDAX ($ in millions) LTM Q1 2021 Q1 2021
Net Income ($235) ($34) Income tax provision 0 0
Income Before Income Taxes ($235) ($34) Unrealized gain/loss on
commodity derivatives 238 38 Non-cash G&A 0 0 Non-cash
write-off of deferred IPO costs 0 0 Non-cash volumetric adjustment
0 0 Depletion, depreciation, and accretion 407 107 Interest Expense
128 34 Strategic 1 0 Severance 0 0 Exploration 0 0
Adjusted EBITDAX $538 $145
Adjusted EBITDAX margin
Revenue $507 Unrealized loss on commodity derivatives 238 Total
revenue before unrealized loss on commodity derivatives $745
Adjusted EBITDAX $538
Adjusted EBITDAX $145
Less: Cash Interest (27)
Less: Capital Incurred (98)
Less: Cash Taxes (payments and distributions) 0 Adjusted Free Cash
Flow $20
Annualized (x4) $82
238
38
0
0
238
$745
2021
2020
2020
38
- 0
- 0
Q1 2021
Adjusted EBITDAX
0
Footnotes
Footnotes Slide 3: (Vine Energy at a Glance: A Top-Tier Natural Gas
Player)
4) Payback period at 12/31/2020 strip pricing. Breakeven price
includes 10% rate of return. Based on remaining inventory at
1/1/2021 and YE 2020 reserve type curves.
5) Effective acreage is sum of net acreage prospective for the
Haynesville and the Mid-Bossier.
6) Based on an average of 4 gross rigs with for remaining core
inventory.
7) Based on 12/31/2020 strip. SEC reserves limited by 5-year
window. Throughout this presentation, proved reserves and proved
PV-10 have an effective date of 12/31/2020
18
Vine Energy at a Glance: A Top-Tier Natural Gas Player
Stacked Development Viability
Assets Located in Over Pressured Core of Both Haynesville and
Mid-Bossier Fairways
Select Operators Notably Target the Mid Bossier
2020 Actuals Exceeding Unit Economics IRRs
Top Tier Well Results
Drilling Days Historical Performance
Slide Number 14
Non-GAAP Reconciliations