Eagle Ford Acquisition Opportunity - Bank of Montreal Page Document Library/2016... · Eagle Ford Acquisition Opportunity Newfield Exploration . ... Newfield Exploration (“Newfield”

Eagle Ford Acquisition Opportunity Newfield Exploration

Newfield Eagle Ford – Investment Highlights

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Core Eagle Ford Acreage

Oil-Weighted Producing Assets with Substantial

Remaining Inventory

Significant Growth Potential

Expected August 2016 net production of 7.7 Mboe/d (~75% liquids) from 125 gross wells(2)

– Includes net production of 1.2 Mboe/d from 12 WOC wells (expected first production July 2016)(3)

2015 annual operating cash flow of $78 MM

Over 300 gross remaining drilling opportunities with average IRR of ~60%, over half of which have IRRs >70%(4)

Acreage geometry and in-place infrastructure ideal for efficient continued development

Robust drilling inventory includes the Lower Eagle Ford (two zones) and the Upper Eagle Ford, supported by significant OOIP

– Lower Eagle Ford (66% of total location count) average IRR of >70% and Upper Eagle Ford average IRR >30%(4)

Stacked-pay development off existing pads allows for high-pace future growth

Recent completion up-sizing by major Eagle Ford operators has substantially increased single-well productivity and returns

Two contiguous Eagle Ford acreage positions comprising 22,800 net acres (~85% HBP) in Dimmit and Atascosa counties, Texas(1)

Acreage predominantly lies along the high IRR volatile oil window of the Eagle Ford

– Volatile oil window comprises a significant portion of current Eagle Ford development

Additional 18,500 net acres in Maverick County with current production predominately from the Georgetown Limestone

1. HBP in this instance denotes both Held by Production and Held by Operations 2. Current net production of 6.5 Mboe/d (73% liquids) 3. Operator (XTO) expected to cap gross production from the 12 WOC wells at 3.0 Mbo/d 4. Based on 3-year NYMEX prices as of May 10, 2016 with $65.00/bbl and $3.25/Mcf held flat thereafter

Newfield Exploration (“Newfield” or “NFX”) is offering for sale its assets located in the Eagle Ford, including Maverick County. Newfield has retained Scotia Waterous and BMO Capital Markets as advisors to assist with the transaction.

Newfield Eagle Ford – Offering Overview

Newfield’s Eagle Ford projects, West Asherton and Fashing, lie in the volatile oil and black oil windows of the Eagle Ford

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Newfield Eagle Ford – West Asherton

Current net production of ~5,700 boe/d from 76

gross Eagle Ford wells

Attractive Eagle Ford position with substantial

remaining resource

– Thick Lower and Upper Eagle Ford sections with high

OOIP, supportive of stacked development

– Offset operators including Chesapeake and Anadarko

are highly active in co-developing multiple zones of the

Lower Eagle Ford, as well as the Upper Eagle Ford

Over 250 operated Eagle Ford drilling locations

remain with >95% working interest:

– Average single-well IRRs >50%

– ~2 MM lateral feet of Eagle Ford development

remaining (~7,700 foot average lateral length)

– ~40 infill locations remaining in the lower portion of the

Lower Eagle Ford at current spacing

– Additional ~100 locations supported by nearby analogs

of staggered development in upper / lower portions of

the Lower Eagle Ford

– Offset activity and OOIP calculations suggest an

additional ~110 locations in the Upper Eagle Ford

– Development of the Austin Chalk offers substantial

attractive additional resource to be developed

4

West Asherton Acreage Highlight Newfield & Offset Operator Wells

6,900'

7,100'

7,300'

7,500'

7,700'

2,000' 1,000' 0' 1,000' 2,000'

Tru

e V

ert

ical

De

pth

(ft

.)Lateral Placement (ft.)

Lower Eagle Ford Test Upper Eagle Ford Test

165'50'

250' Avg. Well Spacing250' Avg. Well Spacing

Newfield Eagle Ford – West Asherton Upside

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Significant upside potential from: – Stacked development of 2 to 4 zones within the

Eagle Ford Proximal tests by Anadarko, Sanchez, Noble, and others

support stacked development and downspacing

– Further downspacing below current projected spacing

– Upsizing of completions actively resulting in higher productivity and returns: Higher proppant concentrations and fluid volumes Tighter cluster and stage spacing

– Additional targets including the Austin Chalk – Further capital and operating cost reductions

Eagle Ford Development Plan (Shotgun View)

Anadarko Dimmit County Spacing Pilots (Shotgun View)

0

40

80

120

160

200

0 10 20 30 40 50 60

Cu

mu

lati

ve P

rod

uct

ion

(M

bo

e)

Days on Production

BR 36 BR 32 NBL 400 Mboe Type Curve

Completion Specifics Noble BR 36 Noble BR 32

IP-30 (boe/d) 3,525 2,236

First Production Jan-16 Jan-16Lateral Length 5,044 4,780

% Oil / % NGL / % Gas 33% / 36% / 31% 30% / 38% / 32%

Proppant (Lbs/ft) 2,000 2,000

Fluid Type Hybrid Gel Hybrid Gel

Cluster Spacing (ft.) 20 20

+ 35

0%

Noble Dimmit Co. Upsized Completion Pilot(1)

1. Noble Energy Q1 2016 Earnings Presentation (May 4, 2016)

Newfield Eagle Ford – Fashing Field

Expected August 2016 net production of 1.9 Mboe/d from 32 gross Eagle Ford wells

– Includes net production of 1.2 Mboe/d from 12 WOC wells (average WI of 48%; expected first production July 2016)(1)

Acreage is operated by both Newfield and XTO, and is situated in the highly prolific southern extension of the Karnes Trough

– XTO and offset operators’ well results and returns among the highest in the Eagle Ford

Significant upside remains:

– Over 50 remaining development opportunities

Over 30 locations with IRRs >100%

– Substantial near-term increase in production from 12 drilled XTO wells (1st production expected by July 2016)

– XTO has conducted several down-spacing pilots in Fashing and is expected to develop its remaining acreage at 460 foot spacing between laterals

– Lower Eagle Ford type curve EUR of over 700 Mboe (7,500 ft lateral, ~90% liquids)

– Austin Chalk potential supported by proximal development by Marathon and other operators

– Further capital and operating cost reductions

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Fashing Acreage Highlight Newfield & Offset Operator Wells

1. Operator (XTO) expected to cap gross production from the 12 WOC wells at 3.0 Mbo/d

Newfield – Maverick County

Primarily operated interest in 41,000 gross / 18,500 net acres in several projects in Maverick County

– Three key areas with potential future development: Burr Ranch (Georgetown), Chittim A (Pearsall Shale), and Mula Creek (San Miguel Tar Sands)

~90 boe/d of current oil-weighted net production

Burr Ranch includes 13 producing Georgetown oil wells with identified drilling locations

– Horizontal development along well defined shear zones in the Georgetown Carbonate; four upside locations have been identified, with potential for several more

Chittim A is a large acreage position along the Chittim Arch with potential for the liquids-rich Pearsall Shale

– Early stage play possessing key fundamental shale-gas elements – fractures, overpressure, and encouraging producing wells (gas and condensate)

Mula Creek includes a large acreage position targeting San Miguel Tar Sands

– 1 billion barrel (OOIP) heavy oil deposit with several historical pilot projects

Southeast Maverick County Glass Ranch position includes 4 Eagle Ford producing wells

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Maverick Acreage Highlight Newfield & Offset Operator Wells

Interested parties are required to execute a Confidentiality Agreement (“CA”) before accessing the Virtual Data Room or attending a Data Room Presentation. The executed CA should be sent to Wil Fischer via e-mail at [email protected]

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June 2016

Process Timing

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S M T W T F S

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July 2016

*Holidays

S M T W T F S

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May 2016

Doug Reynolds Managing Director & Head of U.S.

+1.713.437.5063 [email protected]

Robert Urquhart Director


Tim Pish Director, Geology +1.713.437.5048

[email protected]

Rene McKale Director, Engineering


Max van Adrichem Associate Director, Corporate Finance


Scott Trackwell Associate, Corporate Finance


Cameron Todor Associate, Engineering


Wil Fischer Analyst, Corporate Finance


Geoff Roberts Managing Director & Head of U.S. A&D


Jason Martinez Managing Director +1.713.546.9771

[email protected]

Howard Barnwell Director


Dan Schockling Director, Commercial


Steve Hendrickson Senior Engineer


Eric Monus Vice President, Engineer


Key Events

May 25 • Virtual Data Room Opens

Jun. 1 - Jul. 8 • Physical Data Room Presentations (Scotia Houston Office)

Mid-July • Targeted Bid Date

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Documents

Eagle Ford Acquisition Opportunity - Bank of Montreal Page Document Library/2016... · Eagle Ford Acquisition Opportunity Newfield Exploration . ... Newfield Exploration (“Newfield”