Diamondback Energy, Inc. · NASDAQ:FANG
Diamondback Energy — Investor Presentation (February 2014)
20 slides from Diamondback Energy's investor presentation, Feb 11, 2014
Slide 1: Investor Presentation
Exhibit 99.1 Investor Presentation February 2014
Slide 2: Forward Looking Statements
Forward Looking Statements This presentationcontainsforward-lookingstatements within the meaningof Section27Aof the SecuritiesAct of 1933and Section21Eof the SecuritiesExchangeAct of 1934.All statements,other than statements of historical fact, included in this presentationthat addressactivities,eve
Slide 3: Key Executives
Diamondback Energy Key - Executives 2
Slide 4: Diamondback Energy Overview
Diamondback Energy Overview Diamondback Energy Acreage Aggressive Developer of Horizontal Inventory - Currently running 4 horizontal and 1 vertical rig Midland Basin Eastern - 5th horizontal rig expected in 2Q’14 Shelf - Execution focus drives peer leading performance Volume and Reserve Growth To Co
Slide 5: A Growth Story
A Growth Story 1,2 (BOEPD) Average Daily Net Production 1,2,3 (MMBOE) Total Reserves Growth Key Highlights 1P –By Commodity 3 1P –By Category 3 Shift to horizontal development driving accelerated growth. Less than 5% of horizontal resource potential booked as PUDs. Continuing to prove up additional
Slide 6: Peer Leading in Cash Margins
Peer Leading in Cash Margins Cash Margins Exceed Peers by Nearly2,3 50% 4 ($/BOE) FANG Operating Expenses Over Time 1,2 FANG Percent Oil vs. Public Permian Peers 3,4 Quarterly LOE ($/BOE) Source: Company filings, management data and estimates. (1) Represents latest reported production percentage of
Slide 7: Advantaged Structure Increases Cash Flow through Minerals Ownership
Advantaged Structure Increases Cash Flow through Minerals Ownership (Nasdaq: FANG) 100% Spanish Trail Minerals 100% 2014Guidance2 Production: 2,750 Boe/d LOE: $0.00/boe G&A: $0.00/boe Diamondback $250-$300 million 1 Excluding Minerals $70-$80 million 1 EBITDA 2014Guidance2 Free Cash Flow Production:
Slide 8: Minerals Ownership Impact
Diamondback Energy Minerals – Ownership Impact Completed the acquisition of mineral interests Two Dedicated Hz Drillers under ~15,000 gross (~12,500 net) acres in Ector Midland Midland County in September 2013 Diamondback receives an average ~20% royalty interest on all production from these ~15,000
Slide 9: Execution and Cost Structure Peer-Leading Performance
Execution and Cost Structure Peer – Leading Performance Drilling $/Lateral Foot1 (Midland County) Spud to TD1 (Days) Days vs Depth Hz Diamondback Peers Internal Records Lateral Length Days Cost $MM 5,000’ 11 $4.8 7,500’ 12 $5.9 10,000’ 17 $9.1 Source:Companyfilings,managementdataandestimates.(1)~7,5
Slide 10: Acreage Encouraging Results
Diamondback Energy Acreage Encouraging – Results FANG -UL III 4-1H Wolfcamp B FANG -Kent CSL A 17-1H Wolfcamp B 24-hr IP: 613 BOEPD Well drilled to 7,975’lateral length Peak 30-day avg. rate: 440 BOEPD; ~83% oil Frac scheduled 4,051’lateral length FANG -Mabee Breedlove 22-1H Wolfcamp B FANG -UL Maso
Slide 11: Spraberry Type Curve Results Exceeding Expectations
Spraberry Type Curve Results – Exceeding Expectations LowerSpraberryTypeCurveis650 MBOE(2 stream)with 81%oil (87%oil 1styear). 3 streamequivalentis692 MBOE - Represents a 30% increase over previous EUR estimates and a 60% increase in PV10 - Type Curve is based on initial well. 2nd well (Kemmer 4210H
Slide 12: Wolfcamp B Type Curve Positive Revisions to North Area
Wolfcamp B Type Curve Positive – Revisions to North Area TypeCurveis638MBOE(2 stream)with74%oil(85%oil1st year).3 streamequivalentis695MBOE - Represents a 6% increase over previous EUR estimates and a 23% increase in PV10 - Oil portion of new type curve is a 10% increase over prior estimates (1) -No
Slide 13: Wolfcamp B Type Curve South Area Results
Wolfcamp B Type Curve South – Area Results EastUptonTypeCurveis604MBOE(2 stream),with72%oil(80%oil1st year). 3 streamequivalentis671MBOE - Represents no change to prior estimates WestUptonTypeCurveis463MBOE(2 stream),with70%oil(78%oil1 st year). 3 streamequivalentis519MBOE - Represents a 22% decreas
Slide 14: Multi-year Inventory Continues to Grow
Multi-year Inventory Continues to Grow Identified Net Potential Drilling Locations 160 Acre Hz Spacing 40-acre spacing 20-acre infill spacing Horizontal (Wolfcamp B) Prospective Horizons: Clearfork Lower Spraberry Middle Spraberry Wolfcamp A, B and C Cline (Wolfcamp D) ~19% of 40-acre vertical Addit
Slide 15: Financial Summary
Diamondback Energy Financial - Summary 1 ($ in MMs) Revenue Growth Hedging Average Bbls Average Price Oil Swaps 2014 Per Day Per Bbl First Quarter-LLS 2,311 $99.45 First Quarter-Brent 1,000 $109.70 Second Quarter-LLS 3,670 $98.86 Second Quarter-Brent 330 $109.70 Third Quarter-LLS 4,000 $97.64 Fourth
Slide 16: 2014 Capital Program
Diamondback Energy 2014 - Capital Program Drilling Program1 2014E Capital Expenditures 65-75 gross horizontal and 20-25 gross vertical wells planned for 2014 Average Hz lateral length (all wells) 6,660’ Expected cost range - $6.9 -$7.4MM for 7,500’lateral horizontal well - $2.0 -$2.2MM for vertical
Slide 17: 2014 Guidance
Diamondback Energy 2014 - Guidance Diamondback Excluding Diamondback Minerals Minerals Energy Total Net Production M – Boe/d 12.5 –13.0 2.5 –3.0 15.0 –16.0 Unit costs ($/boe) Lease operating expenses 1 $7.00 -$8.00 $0.00 $6.00 -$7.00 G&A $2.50 -$3.50 $0.00 $2.00 -$3.00 DD&A $22.00-$24.00 $26.00-$28.
Slide 18: In Conclusion
In Conclusion Efficient capital allocation Target Debt/EBITDA < 2X Complementary acreage additions Midland Basin focused Maintain operations excellence Additional testing in other shale benches Stacked laterals in multiple benches Increase inventory Continued D&C cost reduction Continued focus on co
Slide 19: Appendix
DIAMONDBACK Energy APPENDIX 18 DIAMONOBACK Energy
Slide 20: 3 Stream Effect on EUR MBOE
3 Stream Effect on EUR MBOE - (1) 3 stream volumes based on sales volumes after fuel, line loss and plant take. Midland County gas shrink = 38% and ngl yield = 120 19 bbl/MMcf. Andrews County shrink = 40% and yield = 120 bbl/MMcf. Upton County shrink = 39% and yield = 132 bbl/MMcf
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