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Investor Presentation
June 2013
Forward-Looking Statement
Statements made in this presentation that are not historical facts are “forward-looking
statemen...
EVEP Overview
Note: Current yield based on $0.768/unit 1Q13 distribution paid on May 15, 2013. Unit price as of June 19, 2...
Why Invest in EVEP?
▶ Strong long-term performance and growth
▶ Solid, long-lived asset base
▶ Hedging strategy designed t...
Long-term Performance & Growth
Average Daily Production (Mmcfe/d) Capital ($ million)
Adjusted EBITDAX ($ million) Distrib...
▶ Hedges used to reduce the effects of commodity price volatility and
support initial acquisition economics
▶ Hedged appro...
Long-lived, Diverse Asset Base
Total Proved Reserves: 905 Bcfe
Percent Developed: 76%
Percent Gas: 67%
Reserve-Life Index:...
2013 E&P Capital = $90 - $110 Million
Reserves & Capital Spending
8
Estimated Proved Reserves
▶ Base business is performing well
▶ Barnett Shale
♦ Production: ~ 77 Mmcfe/d
 Reached peak production rates since asset ...
EVEP’s Appalachian Evolution
Pre-Utica Appalachia
Utica East Ohio
Midstream Overriding
Royalty Interest
Conventional
Produ...
Our Position in the Utica Shale
11
▶ EVEP and EnerVest combined
have one of the largest
positions in Ohio
♦ > 8,000 wells ...
Recent Developments in the Utica
12
▶ Overall Utica Activity *
♦ 747 wells permitted
♦ 359 wells drilled
♦ 102 wells produ...
Wet Gas and Volatile Oil Windows
▶ Wet Gas Window
♦ Majority of drilling has
helped to de-risk play
♦ Play expanding
north...
Utica Acreage Strategy
14
▶ EVEP and EnerVest began Utica acreage marketing process in 2012
with focus on sale of operated...
Utica Working Interest Acreage
15Note: The total combined EnerVest and EVEP net acreage is 769,700 in Ohio and 156,600 in ...
Utica Overriding Royalty Interest
Acreage
▶ Overriding Royalty Interest
(ORRI) acreage is mostly in
wet gas and oil window...
Midstream Activity Ramping Up
~ 2.6 BCF/d proposed processing projects 4Q12-YE14
Mariner West
Deliver Ethane from SUNOCO
t...
Utica Midstream Investments
Utica East Ohio Midstream – EVEP owns 21%
▶ Gather, process and fractionate wet gas from CHK/E...
UEO – Harrison Hub
19
16 total loading racks
(8 C3, 4 C4, 4 C5+)
CU & OH
main line
Main line
switch
10 total tracks
(4 loa...
Utica Midstream Capital and
EBITDAX
▶ Capital investment of $335-395 million, net to EVEP, over 5 years
▶ Stable, long-ter...
Why Invest in EVEP?
▶ Strong long-term performance and growth
▶ Solid, long-lived asset base
▶ Hedging strategy designed t...
Investor Presentation
June 2013
APPENDIX
24
EnerVest
EV Investors
EnCap
(Limited Partners)
Directors & Officers of
EV Management
EV Energy Partners, L.P.
(Nasdaq: ...
A Strong Strategic Partnership
with EnerVest
▶ EnerVest is recognized as one of
the largest and most successful
managers o...
Source: Ohio Department of Natural Resources – 2012 Shale Production 26
27
Stark Co., OH
EnerVest (1)
Harrison Co., OH
Gulfport (5)
Chesapeake (2)
CNX (1)
Guernsey Co., OH
Anadarko (2)
PDC (2)
G...
Capital Structure
($ millions)
Bank Debt @3/31 $ 445
Senior Notes Due 2019 $ 500
Equity Market Capitalization $ 1,485
Ente...
Historical Financing Strategy
▶ Since 2006, completed $1.9 billion of acquisitions, approximately 60% of
which were financ...
Gas Prices Hedged ($/MMbtu)Gas Volume Hedged (MMbtu/d)
Note: Estimated NYMEX Henry Hub equivalent with basis differentials...
Oil Prices Hedged ($/Bbl)Oil Volume Hedged (Bbl/d)
Commodity Hedging: Oil
31
4,225 4,150 4,158
2,000
-
500
1,000
1,500
2,0...
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EV Energy Partners Investor Presentation at the Credit Suisse MLP and Energy Logistics Conference

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Investor presentation delivered by EV Energy Partners president and CEO Mark Houser at the June 26, 2013 Credit Suisse MLP and Energy Logistics Conference. In the presentation Houser does an extensive review of EV's Utica Shale strategy and their intention to sell some of their leased acreage.

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Transcript of "EV Energy Partners Investor Presentation at the Credit Suisse MLP and Energy Logistics Conference"

  1. 1. Investor Presentation June 2013
  2. 2. Forward-Looking Statement Statements made in this presentation that are not historical facts are “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These statements include information about the sale of our Utica Shale assets, our midstream investments, future plans and other statements which include words such as “anticipates,” “plans,” “projects,” “expects,” “intends,” “believes,” ”should,” and similar expressions of forward-looking information. Forward-looking statements are inherently uncertain and necessarily involve risks that may affect the business prospects and performance of EV Energy Partners, L.P. Actual results may differ materially from those discussed in this presentation. Such risks and uncertainties include, but are not limited to, changes in commodity prices, changes in reserve estimates, requirements and actions of purchasers of properties (including the Utica Shale), changes in the metrics and procedures used to value midstream assets, exploration and development activities in the Utica Shale and elsewhere, the availability and cost of financing, the returns on our capital investments and acquisition strategies, the availability of sufficient cash flow to pay distributions and execute our business plan and general economic conditions. Additional information on risks and uncertainties that could affect our business prospects and performance are provided in the most recent reports of EV Energy Partners with the Securities and Exchange Commission. All forward-looking statements included in this presentation are expressly qualified in their entirety by the foregoing cautionary statements. Any forward-looking statement speaks only as of the date on which such statement is made and EVEP undertakes no obligation to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise. 2
  3. 3. EVEP Overview Note: Current yield based on $0.768/unit 1Q13 distribution paid on May 15, 2013. Unit price as of June 19, 2013. ▶ Upstream MLP delivering solid returns since IPO September 2006 ▶ GP Ownership ♦ EnerVest & Management (76.25%) ♦ Encap (23.75%) ▶ 42.6 million outstanding units ♦ $2.4 billion enterprise value  $1.5 billion equity market cap  $445 million bank debt  $500 million senior notes ▶ Current yield of 9.0% 3
  4. 4. Why Invest in EVEP? ▶ Strong long-term performance and growth ▶ Solid, long-lived asset base ▶ Hedging strategy designed to reduce cash flow volatility ▶ Synergistic relationship with EnerVest ▶ Significant Utica Shale upside ♦ Acreage, overriding royalty interests, and midstream 4
  5. 5. Long-term Performance & Growth Average Daily Production (Mmcfe/d) Capital ($ million) Adjusted EBITDAX ($ million) Distribution Coverage 5Note: 2013E based on 1Q13 actuals and midpoints of 2Q-4Q13 guidance.
  6. 6. ▶ Hedges used to reduce the effects of commodity price volatility and support initial acquisition economics ▶ Hedged approximately 90% for 2013, 80% for 2014 and 70% for 2015 Active Commodity Hedging Strategy 6Note: Percentage hedged based on the midpoint of 2Q-4Q 2013 annual production guidance.
  7. 7. Long-lived, Diverse Asset Base Total Proved Reserves: 905 Bcfe Percent Developed: 76% Percent Gas: 67% Reserve-Life Index: 15 years 2013E Avg. Production: 163 MMcfe/d* Central and East Texas Proved Reserves: 49.4 Bcfe 2012 Production: 18.1 Mmcfe/d Michigan Proved Reserves: 24.4 Bcfe 2012 Production: 6.5 Mmcfe/d Mid-Continent Proved Reserves: 70.0 Bcfe 2012 Production: 21.6 Mmcfe/d San Juan Basin Proved Reserves: 53.5 Bcfe 2012 Production: 8.2 Mmcfe/d Permian Basin Proved Reserves: 43.2 Bcfe 2012 Production: 6.1 Mmcfe/d Monroe Field Proved Reserves: 30.7 Bcfe 2012 Production: 7.1 Mmcfe/d Appalachian Basin Proved Reserves: 100.9 Bcfe 2012 Production: 24.9 Mmcfe/d Barnett Shale Proved Reserves: 532.5 Bcfe 2012 Production: 70.5 Mmcfe/d 7* Based on the midpoint of February 2013 guidance range.
  8. 8. 2013 E&P Capital = $90 - $110 Million Reserves & Capital Spending 8 Estimated Proved Reserves
  9. 9. ▶ Base business is performing well ▶ Barnett Shale ♦ Production: ~ 77 Mmcfe/d  Reached peak production rates since asset purchases  Initial production rates 11% higher ♦ Dropped from 3 to 2 rigs with same expected exit rate for 2013  Reduced refracs, lowered cost on overall drilling  Drilling and completion costs 9% lower ♦ 70 gross wells planned  18 drilled first quarter  14 brought online ▶ Austin Chalk ♦ Production: ~ 13 Mmcfe/d ♦ “Poor boy” horizontal multistage reentries looking encouraging ♦ A-zone multi stage projects – good results  2 wells drilled  3 additional wells planned by year end Operational Performance 9
  10. 10. EVEP’s Appalachian Evolution Pre-Utica Appalachia Utica East Ohio Midstream Overriding Royalty Interest Conventional Production Cardinal Gas Services Midstream Working Interest Acreage Current Appalachia Conventional Production 10
  11. 11. Our Position in the Utica Shale 11 ▶ EVEP and EnerVest combined have one of the largest positions in Ohio ♦ > 8,000 wells operated ♦ > 900,000 HBP acres ♦ Participation in CHK/EV/Total Joint Venture ▶ EVEP’s diversified interest ♦ 177,000 net working interest acres ♦ Overriding royalty interests ♦ Participation in midstream projects through Utica East Ohio and Cardinal Gas Services investments CHK/EV/TOT Joint Venture Black Oil Volatile Oil Wet Gas Dry Gas Black Oil Volatile Oil Wet Gas Dry Gas EVEP WI Acreage CHK/EV/Total JV
  12. 12. Recent Developments in the Utica 12 ▶ Overall Utica Activity * ♦ 747 wells permitted ♦ 359 wells drilled ♦ 102 wells producing ▶ CHK/EV/Total Joint Venture ♦ ~ 235 wells drilled or drilling ♦ Currently 12 rigs running ♦ 67 producing wells ♦ 168 wells in various completion stages (75 wells waiting on pipeline capacity) ♦ Completing wells with more stages, shorter cluster spacing, fewer clusters per stage ♦ Initial production rates significantly improving ♦ Over 540 total wells projected to be drilled through 2014 ▶ Midstream bottleneck disappearing ♦ Natrium plant online in May +200 MMCFED ♦ Initial Utica East Ohio capacity online end of June +200 MMCFED ♦ Other midstream capacity forthcoming * Source: Ohio Department of Natural Resources as of June 20, 2013
  13. 13. Wet Gas and Volatile Oil Windows ▶ Wet Gas Window ♦ Majority of drilling has helped to de-risk play ♦ Play expanding northeasterly into Pennsylvania and southerly into Washington County ▶ Volatile Oil Window ♦ Significant oil in place  EVEP estimates 20-30 million barrels of oil per section ♦ Limited drilling activity  6 wells drilled  Marginal results to date  Suboptimal completions 13 Primary Activity to Date Black Oil Volatile Oil Wet Gas Dry Gas Black Oil Volatile Oil Wet Gas Dry Gas EVEP WI Acreage CHK/EV/Total JV
  14. 14. Utica Acreage Strategy 14 ▶ EVEP and EnerVest began Utica acreage marketing process in 2012 with focus on sale of operated acreage ♦ Over 330,000 total EnerVest net working interest acres (~100,000 net EVEP Acres) ▶ In second quarter of 2013, revised marketing strategy into smaller packages to better align sales process with potential purchaser focus areas ▶ Wet Gas Window ♦ Repackaged with current technical data ♦ Data room open with significant interest ▶ Volatile Oil Window ♦ De-risk through continued technical work and capital risk sharing ♦ Pursue Joint Venture(s) for a portion of the acreage ♦ In parallel, will continue to evaluate cash offers for acreage
  15. 15. Utica Working Interest Acreage 15Note: The total combined EnerVest and EVEP net acreage is 769,700 in Ohio and 156,600 in Pennsylvania. Black Oil Volatile Oil Wet Gas Dry Gas EVEP Net Acres (In thousands) County Wet Gas Vol. Oil Other Total ASHTABULA 21 21 CARROLL 11 11 CUYAHOGA 1 1 GEAUGA 2 2 GUERNSEY 3 2 5 HARRISON 2 2 LAWRENCE 7 7 MAHONING 4 4 MUSKINGUM 6 6 NOBLE 1 1 PORTAGE 3 1 4 STARK 3 38 41 SUMMIT 2 2 TRUMBULL 2 8 2 12 TUSCARAWAS 6 18 24 WASHINGTON 5 5 Other OH 1 3 9 13 TOTAL OH 45 78 38 161 CRAWFORD, PA 1 1 ERIE, PA 3 3 MCKEAN, PA 2 2 MERCER, PA 8 8 WARREN, PA 1 1 Other PA 1 1 TOTAL PA 9 1 6 16 Total 54 79 44 177 Black Oil Volatile Oil Wet Gas Dry Gas EVEP WI Acreage CHK/EV/Total JV
  16. 16. Utica Overriding Royalty Interest Acreage ▶ Overriding Royalty Interest (ORRI) acreage is mostly in wet gas and oil windows ♦ ~880,000 gross acres ▶ Average 2.7% ORRI on ~ 415,000 operated gross acres ▶ Average 1.3% ORRI on ~ 465,000 non-operated gross acres ▶ Significant future cash flow potential as Utica acreage is developed 16
  17. 17. Midstream Activity Ramping Up ~ 2.6 BCF/d proposed processing projects 4Q12-YE14 Mariner West Deliver Ethane from SUNOCO to SARNIA Design: 65 MBbl/d In Service: Mid 2013 Utica East Ohio Processing: 800 MMcf/d NGL Storage: 870 MBbl/d Frac Capacity: 135 MBbl/d Ethane: ATEX Residue: TPG, DEO In Service: 2Q13-2Q14 MarkWest Existing Frac - Houston PA Processing: 325 MMcf/d Frac Capacity: 100 MBbl/d Ethane: MARINER WEST & MARINER Residue: TETCO, DTI, TCO In Service: 1Q 2014 MarkWest/Antero/Gulfport/PDC/Rex Processing: 45; 200; 400 MMcf/d Frac Capacity: To Harrison Complex Ethane: ATEX In Service 2Q 2013; 3Q 2013; 4Q 2013 Dominion - Natrium Processing: 200 MMcf/d; 400 MMcf/d Frac Capacity: 36 MBbl/d; 59 MBbl/d Ethane: ATEX Residue: DTI In Service: 2Q2013; 3Q 2013 Caiman/Blue Racer Processing: 520 MMcf/d Frac Capacity: 43 MBbl/d Ethane: MARINER WEST Residue: TETCO In Service: 4Q 2012 ATEX Washington PA to Mont Belvieu In Service: 1Q 2014 Sunoco Delmont PA to MARINER WEST Shell Cracker Proposed NiSource/Hilcorp Processing: 200 MMcf/d Residue: TETCO, REX, NiSource In Service: 3Q 2013 17 Crosstex Compression & Stabilization
  18. 18. Utica Midstream Investments Utica East Ohio Midstream – EVEP owns 21% ▶ Gather, process and fractionate wet gas from CHK/EV/Total JV production ♦ 800 MMcf/d of processing & 135 MBbls/d of fractionation capacity ♦ Onsite working storage of ~870 MBbls of purity components ♦ ~ 1 million dedicated working interest acres ▶ First 200 mmcf/d online end of June ▶ Upside potential as development drilling expands Cardinal Gas Services – EVEP owns 9% ▶ Low-pressure gathering and compression of wet gas from JV production into Utica East Ohio infrastructure ♦ JV firm drilling schedule calls for 540 wells by year end 2014 ♦ Plans for ~ 4,600 gross wells over 18 years ♦ Over 1 Bcf/d expected within 5 years ▶ Upside potential as development drilling expands 18
  19. 19. UEO – Harrison Hub 19 16 total loading racks (8 C3, 4 C4, 4 C5+) CU & OH main line Main line switch 10 total tracks (4 loading tracks, 3 storage tracks, 3 inbound / outbound / runaround tracks) Track expansion construction underway (20) 90,000 gallon C3 & C4 bullet tanks (2) 60,000 barrel floating roof natural gasoline tanks 50,000 barrel pressurized C4 sphere (4) 750 barrel C5+tanks (2) 200,000 barrel refrigerated C3 tanks (2) 125,000 barrel refrigerated C4 tanks 45,000 bbl/d NGL fractionation facility (1st train)
  20. 20. Utica Midstream Capital and EBITDAX ▶ Capital investment of $335-395 million, net to EVEP, over 5 years ▶ Stable, long-term cash flow stream ▶ UEO has fee structure defined by contract ♦ Fees for gathering, compression, processing, NGL transport, fractionation and storage ▶ CGS has cost-of-services arrangement with fixed IRR ♦ Gathering fee re-calculated annually to provide target IRR ♦ Operating costs are pass-through costs not subject to IRR calculation ▶ Financed to date with bank debt 20 Midstream EBITDAX RangeMidstream Capital Range
  21. 21. Why Invest in EVEP? ▶ Strong long-term performance and growth ▶ Solid, long-lived asset base ▶ Hedging strategy designed to reduce cash flow volatility ▶ Synergistic relationship with EnerVest ▶ Significant Utica Shale upside ♦ Acreage, overriding royalty interests, and midstream 21
  22. 22. Investor Presentation June 2013
  23. 23. APPENDIX
  24. 24. 24 EnerVest EV Investors EnCap (Limited Partners) Directors & Officers of EV Management EV Energy Partners, L.P. (Nasdaq: EVEP) Public Unitholders EnerVest, Ltd. EV Management, LLC (General Partner) EV Energy GP, L.P. 2% General Partner Interest Incentive Distribution Rights 98% Limited Partner Interest 100% Membership Interest EnerVest & EVEP
  25. 25. A Strong Strategic Partnership with EnerVest ▶ EnerVest is recognized as one of the largest and most successful managers of oil and gas assets for institutional investors ▶ Sizeable EnerVest operating base ♦ ~ 3.1 Tcfe of Proved Reserves ♦ > 550 Mmcfe daily production ♦ 5.5 million gross acres under lease ♦ Over $6.8 billion of acquisitions since inception ▶ > 800 employees ▶ EnerVest operates 93% of EVEP’s assets ▶ Closed Fund XIII with $2 billion of equity EVEP EnerVest Institutional 25
  26. 26. Source: Ohio Department of Natural Resources – 2012 Shale Production 26
  27. 27. 27 Stark Co., OH EnerVest (1) Harrison Co., OH Gulfport (5) Chesapeake (2) CNX (1) Guernsey Co., OH Anadarko (2) PDC (2) Gulfport (1) Crawford Co., PA Range (1) Butler Co., PA Rex (1) Beaver Co., PA Chesapeake (1) Range (1) Jefferson Co., OH Chesapeake (1) Hess (1) Monroe Co., OH Antero (1) HG (1) Tuscarawas Co, OH Chesapeake (1) CONSOL/CNX (1) Source: Company reports and Imperial Capital, LLC estimates as of 6/21/2013 Forest Co., PA Seneca (1) Belmont Co., OH Gulfport (3) Carroll Co., OH Chesapeake (11) EnerVest (1) Rex (2) Noble Co., OH Rex (3) Anadarko (3) Antero (2) Reported Utica Test Results (54 Total Wells) Coshocton Co., OH Anadarko (1) Mahoning Co., OH CNX (1) Mercer Co., PA Halcon (1) Venango Co., PA CNX (1)
  28. 28. Capital Structure ($ millions) Bank Debt @3/31 $ 445 Senior Notes Due 2019 $ 500 Equity Market Capitalization $ 1,485 Enterprise Value $ 2,430 Note: Equity market capitalization based on unit price at June 19, 2013. 28
  29. 29. Historical Financing Strategy ▶ Since 2006, completed $1.9 billion of acquisitions, approximately 60% of which were financed with equity and free cash flow Acquisition Financing Since IPO Equity $1,027 53% Free Cash Flow $94 5% Debt Financing $808 42% Total Acquisitions $1,928 100% Capital Activity (1) = Equity = Debt = Free Cash Flow (1) Total dollar amounts represent acquisition activity by period. 29
  30. 30. Gas Prices Hedged ($/MMbtu)Gas Volume Hedged (MMbtu/d) Note: Estimated NYMEX Henry Hub equivalent with basis differentials of: Dominion Appalachia $0.18, MichCon Citygate $0.27, Houston Ship Channel ($0.05) and El Paso Permian ($0.27), El Paso San Juan ($0.35), NGPL TX/OK ($0.12) and TCO $0.15. Commodity Hedging: Natural Gas 30 $4.94 $4.93 $4.88 $5.07 $0.00 $1.00 $2.00 $3.00 $4.00 $5.00 $6.00 2Q13 2H13 2014 2015 Average Swap Price 100,311 101,300 86,600 86,500 - 20,000 40,000 60,000 80,000 100,000 2q13 2h13 2014 2015 Swap Volumes
  31. 31. Oil Prices Hedged ($/Bbl)Oil Volume Hedged (Bbl/d) Commodity Hedging: Oil 31 4,225 4,150 4,158 2,000 - 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 2Q13 2H13 2014 2015 Swap Volumes $89.11 $88.99 $91.19 $90.09 $0.00 $10.00 $20.00 $30.00 $40.00 $50.00 $60.00 $70.00 $80.00 $90.00 $100.00 2Q13 2H13 2014 2015 Average Swap Price
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