PrimeEnergy Corporation

PrimeEnergy Corporation
Shareholder Meeting
May 22, 2014
|1
Forward Looking Statements
This presentation contains forward-looking information and statements within the meaning of the
Private Securities Litigation Act of 1995. The words “believe,” “expect,” “anticipate,” “plan,” “intend,”
“foresee,” “should,” “would,” “could,” or other similar expressions are intended to identify forwardlooking statements. However, the absence of these results may differ materially from those expressed
or implied by forward-looking statements as a result of many factors and events.
|2
Agenda
Agenda
Administrative Matters
Company Overview including non Oil and Gas Assets
Financial Results
Oil and Gas Reserves
District Activity Review
|3
Administrative Matters
Election of Directors
|4
Company Overview
|5
Prime Energy Profile
Areas of Operations
Organizational Structure
|6
Key Points
Operator of Own Assets
Operational & Technical
Expertise
Balanced Portfolio with
Controlled Use of Capital
Prime is the operator of the majority of its assets.
The Company’s operational team has substantial experience in geology,
engineering, finance and accounting with major and independent oil and
gas companies.
The Company has a balanced portfolio of producing properties, proved
undeveloped properties and an inventory of prospects that provides the
Company with numerous developmental drilling opportunities that are
under the Company’s control.
Acreage Position
The Company has significant HBP acreage in Texas, Oklahoma and
West Virginia.
Ample Liquidity
The Company has over $40 million available under it’s current line of
credit of $140 million.
|7
PrimeEnergy Corporation
Oilfield Service – Overview
PrimeEnergy’s oilfield service subsidiaries perform workovers, well
servicing and roustabout work for E&P customers
•
•
In 2013, the Oilfield Services Group generated $20.6 million in revenues; had $5.2 million in
operating cash flows; and $4.2 million in EBITDA.
For the first quarter of 2014, the Oilfield Services Group generated $5.5 million in revenues;
had $1.4 million in operating cash flows; and $1.2 million in EBITDA.
 Eastern Oil Well Service Company (EOWS) provides workover rig services
and produced and frac water hauling services in South Texas, Oklahoma and
West Virginia. EOWS currently operates three workover rigs and 18 water
transport trucks in South Texas, a pole rig in Garvin County, Oklahoma and a
swab unit in West Virginia.
 EOWS Midland Company currently operates eight service rigs and three hot
oil trucks in West Texas.
 Southwest Oilfield Construction Company (SOCC) is located in Oklahoma
and operates two workover rigs for large E&P customers active in the area.
|8
PrimeEnergy Corporation
Oilfield Service – Core Business Lines
Mustang 450 Series
Pulling Units
Rig
Services
Mustang 550 Series
Pulling Units
Fluid
Management
Hot Oiler Trucks
Mack Vacuum Trucks
Mack Pump Trucks
Ancillary
Equipment
•
•
•
•
•
•
•
Winch Trucks
Gin Trucks
Haul Trucks
Forklifts
Front-end Loaders
Backhoes
Dozers
•
•
•
•
•
•
Excavators
Maintainers
Rollers
Dump Trucks
Belly Dumps
Contract Pumpers
|9
PrimeEnergy Corporation
Oilfield Service – Effect of Equipment Loan on Credit Facility
On July 31, 2013, PrimeEnergy’s Oilfield Service subsidiaries entered into
a $10.0 million Loan and Security Agreement with JP Morgan Chase Bank
(Equipment Loan)
•
•
•
Secured by listed major pieces of field equipment, but excludes a substantial portion of newly acquired
major pieces of field equipment.
Fixed annual interest rate of 3.95%.; monthly payments (principal and interest) of $184,000; final maturity of
July 31, 2018.
As of May 12, 2014, $8.6 million outstanding on the Equipment Loan.
Net Proceeds from Equipment Loan and excess cash flows are used to
pay down on Credit Facility creating capacity
for
futureQ1
development
of oil
Q3 2013
Q4 2013
2014
Totals
and gas properties.
Proceeds from Equipment Loan
Less Debt Service:
Principal Payments
Interest Payments
Add: EBITDA
Less: Equipment Purchases
Net Proceeds to Pay Down on Credit Facility
$ 10,000,000
(151,023)
(32,917)
1,217,785
(1,838,869)
(456,058)
(95,761)
835,499
(3,425,790)
$ 9,194,976 $ (3,142,110) $
(460,577)
(91,242)
1,179,978
(729,513)
(101,354)
$ 10,000,000
(1,067,658)
(219,920)
3,233,262
(5,994,172)
$ 5,951,512
| 10
Financial Results
| 11
PrimeEnergy Corporation
| 12
PrimeEnergy Corporation
| 13
PrimeEnergy Corporation
| 14
PrimeEnergy Corporation
Oil and Gas Reserves
| 15
PrimeEnergy Corporation
| 16
PrimeEnergy Corporation
2013 District Statistics – per SEC Report
| 17
Reserve & Production Overview
Total Proved Reserves
December 2013 Average Daily Production
| 18
Reserves by District
Total Proved Developed Reserves
Total Proved Undeveloped Reserves
| 19
Reserve Direct – Indirect Split
Total Proved Reserves
| 20
PrimeEnergy Corporation
District Review
| 21
Midland District Assets & Activity
 Producing Wells: 350
Average Net Production
 2,200 BOPD
 9,500 MCFPD
 Saltwater Disposals: 9
 Primary Focus on Spraberry/Wolfcamp Field
 Optimal Acreage Position in Permian Basin
 Horizontal Wolfcamp Development
 Active Projects with Apache and Endeavor
Prime Operating Company
2013 Drilling Program
Midland District
2013 Drilling Program
 New Drills: 9 Wells
 9 Wolfberry/Penn Completions
 7 POC (Reagan & Martin County)
 2 Endeavor (Martin County)
Progress
Jan – Present
Timeline
2013 & 2014
 9 Wells Drilled
 8 Wells Completed
 8 Wells Producing
Remaining
 1 Well to Complete*
 1 Well to Produce
* Remaining Completion scheduled for first part of June
Martin County
Ramsey
Strain
Harlow
Schenecker
Stimson Burley
Williams
Nail “P”
Wolfberry Completion
 Wolfberry Completions
 Wolfberry/Penn Completions
 PUD Wells
Margie Bentley
Wolfberry/Penn Completion
PUD
 2013 Wolfberry/Penn Completions
 5 Wolfberry/Penn Completions
 Flowing Well
 50 to 90 BO & 60 to 200 MCF
Martin County WB/Penn Completions
(Production Analysis)
 Completion Analysis (JIP)
 5 Wolfberry/Penn Completions
 4 Completions - Include Dean & Spraberry
 1 Completion - Only Wolfcamp/Penn
 POC Completions
 5 Wolfberry/Penn Completions
 2 completions - Include Dean & Spraberry
 3 Completions - Only Wolfcamp/Penn
Reagan County
A
SANT
6
9
AND
A-5
6
A-466
A-466
BLK M
11
T&P
R
SKINNE
A-129
RADO
COLO
A-89
TEXA
A-915
W
12
A-801
22
1
RR
AND
CLEVEL
GULF
BLK G
A-342
OAD
RAILR
A-172
BLK G
Hartgrove
A-61
2
RAL
CENT
16
A-154
A-154
A-382
S
TEXA
A-171
10
20
18
A-740
A-740
BLK K
8
A-464
Hunt (17)
A-238
21
A-346
A-346
A-486
A-462
A-189
A-189
17
7
6
7
A-715
E RR
DS&
A-467
A-467
SSU
14
1
A-426
11
A-940
A-428
2
A-941
Hunt (13)
A-4
MJ
A-58
13
ANDREWS
A-431
JW
A-448
A-448
A-725
BRONSON
A-468
A-468
A-951
1
3
BLK L
A-713
PJ
A-3
A-3
A-365
A-984
BENTON
Ham Ranch
W T RR
11
A-113
A-460
A-937
SF 1372
A-120
9 1/2
PITTMAN
A-854
MA
G C & S F RR
A-461
LINDLEY
8
A-?
A-?
2
A-384
A-384
7
12
1
SA
&M
G RR
SAN
ANTO
CH CO
NIO DIT
D
14
& P RR
A-914
A-914
Stanley
D & S E RR
A-495
Julie
13
27
A-176
A-21
A-452
A-452
A-174
14
7
8
8
A-410
2 1/2
G C & S F RR
Watkins
E BRANCH
A-112
A-943
EW
G C & S F RR
A-714
A-714
A-132
A-132
WALKER
A-889
A-889
A-817
A-680
A-114
A-114
A-22
1203
27
2
A-195
A-195
1204
2
SF 12723
1230
A-192
A-192
1229
1224
M
A-948
1223
27 1/2
SF 6761
A-900
A-727
A-175
1218
A-726
A-726
1217
A-173
ROACH
1212
TJ
Turner Ranch
T T RR
A-724
13
D & S E RR
4
D
Brown
NEVILLE
A-433
A-433
A-25
E L & R R RR
A-816
A-816
1211
G C & S F RR
A-677
4
G C & S F RR
HARDEMAN
A-676
A-676
T T RR
A-863
3
G C & S F RR
28
G C & S F RR
E L & R R RR
E L & R R RR
A-818
A-675
D & S E RR
D & S E RR
A-169
A-23
1201
A-24
1206
A-177
A-177
1205
1231
D & S E RR
A-506
MA
A-135
A-135
A-388
A-388
1225
LINDLEY
A-118
1222
C C S D & R G N G RR
A-385
1219
A-116
1216
FM
A-9
1213
G C & S F RR
A-164
1210
G C & S F RR
MAGRUDER
9
G C & S F RR
BARTLETT
A-193
A-193
1228
C C S D & R G N G RR
WG
D & S E RR
Weatherby 1219
A-190
1200
A-452
A-909
A-909
Slaughter
9
G C & S F RR
WW
SF 12733
1
A-977
A-46
A-46
A-383
2
20
2
Hunt (15)
1
NCE
BRIGA
10
A-983
1947
AL
A-465
A-465
A-463
E W WALKER
A-716
A-716
HE&
15
5
2
E L & R R RR
A-678
E L & R R RR
E L & R R RR
D & S E RR
A-75
6
G C & S F RR
A-350
D & S E RR
A-975
D & S E RR
A-351
1199
Lucy Lindsey
G C & S F RR
WG
A-168
1202
A-179
BARTLETT
1207
1208
A-133
1232
A-761
1227
A-119
A-119
1226
C C S D & R G N G RR
A-153
1221
FM
A-165
1214
E L & R R RR
M
E L & R R RR
E L & R R RR
A-10
1209
Weatherby 1216
E L & R R RR
A-352
HERRIN
A-679
A-869
1215
MAGRUDER
4
A-117
1220
G C & S F RR
3
Prime Kile / Malone
A-870
A-870
6
1
D & S E RR
G C & S F RR
A-976
17
A-7
A-721
D & S E RR
A-349
18
D & S E RR
WG
5
19
A-201
20
A-74
A-167
BARTLETT
21
A-961
A-960
22
A-194
UNIVERSITY
23
A-517
A-136
A-136
LANDS
G C & S F RR
24
25
A-871
A-134
26
A-386
27
28
JW
29
A-166
30
A-387
UNIVERSITY
31
A-115
BILLS
32
A-8
A-163
Wolfberry Completion
 Wolfberry Completions
 Wolfberry/Penn Completions
 PUD Wells
Wolfberry/Penn Completion
PUD
 2013 Wolfberry/Penn Completions
 1 Wolfberry/Penn Completions
 38 BO & 400 MCF
Reagan County WB/Penn Completions
(Production Analysis)
 POC Completion
 1 Wolfberry/Penn Completion
 Completion - Includes Dean & Spraberry
 Production Comparison
 Flowing & Pumping Production Improved
Midland County
Staton
Wolfberry Completion
 Wolfberry Completions
 Wolfberry/Penn Completions
 PUD Wells
Wolfberry/Penn Completion
PUD
 2013 Wolfberry/Penn Completions
 1 Wolfberry/Penn Completions
 Flowing Well
 120 BO & 200 MCF
Midland County WB/Penn Completions
(Production Analysis)
 POC Completion
 1 Wolfberry/Penn Completion
 Completion - Only Wolfcamp Penn
 Production Analysis
 3,595 bbls Oil First Month
 Projected One Year Pay Out
Horizontal Wolfcamp Development
 Horizontal Wolfcamp Drilling & Completion
 Horizontal Drilling Activity Increasing
 5,000 – 10,000’ Laterals
 Cost $6,000,000 – 8,000,000
 Initial Production Rates
 500 – 1500 BO & 300 -900 MCF
Martin
Midland
Howard
Glasscock
Upton
Reagan
 Areas of Interest
 Upton & Reagan County
 Intervals of Interest
 Upper Wolfcamp
 Middle Wolfcamp
Midland District Acreage Position
 Spraberry and Wolfcamp Intervals Found in Midland Basin
 Optimal Acreage Position Located in Midland Basin
 Horizontal Wolfcamp Development
Horizontal Activity
5,000’
6,000’
7,000’
Upper Spraberry
Lower Spraberry
8,000’
Dean
9,000’
Upper Wolfcamp
Middle Wolfcamp
Lower Wolfcamp
10,000’
Cline
Strawn
11,000’
Atoka
8,000’
10,000’
Horizontal Recovery Potential
 Excellent Spraberry and Wolfcamp Oil in Place
 Mud Logs Confirm
 Estimated Potential Recovery up to 75 BBOE
 Wolfcamp A & B Largest Portions
 Largest Oil Field in the United States
Horizontal Wolfcamp
PUDs & Future Drilling Locations
Upton County
Cowden
PUDs
Connell Estate
16
Future
Drilling
Locations
Total
32
48
Martin County
Reagan County
Area One
Area Two
32
16
56
40
268
332
Area Three
Schenecker
124
16
16
Apache Joint Venture
Upton County
Cowden & Connell Estate Area
 Gross Acres – 2560
 Apache – 52.47% (1343 Ac)
 Prime – 47.53% (1217 Ac)
 Number of PUDs – 16
 Number of Future Drilling Locations – 32
Economics
 Investment – 7.15 M
 495 MBOE
 Pay Out – 2.25 years*
 ROR – 44%*
* Economics run at $90 oil and $4
Apache
Joint Venture
Horizontal
PUDs
Upton
County
Horizontal
Activity
Apache
Miller Lease
Apache – CC Lease
Miller 36 #2 HU
IP – 756 BOEPD
3626 HM
IP – 909 BOEPD
Miller 36 #1 HM
IP – 1241 BOEPD
3627 HU
IP – 534 BOEPD
Pioneer
Giddings Lease
Giddings 2041 H
IP – 807 BOEPD
Cowden
Giddings 2073 H
IP – 706 BOEPD
2014 Drilling Program
Planned Drilling & Completion Activity
 Upton County
 12 Horizontal Wolfcamp
 Upper Wolfcamp
 Middle Wolfcamp
 Operator
 Drilling & Completion – Apache
 Production – Prime Operating Company
Drilling Budget
 Individual Well Cost
 $7,000,000
 Estimated Project Cost
 $42,000,000
Apache
Joint Venture
Future Drilling
Locations
Upton
County
Horizontal
Activity
Apache
Miller Lease
Apache – CC Lease
Miller 36 #2 HU
IP – 756 BOEPD
3626 HM
IP – 909 BOEPD
Miller 36 #1 HM
IP – 1241 BOEPD
3627 HU
IP – 534 BOEPD
Connell Estate
Pioneer
Giddings Lease
Giddings 2041 H
IP – 807 BOEPD
Cowden
Giddings 2073 H
IP – 706 BOEPD
Horizontal Wolfcamp
Reagan County Acreage
BLK C
OAD
RAILR
A-304
1
11
SABIN
A-26
13
13
A-333
9
VIEW
LONG
A-325
A-910
A-265
A-265
10
E
AND
3
A-178
12
A-104
Y
VALLE
A-821
2
RW
A-340
14
A-107
A-107
MC GREW
8
A-819
4
BLK E
A-334
A-334
15
MAY
20
7
OAD
RAILR
A-324
5
DG
A-28
A-105
A-77
13
A-820
Y
SABIN
19
VALLE
E
12
A-337
BLK E
14
A-730
A-326
AND
18
VIEW
LONG
11
A-355
A-108
A-404
15
16
A-78
A-766
17
A-336
10
16
A-327
A-897
9
OAD
RAILR
A-27
BLK E
16
A-807
A-807
17
A-225
RY
GOME
MONT
A-85
22
8
1
G
HE&
A-331
BLK E
BLK E
A-212
23
NSU
20
W T RR
7
19
A-788
G RR
C
A-432
A-855
A-156
24
19
17
BLK F
A-430
30
1
9
2
OAD
RAILR
A-106
HE&
A-341
A-363
3
4
Focus Area
Three
A-109
A-243
A-243
RY
GOME
MONT
A-214
A-214
26
5
A-789
10
A-86
BLK G
RAL
CENT
A-6
A-6
10
A-87
A-84
4
A-343
RR
8
3
OAD
RAILR
A FE
SANT
A-83
9
AND
A-5
A-5
6
A-466
BLK M
TEXA
W
12
A-61
BLK G
2
RAL
CENT
16
A-486
A-462
7
A-154
A-154
A-382
TEXAS
10
20
18
A-740
6
A-189
A-189
17
A-171
BLK K
8
SSU
OAD
RAILR
A-172
A-715
E RR
DS&
D
CLEVELAN
14
Hunt (17)
BLK G
Hartgrove
A-464
A-426
11
A-940
A-238
A-238
A-428
2
A-941
21
A-346
Hunt (13)
A-4
A-4
MJ
A-58
A-58
13
ANDREWS
A-431
A-468
A-951
A-951
1
Ham Ranch
3
BRIG
15
11
10
A-460
A-460
A-983
A-983
7
194
9 1/2
PITTMAN
A-854
A-854
A-977
A-977
LINDLEY
A-?
A-?
A-384
A-384
7
12
1
&M
G RR
SAN
CH CO
O DIT
ANTONI
14
RR
D&P
A-914
Stanley
A-25
4
Brown
D
A-410
A-410
SF 6761
2 1/2
Hunt
(15)
D & S E RR
A-495
13
Julie
27
A-176
A-176
A-112
A-112
7
1204
G C & S F RR
1230
EW
G C & S F RR
A-132
WALKER
A-889
A-817
A-817
A-680
A-680
A-114
27
2
SF 12723
A-192
1229
1224
M
A-948
A-948
1223
A-727
A-727
A-175
A-175
1218
A-726
1217
A-173
A-173
ROACH
1212
A-676
1211
G C & S F RR
A-677
A-677
4
G C & S F RR
HARDEMAN
8
8
A-714
A-195
2
Turner Ranch
28
G C & S F RR
E L & R R RR
E L & R R RR
A-818
A-818
A-675
A-675
D & S E RR
D & S E RR
A-169
A-169
A-23
A-23
1201
A-24
A-24
1206
A-177
1205
1231
Watkins
Weatherby 1219
A-193
A-135
A-118
A-118
1222
C C S D & R G N G RR
A-385
A-385
1219
Focus Area
One
5
E L & R R RR
E L & R R RR
E L & R R RR
D & S E RR
G C & S F RR
D & S E RR
A-975
A-975
D & S E RR
A-351
A-351
A-168
A-168
1202
G C & S F RR
A-179
A-179
A-870
1208
C C S D & R G N G RR
A-761
1227
A-119
1226
A-153
A-153
1221
A-869
A-869
1215
E L & R R RR
E L & R R RR
E L & R R RR
D & S E RR
A-167
1
A-7
A-7
A-721
A-721
WG
5
BARTLETT
21
A-961
A-961
A-960
A-960
22
A-194
A-194
23
G C & S F RR
A-517
A-517
A-136
UNIVERSITY
6
D & S E RR
D & S E RR
20
A-679
A-679
A-10
A-10
1209
Weatherby 1216
G C & S F RR
A-976
A-976
A-349
A-349
19
A-74
6
A-165
A-165
1214
E L & R R RR
A-352
A-352
HERRIN
A-117
A-117
1220
G C & S F RR
MAGRUDER
A-678
A-678
Prime Kile / Malone
A-133
A-133
1232
FM
3
M
2
WG
BARTLETT
1207
4
A-506
A-506
LINDLEY
A-164
A-164
1210
G C & S F RR
MAGRUDER
A-75
A-75
1199
9
MA
A-9
A-9
1213
G C & S F RR
A-452
A-452
G C & S F RR
BARTLETT
A-116
A-116
1216
FM
A-350
D & S E RR
A-388
1225
C C S D & R G N G RR
Focus Area
Two
WG
D & S E RR
1228
18
T T RR
A-863
A-863
3
G C & S F RR
A-190
1200
17
A-452
A-452
A-174
14
A-943
A-943
A-22
A-22
1203
TJ
T T RR
A-724
A-724
13
D & S E RR
E BRANCH
NEVILLE
A-433
A-433
A-21
A-900
E L & R R RR
A-816
A-816
27 1/2
SA
A-201
A-201
MA
G C & S F RR
A-461
8
Lucy Lindsey
9
G C & S F RR
WW
SF 12733
SF 13721
A-120
A-120
Slaughter
A-383
2
20
2
A-937
A-937
1
ANCE
A-46
2
A-3
A-463
A-113
AL
A-465
A-448
BRONSON
A-365
A-365
A-984
A-984
A-909
A-909
HE&
JW
A-725
BLK L
A-713
PJ
BENTON
A-716
W T RR
E W WALKER
A-467
SKINNER
A-915
A-801
GULF
A-342
A-342
1
7
LG
GEE
JE
A-129
RADO
COLO
A-89
A-89
22
RR
A-405
HAMILTON
A-381
8
A-88
7
6
JWN
5
A-802
C&M
A-923
T&P
21
22
9
A-62
11
18
A-362
3
A-896
BKL H
A-439
27
4
A-344
A-477
A-82
OAD
RAILR
BAKER
W
BLK F
28
A-161
JST
A-806
5
TAYLOR
29
2
W T RR
5
VALLEY
SABINE
MRS S
A-81
A-213
A-213
AND
SA
GLASS
& M RR
A-79
25
A-804
A-804
18
A-330
MRS S W
SUTPHEN
A-80
A-429
8
A-366
21
22
RAL
CENT
A-211
21
LIN
SUTHER
A-805
6
A-364
AND
A-335
BLK D
24
25
A-871
LANDS
A-134
A-134
26
27
A-386
A-386
28
JW
29
A-166
A-166
30
A-387
A-387
UNIVERSITY
31
A-115
A-115
BILLS
32
A-8
A-8
A-163
A-163
BLK 58
SF 15650
LANDS
A-U357
A-U359
A-U359
34
BLK 58
A-U360
A-U360
35
A-991
A-991
A-U358
A-U358
33
UNIVERSITY
1
A-U362
A-U362
1
A-U363
2
A-389
A-389
A-U364
3
A-U365
4
A-U366
5
BLK 58
A-U367
A-U367
6
A-U368
A-U368
1
2
A-U369
A-U369
A-U370
A-U370
JW
3
A-U371
A-U371
4
WHATELY
5
6
A-U70
A-U70
A-U71
28
A-31
A-31
LANDS
A-U361
A-U361
36
Horizontal
PUDs
Reagan
County
Horizontal
Activity
Enduring
API #: 383-38-244
IP – 1338 BOEPD
Hunt 15 & 17
Enduring
API #: 383-38-384
IP – 1779 BOEPD
Enduring
API #: 383-38-203
IP – 1201 BOEPD
Watkins
Future
Drilling
Locations
Focus
Area
One
Enduring
API #: 383-38-244
IP – 1338 BOEPD
Hunt 15 & 17
Ham Ranch
Enduring
API #: 383-38-384
IP – 1779 BOEPD
Enduring
API #: 383-38-203
IP – 1201 BOEPD
Stanley
Watkins
Brown
Turner Ranch
Reagan
County
Horizontal
Activity
Horizontal
PUDs
Weatherby 1219
Pioneer
University 10-9
I – 471 BOEPD
J – 879 BOEPD
K – 568 BOEPD
Weatherby 1216
AB
Pioneer
University 27
A – 1397 BOEPD
B – 517 BOEPD
C – 1301 BOEPD
D – 1127 BOEPD
Pioneer
University 28
E – 754 BOEPD
F – 679 BOEPD
Pioneer
University 29
G – 497 BOEPD
H – 500 BOEPD
Pioneer
University 10-17
L – 492 BOEPD
M – 629 BOEPD
N – 450 BOEPD
CD EF
GH
IJK
LMN OP
Q
Pioneer
University 10-18
O – 693 BOEPD
P – 575 BOEPD
Q – 630 BOEPD
Future
Drilling
Locations
Focus
Area
Two
Weatherby 1219
Prime Kile
Malone
Pioneer
University 10-9
I – 471 BOEPD
J – 879 BOEPD
K – 568 BOEPD
Weatherby 1216
AB
Pioneer
University 27
A – 1397 BOEPD
B – 517 BOEPD
C – 1301 BOEPD
D – 1127 BOEPD
Pioneer
University 28
E – 754 BOEPD
F – 679 BOEPD
Pioneer
University 29
G – 497 BOEPD
H – 500 BOEPD
CD EF
Pioneer
University 10-17
L – 492 BOEPD
M – 629 BOEPD
N – 450 BOEPD
GH
IJK
LMN OP
Q
Pioneer
University 10-18
O – 693 BOEPD
P – 575 BOEPD
Q – 630 BOEPD
Reagan
County
Horizontal
Activity
Apache
Rocker B
API #: 383-38-428
IP – 843 BOEPD
Apache
Rocker B
API #: 383-38-429
IP – 763 BOEPD
Future
Drilling
Locations
Focus
Area
Three
Apache
Rocker B
API #: 383-38-428
IP – 843 BOEPD
NSU
Apache
Rocker B
API #: 383-38-429
IP – 763 BOEPD
Hughes Alpine
West
SSU
Charles Hughes
Horizontal Wolfcamp
PUDs & Future Drilling Locations
Upton County
Cowden
PUDs
Connell Estate
16
Future
Drilling
Locations
Total
32
48
Martin County
Reagan County
Area One
Area Two
32
16
56
40
Area Three
Schenecker
124
16
268
332
Investment - $1.5 B
16
Future Horizontal Activity
5,000’
5,000’
6,000’
7,000’
Clearfork
Upper Spraberry
Lower Spraberry
8,000’
Dean
9,000’
Upper Wolfcamp
Middle Wolfcamp
Lower Wolfcamp
10,000’
Cline
Strawn
11,000’
Atoka
8,000’
10,000’
Saltwater Disposal Systems
 POC Operates Nine Saltwater Disposals Systems
 Martin, Midland, Gaines & Reagan County
 Essential for Economic Operations
 Additional Volume Available for Horizontal Development & 3rd Party
S WD
Saltwater + Disposals = $
Reagan County – SWD Systems




Brown SWD
 8,000 bbls/day Capacity

Watkins SWD
 8,000 bbls/day Capacity
SWD Systems Offset Large Water Production
Continuous Operations Possible at Brown & Watkins
Agreements in Place for 3rd Party Water
 Tall City
 Enduring
 Apache

Zullette Hughes SWD
 10,000 bbls/day Capacity
SWD Systems

Brown SWD
Monthly Net Income
 Projected - $62,500

Skim Oil Sales – 2 Loads

Watkins SWD
Monthly Net Income
 Projected - $22,000

Skim Oil Sales – 1 Load
SWD Yearly Net Income
$1,692,000

Zullette Hughes SWD
Monthly Net Income
 Projected - $45,000

Skim Oil Sales – 2 Loads

Nail SWD
Monthly Net Income
 Projected - $11,500

Skim Oil Sales – 2 Loads/yr
QUESTIONS
PRIME OPERATING COMPANY
Active Development Areas in
Oklahoma – Grant, Canadian,
& Garvin Co.
OKLAHOMA DISTRICT
PRIME OPERATING COMPANY
Oklahoma Key Attributes of a Core Asset


Operated Wells: 240 Active Producers & 42 Active
Injectors.
2013 Average Production/Activity for Oklahoma:



498 BOPD & 3,822 MCFPD
Prime Sold 754.94 acres of lease hold in Grant Co., to Primexx for
$754,940. Prime retained 1411.19 Net Acres in Grant Co. for Horizontal
Development.
2014 Average Production/Activity for Oklahoma thru
February:


555 BOPD & 3,652 MCFPD
Prime sold 3 year Term Assignment in Canadian & Kingfisher Co., 1481.58
acres for $2,773,264 and picked up some ORRI as to sale to Felix Energy.
Prime retained approximately 5036 Net Acres in Canadian Co, & 387 Net
Acres in Kingfisher Co. for Horizontal Development.
Eola Robberson
Garvin Co. Production and Future Development
•
Prior meeting Prime proposed 6 New PUDs to be drilled in 2013.
PDPs
Well Name
Etta Gibson #14 (Garvin Co.)
RSSU #2-7 (Garvin Co. )
RSSU #12-12 ( Garvin Co. )
Etta Gibson #15 (Garvin Co. )
F.H. Harris #23 ( Garvin Co. )
RSSU #10-24 ( Garvin Co. )
•
Production
Start Date
5/25/2013
6/23/2013
7/3/2013
11/5/2013
12/18/2013
12/19/2013
Avg Cash-Flow
Expenditure per/mth - Mar 20
Comments
$164,844
$52,800
Paid-Out 3 months.
$188,483
$6,200
Est Payout 31 months.
$207,322
$29,100
Paid-Out 7 months.
$217,252
$38,000
Est Payout 6 months.
$241,632
$3,200
Est Payout 76 months.
$248,954
$42,700
Est Payout 6 months.
Internal
ROR %
100% plus
30.0%
100% plus
100% plus
10.0%
100% plus
Proposed 1 re-completion in 2013.
PDP
Well Name
Etta Gibson #13 ( Garvin Co. )
•
Production
Avg Cash-Flow
Start Date Expenditure per/mth - Mar 20
Comments
1/30/2014
$114,791
$25,000
Est Payout 5 months.
Internal
ROR %
100% plus
Future Development, 3 PUDs for 2014.
PUDs
Well Name
Etta Gibson #16 ( Garvin Co. )
RSSU #16-50 ( Garvin Co. )
RSSU #4-3 ( Garvin Co. )
Est Spud
Start Date
8/15/2014
9/1/2014
9/15/2014
Expenditure
Comments
$211,000
Est 15 BOPD at $75 oil, payout 10 months.
$221,000
Est 15 BOPD at $75 oil, payout 11 months.
$223,000
Est 10 BOPD at $75 oil, payout 19 months.
Internal
ROR %
100% plus
100% plus
50.0%
Oklahoma Horizontal
PUDs & Future Drilling Prospects
Canadian Co.
Grant Co.
Garvin Co.
Kingfisher Co.
5036 Net Acres
1411 Net Acres
386 Net Acres
387 Net Acres
PUDs
3
5
0
0
Future
Drilling
16
12
3
3
Est Total Expenditure
$12,500,000
Total
19
Est Total Expenditure
$1,500,000
17
3
Est Total Expenditure
$22,000,000
3
Est Total Expenditure
$2,000,000
Combined
Total
42
Est Total Combined Expenditure
$38,000,000
Non-Operated Horizontal
Development – Grant Co.
 Prior meeting, we had 4 Horizontal Wells (PDPs) in Grant Co.
PDPs
Well Name
Bertha #1H (Grant Co.)
Barbara #1H (Grant Co.)
Myrna #1H (Grant Co.)
Adeline #1H (Grant Co.)
Production
Start Date
9/12/2012
1/16/2013
6/27/2013
10/23/2013
Prime's
WI
18.750%
10.625%
42.234%
21.249%
Prime's
Expenditure
$801,784
$359,247
$1,589,190
$723,757
Comments
Recouped 61% in 20 mths, Est PO 36 Mths
Recouped 99% in 16 mths, Est PO 17 Mths
Recouped 146% in 11 mths, PO 4 Mths
Recouped 28% in 6 mths, Est PO 24 Mths
Internal
ROR %
33.3%
60.0%
100% plus
50.0%
 Prior meeting, we proposed 6 New Horizontal Wells (PUDs) in Grant Co, 4 of those
are now PDPs & 2 are BP as of April 30, 2014.
, presently producing 158 BOEPD,
Cum 25,390
Apr
POP 4/2/14, presently producing 379 BOEPD,
PDPs
Production
Prime's BOE thru
Prime's
Internal
Cum 8,427
BOE
thru Apr
Recouped 5% in 1 month
of $1,048,753 Est Expenditure.
Well
Name
Start2014.
Date Prime’s
WIWI 9.375%.
Expenditure
ROR %
Comments
Estimated
Payout
Barbara #2H (Grant Co.)
12/6/2013
10.714%
$418,096
Recouped 13% in 5 mths, Est PO 42 Mths
20.0%
Myrna #2H (Grant Co.)
Lebeda #1H (Grant Co.)
Virgil #1H (Grant Co.)
1/15/2014
1/21/2014
2/20/2014
44.609%
10.625%
50.000%
$1,589,460
$388,408
$1,613,251
Recouped 36% in 4 mths, Est PO 24 Mths
Recouped 49% in 4 mths, Est PO 18 Mths
Recouped 37% in 3 mths, Est PO 24 Mths
50.0%
60.0%
50.0%
Behind Pipe
6
months.
Well
Name
Lebeda #2H (Grant Co.)
Virgil #2H (Grant Co.)
SPUD
Date
3/21/2014
4/5/2014
Prime's
WI
9.961%
50.000%
Prime's Share
Internal
Est-Expenditure
ROR %
Comments
$327,346
TD 4/7/14. WOC. 8/8th EUR-124 MBO-372 MM 50.0%
$1,792,575
TD 4/25/14. WOC. 8/8th EUR-121 MBO-255 MM 50.0%
Non-Operated Horizontal
Development – Grant Co.
 Non-Op Horizontal Wells (PUDs) for 2014 & 2015 in Grant Co.
2014 & 2015 PUDs
Well Name
Gott #11-1H (Grant Co.) PUD
Schmitz #2-1H (Grant Co.) PUD
Bertha #25-2H (Grant Co.) PUD
Adeline #31-2H (Grant Co.) PUD
Virgil #1-3H (Grant Co.) PUD
Est Spud
Date
9/30/2014
10/30/2014
12/24/2014
1/25/2015
9/1/2015
Prime's
WI
29.883%
19.922%
18.750%
19.921%
50.000%
Prime's Share
Comments
Est-Expenditure
$1,075,781
Mississippian, not yet proposed. 8/8th EUR-121 MBO-254 MMCF.
$717,188
Mississippian, not yet proposed. 8/8th EUR-121 MBO-254 MMCF.
$675,000
Mississippian, not yet proposed. 8/8th EUR-202 MBO-585 MMCF.
$706,806
Mississippian, proposed & included in study. 8/8th EUR-129 MBO-323 MMCF.
$1,800,000
Mississippian, not yet proposed. 8/8th EUR-121 MBO-254 MMCF.
Internal
ROR %
50.0%
50.0%
70.0%
50.0%
50.0%
Next slide is map of Grant Co., showing PDPs, PUDs & also Future Drilling Prospects.
Prime has 1411 Net Acres in the Grant Co. Properties.
Non-Operated Horizontal
Development – Canadian Co.
 Prior meeting, we had 1 Horizontal Well (PDPs) in Canadian Co.
PDPs
Well Name
Kremeier #1H-18X (Canadian Co.)
Production
Prime's
Start Date
WI
9/14/2013
7.638%
Prime's
Expenditure
$992,744
Internal
ROR %
Comments
Recouped 29% in 8 mths, Est PO 36 Mths 33.3%
 Prior meeting, we proposed 3 New Horizontal Wells - ( 2 PUDs ) & ( 1 PBUD ) in
Canadian Co., 1 of those is now PDPs. We are adding 1 New Horizontal Well
(PBUD) to be drilled in Canadian Co. for 2014.
, presently producing 158 BOEPD,
Cum 25,390
BOE thru
Apr
POP 4/2/14, presently producing 379 BOEPD,
PDPs
Production
Prime's
Prime's
Internal
Cum 8,427
BOE
thru
Apr
2014.
Prime’s
WI
9.375%.
Recouped
5%
in
1
month
of
$1,048,753
Est
Expenditure.
Well Name
Start Date
WI
Expenditure
ROR %
Comments
Estimated
Payout
Bohlman #1H-34X (Canadian Co.)
4/2/2014
9.375%
$1,048,753
Recouped 5% in 1 mth, Est PO 36 Mths
33.3%
2014 PUDs
Est Spud
Well Name
Date
Peters #1H-15X (Canadian Co.) PUD 10/15/2014
Prime's Prime's Share
Internal
WI
Est-Expenditure
ROR %
Comments
11.250%
$1,244,531
Woodford, proposed & included in study. 8/8th EUR-421 MBO-686 MMCF. 33.3%
6
months.
2014 PBUDs
Est Spud
Well Name
Date
Slash C #1H-17X (Canadian Co.) PBUD 6/1/2014
Avanti #3526-4H (Canadian Co.) PBUD 10/1/2014
Prime's
WI
1.556%
3.125%
Prime's Share
Est-Expenditure
Comments
$151,837
Woodford, proposed & included in study.
$351,903
Woodford, proposed & included in study.
Internal
ROR %
33.3%
33.3%
Prior meeting, we proposed 3 New Horizontal Wells - ( 2 PUDs ) & ( 1 PBUD ) in
Canadian Co., 1 of those is now PDPs. We are adding 1 New Horizontal Well
(PBUD) to be drilled in Canadian Co. for 2014.
Non-Operated Horizontal
Development – Beaver Co.
 Prior meeting, we had 2 Horizontal Wells (PDPs) in Beaver Co.
PDPs
Well Name
LaMaster #1H (Beaver Co.)
LaMaster #2H (Beaver Co.)
Production
Prime's
Start Date
WI
10/8/2012
5.441%
5/12/2013
5.441%
Prime's
Expenditure
$302,846
$309,951
Comments
Recouped 60% in 19 mths, Est PO 48 Mths
Recouped 81% in 12 mths, Est PO 21 Mths
Internal
ROR %
19.0%
40.0%
Horizontal
Development – Garvin Co.
 Next slide is Garvin Co. Map that shows Horizontal Activity that is North &
Northwest of our properties. Prime has a Total of 386 Net Acres in this area
that would hold deep rights that could be developed.
PrimeEnergy’s Value in Chase
•
•
•
•
45% ownership in Chase
Total investment in Chase - $4.13 MM
Recovered 100% of its investment plus $500 M
Pv9 Proved and Probable (Bank Pricing) $11.880 MM
– Net oil reserves – 294.1 MBO
– Net gas reserves – 1,815.85 MMcf
• Yearly net income - $3.14 MM
• Goal to continue growing Chase through cash
flow re-investment
CHASE’S Key Properties Ranked on
Monthly Cash Flow ($ Net to Prime)
Five Key Assets
•
•
•
•
•
Camptown Field - Newton Co., Tx
Segno Field Deep – Polk Co., Tx
Segno Field Shallow – Polk Co., Tx
Winnie Field – Chambers Co., Tx
Bon Wier Field – Newton Co., Tx
$105,750
$ 87,075
$ 40,500
$ 24,750
$ 24,075
Prime Operating Company
APPALACHIAN BASIN
MAY 2014 PRESENTATION
Operations:
496 Producing Wells
21,000 Acres HBP
in 11 Counties
Arnoldsburg - field office
Charleston - Main Office
Russet Field –
Marcellus Potential
PrimeEnergy
Leasehold:
Noble –
Normantown
6 well Pad
- 4171 Gross Acres
- 3052 Net Acres
3 miles
Calhoun County, WV
RUSSET FIELD –
LOWER HURON HORIZONTAL OIL PLAY
Proven Lower Huron Oil Field
Cum to date:
855,000 BO, 6,049 MMCF
Horizontal Potential :
+20 Laterals
3500’ - 5000’ in length
Idealized
Representation of
4000’ Laterals
Core Area
Calhoun County
Gilmer County