Montage Resources — Eclipse Resources — Merger or Acquisition (August 2018)
16 slides from Montage Resources's merger presentation, Aug 27, 2018
Slide 1: Strategic Combination: Eclipse Resources and Blue Ridge Mountain Resources
Strategic Combination: Eclipse Resources and Blue Ridge Mountain Resources Transformative Transaction in the Appalachian Basin August xx, 2018 August 2018 Exhibit 99.2
Slide 2: Forward-Looking Statements, Cautionary Statements, and Other Disclosures
Forward-Looking Statements, Cautionary Statements, and Other Disclosures No Offer or Solicitation This communication relates to a proposed business combination transaction (the “Transaction”) between the Company and Blue Ridge. This communication is for informational purposes only and does not const
Slide 3: Transaction Summary
Transaction Terms 100% stock combination of Eclipse Resources (“Eclipse”) and Blue Ridge Mountain Resources (“Blue Ridge” or “BRMR”) ~230 million shares to be issued to Blue Ridge shareholders (~540 million total shares) 15-to-1 reverse stock split at close Post-stock split pro forma shares of ~36 m
Slide 4: Transaction Rationale
Transaction Rationale Improved balance sheet & liquidity drives increased production growth at low leverage levels Significant operating & corporate level synergies Furthers ability to optimize netbacks, as well as midstream & marketing commitments Increases inventory of core Utica locations and add
Slide 5: Top Tier Appalachian Energy Company
Pro forma leverage ratio of ~2.1x2, line of sight to 1.5-1.7x in Q4 20183 Substantial pro forma liquidity estimated at $312 million4 Positive cash flow generating anticipated by 20205 Substantial upside from further delineation Positioned for accretive acquisitions to add scale and cash flow Top Tie
Slide 6: Merger Creates a Solid Company of Scale
Pro Forma Net Effective Undeveloped Core Acres2 128,000 99,000 227,000 % HBP 54% 81% 66% Net Remaining Locations 379 356 7353 Q2 2018 Production (MMcfe/d) 306 122 427 % Natural Gas 72% 81% 74% YE 2017 Proved Reserves (Bcfe)4 1,459 357 1,816 Net Debt ($ million) $558 ($40) $519 Q2 2018 EBITDAX ($ mil
Slide 7: Pro Forma Asset Portfolio
Type Curve Utica Condensate Utica Rich Gas Utica Dry Gas Utica Dry Gas South Marcellus Condensate Marcellus Retro West Flat Castle Total Eclipse Lateral Length 13,000 13,000 13,000 - 12,000 - 16,000 - Eclipse Net Undeveloped Core Acres3 25,800 6,800 38,000 - 14,100 - 43,300 128,000 Eclipse Net Locat
Slide 8: Experienced Appalachian Basin Leadership Team
Prior Companies Experience (years) John Reinhart President & CEO 25 Oleg Tolmachev EVP & COO 19 Matthew DeNezza EVP & CFO (interim) 18 Paul Johnston EVP & General Counsel 38 Matthew Rucker SVP, Resource Development & Planning 11 Experienced Appalachian Basin Leadership Team
Slide 9: Strong Financial Positioning
Strong Financial Positioning Balance Sheet and Liquidity Blue Ridge $25 million term loan to be retired at transaction close Pro forma borrowing base expected to be $375 million1 ECR senior unsecured notes to remain outstanding No near term debt maturities ECR does not intend to proceed with third t
Slide 10: Midstream and Marketing Portfolio Allowing for Operational Synergies
Midstream and Marketing Portfolio Allowing for Operational Synergies Midstream & Marketing Portfolio Combined Marketing Overview Contiguous acreage position facilitates midstream efficiencies Limited minimum volume commitments for gathering and processing covered by pro forma production Allows combi
Slide 11: Provides the Basis for a Growth-Oriented Strategy
Provides the Basis for a Growth-Oriented Strategy 2 to 3 rig development program concentrated on highest returning, low risk, Marcellus and Utica core acreage Targeting 20% annual production growth and positive 2020 cash flow1 Proven, low risk, high deliverability program Enhanced cycle times and op
Slide 12: Combined Management Team
Combined Management Team Highly experienced team with a history of success in Appalachia 111 years of combined Oil and Gas Experience Highly Complementary Asset Fit Ability to high grade development plan Maximize efficiency and cash generation Healthy Balance Sheet Credit accretive transaction suppo
Slide 13: Appendices
Appendices
Slide 14: Overview of Blue Ridge
Overview of Blue Ridge Disciplined, sector leading, growth 1-2 operated rigs running Q2 2018 daily production of 122 MMcfe/d (19% liquids) Strong asset base ~99,000 net effective undeveloped core acres in Ohio and West Virginia1 357 Bcfe of YE 2017 proved reserves (22% liquids)2 ~4,888 Bcfe of total
Slide 15: Risk Management: Pro Forma Hedging
Risk Management: Pro Forma Hedging Pro forma hedging portfolio is ~77% hedged for natural gas and ~67% hedged for condensate production in 2018 and will continue adding incremental hedges in 2019 to further enhance cash flow stability Summary of Pro Forma Hedges Natural Gas (MMBtu/d) Hedge % based o
Slide 16: Non-GAAP Reconciliation
Non-GAAP Reconciliation Eclipse Adjusted EBITDAX BRMR Adjusted EBITDAX
Eclipse Resources — Merger or Acquisition (August 2018) on 6ix