Clayton Williams Energy — Merger or Acquisition (January 2017)
25 slides from Clayton Williams Energy's merger presentation, Jan 17, 2017
Slide 1: Acquisition of Clayton Williams Energy, Inc.
Acquisition of Clayton Williams Energy, Inc. January 2017
Slide 2: Forward-Looking Statements and Other Matters
NBL Forward-Looking Statements and Other Matters This presentation contains certain “forward-looking statements” within the meaning of federal securities law. Words such as “anticipates”, “believes”, “expects”, “intends”, “will”, “should”, “may”, “estimates”, and similar expressions may be used to i
Slide 3: Forward-Looking Statements and Other Matters (Non-GAAP, Additional Information)
NBL Forward-Looking Statements and Other Matters This presentation also contains certain forward-looking non-GAAP financial measures, including return on average capital employed, net free cash flow, operating cash flow margin, EBITDA and net debt. Due to the forward-looking nature of the aforementi
Slide 4: Highly Strategic and Complementary Acquisition Creates Industry-Leading Position
NBL Highly Strategic and Complementary Acquisition Creates an Industry-Leading Southern Delaware Basin Position ▪Nearly 120,000 net acres ▪More than 4,200 gross future drilling locations ▪Over 2 BBoenet unriskedresources High-Quality, Contiguous Bolt-on Consistent with Expansion Strategy ▪Majority o
Slide 5: Clayton Williams Energy, Inc. Overview
NBL NBL Acreage CWEI Acreage Clayton Williams Energy, Inc. Overview Premier Southern Delaware Basin position 71,000 Core Delaware Acres Adjacent to Existing NBL Position ▪Delaware position –avg. 80% WI, over 95% operated ▪Delaware potential -over 2,400 gross drilling locationswith average lateral le
Slide 6: CWEI Transaction Overview
NBL Total Transaction Value of $3.2 Bn(Includes ~$500 MM Net Debt Assumed) 55 MM NBL Shares to CWEI Shareholders, Who Will Own ~11% of NBL $665 MM Cash Consideration Funded From Draw on Revolver Represents Valuation of ~$32,000* per Southern Delaware Acre Materially Enhances Oil Focus and Growth Out
Slide 7: Transaction Advances NBL Delaware Expansion Strategy
NBL Transaction Advances NBL Delaware Expansion Strategy Superior rock, contiguous acreage, and midstream competitive advantages Focus on High-Quality Geology and Increase Oil Exposure ▪Acreage located in the over-pressured, low GOR area (over 75% oil) Capacity to Accelerate Activity and Growth ▪Inc
Slide 8: Industry-Leading Combined Southern Delaware Basin Position
NBL Industry-Leading Combined Southern Delaware Basin Position Best-in-class assets and best-in-class operator Transaction Creates 2ndLargest Southern Delaware Operator Accelerating Activity and Applying NBL Expertise ▪Leverage NBL technical capabilities in onshore unconventionals Development Effici
Slide 9: Additions Significantly Expand Delaware Scale
NBL Additions Significantly Expand Delaware Scale More than doubling future opportunity set 47.2 NBL Net Acres (000s) 71 CWEI Added 118.2 Combined 3 NBL YE 2017 Rigs 3 CWEI Added 6 Combined 0 750 1,500 2,250 3,000 3,750 4,500 NBL CWEI Added Combined Gross Hz. Drilling Locations 0 5 10 15 20 NBL CWEI
Slide 10: Premier Geology Foundation for Value Creation
NBL Premier Geology Foundation for Value Creation Expanding Noble’s core of the core position Over-Pressured Oil Reservoir ▪Over 75% oil High-Quality Stacked Targets Across Position ▪Pay interval 3,200 ftthick Well Control Data Provides Certainty on Geologic Quality and Consistency ▪100 existing wel
Slide 11: Significant Stacked Pay Running Room
NBL Significant Stacked Pay Running Room Adds 2,400 identified future drilling locations Majority of Undeveloped CWEI Acreage Value Allocated to WolfcampA Upper and Lower Nearby Industry Well Results Indicate Substantial Stacked Pay Upside ▪Tests include 2ndand 3rdBone Spring, WolfcampB, WolfcampC O
Slide 12: Southern Delaware Basin Well Performance
NBL Southern Delaware Basin Well Performance Strong results from multiple benches across Southern Delaware Basin Calamity Jane 2101H Lateral: 4,859’ Proppant: 3,072 lb/ft IP30: 2,541 BOE/D Lemur 24 1H Lateral: 4,498’ Proppant: 2,171 lb/ft IP30: 936BOE/D Lemur Unit 24 2H Lateral: 4,450’ Proppant: 2,9
Slide 13: Acquisition Stacks Up Well with Existing Delaware Inventory
NBL Acquisition Stacks Up Well with Existing Delaware Inventory Robust WolfcampA economics enhanced with long laterals WolfcampA Driving Multi-Year Value and Production Growth With Estimated 1 MMBoeEUR and ROR Ranges 60% -90% at Base/Upside Plan Pricing ▪Most recent CWEI wells materially outperformi
Slide 14: Material Value Through Acceleration and Unconventional Expertise
NBL Material Value Through Acceleration and Unconventional Expertise Growing volumes on acquired acreage to 60 MBoe/d by 2020 0 2,000 4,000 6,000 8,000 CWEI '15-'16 Average NBL Plan Lateral Length (ft) 0 500 1,000 1,500 2,000 2,500 3,000 CWEI '15-'16 Average NBL Plan ProppantConcentration (lbs/ft) 0
Slide 15: NBL Outlook for CWEI Assets
NBL 0 1 2 3 4 5 6 0 10 20 30 40 50 60 70 2017E 2018E 2019E 2020E Sales Volumes 0 100 200 300 400 500 600 2017E 2018E 2019E 2020E Capital** $MM NBL Outlook for CWEI Assets Volumes Grow at ~60% CAGR 2016-2020E Asset Reaches 60 MBoe/d in 2020E in Base Plan and 70 MBoe/d in Upside Plan Net Free Cash Flo
Slide 16: Midstream Assets Enhance Operational and Financial Flexibility
NBL Midstream Assets Enhance Operational and Financial Flexibility Unique midstream position with acreage largely undedicated Material Benefits of Infrastructure Ownership ▪Supports long-term growth objectives ▪Ensures timely well connects ▪Lowers cost structure Further Enhances NBLX’s Permian Basin
Slide 17: Planning Infrastructure for Optimal Long-Term Development
NBL Planning Infrastructure for Optimal Long-Term Development NBL development plan drives $600 million in current midstream value Midstream Facility Build Out Consistent With Development Underway in Delaware ▪NBLX installing first central gathering facility on NBL existing acreage, operational mid 2
Slide 18: Updated Combined Delaware Outlook to 2020
NBL 0 2 4 6 8 10 12 14 0 25 50 75 100 125 150 175 200 2017E 2018E 2019E 2020E Delaware Sales Volumes 0 250 500 750 1,000 1,250 1,500 2017E 2018E 2019E 2020E Delaware Capital** $MM Updated Combined Delaware Outlook to 2020 73-83% CAGR 2016-2020E Pro forma ▪Plans for NBL existing acreage remain unchan
Slide 19: Enhancing Position as Leading U.S. Onshore Operator
NBL Enhancing NBL Position as Leading U.S. Onshore Operator with Top Tier Acreage 2 BBoeeach in core oil positions in DJ and Delaware Delaware 352,000 net acres 3,220 gross locations 8,400’ average lateral length 2BBoe net unrisked resources Eagle Ford Marcellus 363,000 net acres 1,900 gross locatio
Slide 20: Transaction Accelerates Volumes and Cash Flow Even Faster
NBL Transaction Accelerates Volumes and Cash Flow Even Faster New addition increases volume growth by 3 to 5 percentage points, Cash flow up 7 points Total NBL 33% 45% Total Company Operating Cash Flow Grows Even Stronger * (2016 –2020E CAGR Pro forma) 11% 15% 16% 20% 16% 21% 28% 34% * Adjusted for
Slide 21: Track Record of Enhancing Value Through M&A
NBL Track Record of Enhancing Value Through M&A Rosetta outcomes far exceeding merger plan 0 100 200 300 400 500 600 A NBL B C D E F G H I 2016 Delaware Basin Operator Average 24 Hour Test Rate per 1,000 ft Boe/d per 1,000 ft. Source: Analysis by KLR Group, report dated 10/20/16; Peers include APA,
Slide 22: Highly Strategic and Complementary Acquisition Creates Industry-Leading Position
NBL Highly Strategic and Complementary Acquisition Creates an Industry-Leading Southern Delaware Basin Position ▪Nearly 120,000 net acres ▪More than 4,200 gross future drilling locations ▪Over 2 BBoenet unriskedresources High-Quality, Contiguous Bolt-on Consistent with Expansion Strategy ▪Majority o
Slide 23: Appendix
NBL Appendix 23
Slide 24: Base and Upside Plan Commodity Price Assumptions
NBL Period BasePlan Upside Plan WTI, Brent ($/Bbl) Henry Hub ($/Mcf) WTI,Brent ($/Bbl) Henry Hub ($/Mcf) 2017 $50 $3 $60 $3 2018 $55 $3 $65 $3 2019 $55 $3 $65 $3 2020 $56 $3 $66 $3 ’17-’20 Avg $54 $3 $64 $3
Slide 25: Defined Terms
NBL Defined Terms Defined Terms and Divestment AdjustmentsTerm Definition Operating CashFlow GAAP Net cashprovided by operating activities Net Free Cash Flow Operating cash flow less organic cash capital lessdividend
Clayton Williams Energy — Merger or Acquisition (January 2017) on 6ix