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Chk Aug 2012

Chk Aug 2012

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Published by Devon Shire

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Published by: Devon Shire on Aug 07, 2012
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12/23/2013

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August 2012 Investor Presentation
 
AUGUST 2012
INVESTOR PRESENTATION
 
August 2012 Investor Presentation
FORWARD-LOOKING STATEMENTS
This presentation includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements give our current expectations orforecasts of future events. They include estimates of our natural gas and liquids reserves and resources, expected naturalgas and liquids production and future expenses, assumptions regarding future natural gas and liquids prices, plannedasset sales, budgeted capital expenditures for drilling and other anticipated cash outflows, as well as statementsconcerning anticipated cash flow and liquidity, business strategy and other plans and objectives for futureoperations. Disclosures of the estimated realized effects of our hedging positions on natural gas and liquids sales arebased upon market prices that are subject to significant volatility. Our production forecasts are dependent upon manyassumptions, including estimates of production decline rates from existing wells and the outcome of future drillingactivity. Although we believe the expectations and forecasts reflected in forward-looking statements are reasonable, wecan give no assurance they will prove to have been correct. They can be affected by inaccurate assumptions or by knownor unknown risks and uncertainties.
Factors that could cause actual results to differ materially from expected results are described in Item 1A "Risk Factors" inour 2011 Form 10-K filed with the U.S. Securities and Exchange Commission on February 29, 2012. These risk factorsinclude the volatility of natural gas and liquids prices; the adverse effect of lower prices for an extended period of time onour business; the limitations our level of indebtedness may have on our financial flexibility, including a reduced ability toborrow or raise additional capital as a result of lower natural gas and liquids prices; declines in the values of our naturalgas and liquids properties resulting in ceiling test write-downs; the availability of capital on an economic and timely basisfrom planned asset monetization transactions and other sources to fund reserve replacement costs and other capitalexpenditures; our ability to replace reserves and sustain production; uncertainties inherent in estimating quantities ofnatural gas and liquids reserves and projecting future rates of production and the amount and timing of developmentexpenditures; inability to generate profits or achieve targeted results in drilling and well operations; leasehold termsexpiring before production can be established; hedging activities resulting in lower prices realized on natural gas andliquids sales, the need to secure hedging liabilities and the inability of hedging counterparties to satisfy their obligations;drilling and operating risks, including potential environmental liabilities; legislative and regulatory changes adverselyaffecting our industry and our business, including those relating to hydraulic fracturing; general economic conditionsnegatively impacting us and our business counterparties; oilfield services shortages and transportation capacityconstraints and interruptions that could adversely affect our revenues and cash flow; and adverse results in pending orfuture litigation.
We caution you not to place undue reliance on our forward-looking statements, which speak only as of the date of thispresentation, and we undertake no obligation to update this information.
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August 2012 Investor Presentation
 
August 2012 Investor Presentation
2Q ’12 EARNINGS SUMMARY 
We believe this is an excellent series of accomplishments in a very toughyear for the industry as natural gas prices declined ~30%
 
We are focused on executing our transformation to a more balanced asset base betweenliquids and natural gas - it’s not easy with $2/mcf wellhead natural gas, but we are doing it
(1)Reconciliations of non-GAAP financial measures to comparable GAAP measures appear on pages 46–47
3
Top-tier production growth
2Q ’12 total production averaged~3.8 bcfe/d, up 25% YOY and 4%sequentially
2Q ’12 liquids production of ~130,200 bbls/d, up 65% YOY and 15%sequentially
Liquids now 21% of total production and 70% of unhedged revenue
2Q ’12 financial performance
~$803 mm of adjusted ebidta
(1)
~$895mm of operating cash flow
(1)
Anticipate entering into asset sales of ~$7.0 Billion in 3Q’12,bringing expected 2012 sales through 3Q’12 to ~$11.7 billion
Raised 2012 sales goal to $13-14 billion
Proceeds to fully fund cap-ex budget and reduce long-term debt to $9.5billion by YE 2012
Cap-ex for drilling, completion and leasehold to be significantlyreduced from 2Q ’12 levels during remainder of 2H’12 and in 2013
Increased natural gas hedges for last half of 2012

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