Chicago Jun 25, 2015 (Thomson StreetEvents) -- Edited Transcript of Bill Barrett Corp presentation Tuesday, June 23, 2015 at 3:00:00pm GMT TEXT version of Transcript ================================================================================ Corporate Participants ================================================================================ * Scot Woodall Bill Barrett Corporation - CEO and President ================================================================================ Presentation -------------------------------------------------------------------------------- Scot Woodall, Bill Barrett Corporation - CEO and President [1] -------------------------------------------------------------------------------- Good morning. I'm Scot Woodall, the CEO and President of the Bill Barrett Corporation. I appreciate everyone in attendance today, and I appreciate your interest in our Company. Before we get started here, I would refer you to the last couple of pages of our presentation for our forward-looking and other cautionary statements. We're going to start with a few key highlights of the Company. And we've got a few things listed here and some points here that I'd like to make, and hopefully, be kind of takeaways of the presentation today. The first off is in that bullet number one there. Our program in the DJ Basin of drilling extended reach laterals in the Niobrara formations is working. And I think you'll see a lot of supporting data associated with that throughout the presentation. But with our latest designs of completion, our latest well costs, our latest estimates of EUR, I think we are achieving about a 40% at-the-well rate of return at current commodity pricing. Secondly, the Company's overall performance is really exceeding our expectations. In the first quarter, we met our first-quarter production guidance. We actually did one of those beat and raises, and upped full-year guidance for 2015. And then, obviously, here today, we are reconfirming second-quarter guidance, which I don't think is too much of a stretch, with only like seven or eight days left in the quarter. But we are reconfirming, obviously, our second-quarter guidance. Really all of the well -- of the Company's performance of meeting and beating and raising guidance is all a direct result of the program that we are doing in DJ Basin and the extended reach lateral program. We're going to talk a little bit here about what we most recently announced, is that we are going to add a second rig into the Northeast Wattenberg program. I think the investment thesis is so compelling, generating a 40% rate of return, the results are becoming very predictable. Our execution has been top notch, in that we will add a second rig. And we expect that second rig to come in, in July. Financially, the Company is in great shape. We have about $150 million of cash in the bank. We have a credit revolver of $375 million that is undrawn. So I think we have plenty of liquidity to fund our operations on a go-forward basis. We also have, I think, an enviable hedge position, with nearly 90% of our production hedged in 2015 at $90 a barrel, and then somewhere north of 50% of our production hedged in 2016 at prices of about $61 a barrel. So very solid from a financial position. So, if we just go over a little bit of the overview of the Company on slide 5 here -- you know, we have been down the path of repositioning the Company over the last several years. And we repositioned the Company into two key basins, in which we have very contiguous acreage positions. So we have about 165,000 acres in the Uinta Basin oil play, and about 100,000 acres in the DJ Niobrara play. Very consolidated positions, very focused positions. The DJ Basin is really becoming a flagship asset for us. And you see in 2015, we will devote about 90% of our capital to the DJ Basin program, about 10% to Utah. This is really strictly based on allocations of internal rate of return. The Company is also in a very enviable position in terms of almost all of our acreage is HBP. Very few drilling commitments associated with holding this very large contiguous acreage position. We'll talk a little bit about 2014, 2015, and 2016. The Company just came out with some 2016 guidance I'll address here in a little bit. But I will say these two assets are providing a strong foundation for future growth going forward. And the financial position I just spoke to, with the one added comment there about our first maturity is not until 2019. So the Company has really gone through a lot of transition in the last several years, and I think is emerging as a very strong player in the sector. We talk about that growth. And this slide kind of illustrates a little bit what I am speaking to. So we've got a production bar chart here that's talking about a CAGR over the last several years of 60%; a proved reserve over on the right side of the chart there, but a CAGR of over 100% in terms of growth. What I find more interesting is almost if you look at the contribution of the DJ and the Utah, you go back as short as 2010, 2011, they are a minor part of the Company's profile in terms of production and reserves. So I think that fits into what we've been saying about we basically bought and sold the Company's entire portfolio over the last couple of years. And then here we talk about the DJ being the flagship asset of the Company. And you can see it's not even contributing anything to production until 2012. So we are pretty new entrants into each of these plays. And I think we've accomplished quite a bit in a very short period of time, as you'll see throughout this presentation. You know, the DJ is really turning out to provide us, almost single-handedly, the growth and cash flows that the Company needs going forward. You know, when you think about, like I said, we just started the program in 2012 and where we are today, and where that Basin has come today -- we'll show a slide here in a few minutes that will talk about where the DJ Basin sits in terms of overall basins in the United States. But it is really providing that vehicle for growth. So when we talk about one of the announcements that we made last week there in that second bullet point, is we are adding in a second rig into the DJ Basin. So, we'll talk about some things -- we used to run three rigs in the Basin last year. We cut it to one rig here at the beginning of the year. But we had some uncertainty concerning commodity prices, service costs, even our own well results. And I think we have a better view of all of those things that's added -- that has had us go forward and add in a second rig. |