Prompt Oil Price ($/bbl) $52.45 ($3.96) (7.0%) Let’s ...€¦ · 07.10.2019 · Longer term forecasts indicate normal to above normal weather in the second half of October. Gas

1

October 7, 2019

IndicatorCurrent

Value

Week's

Change

%

Change Direction

Prompt Oil Price ($/bbl) $52.45 ($3.96) (7.0%)

Prompt Gas Price ($/mmbtu) $2.33 ($0.10) (4.1%)

Wkly Trans. Value ($mm) $1,147 $1,147 nmf

Wkly Trans. Count 4 3 300%

US Rig Count 855 (5) (0.6%)

US Oil Prod'n (mmbbl/d) 12.4 (0.1) (0.8%)

US Gas Prod'n (bcf/d)(1) 108.9 (0.9) (0.8%)

US Oil Storage (mmbbl) 422.6 3.1 0.7%

US Gas Storage (tcf) 3.3 0.1 3.5%

$2.2

$8.0

$9.9 $10.7

$4.9

$15.8

$21.2 $21.9 $24.1

$17.0

$9.1 $9.2

$20.8

$8.2

$31.6

$19.5

$1.7

$16.8

$1.0

--

50

100

150

200

250

300

350

400

450

500

--

$5

$10

$15

$20

$25

$30

$35

$40

1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19

61% 83% 74% 79% 39% 52% 62% 71% 93% 24% 68% 82% 91% 64% 46% 93% 51% 95% 74% 26%

Nu

mb

er

of

Tra

ns

ac

tio

ns

Tra

ns

ac

tio

n V

alu

e (

$b

n)

Asset Corporate Number of Transactions

% Oil% Oil% Oil

$64.3

NextEra Energy Partners, LP announced the acquisition of

Meade Pipeline Co LLC for $1.28 billion. BMO Capital

Markets acted as exclusive financial advisor to Meade

Citizen Energy acquired Roan Resources for $1.0 billion.

BMO Capital Markets acted as a joint bookrunner and

joint lead arranger on the committed financing

Contango Oil & Gas announced the acquisition of White Star

Petroleum LLC’s Oklahoma assets for $132.5 million

Fortis Minerals filed with the SEC a proposal to IPO its

Class A shares

BMO is marketing Caerus Oil and Gas’ divestiture of

producing mineral and overriding royalty interests in the

Piceance Basin (see page 6)

Debt

Markets

Seven issuers priced seven tranches for $3.4 billion last week

U.S. high yield funds reported an inflow of $198 million

ETFs reported an inflow of $557 million while mutual funds reported an outflow of $359 million

High yield index yield was 6.08%; high yield energy index yield was 9.31%

Source: BMO Transaction Database, Baker Hughes, BMO Commodity Products Group, Bloomberg, EIA, PLS

Note: Current quarter’s data is through the week covered by this issue.

1. EIA U.S. natural gas gross withdrawals and production reported monthly as of July 2019.

2. S&P E&P = S&P Oil & Gas E&P Select Industry, SPX = S&P 500 Index.

Key Industry Indicators

Quarterly Deal Activity

S&P E&P(2) underperformed last week (6.0)% vs. SPX(2) (2.2)%

All of the major U.S. equity indexes finished lower Equity

Markets

Oil ended last week down. Saudi Aramco announced that it is producing more than 9.9 mmbbl/d of crude

as it fully recovers from attacks much sooner than expected. Overall market decline has been driven by

the U.S.-China trade war as well as concerns that demand will weaken despite the return of Saudi

supplies after last month’s attack on two oil processing centers that briefly halted more than 5% of the

world’s oil production. Ecuador announced that it will leave OPEC. The near-term contract closed down

$3.96, or 7.0%, at $52.45

Natural gas ended last week down as longer term forecasts show normal to above normal weather in the

second half of October. Gas storage numbers indicated the market is still very oversupplied despite

warmer weather from the mid-Atlantic to Texas. Most analysts believe that the summer heat is almost

done for the year. However, with production at near record levels, it will take prolonged cold temperatures

to make a large difference. The near-term contract closed down $0.10, or 4.1%, at $2.33

Commodities

Week in Review

Let’s follow these guidelines when sorting articles:

• First priority: Domestic A&D, ranked by size

• Next: Domestic M&A

• Then: US companies doing international deals (like

Noble’s Tamar)

• Then: Others (Cabot’s Lackawanna)

• Then: Prices, rig count, completions, etc.

To paste the arrows with colors,

• FactSet

• Settings

• Presentation Linking and Formatting

• Import

• Colors

• Change Color Font Covering the Week of September 27 to October 3, 2019

This is the final issue for 2018. The Market Monitor will

return on Monday, January 7th. Happy Holidays from the

BMO Capital Markets team!

BMO is marketing PayRock Energy’s divestiture of South

Texas Eagle Ford assets (see page [x])

The October issue of BMO Calgary’s A&D (Canadian) Market

Monitor went live last week – read more here

One E&P deal priced last week

WPX Energy (b1/BB-) priced $600 million of x% Senior

Notes due 2027

One E&P issuer priced last week

Noble Energy priced $500 million of 3.25% senior notes

due 2029 and $500 million of 4.20% senior notes due

2049. BMO Capital Markets acted as a Joint

Bookrunner on this transaction

All references to last week in the comments below are through Thursday

Saudi Aramco announced that it is producing more than 9.9 mmbbl/d of crude as it fully recovers from attacks much sooner than

expected. Overall market decline has been driven by the U.S.-China trade war as well as concerns that demand will weaken despite

the return of Saudi supplies after last month’s attack on two oil processing centers that briefly halted more than 5% of the world’s oil

production. Ecuador announced that it will leave OPEC.

Longer term forecasts indicate normal to above normal weather in the second half of October. Gas storage numbers indicated the

market is still very oversupplied despite warmer weather from the mid-Atlantic to Texas. Most analysts believe that the summer heat is

almost done for the year. However, with production at near record levels, it will take prolonged cold temperatures to make a large

difference

Continued downward momentum combined with production destined for new record highs affected the markets.

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http://click.bmocapitalmarkets.bmo.com/?qs=06431ffcb9e46ff9ceb552c71599979cce1497589a985c6f6db2bcdad857fec824bec1ef9245eef7759c94d656a26e446b38de2e8b6d3a20

2

October 7, 2019

y = 29.489e-0.068x

R² = 0.3414

--

$10

$20

$30

$40

$50

$60

-- 5.0x 10.0x 15.0x 20.0x 25.0x 30.0x

Sa

les

Pri

ce

/ P

rove

d R

es

erv

es

($

/bo

e @

15

:1)

R / P

Public Company

43%

PE / PE-Backed

17%

Private11%

Other29%

LTM By Buyer Type

Ann'd

Date Buyer Seller Area Asset Description Value(1)

Proved

Multiple

Prod.

Multiple Net Acres

($mm) ($/boe) ($/boe/d) ($/acre)

27-Sep-19 Contango White Star Petroleum LLC Mid-Continent 314,800 net acres in Mid-Con $133 $1.57 $8,833 $421

13-Sep-19 Viper Energy Partners Santa Elena Minerals LP Permian 1,358 net royalty acres in Permian $150 n.a. $107,143 nmf

12-Sep-19 Contango Will Energy Corporation Mid-Continent TX Panhandle, W. Anadarko, and N.LA $23 n.a. $16,429 $144

03-Sep-19 Spur Energy Partners Concho Resources Inc Permian ~70,000 net acres in Eddy and Lea, NM $925 n.a. $37,000 $13,214

03-Sep-19 Undisclosed Buyer Crescent Point Other Rockies 224,000 net undeveloped acres in Uinta $525 n.a. $32,051 $2,344

28-Aug-19 Scout Energy Partners Riviera Resources Inc Mid-Continent Hugoton Basin assets $295 $2.30 $17,020 $295

27-Aug-19 Hilcorp Energy Co BP Alaska Alaskan area exit $5,600 n.a. $75,676 n.a.

06-Aug-19 Undisclosed Buyer Pioneer Permian 3,300 net acres in Martin County $66 n.a. n.a. $20,000

31-Jul-19 Continental Resources Inc Undisclosed Seller Mid-Continent SCOOP assets $80 n.a. n.a. n.a.

31-Jul-19 Ecopetrol Oxy Permian Midland Basin JV $1,500 n.a. n.a. $31,559

Blue = BMO provided transaction advisory services Green = BMO provided acquisition financing or related services

Purple = BMO provided both transaction advisory services and acquisition financing or related services

R / P

Sales Value /

Proved Reserves

(15:1)

(ratio) ($ / boe) ($ / mcfe)

8x $16.99 $1.13

10x $14.81 $0.99

15x $10.52 $0.70

20x $7.47 $0.50

Permian27%

Rockies (ex. Bakken)

9%

Bakken4%

Appalachia5%

Mid-Con14%

Eagle Ford5%

Ark-La-Tex5%

Gulf of Mexico5%

Other26%

LTM By Region

Oil57%

Gas43%

LTM By Commodity

$30.0 $33.9 $38.9

$18.2

$12.1 $16.4

$22.2 $65.7 $42.1

$50.2

$61.1

$83.9

2016 2017 2018 2019

922 1,291 735 163

Asset Corporate

Deal Count

The 10 Most Recent Asset Transactions Over $20 Million

A&D Valuation Trends(3)

Source: BMO Transaction Database, Baker Hughes, BMO Commodity Products Group, Bloomberg, PLS

1. Represents total enterprise value. 2. Calculated as percentage of total LTM transaction count (number of transactions, not dollar value).

3. 65 transactions from January 2015 to 2019 with transaction value >$20mm. Adjusted for changes in price outlooks. Recalculated boe reserves are on a 15:1

(gas:oil) basis. Acreage transactions excluded by using deals with PDP of >= 40% of total proved.

4. Year-to-date data is through this week’s date for each respective year.

(2) (2) (2)

Confirm number of transactions weekly --->

YTD Deal Activity ($bn)(4)

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3

October 7, 2019

10/3/2019

Appalachia 3

Ark-La-Tex 5

Bakken 6

Eagle Ford 12

Mid-Con 8

Other 13

Permian 19

Rockies 10

76

Select Significant Deals on the Market

Disclaimer: The foregoing links are for convenience only and relate to materials that were not prepared or reviewed by BMO Capital Markets. BMO Capital Markets takes

no responsibility for and makes no representations with respect to the contents thereof. These materials may be inconsistent with the views of BMO Capital Markets.

Source of Select Significant Deals on the Market: BMO Transaction Database

Source of Headlines: Press releases

Industry Headlines

Appalachia

3 Deals

Mid-Con

8 Deals

Eagle Ford

12 Deals

Permian

19 Deals

Other

13 Deals

Rockies

10 Deals

(Click headline to link to the full article)

M&A&D Headlines

Bakken

6 Deals

Ark-La-Tex

5 Deals

BMO Deals (Status)

Siltstone Appalachia (In Market) – See page 6

Oil Rebounds After Worst Quarter of 2019, While

Demand Fears Persist

After the Saudi Attack, Are Russia and Saudi Arabia

Still Pumping Too Much Oil?

Ecuador Quits OPEC, Signals It's Ready for More

E&P Activity

Oil Near 2-Month Low on Swelling U.S. Stockpiles,

Demand Woes

Is Oil Headed Back to $100 a Barrel?

Fortis Minerals Files a Proposal to IPO its Class A

Shares

Roan Resources to Be Bought by Warburg Pincus-

Backed Citizen Energy

Contango Announces Acquisition of White Star

Petroleum's Oklahoma Assets for $132.5 Million

NextEra Energy Partners Announces Acquisition of

Meade Pipeline Co for $1.28 Billion

Talos Energy Announces Full Year 2019 Operating

and Financial Guidance (includes A&D

announcement)

BMO Deals (Status)

Caerus Piceance Basin (In Market) – See page 6

PayRock Eagle Ford (In Market) – See page 7

Siltstone Appalachia (In Market) – See page 8

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https://www.worldoil.com/news/2019/10/1/oil-rebounds-after-worst-quarter-of-2019-while-demand-fears-persist

https://www.worldoil.com/news/2019/10/1/oil-rebounds-after-worst-quarter-of-2019-while-demand-fears-persist

https://www.worldoil.com/news/2019/10/2/after-the-saudi-attack-are-russia-and-saudi-arabia-still-pumping-too-much-oil

https://www.worldoil.com/news/2019/10/2/after-the-saudi-attack-are-russia-and-saudi-arabia-still-pumping-too-much-oil

https://www.worldoil.com/news/2019/10/2/ecuador-quits-opec-signals-it-s-ready-for-more-ep-activity

https://www.worldoil.com/news/2019/10/2/ecuador-quits-opec-signals-it-s-ready-for-more-ep-activity

https://www.chron.com/business/energy/article/Oil-Extends-Decline-on-Rising-U-S-Stockpiles-and-14488490.php?cmpid=ffcp




https://www.chron.com/business/energy/article/Is-oil-headed-back-to-100-a-barrel-14487059.php?cmpid=ffcp

https://www.sec.gov/Archives/edgar/data/1767007/000119312519257661/d801915ds1.htm

https://www.sec.gov/Archives/edgar/data/1767007/000119312519257661/d801915ds1.htm

https://www.reuters.com/article/us-roan-resoruces-m-a-citizen-enery/roan-resources-to-be-bought-by-warburg-pincus-backed-citizen-energy-idUSKBN1WG427




http://ir.contango.com/news-releases/news-release-details/contango-announces-signing-agreement-acquire-assets-white-star





http://www.investor.nexteraenergypartners.com/news-and-events/news-releases/2019/09-30-2019-113005034

http://www.investor.nexteraenergypartners.com/news-and-events/news-releases/2019/09-30-2019-113005034

https://www.prnewswire.com/news-releases/talos-energy-announces-full-year-2019-operating-and-financial-guidance-300779250.html





4

October 7, 2019

Purchase Price (US$ mm)

Total Consideration $525

Metrics

Net Undeveloped Acres(1) 224,000

2020E Net Production (boe/d)(2) 16,380

PDP Reserves (mmboe)(2) 24

2P Reserves (mmboe)(2) 101

Cash Flow ($mm) $109

Multiples

TEV / Net Undeveloped Acres ($/acre) $2,344

TEV / Adj. Net Undeveloped Acres ($/acre)(3) $540

TEV / 2020E Net Production ($/boe/d) $32,051

TEV / PDP Reserves ($/boe) $21.73

TEV / 2P Reserves ($/boe) $5.21

TEV / Cash Flow $4.8

Crescent Point is expected to generate improved

corporate returns and a stronger operating netback

Including this transaction and the Saskatchewan sale,

Crescent Point has executed approximately CAD$975

million in asset divestitures in 2019

On September 30, 2019, AltaGas, Ares Management

Corp., Cabot Oil & Gas Corp., and Vega Energy

Partners (the “Meade Partners”) announced the sale

of their collective interests in Meade Pipeline Co, LLC

(“Meade”) for $1.28 billion to NextEra Energy

Partners, LP (NYSE: NEP)

Transaction value represents a forward EBITDA

multiple in excess of 13.0x

Meade owns a combined 39.2% interest in Transco’s

Central Penn Line and a 40% interest in Transco’s

Leidy South expansion

Meade is underpinned by a 20-year lease from

Transco, an investment grade counterparty, providing

stable, fixed-fee cash flows

BMO Capital Markets acted as exclusive financial

advisor to the Meade Partners on this transaction

TRANSACTION SUMMARY

Source: Company disclosure

ASSET OVERVIEW

Central Penn Line

The Central Penn Line is the greenfield pipeline

segment of Transco’s Leidy Line in Pennsylvania

connecting the northeastern Marcellus producing

region to the Transco mainline near Station 195 in

southeastern Pennsylvania

Central Penn Line includes a total of approximately

185 miles of new greenfield pipe (Central Penn North

& Central Penn South) and added 1.7 bcf/d of pipeline

capacity to the Transco system

Central Penn Line went into service in October 2018;

capacity for the pipeline is fully contracted by

established off-takers

Leidy South Expansion

In October 2018, Williams announced additional

takeaway on Transco’s Leidy South expansion project

The expansion provides an additional 0.580 bcf/d

capacity

The Leidy South Expansion is expected to be

completed in mid-2022

BMO Deal of the Week:

BMO Advises Meade Pipeline on its Sale to NextEra Energy Partners for $1.28 Billion

ASSET MAP

ACQUISITION METRICS

OBSERVATIONS

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Existing Transco Pipeline

Central Penn Line South

Central Penn Line North

Leidy South Expansion

NFGSC / Transco Lease Route

River Road Regulator Station

New Compressor Station

Existing Transco Compressor

Station

Existing Leidy Hub

Existing Meter /

Regulator Station

Sta. 535

Sta. 520

Sta. 610

Sta. 620

Sta. 517

Sta. 607

Sta. 605

Sta. 515

Sta. 200

Sta. 195

CAMERON

POTTER

CLINTON

TIOGA BRADFORD

LYCOMING SULLIVAN

SUSQUEHANNA

WYOMING

PIKE

LUZERNE

MONROE

CARBON

NORTH- AMPTON

LEHIGH

COLUMBIA MONTOUR

NORTHUM- BERLAND

UNION

SNYDER

PERRY

ADAMS YORK

DAUPHIN

LEBANON

LANCASTER

SCHUYLKILL

BERKS

CHESTER

BUCKS

MONTGOMERY

DELAWARE

WARREN

BU

RL

ING

TO

N

GLOUCESTER

LACKAWANNA

PA

NJ

DE

BMO’S ADVISORY TO THE MEADE PARTNERS

BMO served as exclusive financial adviser to the Meade Partners

The successful Meade transaction highlights BMO’s strong M&A

capabilities

Consistent presence in the midstream space

Differentiated advisory service from combined leadership across

M&A, midstream, and upstream platforms

BMO’s oil and gas, energy infrastructure, and financial sponsor

relationships enhanced the quality of the buyer universe, provided valuable

buyer feedback, and maximized value for its clients

BMO provided a financing read and committed financing papers to certain

potential buyers in the process

The transaction continues a focus on midstream monetization by upstream

companies

Exclusive Financial Advisor

to the Meade Partners

Announced

$1.28 billion Sale of

Meade Pipeline Co, LLC

to

The transaction continues a focus on midstream

monetization by upstream companies

OBSERVATIONS

5

October 7, 2019


Total Consideration $525

Metrics

Net Undeveloped Acres(1) 224,000

2020E Net Production (boe/d)(2) 16,380

PDP Reserves (mmboe)(2) 24

2P Reserves (mmboe)(2) 101

Cash Flow ($mm) $109

Multiples

TEV / Net Undeveloped Acres ($/acre) $2,344

TEV / Adj. Net Undeveloped Acres ($/acre)(3) $540

TEV / 2020E Net Production ($/boe/d) $32,051

TEV / PDP Reserves ($/boe) $21.73

TEV / 2P Reserves ($/boe) $5.21

TEV / Cash Flow $4.8

Crescent Point is expected to generate improved

corporate returns and a stronger operating netback

Including this transaction and the Saskatchewan sale,

Crescent Point has executed approximately CAD$975

million in asset divestitures in 2019

On October 1, 2019, Citizen Energy Operating, LLC

(“Citizen Energy”) announced that it had entered into

a definitive agreement to acquire Roan Resources,

Inc. (NYSE: ROAN) (“Roan”)

All-cash transaction valuing Roan at ~$1.0 billion,

including Roan’s net debt of $780 million

Represents ~24% premium to Roan’s closing

price on September 30, 2019

The transaction is expected to close in Q4 2019

or Q1 2020

Citizen Energy, backed by Warburg Pincus, originally

contributed a portion of current Roan assets through

a combination of Citizen Energy II and Linn Energy

in 2017

BMO served as Joint Lead Arranger and Joint

Bookrunner to Citizen Energy providing

underwritten financing on a $725 million

borrowing base Reserve Based Lending Facility

TRANSACTION SUMMARY

Source: Company disclosure

1. Adj. TEV represents illustrative total value less illustrative PDP value. Illustrative PDP value calculated as net production multiplied by $15,000/boe/d.

2. Assumes Company reported 10 year inventory at 3 rigs assuming ~20 days spud to spud.

ASSET SUMMARY

Largest contiguous acreage position in the Anadarko

Basin with ~182,000 net acres in Oklahoma

Offset operators include Cimarex, Devon, EOG,

Encana, and Continental

~64% of total acreage position located in the

Merge play

– ~75% of Merge acreage in oil and liquids-rich

windows

Q2 2019 production of 50.8 mboe/d (26% oil, 29%

NGL, 45% gas)

Primarily targeted formations include Woodford and

Mississippian

~550 net drilling locations(2)

BMO Deal of the Week:

Citizen Energy Acquires Roan Resources for $1.0 Billion

ACQUIRED ASSETS ACQUISITION METRICS

OBSERVATIONS

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Joint Lead Arranger &

Joint Bookrunner

Announced

RBL Credit Facility

$725 million


Total Consideration $1,000

Metrics

Net Acreage 182,000

Production (mboe/d) 50.8

Q2 2019 Ann. EBITDA $317

Net Undeveloped Locations(2) 550

Multiples

TEV / Net Acre ($/acre) $5,495

TEV / Production ($/boe/d) $19,685

TEV / Q2 2019 Ann. EBITDA 3.2x

Adj. TEV(1)

/ Net Acre(2)

($/acre) $1,308

Adj. TEV(1)

/ Net Undeveloped Locations(2)

($mm/location) $0.43

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Roan Assets

6

October 7, 2019

Caerus Operating, LLC (“Caerus”) and its subsidiary, Grand

Valley Mineral Company LLC, are offering for sale select

producing mineral and overriding royalty interests in the

Piceance Basin

Opportunity to acquire ~4,150 developed mineral acres in

the Piceance Basin located in Garfield County, Colorado

Offering includes mineral and overriding royalty

interests in the Areas of Interest: East Fork, Battlement

Mesa, and Mamm Creek

ORRI interest in ~1,650 wells

All assets are held-by-production (“HBP”)

Future acquisition opportunities are expected as the

company owns ~45,000 net mineral acres in the basin

and is actively acquiring and developing additional

interests

~4 mmcfe/d (95% gas) Q4 2019E net production from

>2,200 gross producing wells

Q4 2019E annualized cash flow of >$3 million

Source: Caerus 2019 Piceance Minerals Divestiture announcement

Currently on the Market from BMO: Caerus Piceance Minerals Divestiture

ASSET HIGHLIGHTS

ASSET OVERVIEW PROCESS OVERVIEW

VDR available early October 2019 with ARIES model and

LOS

Contact Chelsea Neville at [email protected] or

713-546-9703 for a Confidentiality Agreement, access to the

VDR, and/or to request a data room presentation

Grand Valley Minerals

Areas of Interest

Piceance

Represents One

of the Premier

U.S. Onshore

Natural Gas

Basins

One of the largest natural gas accumulations in North America, with an estimated 300 tcf gas-in-place

Drilling activity began to increase in 2017 with operators primarily focused on directional Mesaverde exploitation

16,000+ wells drilled to-date in the basin with cumulative production > 8 tcf

3,000’ – 5,000’ of vertical pay in the Williams Fork sands within the Mesaverde Group

Large Minerals

and ORRI Position

in the Piceance

Basin

~4,150 net mineral acres in Garfield County, CO and ORRI interest in ~1,650 wells

Average NRI of 2.7%

All assets are HBP and largely developed

Stable Production

and Cash Flow

Q4 2019E annualized cash flow of >$3 million

While asset is largely producing, any future developments would be free of capital contributions given leased mineral and

ORRI nature

Cost free royalties enhance economics by improving realizations

~4 mmcfe/d (95% gas) Q4 2019E net production

Low decline of 8% provides predictable production stream, as wells were generally developed between 2006 and 2012

Low concentration risk as properties contain interests in >2,200 gross wells

Forecast utilizes key decline curve parameters based off year-end NSAI reserves

Caerus is a Top

Piceance

Operator

Caerus is the second largest producer in the Piceance Basin and the second largest mineral owner

Position located in the core of the basin with ample takeaway options

Actively involved in acquisitions and development of the basin with 2 rigs currently running

Since 2014, Caerus has drilled and completed >350 Williams Fork wells

Caerus formed Grand Valley Mineral in 2018 to manage existing minerals and, alongside its partners, acquire additional

minerals

Caerus owns a total of ~45,000 net mineral acres in the Piceance with the majority in the North Parachute Ranch area

90% of total minerals operated by Caerus

ASSET MAP (PICEANCE BASIN – GARFIELD COUNTY)

7

October 7, 2019

Opportunity to acquire economic, highly contiguous,

and de-risked acreage position in the Eagle Ford

11,212 gross / net largely undeveloped acres located

in La Salle, McMullen, and Dimmit counties, TX

100% operated with 100% working interest

Highly economic locations with average >8,500’

lateral length and robust EURs of >100 boe/ft

Executable optimized development plan on 660’

well spacing supports 63 gross drilling locations

in the Lower Eagle Ford

Volatile oil window provides favorable liquids content

with pressure and gas volumes to sustain solution gas

drive

June 2019 net production of ~1,500 boe/d (72%

liquids) from 4 gross wells

Offset activity by top tier operators including EOG,

Chesapeake, XTO, Sundance Energy, EP Energy,

and Carrizo

Significant upside potential from Upper Eagle Ford

and Austin Chalk

EOR pilots being delineated near PayRock’s acreage

position

Favorable marketing contracts and no minimum

volume commitments or acreage dedications

VDR available now

Contact Chelsea Neville at [email protected] or

713-546-9703 for a Confidentiality Agreement and access to the VDR

Source: PayRock Energy 2019 Eagle Ford Divestiture announcement

Asset Ready for

Full-Scale

Development

High degree of control as asset is 100% operated

Nominal number of leases simplifies the management of the land position

Ample access to third party gathering for oil and gas in addition to salt water disposal

No minimum volume commitments or acreage dedications

Largely

Undeveloped

Blocky Eagle Ford

Position

Attractive acquisition opportunity with exposure to the highly economic Eagle Ford volatile oil window

11,212 net acre position located in La Salle, McMullen, and Dimmit counties, TX

100% operational control with 100% working interest and 75% NRI across acreage

Distinct contiguous acreage blocks allow for average lateral length >8,500’ and 23 locations in excess of 10,000’

High Quality

Subsurface

Attributes

The Lower Eagle Ford exhibits exceptional reservoir quality across PayRock’s acreage

Efficiently developed with a single drilling target

Average in-place volume of 15 MMBO/section

Two distinct Eagle Ford reservoirs allow for flexible development strategy

Shallow, liquids-rich, low water saturation in the Thurman area

Deeper, volatile oil with significant over-pressure in the STS area

The Austin Chalk represents significant opportunity for co-development with the Eagle Ford

Thurman overlies a thick section of reservoir-quality lower Austin Chalk

Sugarkane Field has demonstrated that higher GORs support success in the Austin Chalk

Highly Economic

Drilling Inventory

through

Enhanced

Completions

One of the last remaining undeveloped areas of scale in core Eagle Ford

63 gross operated Lower Eagle Ford drilling locations at conservative 660’ inter-well spacing provide ample running room

Position de-risked by existing wells and offset performance

PayRock wells exceed historical type curve for the area due to improved completion technology

Additional upside from offsetting Austin Chalk activity, a potential second bench in the Eagle Ford, and EOR pilots in the

area

Currently on the Market from BMO: PayRock Energy Eagle Ford Divestiture

ASSET HIGHLIGHTS

ASSET OVERVIEW PROCESS OVERVIEW

.

ASSET MAP

mailto:[email protected]

8

October 7, 2019

Opportunity to acquire a substantial portfolio of mineral and

overriding royalty assets in the core of the Utica, Marcellus,

and Upper Devonian

55,329 net royalty acres(1), 1,866 ORRI acres(1), and

1,760 additional leased working interest acres

Low concentration risk, with interest in greater than 675

currently producing wells across 20 counties in OH, PA, and

WV

March 2019 production of 16.8 net mmcfe/d (91% gas)

with drilling inventory consisting of more than 3,800

locations

Siltstone has exposure to a significant number of future

development locations in core Utica

Siltstone continues to actively acquire mineral positions

Source: Siltstone 2019 Appalachia Divestiture announcement

1. Net royalty acres normalized to 1/8th royalty.

2. March 2019 daily production. Upper Devonian production represents <1% of total production.

Currently on the Market from BMO: Siltstone Appalachia Minerals Divestiture

ASSET HIGHLIGHTS

ASSET OVERVIEW ASSET MAP

VDR available now

Contact Sandra Ramsey at [email protected]

or 713-518-1187 for a Confidentiality Agreement, access to

the VDR, and/or to request a data room presentation

PROCESS OVERVIEW

Acreage concentrated in the core of the play

Exposure to premier acreage within areas of activity for major Appalachian operators including Antero, Ascent, Encino, EQT,

and Gulfport, plus well-capitalized operators including Chevron, ExxonMobil, and Shell

Increasing development activity due to unrestricted market access following recent completion of midstream de-bottlenecking

programs

Substantial free cash flow generation

Royalty revenue from interest in greater than 675 producing horizontal wells

Lease extensions and renewals provide additional revenue source

Significant potential upside

Portfolio contains repeatable drilling inventory of highly economic locations with line of sight to more than 150 DUCs/PUDs

Wells spud on Siltstone acreage increasing annually

Comprehensive land and title documentation (both digital and hard copy)

52% in

Belmont and

Jefferson, OH

42% in

Washington and

Greene, PA

Concentrated in most

economic and actively

developed areas

Elk

Erie

York

Tioga

Erie

Potter

Steuben

Centre

Oneida

Berks

Butler

Bradford

Kent

Lycoming

Bedford

Clinton

McKeanWarren

Clearfield

Augusta

Allegany

Blair

Indiana

Crawford

Luzerne

Somerset

Stark

Otsego

Wayne

Cattaraugus

Randolph

Bath

Fayette

Perry

Lancaster

Hardy

Mercer

Kanawha

Franklin

Chester

Garrett

Sussex

Cayuga

Tioga Delaware

Oswego

Broome

Ontario

Knox

Wayne

Chautauqua

Monroe

Chenango

Grant

Clarion

Preston

Schuylkill

Gallia

Cambria

Wayne

Monroe

Herkimer

Pike

Pocahontas

Lorain

Madison

Huntingdon

Onondaga

Venango

Greene

Perry

Clay

Nicholas

Allegheny

Adams

Fauquier

Trumbull

Washington

Meigs

Roane

Athens

Westmoreland

Cecil

Jefferson

Ashtabula

Frederick

Mifflin

Fulton

Rockingham

Licking

Noble

Pendleton

Carroll

Louisa

Yates

Fayette

Lewis

Wayne

Forest

Niagara

Webster

Braxton

Dauphin

Ritchie

Belmont

Mason

Wyoming

Wood

Armstrong

Portage

Baltimore

Livingston

Tucker

Beaver

Caroline

Lincoln

Albemarle

Carroll

Monroe

Boone

Susquehanna

Fairfax

Loudoun

Page

Hampshire

Cortland

Charles

Kent

Harford

Muskingum

Wirt

Medina

Sullivan

Jackson

Holmes

Morgan

Bucks

Summit

Washington

Guernsey

Genesee

Juniata

Union

Tyler

Carbon

Coshocton

Wetzel

Ashland

Greenbrier

Columbia

Tompkins

Lehigh

Gilmer

Geauga

Dorchester

Orleans

Vinton

Harrison

Upshur

Allegany

Harrison

Salem

Lake

Tuscarawas

Highland

Snyder

Orange

Frederick

Marion

Putnam

Cuyahoga

Cumberland

Jefferson

Columbiana

Cabell

Mineral

Wyoming

Cameron

Mahoning

Barbour

Culpeper

Chemung

Lebanon

Huron

Montgomery

Washington

Schuyler

Hocking

Wicomico

Essex

Lawrence

Marshall

Berkeley

Montgomery

Stafford

Howard

Monongalia

Morgan

Warren

Taylor

Clarke

Erie

Ohio

Doddridge

Ohio

Pennsylvania

New York

Virginia

West Virginia Maryland

Pad / Well Name OperatorAvg. Peak

(mmcfe/d)

Jack Hamilton E SMF JF Ascent 29.1

Bounty Hunter EQT 21.7

Cosgray EQT 22.0

Quarto Mining Co. CNX 20.9

Coastal Forest Res. Co. Antero 22.3

My TB Investments 25H Shell 16.3

1

2

3

4

5

6

6

1

2

3 4

5

OH31,674

PA14,190

WV9,465

Net Royalty Acres

by State(1)

OH84%

PA11%

WV5%

Production

by State(2)

Production

by Operator(2)

Utica86%

Marcellus14%

Production

by Formation(2)

EQT22%

Encino21%

GPOR21%

Ascent13%

AR6%

CNX5%

MR4%

SWN2%

Other6%

mailto:[email protected]

9

October 7, 2019

Historical Prices as of 03-Oct-19 Close ($/gal)

NGLs Current Last Wk. 6 Mo. Ago 1 Yr. Ago

Ethane $0.20 $0.19 $0.21 $0.54

Propane $0.43 $0.47 $0.62 $1.06

Butane $0.54 $0.55 $0.62 $1.25

Iso-butane $0.80 $0.84 $0.76 $1.30

Pentane+ $1.06 $1.15 $1.28 $1.70

25%

35%

45%

55%

65%

Feb-16 Aug-16 Feb-17 Aug-17 Feb-18 Aug-18 Feb-19 Aug-19

% o

f W

TI

NGL as % of WTI

$1

$2

$3

$4

$5

Oct-18 Apr-19 Oct-19 Apr-20 Oct-20

($/m

mb

tu)

NYMEX Gas Futures as of 03-Oct-19 Close ($/mmbtu)

Period(1) Current Last Wk. 6 Mo. Ago 1 Yr. Ago

12 Mo. Strip $2.41 $2.46 $2.85 $2.93

2019 $2.41 $2.49 $2.80 $2.86

2020 $2.43 $2.47 $2.75 $2.65

2021 $2.45 $2.46 $2.67 $2.59

2022 $2.63 $2.64 $2.84 $2.72

2023 $2.63 $2.64 $2.84 $2.72

NYMEX WTI Futures as of 03-Oct-19 Close ($/bbl) NYMEX Gas Futures as of 03-Oct-19 Close ($/mmbtu)


12 Mo. Strip $51.16 $54.32 $61.90 $75.14

2019 $52.41 $56.35 $62.34 $74.88

2020 $50.72 $53.60 $59.83 $70.56

2021 $49.42 $51.37 $56.82 $66.52

2022 $49.52 $51.05 $54.73 $63.42

2023 $50.16 $51.43 $53.72 $61.27

$20

$30

$40

$50

$60

$70

$80

Oct-18 Apr-19 Oct-19 Apr-20 Oct-20

($/b

bl)

NGL PRICING(2)

HENRY HUB NATURAL GAS (HISTORICAL / FORECAST)

Commodity Prices

Source: BMO Commodity Products Group, Bloomberg, FactSet

1. Future prices are calendar year average unless stated otherwise.

2. Assumes typical Gulf Coast barrel composition.

WTI OIL (HISTORICAL / FORECAST)

Links:

http://www.nasdaq.com/markets/crude-oil.aspx

http://www.bloomberg.com/quote/CL1:COM

http://www.nasdaq.com/markets/natural-gas.aspx

http://www.bloomberg.com/quote/NG1:COM

Link to Detailed

Futures Data

Link to Detailed

Historical Graph

Link to Detailed

Futures Data

Link to Detailed

Historical Graph

[TBU]

[TBU]

[TBU]

[TBU]

[TBU]

[TBU]

Historical Prices as of 26-Sep-19 Close ($/gal)

NGLs Current Last Wk. 6 Mo. Ago 1 Yr. Ago

Ethane $0.19 $0.21 $0.23 $0.50

Propane $0.47 $0.46 $0.64 $1.05

Butane $0.55 $0.56 $0.62 $1.21

Iso-butane $0.84 $0.71 $0.83 $1.27

Pentane+ $1.15 $1.14 $1.28 $1.60

NYMEX Gas Futures as of 26-Sep-19 Close ($/mmbtu)


12 Mo. Strip $2.46 $2.53 $2.92 $2.84

2019 $2.49 $2.61 $2.87 $2.77

2020 $2.47 $2.51 $2.76 $2.64

2021 $2.46 $2.46 $2.66 $2.60

2022 $2.64 $2.63 $2.83 $2.73

2023 $2.64 $2.63 $2.83 $2.73

NYMEX WTI Futures as of 26-Sep-19 Close ($/bbl) NYMEX Gas Futures as of 26-Sep-19 Close ($/mmbtu)


12 Mo. Strip $54.32 $56.07 $60.00 $70.23

2019 $56.35 $58.08 $60.21 $69.98

2020 $53.60 $54.80 $58.69 $66.17

2021 $51.37 $51.81 $56.28 $62.64

2022 $51.05 $51.04 $54.56 $59.87

2023 $51.43 $51.17 $53.76 $58.08














http://www.cmegroup.com/trading/energy/crude-oil/light-sweet-crude.html

http://www.cmegroup.com/trading/energy/crude-oil/light-sweet-crude.html



http://www.cmegroup.com/trading/energy/natural-gas/natural-gas.html

http://www.cmegroup.com/trading/energy/natural-gas/natural-gas.html



10

October 7, 2019

Clearbrook

Midland

Cushing

St. James

(LLS)

East Coast

U.S. (Brent)

Midland Sweet-

Sour Spread

EMS

($0.39)

$50.60

($1.85)

AECO

Northern

California

Sumas

Southern

California

El Paso - SJ

Waha

HSC

Henry Hub

Panhandle

CIG Chicago

Dominion

Transco

$52.45

$57.71

$5.26

$47.45

($5.00)

NATURAL GAS PRICING & DIFFERENTIALS TO HENRY HUB ($ / MMBTU) – AS OF 03-OCT-19

Commodity Prices (cont’d)

OIL PRICING & DIFFERENTIALS TO CUSHING WTI ($ / BBL) – AS OF 03-OCT-19

Legend

Price

Diff.

Legend

Price

Diff.

Source: BMO Commodity Products Group, Bloomberg

Note: Prices and differentials are for prompt month futures except for Clearbrook which is based on spot prices.

MAPS IN

MASTER VIEW

TBU

TBU

TBU

TBU

TBU

TBU

TBU

TBU $55.46

$3.01

$53.14

$0.69

TBU

TBU

TBU

$2.33

$1.73

($0.60)

$2.18

($0.15)

$1.85

($0.48)

$1.73

($0.60)$1.63

($0.70)

$1.09

($1.24)

$1.59

($0.74)

$2.24

($0.09)

$1.65

($0.68)

$3.05

$0.72

$2.49

$0.16

$2.98

$0.65

11

October 7, 2019

Item Value Wkly Change Last Week Item Value Wkly Change Last Week

Rig Count 415 1 414 Oil Differential $0.85 -- $0.85

Permitting Activity 113 (35) 148 Gas Differential ($1.21) ($0.40) ($0.81)

0%

10%

20%

30%

40%

50%

--

100

200

300

400

500

Jan-15 Jan-16 Jan-17 Jan-18 Jan-19

H V+D % of Total Rigs

-$4.80

-$3.20

-$1.60

$0.00

$1.60


-$18.00

-$12.00

-$6.00

$0.00

$6.00

$ /

mm

btu

$ /

bb

l

Midland Waha

5,000

7,000

9,000

11,000

13,000

15,000

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Jan-18 Jul-18 Jan-19

mm

cf/

d

mb

bl/

d

Oil Gas

4,057

13,9001,212

1,010868

1,247

1,065

1,207

1,050

1,256

910763 744

568

45

Oct-18 Dec-18 Feb-19 Apr-19 Jun-19 Aug-19 Oct-19

H V+D

--

$20,000

$40,000

$60,000

$80,000

1Q

15

2Q

15

3Q

15

4Q

15

1Q

16

2Q

16

3Q

16

4Q

16

1Q

17

2Q

17

3Q

17

4Q

17

1Q

18

2Q

18

3Q

18

4Q

18

1Q

19

2Q

19

3Q

19

1 2 8 8 6 6 12 13 15 7 2 2 7 2 5 4 1 2 0

$ /

acre

# Deals

$25,221

Ann'd

Date Buyer Seller Asset Description Value(1)

Proved

Multiple

Prod.

Multiple Net Acres

($mm) ($/boe) ($/boe/d) ($/acre)(2)

13-Sep-19 Viper Energy Partners Santa Elena Minerals LP 1,358 net royalty acres in Permian $150 n.a. $107,143 nmf

03-Sep-19 Spur Energy Partners Concho Resources Inc ~70,000 net acres in Eddy and Lea, NM $925 n.a. $37,000 $13,214

06-Aug-19 Undisclosed Buyer Pioneer 3,300 net acres in Martin County $66 n.a. n.a. $20,000

31-Jul-19 Ecopetrol Oxy Midland Basin JV $1,500 n.a. n.a. $31,559

30-Jul-19 Viper Energy Partners Diamondback Energy Permian royalty assets $700 n.a. $175,000 nmf

Mean $668 n.a. $106,381 $21,591

Median $700 n.a. $107,143 $20,000



--

$50,000

$100,000

$150,000

$200,000

1Q

15

2Q

15

3Q

15

4Q

15

1Q

16

2Q

16

3Q

16

4Q

16

1Q

17

2Q

17

3Q

17

4Q

17

1Q

18

2Q

18

3Q

18

4Q

18

1Q

19

2Q

19

3Q

19

1 2 6 9 5 7 11 9 9 6 1 0 7 2 5 4 1 2 3

$ /

bo

e/d

# Deals

$113,122

GROSS PRODUCTION

TRANSACTION ACTIVITY (EXCLUDES CORPORATE DEALS)

TRANSACTION PRODUCTION MULTIPLES(3) TRANSACTION ADJUSTED NET ACRE MULTIPLES(3,4)

PERMITTING ACTIVITY BY MONTH

DIFFERENTIALS

Permian Snapshot

RIG COUNT

Source: BMO Transaction Database, Baker Hughes, BMO Commodity Products Group, Bloomberg, Drilling Info, PLS


1. Represents total enterprise value. Excludes transactions with deal value <$20 million. 2. $/acre multiple not adjusted for value associated with production.

3. Red line denotes average since 01-Jan-17. Calculated as the weighted average of each quarter’s transactions.

4. Production valued at $45,000/boepd in 2014, $30,000/boepd in 2015, $35,000/boepd in 2016 & 2017, and $40,000/boepd in 2018 & 2019.

TBU

TBU

TBU

TBU

TBU

TBU

TBU TBU

TBU TBU

TBU TBU

TBU

12

October 7, 2019


Rig Count 74 (1) 75 Oil Differential $2.90 ($0.05) $2.95


0%

5%

10%

15%

20%

--

100

200

300



-$0.30

-$0.20

-$0.10

$0.00

$0.10

$0.20

$0.30

$0.40

$0.50


-$6.00

-$4.00

-$2.00

$0.00

$2.00

$4.00

$6.00

$8.00

$10.00

$ /

mm

btu

$ /

bb

l

MEH HSC

6,000

6,500

7,000

7,500

8,000

1,000

1,200

1,400

1,600

1,800

2,000


mm

cf/

d

mb

bl/

d

Oil Gas

1,353

6,916

402350

315

398353

472

351 401

222175 200 191

18


H V+D

--$10,000$20,000$30,000$40,000$50,000$60,000

1Q

15

2Q

15

3Q

15

4Q

15

1Q

16

2Q

16

3Q

16

4Q

16

1Q

17

2Q

17

3Q

17

4Q

17

1Q

18

2Q

18

3Q

18

4Q

18

1Q

19

2Q

19

3Q

19

0 1 2 1 2 2 0 4 2 3 1 2 4 2 1 3 0 0 0

$ /

acre

# Deals

$6,130

--

$50,000

$100,000

$150,000

1Q

15

2Q

15

3Q

15

4Q

15

1Q

16

2Q

16

3Q

16

4Q

16

1Q

17

2Q

17

3Q

17

4Q

17

1Q

18

2Q

18

3Q

18

4Q

18

1Q

19

2Q

19

3Q

19

1 1 3 1 2 2 2 4 4 3 1 2 7 2 0 3 0 0 1

$ /

bo

e/d

# Deals

$68,384

Ann'd


Proved

Multiple

Prod.

Multiple Net Acres

($mm) ($/boe) ($/boe/d) ($/acre)(2)

17-Jul-19 Undisclosed Buyer Sundance Energy 6,100 net acres in Dimmit County $30 n.a. $28,069 $4,836

19-Nov-18 Lonestar Resources Inc Sabine Oil & Gas Corp 2,706 net acres in Eagle Ford $39 $2.98 $48,375 $14,302

20-Sep-18 WildHorse Undisclosed Seller 20,305 net Eagle Ford/Austin Chalk acres $35 n.a. n.a. $1,743

07-Sep-18 Undisclosed Buyer Viking Minerals LLC 1,191 net royalty acres in Eagle Ford $28 n.a. n.a. nmf

31-Jul-18 EP Energy Corp Undisclosed Seller Additional working interests in Eagle Ford $31 n.a. n.a. n.a.

Mean $33 $2.98 $38,222 $6,960

Median $31 $2.98 $38,222 $4,836



Eagle Ford Snapshot



DIFFERENTIALS RIG COUNT







GROSS PRODUCTION

TBU

TBU

TBU

TBU

TBU TBU

TBU

TBU

TBU

TBU

TBU

TBU TBU

TBU

TBU

13

October 7, 2019


Rig Count 54 -- 54 Oil Differential $3.20 ($0.40) $3.60

Permitting Activity 10 (1) 11 Gas Differential -- -- --

0%

5%

10%

15%

20%

--

20

40

60

80



5,000

6,000

7,000

8,000

9,000

10,000

11,000

12,000

13,000

70

80

90

100

110

120


mm

cf/

d

mb

bl/

d

Oil Gas

81

11,744

--

$2.00

$4.00

$6.00

$8.00

$10.00


--

$2.00

$4.00

$6.00

$8.00

$10.00

$ /

mm

btu

$ /

bb

l

LLS Henry Hub

180

115 105

174

113116 116

132

8698

179

82

4


H V+D

--$2,000$4,000$6,000$8,000

$10,000$12,000

1Q

15

2Q

15

3Q

15

4Q

15

1Q

16

2Q

16

3Q

16

4Q

16

1Q

17

2Q

17

3Q

17

4Q

17

1Q

18

2Q

18

3Q

18

4Q

18

1Q

19

2Q

19

3Q

19

0 0 5 1 1 3 2 3 0 2 2 0 1 1 2 1 0 1 1

$ /

mcfe

/d

# Deals

$4,808

--

$5,000

$10,000

$15,000

$20,000

1Q

15

2Q

15

3Q

15

4Q

15

1Q

16

2Q

16

3Q

16

4Q

16

1Q

17

2Q

17

3Q

17

4Q

17

1Q

18

2Q

18

3Q

18

4Q

18

1Q

19

2Q

19

3Q

19

0 0 3 1 1 2 1 3 0 1 2 0 1 1 1 1 0 1 1

$ /

acre

# Deals

$3,267

Ann'd


Proved

Multiple

Prod.

Multiple Net Acres

($mm) ($/mcfe) ($/mcfe/d) ($/acre)(2)

29-Jul-19 Osaka Gas Sabine Oil & Gas Corp 175,000 net acres in East TX $610 n.a. $2,905 $9,136

19-Dec-18 Comstock Shelby Shale LLC 6,023 net acres in Haynesville $21 n.a. n.a. $3,404

19-Nov-18 Aethon III QEP Resources Inc 49,700 net acres in Haynesville $735 $0.77 $2,475 $14,789

05-Sep-18 Viking Energy Group Multiple Sellers Texas and Louisiana assets $100 n.a. n.a. n.a.

05-Sep-18 Equinor Texegy LLC 60,000 net acres in Austin Chalk $75 n.a. n.a. $1,250

Mean $308 $0.77 $2,690 $7,145

Median $100 $0.77 $2,690 $6,270



Ark-La-Tex Snapshot








4. Production valued at $3,000/mcfepd in 2014, and $2,000/mcfepd in 2015, 2016, 2017, 2018, and 2019.


GROSS PRODUCTION

TBU

TBU

TBU

TBU

TBU TBU

TBU

TBU

TBU

TBU

TBU

TBU

TBU

TBU

TBU

14

October 7, 2019


Rig Count 61 (2) 63 Oil Differential $5.26 ($1.07) $6.33


0%

5%

10%

15%

20%

--

50

100

150



14,000

19,000

24,000

29,000

34,000

50

70

90

110

130

150


mm

cf/

d

mb

bl/

d

Oil Gas

101

30,257

-$3.00

-$2.00

-$1.00

$0.00

$1.00

$2.00

$3.00


-$15.00

-$10.00

-$5.00

$0.00

$5.00

$10.00

$15.00

$ /

mm

btu

$ /

bb

l

Brent Dominion

370

305258

397

276

382419

384334 346

277217

4


H V+D

--$5,000

$10,000$15,000$20,000$25,000$30,000

1Q

15

2Q

15

3Q

15

4Q

15

1Q

16

2Q

16

3Q

16

4Q

16

1Q

17

2Q

17

3Q

17

4Q

17

1Q

18

2Q

18

3Q

18

4Q

18

1Q

19

2Q

19

3Q

19

0 1 0 0 1 2 2 3 2 5 1 4 3 4 3 1 1 0 2

$ /

mcfe

/d

# Deals

$4,878

--$2,000$4,000$6,000$8,000

$10,000$12,000

1Q

15

2Q

15

3Q

15

4Q

15

1Q

16

2Q

16

3Q

16

4Q

16

1Q

17

2Q

17

3Q

17

4Q

17

1Q

18

2Q

18

3Q

18

4Q

18

1Q

19

2Q

19

3Q

19

0 1 0 0 1 2 2 4 2 4 1 3 1 3 2 0 0 0 0

$ /

acre

# Deals

$2,083

Ann'd


Proved

Multiple

Prod.

Multiple Net Acres

($mm) ($/mcfe) ($/mcfe/d) ($/acre)(2)

24-Jul-19 Diversified Gas & Oil EdgeMarc Energy Holdings 12,730 net acres in Ohio Utica $50 $0.32 $769 $3,928

19-Jul-19 Multiple Range Resources Corp Southwest Applachia ORRIs $600 n.a. $15,790 nmf

30-Jun-19 Undisclosed Buyer Range Resources Corp 20,000 non-producing net acres in PA $34 n.a. n.a. $1,700

27-Mar-19 Diversified Gas & Oil HG Energy II LLC Huckleberry assets in Appalachia $400 n.a. $3,227 n.a.

15-Oct-18 Undisclosed Buyer Range Resources Corp Overriding royalty interests in Appalachia $300 n.a. $17,649 nmf

Mean $277 $0.32 $9,359 $2,814

Median $300 $0.32 $9,509 $2,814



Appalachia Snapshot








4. Production valued at $3,000/mcfepd in 2014, and $2,000/mcfepd in 2015, 2016, 2017, 2018, and 2019.


GROSS PRODUCTION

TBU

TBU

TBU

TBU

TBU

TBU

TBU

TBU

TBU

TBU

TBU

TBU

TBU

TBU

TBU

15

October 7, 2019


Rig Count 55 2 53 Oil Differential ($1.85) $0.65 ($2.50)

Permitting Activity 11 (18) 29 Gas Differential ($0.60) $0.12 ($0.72)

0%

5%

10%

15%

20%

--

50

100

150

200



-$1.00

-$0.50

$0.00

$0.50


-$20.00

-$10.00

$0.00

$10.00

$ /

mm

btu

$ /

bb

l

Clearbrook CIG

1,500

1,800

2,100

2,400

2,700

3,000

800

900

1,000

1,100

1,200

1,300

1,400

1,500


mm

cf/

d

mb

bl/

d

Oil Gas

1,432

2,912201

12896

133114 144 138 145 144 154

137

103

6


H V+D

--

$5,000

$10,000

$15,000

$20,000

$25,000

1Q

15

2Q

15

3Q

15

4Q

15

1Q

16

2Q

16

3Q

16

4Q

16

1Q

17

2Q

17

3Q

17

4Q

17

1Q

18

2Q

18

3Q

18

4Q

18

1Q

19

2Q

19

3Q

19

0 0 1 2 0 0 2 3 1 0 3 2 0 5 2 0 0 1 0

$ /

acre

# Deals

$2,702

--

$20,000

$40,000

$60,000

$80,000

1Q

15

2Q

15

3Q

15

4Q

15

1Q

16

2Q

16

3Q

16

4Q

16

1Q

17

2Q

17

3Q

17

4Q

17

1Q

18

2Q

18

3Q

18

4Q

18

1Q

19

2Q

19

3Q

19

0 1 1 4 0 2 3 3 0 1 3 3 0 6 3 0 0 1 0

$ /

bo

e/d

# Deals

$43,737

Ann'd


Proved

Multiple

Prod.

Multiple Net Acres

($mm) ($/boe) ($/boe/d) ($/acre)(2)

22-Apr-19 Northern Oil and Gas Flywheel Energy LLC 18,000 net acres in Williston Basin $310 n.a. $47,014 $17,238

31-Jul-18 Northern Oil and Gas W Energy Partners 10,600 net acres in Williston Basin $288 n.a. $42,708 $27,196

18-Jul-18 Northern Oil and Gas Pivotal Petroleum Partners LP Producing assets in Williston Basin $152 n.a. $37,032 n.a.

12-Jul-18 PetroShale Inc Slawson Exploration Co 1,981 net acres in Williston Basin $55 $6.04 $100,000 $27,764

06-Jul-18 Energy Resources 12 LP Bruin E&P Partners LLC 2.8% non-operated WI in Bakken assets $83 n.a. n.a. n.a.

Mean $178 $6.04 $56,688 $24,066

Median $152 $6.04 $44,861 $27,196



Bakken Snapshot










GROSS PRODUCTION

TBU

TBU

TBU

TBU

TBU TBU

TBU

TBU

TBU

TBU

TBU

TBU TBU

TBU

TBU

16

October 7, 2019


Rig Count 65 -- 65 Oil Differential ($1.85) $0.65 ($2.50)

Permitting Activity 83 20 63 Gas Differential ($0.60) $0.12 ($0.72)

0%

5%

10%

15%

20%

--

50

100

150



-$1.00

-$0.50

$0.00

$0.50


-$20.00

-$10.00

$0.00

$10.00

$ /

mm

btu

$ /

bb

l

Clearbrook CIG

12,500

13,000

13,500

14,000

14,500

15,000

15,500

500

600

700

800

900

1,000


mm

cf/

d

mb

bl/

d

Oil Gas

874

13,723

689

829 812

352 402494

328

164

306 283

434325

24


H V+D

Ann'd


Proved

Multiple

Prod.

Multiple Net Acres

($mm) ($/boe) ($/boe/d) ($/acre)(2)

03-Sep-19 Undisclosed Buyer Crescent Point 224,000 net undeveloped acres in Uinta $525 n.a. $32,051 $2,344

14-Feb-19 Undisclosed Buyer Harvest Oil & Gas Corp San Juan Basin assets $43 $1.57 $10,835 n.a.

31-Jan-19 Undisclosed Buyer Extraction Oil & Gas 5,000 net acres in Powder River $22 n.a. n.a. $4,480

01-Oct-18 DJR Energy LLC Encana 182,000 net acres in San Juan Basin $480 n.a. $88,889 $2,637

28-Aug-18 Vermilion Energy Inc Massif Oil & Gas LLC 55,000 acres in Powder River Basin $150 n.a. $56,604 $2,727

Mean $244 $1.57 $47,095 $3,047

Median $150 $1.57 $44,328 $2,682



--$20,000$40,000$60,000$80,000

$100,000$120,000

1Q

15

2Q

15

3Q

15

4Q

15

1Q

16

2Q

16

3Q

16

4Q

16

1Q

17

2Q

17

3Q

17

4Q

17

1Q

18

2Q

18

3Q

18

4Q

18

1Q

19

2Q

19

3Q

19

2 0 4 4 1 6 2 0 1 6 3 9 3 1 3 1 1 0 2

$ /

bo

e/d

# Deals

$36,959

--

$5,000

$10,000

$15,000

$20,000

1Q

15

2Q

15

3Q

15

4Q

15

1Q

16

2Q

16

3Q

16

4Q

16

1Q

17

2Q

17

3Q

17

4Q

17

1Q

18

2Q

18

3Q

18

4Q

18

1Q

19

2Q

19

3Q

19

0 0 3 3 0 1 1 0 1 0 1 5 2 0 2 1 0 0 0

$ /

acre

# Deals

$4,655



DIFFERENTIALS

Rockies (excl. Bakken) Snapshot

RIG COUNT







GROSS PRODUCTION

TBU

TBU

TBU

TBU

TBU TBU

TBU

TBU

TBU

TBU

TBU

TBU TBU

TBU

TBU

17

October 7, 2019


Rig Count 69 (3) 72 Oil Differential -- -- --

Permitting Activity 64 (13) 77 Gas Differential ($0.68) $0.13 ($0.80)

0%

5%

10%

15%

20%

--

100

200

300

400



-$1.00

-$0.75

-$0.50

-$0.25

$0.00

$0.25


-$1.00

-$0.75

-$0.50

-$0.25

$0.00

$0.25

$ /

mm

btu

$ /

bb

l

Cushing Panhandle

8,000

10,000

12,000

14,000

16,000

18,000

550

600

650

700

750

800

850


mm

cf/

d

mb

bl/

d

Oil Gas 763

14,278

405 382355

403339

435 389

298

359 341314 336

25


H V+D

--

$5,000

$10,000

$15,000

$20,000

1Q

15

2Q

15

3Q

15

4Q

15

1Q

16

2Q

16

3Q

16

4Q

16

1Q

17

2Q

17

3Q

17

4Q

17

1Q

18

2Q

18

3Q

18

4Q

18

1Q

19

2Q

19

3Q

19

4Q

19

1 3 1 2 0 3 3 2 4 1 2 1 0 0 0 1 0 0 0 0

$ /

acre

# Deals

$5,760

--

$50,000

$100,000

$150,000

$200,000

1Q

15

2Q

15

3Q

15

4Q

15

1Q

16

2Q

16

3Q

16

4Q

16

1Q

17

2Q

17

3Q

17

4Q

17

1Q

18

2Q

18

3Q

18

4Q

18

1Q

19

2Q

19

3Q

19

4Q

19

1 4 1 3 1 6 3 1 4 2 4 5 2 2 5 4 2 0 4 1

$ /

bo

e/d

# Deals

$39,380

Ann'd


Proved

Multiple

Prod.

Multiple Net Acres

($mm) ($/boe) ($/boe/d) ($/acre)(2)

27-Sep-19 Contango White Star Petroleum LLC 314,800 net acres in Mid-Con $133 $1.57 $8,833 $421

12-Sep-19 Contango Will Energy Corporation TX Panhandle, W. Anadarko, and N.LA $23 n.a. $16,429 $144

28-Aug-19 Scout Energy Partners Riviera Resources Inc Hugoton Basin assets $295 $2.30 $17,020 $295

31-Jul-19 Continental Resources Inc Undisclosed Seller SCOOP assets $80 n.a. n.a. n.a.

08-Jul-19 NextEra Energy Inc Encana 140,000 net acres in Arkoma Basin $165 n.a. $12,857 $1,179

Mean $139 $1.93 $13,785 $510

Median $133 $1.93 $14,643 $358



Mid-Continent Snapshot










GROSS PRODUCTION

TBU

TBU

TBU

TBU

TBU TBU

TBU

TBU

TBU

TBU

TBU

TBU

TBU

TBU

TBU

18

October 7, 2019


Rig Count 22 -- 22 Oil Differential $3.20 ($0.40) $3.60

Permitting Activity 16 7 9 Gas Differential -- -- --

0%

5%

10%

15%

20%

--

10

20

30

40


Deep Water Shelf % of Total Rigs

--

$2.00

$4.00

$6.00

$8.00

$10.00


--

$2.00

$4.00

$6.00

$8.00

$10.00

$ /

mm

btu

$ /

bb

l

LLS Henry Hub

2,000

2,500

3,000

3,500

4,000

4,500

1,000

1,200

1,400

1,600

1,800

2,000

2,200


mm

cf/

d

mb

bl/

d

Oil Gas1,932

3,116

39

32 30 32 33

2629

26 27 28

21

35

10


--

$15,000

$30,000

$45,000

$60,000

1Q

15

2Q

15

3Q

15

4Q

15

1Q

16

2Q

16

3Q

16

4Q

16

1Q

17

2Q

17

3Q

17

4Q

17

1Q

18

2Q

18

3Q

18

4Q

18

1Q

19

2Q

19

3Q

19

0 0 1 1 0 0 2 0 0 0 0 1 2 2 2 1 1 3 0

$ /

bo

e/d

# Deals

$32,727

--

$10

$20

$30

$40

1Q

15

2Q

15

3Q

15

4Q

15

1Q

16

2Q

16

3Q

16

4Q

16

1Q

17

2Q

17

3Q

17

4Q

17

1Q

18

2Q

18

3Q

18

4Q

18

1Q

19

2Q

19

3Q

19

0 0 1 0 0 0 2 1 0 0 0 1 2 1 0 1 1 2 0

$ /

bo

e

# Deals

$16.39

Ann'd


Proved

Multiple

Prod.

Multiple Net Acres

($mm) ($/boe) ($/boe/d) ($/acre)(3)

27-Jun-19 W&T Offshore ExxonMobil Mobile Bay assets $200 $2.70 $10,101 n.a.

13-May-19 Equinor Shell 22.45% WI in Caesar-Tonga Field $965 n.a. $60,313 n.a.

23-Apr-19 Murphy LLOG Bluewater LLC Mississippi Canyon & Green Canyon $1,375 $20.83 $36,184 n.a.

16-Jan-19 Talos Energy Inc Samson Energy Co LLC Non-op Gulf of Mexico working interest $30 $13.45 $17,939 n.a.

10-Oct-18 Murphy Petrobras Gulf of Mexico joint venture $900 $15.00 $21,951 n.a.

Mean $694 $13.00 $29,298 n.a.

Median $900 $14.23 $21,951 n.a.



Gulf of Mexico Snapshot

PERMITTING ACTIVITY BY MONTH(1)




1. Permits include directional and unidentified drilling permits. 2. Represents total enterprise value. Excludes transactions with deal value <$20 million.

3. $/acre multiple not adjusted for value associated with production.


GROSS PRODUCTION


TRANSACTION PRODUCTION MULTIPLES(4) TRANSACTION PROVED RESERVE MULTIPLES(4)

TBU

TBU TBU

TBU TBU

TBU

TBU

TBU TBU

TBU

TBU TBU

TBU

TBU

19

October 7, 2019

Upcoming Industry Events

Disclaimer: The foregoing links are for convenience only and relate to materials that were not prepared or reviewed by BMO Capital Markets. BMO Capital Markets takes

no responsibility for and makes no representations with respect to the contents thereof. These materials may be inconsistent with the views of BMO Capital Markets.

Click event to open

April 2019 Apr 22-23 Mineral & Royalty Conference

June 2019 Jun 24-26 IPAA Midyear Meeting

October 2019 Oct 9 IPAA Leaders in Industry Luncheon

Oct 15 Houston Producers Forum Luncheon

Oct 18 ADAM-Houston Monthly Luncheon

Oct 22-23 A&D Strategies and Opportunities Conference

2020

Sep 8-10 DUG Eagle Ford (San Antonio)

Oct 27-28 A&D Strategies and Opportunities Conference

Nov 2-4 Executive Oil Conference & Exhibition

November 2019 Nov 4-6 Executive Oil Conference & Exhibition

Nov 13 IPAA Leaders in Industry Luncheon

Nov 15 ADAM-Houston Monthly Luncheon

Nov 19 IPAA Oil & Gas for Newcomers

Nov 19 Houston Producers Forum Luncheon

Nov 19-21 DUG Midcontinent (Oklahoma City)

Nov 20-21 11th Annual North America Assembly & Dinner

December 2019 Dec 5 177th OPEC Meeting

Dec 11 IPAA Leaders in Industry Luncheon

Dec 17 Houston Producers Forum Luncheon

Dec 20 ADAM-Houston Monthly Luncheon

January 2019 Jan 15 Houston Producers Forum Luncheon

Jan 25 ADAM-Houston Monthly Luncheon

Jan 24 IPAA Private Capital Conference

May 2019

May 21 Houston Producers Forum Luncheon

May 22 SPE Business Development Group Meeting

March 2019 Mar 26-28 International Petroleum Technology Conference

February 2020 Feb 3-7 NAPE Summit Week

Feb 11-12 Enercom Dallas

Feb 18-19 DUG Rockies (Denver)

Feb 19 Houston Producers Forum Luncheon

March 2020 Mar 2 Energy Capital Conference

Mar 4 Women in Energy Luncheon

Mar 5-7 IADC/SPE International Drilling Conference

Mar 9-13 Houston CERA Week

Mar 17 Houston Producers Forum Luncheon

Mar 20 ADAM-Houston Monthly Luncheon

April 2020 Apr 6-8 DUG Permian (Fort Worth)

Apr 17 ADAM-Houston Monthly Luncheon

Apr 20-22 OGIS New York

Apr 21 Houston Producers Forum Luncheon

May 2020 May 15 ADAM-Houston Monthly Luncheon

May 19 Houston Producers Forum Luncheon

May 19-20 DUG Haynesville (Shreveport)

June 2020 Jun 16 Houston Producers Forum Luncheon

Jun 16-18 DUG East (Pittsburgh)

Jun 19 ADAM-Houston Monthly Luncheon

January 2020 Jan 15 ADI Forum

Jan 17 ADAM-Houston Monthly Luncheon

Jan 21 Houston Producers Forum Luncheon

Jan 23 IPAA Private Capital Conference

July 2020 Jul 17 ADAM-Houston Monthly Luncheon

Jul 21 Houston Producers Forum Luncheon

Jul 22-24 SPE Unconventional Resources Technology

August 2020 Aug 9-12 Enercom Oil & Gas Conference

Aug 18 Houston Producers Forum Luncheon

Aug 21 ADAM-Houston Monthly Luncheon

https://mineralconference.com/





https://www.ipaa.org/events/midyear-meeting-2019/





https://www.ipaa.org/events/leaders-industry-luncheon-october-2019/



http://www.houstonproducersforum.org/Luncheons.aspx



http://adamhouston.org/events





https://www.hartenergyconferences.com/ad-strategies-and-opportunities





https://www.hartenergyconferences.com/dug-eagle-ford











https://www.hartenergyconferences.com/executive-oil-conference










https://www.ipaa.org/events/leaders-industry-luncheon-november-2019/









https://www.ipaa.org/events/oil-gas-orientation-november-2019/








https://www.hartenergyconferences.com/dug-midcontinent






https://oilandgascouncil.com/event-events/north-america-assembly-and-dinner/





https://www.opec.org/opec_web/en/311.htm



https://www.ipaa.org/events/























http://www.ipaa.org/events/private-capital-conference-2019/



http://www.spegcs.org/events/4214/

https://ace.aapg.org/2019


https://events.mergermarket.com/energy




https://www.spegcs.org/events/4376/



http://www.iptcnet.org/19iptc/home/?_ga=2.149135166.98797786.1524242931-1252836126.1522358097





https://www.ipaa.org/events/nape-summit-week/





http://www.enercomdallas.com/







https://www.hartenergyconferences.com/dug-rockies









https://www.hartenergyconferences.com/energy-capital-conference



https://www.hartenergyconferences.com/women-in-energy



https://www.spe.org/en/events/drilling-conference/home/

https://www.spe.org/events/en/2019/conference/19dc/schedule-overview.html





https://ceraweek.com/register.html













https://www.hartenergyconferences.com/dug-permian-basin





https://www.ipaa.org/events/ogis-new-york-2020/























https://www.hartenergyconferences.com/dug-haynesville








https://www.hartenergyconferences.com/dug-east












https://www.adi-forum.com/












https://www.ipaa.org/events/private-capital-conference-2019-2/












https://www.spe.org/events/calendar/







https://www.theoilandgasconference.com/















20

October 7, 2019

SCOOP/STACK/Merge

DJ-Niobrara

Eagle Ford

Haynesville

Granite Wash

GOM

Permian

Marcellus

Utica

Williston

Gulf Coast Onshore

Piceance

Powder River Green River

Legend

Current

Change

This material is prepared by the BMO Capital Markets’ Investment and Corporate Banking Department, for distribution to BMO Capital Markets’ clientele. It is not a product of

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by any means by any third parties, except with the prior written permission of BMO Capital Markets.

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Source of rig count stats: Baker Hughes

Rig Count Summary MAPS IN

MASTER VIEW

Contacts

Disclaimer

Jason Martinez

MD & Head of U.S. A&D

713-546-9771

[email protected]

Howard Barnwell

MD & Transactions Mgr.

713-546-9767

[email protected]

Rob Priske

MD & Transactions Mgr.

713-546-9727

[email protected]

Dan Schockling

Director & Head of Commercial

713-518-1223

[email protected]

Michael Hackett

Vice President

Marian Yu

Associate

Aaron Moeller

Associate

BMO uses updated basin outlines, and the resulting rig counts, to more accurately represent current basin knowledge. The data below reflect these changes

and is different than those shown by Baker Hughes. The totals are the same.

415

1

55

2

12

--

49

(2)21

(1)

22

--

5

--52

(3)

54

--

74

(1)

14

(2)

3

--

26

111

(1)

This

Week Change

Last

Week

Last

Year

Total Rigs 855 (5) 860 1,052

Oil 710 (3) 713 861

Gas 144 (2) 146 189

Miscellaneous 1 -- 1 2

Directional 54 (3) 57 66

Horizontal 749 (3) 752 919

Vertical 52 1 51 67

Basin

Permian 415 1 414 485

SCOOP/STACK/Merge 52 (3) 55 111

Granite Wash 5 -- 5 27

Eagle Ford 74 (1) 75 87

Haynesville 54 -- 54 56

Marcellus 49 (2) 51 56

Utica 12 -- 12 20

Williston 55 2 53 52

DJ-Niobrara 21 (1) 22 27

Green River 11 (1) 12 18

Powder River 26 1 25 15

Piceance 3 -- 3 7

Gulf Coast Onshore 14 (2) 16 25

GOM 22 -- 22 22

Alaska 9 1 8 5

Other 33 -- 33 39

Mid-Con 12 -- 12 21

Rockies 4 1 3 3

Western 15 (1) 16 13

Eastern 2 -- 2 2

Michelle Tankimovich

Analyst

TBU

TBU

TBU

Documents

Prompt Oil Price ($/bbl) $52.45 ($3.96) (7.0%) Let’s ...€¦ · 07.10.2019 · Longer term forecasts indicate normal to above normal weather in the second half of October. Gas