Sanchez Energy — Corporate Update (April 2020)
49 slides from Sanchez Energy's corporate update, Apr 7, 2020
Slide 1: Sanchez Energy Business Plan
CONFIDENTIAL SUBJECT TO CONFIDENTIALITY AGREEMENTS SUBJECT TO MATERIAL REVISION Results Driven. Manufacturing Focused. FOR SETTLEMENT AND DISCUSSION PURPOSES ONLY SUBJECT TO FRE 408 Sanchez Energy Business Plan March 2020 January 23, 2017 www.sanchezenergycorp.com
Slide 2: Management Representatives
CONFIDENTIAL SUBJECT TO CONFIDENTIALITY AGREEMENTS Management Representatives SUBJECT TO MATERIAL REVISION FOR SETTLEMENT AND DISCUSSION PURPOSES ONLY SUBJECT TO FRE 408 Mo Meghji Chief Restructuring Officer Cam George Executive Vice President and Chief Financial Officer Greg Kopel Executive Vice Pr
Slide 3: Table of Contents
CONFIDENTIAL SUBJECT TO CONFIDENTIALITY AGREEMENTS Table of Contents SUBJECT TO MATERIAL REVISION FOR SETTLEMENT AND DISCUSSION PURPOSES ONLY SUBJECT TO FRE 408 I. Executive Summary 4 II. Business Plan and Financial Projections 8 III. Asset Development Plan 20 IV. Midstream 26 V. Corporate G&A 29 Ap
Slide 4: I. Executive Summary
CONFIDENTIAL SUBJECT TO CONFIDENTIALITY AGREEMENTS SUBJECT TO MATERIAL REVISION FOR SETTLEMENT AND DISCUSSION PURPOSES ONLY SUBJECT TO FRE 408 I. Executive Summary 4 4
Slide 5: Business Plan Approach and Summary
CONFIDENTIAL SUBJECT TO CONFIDENTIALITY AGREEMENTS Business Plan Approach and Summary SUBJECT TO MATERIAL REVISION FOR SETTLEMENT AND DISCUSSION PURPOSES ONLY SUBJECT TO FRE 408 The Sanchez Energy management team and advisors (“SN,” or the “Company”) have been working diligently on a revised busines
Slide 6: Business Plan Approach and Summary (continued)
CONFIDENTIAL SUBJECT TO CONFIDENTIALITY AGREEMENTS Business Plan Approach and Summary (continued) SUBJECT TO MATERIAL REVISION FOR SETTLEMENT AND DISCUSSION PURPOSES ONLY SUBJECT TO FRE 408 ◆ Key Building Blocks (continued): 2. Midstream and Marketing ◆ A contract-by-contract financial model was cre
Slide 7: Business Plan Approach and Summary (continued)
CONFIDENTIAL SUBJECT TO CONFIDENTIALITY AGREEMENTS Business Plan Approach and Summary (continued) SUBJECT TO MATERIAL REVISION FOR SETTLEMENT AND DISCUSSION PURPOSES ONLY SUBJECT TO FRE 408 ◆ Preliminary Conclusions: ◆ Preliminary analysis indicates higher asset value under the Option Preservation a
Slide 8: II. Business Plan and Financial Projections
CONFIDENTIAL SUBJECT TO CONFIDENTIALITY AGREEMENTS SUBJECT TO MATERIAL REVISION FOR SETTLEMENT AND DISCUSSION PURPOSES ONLY SUBJECT TO FRE 408 II. Business Plan and Financial Projections 8 8
Slide 9: Business Plan Assumptions
CONFIDENTIAL SUBJECT TO CONFIDENTIALITY AGREEMENTS Business Plan Assumptions SUBJECT TO MATERIAL REVISION FOR SETTLEMENT AND DISCUSSION PURPOSES ONLY SUBJECT TO FRE 408 The Company and its advisors have conducted a thorough review of business plan assumptions Assumption Commentary ◆ Strip pricing as
Slide 10: NAV (PV-10) Analysis and Comparison
CONFIDENTIAL SUBJECT TO CONFIDENTIALITY AGREEMENTS NAV (PV-10) Analysis and Comparison SUBJECT TO MATERIAL REVISION FOR SETTLEMENT AND DISCUSSION PURPOSES ONLY SUBJECT TO FRE 408 $ millions Option Preservation Case Summary NAV Analysis(1) $50/$2.50 Strip(2) $60/$2.50 $70/$2.50 $80/$2.50 Asset Values
Slide 11: Illustrative and Preliminary NAV (PV-10) Sensitivities
CONFIDENTIAL SUBJECT TO CONFIDENTIALITY AGREEMENTS Illustrative and Preliminary NAV (PV-10) Sensitivities SUBJECT TO MATERIAL REVISION FOR SETTLEMENT AND DISCUSSION PURPOSES ONLY SUBJECT TO FRE 408 PV-10 for Option Preservation Case, Accelerated Completions Case and PDP Case at Various Price Decks(1
Slide 12: Option Preservation Case Financial Projections (Accrual)
CONFIDENTIAL SUBJECT TO CONFIDENTIALITY AGREEMENTS Option Preservation Case Financial Projections (Accrual) SUBJECT TO MATERIAL REVISION FOR SETTLEMENT AND DISCUSSION PURPOSES ONLY SUBJECT TO FRE 408 Pre- Post- Emergence Emergence Jan-May Jun-Dec Full Year $ millions 2017A 2018A 2019E(1) 2020E 2020E
Slide 13: Option Preservation Case 2020E Financial Projections (Accrual)
CONFIDENTIAL SUBJECT TO CONFIDENTIALITY AGREEMENTS Option Preservation Case 2020E Financial Projections (Accrual) SUBJECT TO MATERIAL REVISION FOR SETTLEMENT AND DISCUSSION PURPOSES ONLY SUBJECT TO FRE 408 $ millions Jan 2020E Feb 2020E Mar 2020E Apr 2020E May 2020E Jun 2020E Jul 2020E Aug 2020E Sep
Slide 14: Accelerated Completions Case Financial Projections (Accrual)
CONFIDENTIAL SUBJECT TO CONFIDENTIALITY AGREEMENTS Accelerated Completions Case Financial Projections (Accrual) SUBJECT TO MATERIAL REVISION FOR SETTLEMENT AND DISCUSSION PURPOSES ONLY SUBJECT TO FRE 408 Pre- Post- Emergence Emergence Jan-May Jun-Dec Full Year $ millions 2017A 2018A 2019E(1) 2020E 2
Slide 15: Accelerated Completions Case 2020E Financial Projections (Accrual)
CONFIDENTIAL SUBJECT TO CONFIDENTIALITY AGREEMENTS Accelerated Completions Case 2020E Financial Projections (Accrual) SUBJECT TO MATERIAL REVISION FOR SETTLEMENT AND DISCUSSION PURPOSES ONLY SUBJECT TO FRE 408 $ millions Jan 2020E Feb 2020E Mar 2020E Apr 2020E May 2020E Jun 2020E Jul 2020E Aug 2020E
Slide 16: Option Preservation Case Provides Commodity Price Upside
CONFIDENTIAL SUBJECT TO CONFIDENTIALITY AGREEMENTS Option Preservation Case Provides Commodity Price Upside SUBJECT TO MATERIAL REVISION FOR SETTLEMENT AND DISCUSSION PURPOSES ONLY SUBJECT TO FRE 408 A going concern company best positions the assets for future rebound in commodity prices or monetiza
Slide 17: Key Ongoing Business Initiatives
CONFIDENTIAL SUBJECT TO CONFIDENTIALITY AGREEMENTS Key Ongoing Business Initiatives SUBJECT TO MATERIAL REVISION FOR SETTLEMENT AND DISCUSSION PURPOSES ONLY SUBJECT TO FRE 408 Immediate steps have been taken to delay capital spend, optimize operations and reduce costs; the Company is focused on key
Slide 18: Key Near Term Operational Decisions (2020)
CONFIDENTIAL SUBJECT TO CONFIDENTIALITY AGREEMENTS Key Near Term Operational Decisions (2020) SUBJECT TO MATERIAL REVISION FOR SETTLEMENT AND DISCUSSION PURPOSES ONLY SUBJECT TO FRE 408 Outlined below are key operational decisions over the next 12 months Category Decision Option Preservation ◆ Drill
Slide 19: Potential Risks and Upsides to the Proposed Business Plan
CONFIDENTIAL SUBJECT TO CONFIDENTIALITY AGREEMENTS Potential Risks and Upsides to the Proposed Business Plan SUBJECT TO MATERIAL REVISION FOR SETTLEMENT AND DISCUSSION PURPOSES ONLY SUBJECT TO FRE 408 Risk/Considerations Commodity Prices ◆ Further degradation in commodity prices, realizations or dif
Slide 20: III. Asset Development Plan
CONFIDENTIAL SUBJECT TO CONFIDENTIALITY AGREEMENTS SUBJECT TO MATERIAL REVISION FOR SETTLEMENT AND DISCUSSION PURPOSES ONLY SUBJECT TO FRE 408 III. Asset Development Plan 20 20
Slide 21: Asset Development Approach and Overview
CONFIDENTIAL SUBJECT TO CONFIDENTIALITY AGREEMENTS Asset Development Approach and Overview SUBJECT TO MATERIAL REVISION FOR SETTLEMENT AND DISCUSSION PURPOSES ONLY SUBJECT TO FRE 408 A comprehensive asset development assessment was completed since the last business plan presentation ◆ Previous manda
Slide 22: Catarina Asset Overview
CONFIDENTIAL SUBJECT TO CONFIDENTIALITY AGREEMENTS Catarina Asset Overview SUBJECT TO MATERIAL REVISION FOR SETTLEMENT AND DISCUSSION PURPOSES ONLY SUBJECT TO FRE 408 Asset Map Lease◆Summary ◆ ~106,000 gross / net acres ◆ 2019 Production: ~35,000 Boe/d E35-E36 (East) ◆ EF wet gas / condensate window
Slide 23: Comanche Asset Overview
CONFIDENTIAL SUBJECT TO CONFIDENTIALITY AGREEMENTS Comanche Asset Overview SUBJECT TO MATERIAL REVISION FOR SETTLEMENT AND DISCUSSION PURPOSES ONLY SUBJECT TO FRE 408 Asset Map Lease Summary ◆ ◆ ~250,000 gross / ~61,000 net acres ◆ 2019 Production: ~28,000 Boe/d ◆ EF volatile oil / condensate gas wi
Slide 24: Palmetto Asset Overview
CONFIDENTIAL SUBJECT TO CONFIDENTIALITY AGREEMENTS Palmetto Asset Overview SUBJECT TO MATERIAL REVISION FOR SETTLEMENT AND DISCUSSION PURPOSES ONLY SUBJECT TO FRE 408 Asset Map Lease Summary Barnhart G Pad ◆ ~15,500 gross / ~7,500 net acres ◆ 2019 Production: ~1,000 Boe/d ◆ EF black oil window ◆ Gro
Slide 25: Maverick Asset Overview
CONFIDENTIAL SUBJECT TO CONFIDENTIALITY AGREEMENTS Maverick Asset Overview SUBJECT TO MATERIAL REVISION FOR SETTLEMENT AND DISCUSSION PURPOSES ONLY SUBJECT TO FRE 408 Asset Map Lease Summary ◆ ◆ ~62,000 gross / ~40,000 net acres ◆ 2019 Production: ~2,600 Boe/d ◆ ~24,316 net acres held by production
Slide 26: IV. Midstream
CONFIDENTIAL SUBJECT TO CONFIDENTIALITY AGREEMENTS SUBJECT TO MATERIAL REVISION FOR SETTLEMENT AND DISCUSSION PURPOSES ONLY SUBJECT TO FRE 408 IV. Midstream 26 26
Slide 27: Illustrative Catarina Marketing Diagram
CONFIDENTIAL SUBJECT TO CONFIDENTIALITY AGREEMENTS Illustrative Catarina Marketing Diagram SUBJECT TO MATERIAL REVISION FOR SETTLEMENT AND DISCUSSION PURPOSES ONLY SUBJECT TO FRE 408 Diagrams below represent the flow of hydrocarbons from Catarina Gas Marketing Wellhead Gathering Gas Processing Trans
Slide 28: Illustrative Comanche Marketing Diagram
CONFIDENTIAL SUBJECT TO CONFIDENTIALITY AGREEMENTS Illustrative Comanche Marketing Diagram SUBJECT TO MATERIAL REVISION FOR SETTLEMENT AND DISCUSSION PURPOSES ONLY SUBJECT TO FRE 408 Diagrams below represent the flow of hydrocarbons from Comanche Gas Marketing Terminated Jan 2020 Wellhead Gathering
Slide 29: V. Corporate G&A
CONFIDENTIAL SUBJECT TO CONFIDENTIALITY AGREEMENTS SUBJECT TO MATERIAL REVISION FOR SETTLEMENT AND DISCUSSION PURPOSES ONLY SUBJECT TO FRE 408 V. Corporate G&A 29 29
Slide 30: COPAS Overview
CONFIDENTIAL SUBJECT TO CONFIDENTIALITY AGREEMENTS COPAS Overview SUBJECT TO MATERIAL REVISION FOR SETTLEMENT AND DISCUSSION PURPOSES ONLY SUBJECT TO FRE 408 General Summary ◆ The Council of Petroleum Accountants Societies (“COPAS”) is a non-profit professional organization established in 1961 that
Slide 31: Appendix
CONFIDENTIAL SUBJECT TO CONFIDENTIALITY AGREEMENTS SUBJECT TO MATERIAL REVISION FOR SETTLEMENT AND DISCUSSION PURPOSES ONLY SUBJECT TO FRE 408 Appendix 31 31
Slide 32: A. PDP Reference Case
CONFIDENTIAL SUBJECT TO CONFIDENTIALITY AGREEMENTS SUBJECT TO MATERIAL REVISION FOR SETTLEMENT AND DISCUSSION PURPOSES ONLY SUBJECT TO FRE 408 A. PDP Reference Case 32 32
Slide 33: PDP Reference Case: Historical and Financial Projections (Accrual)
CONFIDENTIAL SUBJECT TO CONFIDENTIALITY AGREEMENTS PDP Reference Case: Historical and Financial Projections (Accrual) SUBJECT TO MATERIAL REVISION FOR SETTLEMENT AND DISCUSSION PURPOSES ONLY SUBJECT TO FRE 408 Pre- Post- Emergence Emergence Jan-May Jun-Dec Full Year $ millions 2017A 2018A 2019E(1) 2
Slide 34: B. Other Supporting Items
CONFIDENTIAL SUBJECT TO CONFIDENTIALITY AGREEMENTS SUBJECT TO MATERIAL REVISION FOR SETTLEMENT AND DISCUSSION PURPOSES ONLY SUBJECT TO FRE 408 B. Other Supporting Items 34 34
Slide 35: UnSub Historical Financials (and 4Q19 Estimates)
CONFIDENTIAL SUBJECT TO CONFIDENTIALITY AGREEMENTS UnSub Historical Financials (and 4Q19 Estimates) SUBJECT TO MATERIAL REVISION FOR SETTLEMENT AND DISCUSSION PURPOSES ONLY SUBJECT TO FRE 408 SN UNSUB 1Q 17 2Q 17 3Q 17 4Q 17 1Q 18 2Q 18 3Q 18 4Q 18 1Q 19 2Q 19 3Q 19 4Q 19* Oil (MBbl) 300 836 756 819
Slide 36: Historical EBITDAX Reconciliation – Restricted Group
CONFIDENTIAL SUBJECT TO CONFIDENTIALITY AGREEMENTS Historical EBITDAX Reconciliation – Restricted Group SUBJECT TO MATERIAL REVISION FOR SETTLEMENT AND DISCUSSION PURPOSES ONLY SUBJECT TO FRE 408 2017 2018 (In Thousands) Consolidated SN Restricted Group (Model) Consolidated SN Restricted Group (Mode
Slide 37: Historical EBITDAX Reconciliation – UnSub
CONFIDENTIAL SUBJECT TO CONFIDENTIALITY AGREEMENTS Historical EBITDAX Reconciliation – UnSub SUBJECT TO MATERIAL REVISION FOR SETTLEMENT AND DISCUSSION PURPOSES ONLY SUBJECT TO FRE 408 ($ millions) 1Q 2017 2Q 2017 3Q 2017 4Q 2017 1Q 2018 2Q 2018 3Q 2018 4Q 2018 Adjusted EBITDA: Net income $ 18.8 $ 3
Slide 38: Business Plan Assumptions (Option Preservation Case)
CONFIDENTIAL SUBJECT TO CONFIDENTIALITY AGREEMENTS Business Plan Assumptions (Option Preservation Case) SUBJECT TO MATERIAL REVISION FOR SETTLEMENT AND DISCUSSION PURPOSES ONLY SUBJECT TO FRE 408 Pricing Strip 2020 2021 2022 2023 2024 WTI Oil ($/Bbl) $51.27 $50.89 $50.96 $51.32 $51.69 (As of 2/11/20
Slide 39: Business Plan Assumptions (Option Preservation Case)
CONFIDENTIAL SUBJECT TO CONFIDENTIALITY AGREEMENTS Business Plan Assumptions (Option Preservation Case) SUBJECT TO MATERIAL REVISION FOR SETTLEMENT AND DISCUSSION PURPOSES ONLY SUBJECT TO FRE 408 Catarina Comanche Other 79 77 67 66 53 Gross Wells Drilling 55 Activity (SPUD) 77 67 66 53 24 2020 2021
Slide 40: Business Plan Assumptions (Option Preservation Case)
CONFIDENTIAL SUBJECT TO CONFIDENTIALITY AGREEMENTS Business Plan Assumptions (Option Preservation Case) SUBJECT TO MATERIAL REVISION FOR SETTLEMENT AND DISCUSSION PURPOSES ONLY SUBJECT TO FRE 408 Catarina Comanche Non D&C/Other $160 $149 $1 $140 $40 $113 $120 $1 $100 Capital ` $37 $ MM Expenditures
Slide 41: Business Plan Assumptions (Accelerated Completions Case)
CONFIDENTIAL SUBJECT TO CONFIDENTIALITY AGREEMENTS Business Plan Assumptions (Accelerated Completions Case) SUBJECT TO MATERIAL REVISION FOR SETTLEMENT AND DISCUSSION PURPOSES ONLY SUBJECT TO FRE 408 Pricing Strip 2020 2021 2022 2023 2024 WTI Oil ($/Bbl) $51.27 $50.89 $50.96 $51.32 $51.69 (As of 2/1
Slide 42: Business Plan Assumptions (Accelerated Completions Case)
CONFIDENTIAL SUBJECT TO CONFIDENTIALITY AGREEMENTS Business Plan Assumptions (Accelerated Completions Case) SUBJECT TO MATERIAL REVISION FOR SETTLEMENT AND DISCUSSION PURPOSES ONLY SUBJECT TO FRE 408 Catarina Comanche Other 77 67 66 56 53 Gross Wells Drilling Activity (SPUD) 77 67 66 55 53 1 2020 20
Slide 43: Business Plan Assumptions (Accelerated Completions Case)
CONFIDENTIAL SUBJECT TO CONFIDENTIALITY AGREEMENTS Business Plan Assumptions (Accelerated Completions Case) SUBJECT TO MATERIAL REVISION FOR SETTLEMENT AND DISCUSSION PURPOSES ONLY SUBJECT TO FRE 408 Catarina Comanche Non D&C/Other $140 $125 $120 $1 $100 $40 Capital ` $80 $ MM Expenditures $60 $50 $
Slide 44: Forecast Liquidity
CONFIDENTIAL SUBJECT TO CONFIDENTIALITY AGREEMENTS Forecast Liquidity SUBJECT TO MATERIAL REVISION FOR SETTLEMENT AND DISCUSSION PURPOSES ONLY SUBJECT TO FRE 408 Similar Liquidity Profile at Exit in Option Preservation, Accelerated Completions, and PDP Reference Scenarios Option Preservation Acceler
Slide 45: Sanchez Energy Organizational Structure (Pre-Petition)
CONFIDENTIAL SUBJECT TO CONFIDENTIALITY AGREEMENTS Sanchez Energy Organizational Structure (Pre-Petition) SUBJECT TO MATERIAL REVISION FOR SETTLEMENT AND DISCUSSION PURPOSES ONLY SUBJECT TO FRE 408 Services Agreement Sanchez Oil & Gas Corporation (“SOG”) Other Sanchez Group Public Sanchez Energy Cor
Slide 46: Comanche Ownership Structure
CONFIDENTIAL SUBJECT TO CONFIDENTIALITY AGREEMENTS Comanche Ownership Structure SUBJECT TO MATERIAL REVISION FOR SETTLEMENT AND DISCUSSION PURPOSES ONLY SUBJECT TO FRE 408 Gavilan Venado KNOC Mitsui Sanchez Energy Corporation (Blackstone) ~25% (KKR) ~12.5% ~25% ~12.5% Restricted UnSub Comanche Coman
Slide 47: Annual NYMEX WTI Oil Strip Pricing
CONFIDENTIAL SUBJECT TO CONFIDENTIALITY AGREEMENTS Annual NYMEX WTI Oil Strip Pricing SUBJECT TO MATERIAL REVISION FOR SETTLEMENT AND DISCUSSION PURPOSES ONLY SUBJECT TO FRE 408 $60.0 $57.5 Price ($ / Bbl) $55.0 $52.5 $50.0 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Strip as of 11/30/201
Slide 48: Annual NYMEX Henry Hub Gas Strip Pricing
CONFIDENTIAL SUBJECT TO CONFIDENTIALITY AGREEMENTS Annual NYMEX Henry Hub Gas Strip Pricing SUBJECT TO MATERIAL REVISION FOR SETTLEMENT AND DISCUSSION PURPOSES ONLY SUBJECT TO FRE 408 $3.25 $3.00 $2.75 Price ($ / MBtu) $2.50 $2.25 $2.00 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Strip as
Slide 49: Annual Mt. Belvieu Propane Strip Pricing
CONFIDENTIAL SUBJECT TO CONFIDENTIALITY AGREEMENTS Annual Mt. Belvieu Propane Strip Pricing SUBJECT TO MATERIAL REVISION FOR SETTLEMENT AND DISCUSSION PURPOSES ONLY SUBJECT TO FRE 408 $24.0 Price ($ / Bbl) $21.0 $18.0 $15.0 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Strip as of 11/30/201