Investor Presentation
Transcription
Investor Presentation
Baron Energy, Inc. Investor Presentation June 12, 2015 Forward-Looking Statements Certain statements contained herein regarding future expectations, access to public capital markets, plans for acquisitions and dispositions, oil and gas reserves, exploration, development, production and pricing may be regarded as "forward-looking statements" within the meaning of the Securities Litigation Reform Act. They are subject to various risks, such as operating hazards, drilling risks, the inherent uncertainties in interpreting engineering data relating to underground accumulations of oil and gas, as well as other risks discussed in detail in the Company's periodic reports and other documents filed with the SEC. Actual results may vary materially. Any number of factors could cause actual results to differ materially from those in the forward-looking statements, including, but not limited to, the volatility of oil and gas prices, the costs and results of drilling and operations, the timing of production, mechanical and other inherent risks associated with oil and gas production, weather, the availability of drilling equipment, changes in interest rates, litigation, uncertainties about reserve estimates, environmental risks and other risks and uncertainties set forth in Company's periodic reports and other documents filed with the SEC. The Company undertakes no obligation to publicly update or revise any forward-looking statements. 6/12/2015 www.baronenergy.com 2 Company Overview Baron Energy, Inc. (TKR: BROE) is an independent petroleum company engaged in the acquisition, development, and production of crude oil and natural gas in North America. We leverage the substantial experience of our management team to acquire, operate, and grow a portfolio of low-risk producing oil and gas properties with meaningful near-term upside and long-term production. Baron owns and operates oil and gas properties in South and Central Texas. The company is headquartered in San Marcos, Texas. 6/12/2015 www.baronenergy.com 3 Investment Highlights Seasoned and incentivized management team 35 years industry experience on average 40% ownership creates shareholder alignment Significant asset base in place 8,000+ acres; 100% operated; 75-100% working interest Multi-year development drilling inventory; 50-year reserve life Low-risk vertical and horizontal oil wells; multiple pay zones: 90% oil weighted Ramp-up in production and revenue targeted by year-end 2015 via new drills and recompletions Successful ramp-up will significantly increase production and revenue Working to become fully SEC compliant; upgrade to the OTC exchange by year-end 2015 Listing upgrade will provide company exposure to new investors and increase shareholder liquidity 6/12/2015 www.baronenergy.com 4 Company Overview HQ in San Marcos, Texas Pink Sheets: BROE Common shares outstanding (est): 132 million/15 million float Current price (6/12/15): $0.10/share 3 month average volume: 5,975 shares/day 52 week range: $0.02 - $0.15/share Current Market Cap: $13.2 million Total Debt (est): $11.2 million (includes VPP) www.baronenergy.com 1) VPP = Volumetric Production Payment 6/12/2015 www.baronenergy.com 5 Management Team Ronnie L. Steinocher, P.E. Chairman, President and CEO Lisa P. Hamilton Executive Vice President, CFO and Director Management team has worked together for more than 23 years 6/12/2015 • 35 years of oil and gas experience including 18 years with a major oil company and 14 years as owner/operator • Extensive experience in drilling, engineering, production operations, business development, and general management • Licensed Professional Engineer in Texas since 1985 • 35 years of oil and gas experience including 20 years with a major oil company and 14 years as owner/operator • Extensive experience in finance, land, contracts, production operations, business development, and general management • BS in Business and Commerce with Highest Honors • Business development; North America and International • Acquisitions/Divestments; > 100 transactions since 2002 • Drilling and production operations • Private and public companies www.baronenergy.com 6 Board of Directors Ronnie L. Steinocher, P.E. | Chairman, President and CEO 35 years of oil and gas experience; 18 years with a major oil company; 14 years as owner/operator Extensive experience in drilling, engineering, production, business development, and general management BS in Architecture, The University of Texas at Arlington; BS in Civil Engineering, The University of Texas at Austin Licensed professional engineer in Texas since 1985; member of Society of Petroleum Engineers since 1983 Lisa P. Hamilton | Executive Vice President, CFO and Director 35 years of oil and gas experience; 20 years with a major oil company; 14 years as an owner/operator Extensive experience in finance, land, contracts, operations, business development, and general management BS in Business and Commerce with Highest Honors, University of Houston - Downtown 6/12/2015 www.baronenergy.com 7 Current Status Company-Wide Baron operates 100% of all properties 75-100% WI (working interest) ownership; 56-77% NRI (net royalty interest) 225 BOEPD gross / 150 BOEPD net; 90% oil 16 producers; 2 SWD wells 8,106 acres gross Multi-year drilling inventory Reserve life > 50 Years 6/12/2015 www.baronenergy.com 8 Production Focus Areas N TEXAS HQ San Marcos County of Operations 6/12/2015 www.baronenergy.com 9 Oil and Gas Reserves Category Crude Oil Natural Gas Total (Bbls) (Mcf) (Boe) PDP 252,368 279,917 302,353 $5,430,895 PDNP 123,270 124,074 145,426 $2,047,158 PUD 893,626 739,144 1,025,616 $9,969,410 Total Proved 1,269,264 1,143,135 1,473,395 $17,447,463 Probable 1,114,114 114,079 1,134,485 $8,904,510 Total 2P 2,383,378 1,257,214 2,607,881 $26,351,973 Possible 1,276,450 595,820 1,382,846 $13,734,950 Total 3P 3,659,828 1,853,034 3,990,727 $40,086,923 1) 2) 3) 6/12/2015 PV-10 As of May 1, 2015 NYMEX strip pricing PGH Petroleum and Environmental Engineers, LLC, independent 3rd party www.baronenergy.com 10 Production and Projected Production and Projected 900 800 Drilling Program to begin in July 2015 to ramp-up production Gross BOEPD 700 600 500 Frio County 400 Taylor County 300 200 100 0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 2014-2015 1) 2) 3) 6/12/2015 Production at end of Q 3-4Q projections based on current capex and drilling schedule Projected production is base case and may vary up or down depending on well results www.baronenergy.com 11 2015 Targets Continue development of properties 3-4Q Execute ramp-up in production Become fully SEC compliant; trade on the OTC exchange Complete audited financials; complete SEC filings Complete divestment of non-core properties Sell by year-end (pending market conditions) Maintain current low-cost G&A structure 6/12/2015 www.baronenergy.com 12 Frio County, South Texas 100% operated properties 89-100% WI/64.15%-77% NRI Gross 153BOPD/170 MCFPD/180 BOEPD (134 BOEPD net) 14 producers; 90% Oil 7,497 gross acres; 8 producing leases Multi-year drilling inventory – Multiple production targets (Olmos Sand, San Miguel, Austin Chalk, Eagle Ford Shale, Buda Lime, Pearsall Shale) • Horizontal wells – 100-300 BOPD/well IP’s; 50M-500MBO/well EUR – Some wells are dual-laterals – Possible future multi-lateral completions in some chalk wells • Vertical wells – 30-100 BOPD/well IP’s; 30M-100MBO/well EUR; 40 acre/well spacing – Possible down-spacing to 20 acre/well Reserve life > 50 years 6/12/2015 www.baronenergy.com 13 Austin Chalk Section Austin Chalk has three productive zones: B-1, B-2, and Lower Chalk 5,150’ Top of Chalk Upper Chalk B-1 Upper Chalk B-2 Lower Chalk 5,500’ Base of Chalk Eagle Ford Shale 6/12/2015 www.baronenergy.com 14 First Horizontal Recompletion • December 2014 Baron’s first horizontal recompletion in the Austin Chalk • 96% WI; Baron operated • 2,800’ lateral • Drilling rigs must be capable of drilling 5,000’ plus lateral wells • 67 possible future new wells and recompletions identified • > 50 year reserve life 6/12/2015 www.baronenergy.com 15 Production Systems • Horizontal wells IP at 100-500 BOPD • 50,000 to 150,000 BO EUR per lateral • Large pump jacks are required to move substantial volumes of fluid • Both single lateral and dual lateral wells 6/12/2015 www.baronenergy.com 16 Taylor County, Central Texas 100% operated properties 75% WI/54.75% NRI Gross 25-30 BOPD gross / 14-16 BOPD net 2 producers; 1 SWD; 100% Oil 609 contiguous acres; 2 producing leases Possible future well locations – Flippen Sand Formation at 2,900’ – 10-acre spacing – Open hole completions – 30-60 BOPD/well IP’s; 20-40 MBbl/well EUR – 3 PUD locations permitted to drill; 3 future possible locations Reserve life > 20 years 6/12/2015 www.baronenergy.com 17 Taylor County, Central Texas • Shaffer Leases, Taylor County, Texas • Baron operated with 75%WI • Shallow oil wells with long-lived production • Field has been on production for more than 40 years • A number of future in-field drilling locations on 10 acre spacing; 3 permitted for drilling • Open hole completions should provide high initial production rates for new drills • > 20 year reserve life 6/12/2015 www.baronenergy.com 18 Acquisition Focus Area Baron Energy, Inc. HQ in San Marcos, Texas 6/12/2015 www.baronenergy.com 19 Austin Chalk Trend • Baron is focused on the Austin Chalk trend • Future acquisition priorities & preferences would be on trend in the Austin Chalk 6/12/2015 www.baronenergy.com 20 Acquisition Criteria for Producing Properties Operated properties only; prefer 100% WI Current production > 200 BOEPD per project Focus on oil production Less than 10,000 feet well depth Multiple pay zones Upside via drilling, recompletions, and horizontal wells Long-term production life > 20 years 6/12/2015 www.baronenergy.com 21 Company Contact Baron Energy, Inc. 300 S. C.M. Allen Parkway, Suite 400 San Marcos, Texas 78666-2278 Phone: 512-392-5775 Fax: 512-392-7238 [email protected] www.baronenergy.com 6/12/2015 www.baronenergy.com 22