Fairway Resources Company Introduction June 2018

Transcription

1 Company Introduction June 08

2 Growing Liquids-Weighted Position in the NW STACK Fairway Profile Fairway NW STACK Asset Map III ( Fairway or the Company ) is a privately owned oil and gas operator focused on acquiring and exploiting assets in Oklahoma and Texas Formed in June 06 with financial backing from Denham Capital Management, Fairway closed its initial acquisition in November 06 NW STACK Asset Overview 6 Led by an experienced management team, Fairway has embarked on building a scalable business in the NW STACK Largely operated, contiguous position: ~6,000 net acres primarily in Major County, OK Continuing to grow acreage position Significant upside potential in various formations: Multi-year drilling inventory across multiple proven landing zones including Osage and Meramec 5 Recent well results highlight the region s potential: Fairway s Burson -H well, IP0:,005 Boepd, top performing Osage well in the region (,76 lateral length) Meramec is proving to be a strong consistent producer with Fairway s Dora Bell Bach -5H and Nickel -6H Large upside potential emerging in the Chester with Sandridge s McCray -0H/5H well, IP0: 980 Boepd (9,8 lateral length) Burson -H IP0:,005 Boepd % Oil: 8% Dora Bell Bach -5H IP0: 679 Boepd % Oil: 86% 5 6 Dietz 5-H IP0: 68 Boepd % Oil: 79% Edwards -H IP0: 57 Boepd % Oil: 7% Nickel -6H IP0: 68 Boepd % Oil: 70% Sandridge Energy McCray -0H/5H IP0: 980 Boepd % Oil: 65% Source: IHS, FactSet, RigData 5//8, Investor Presentation Q07 Active Permits include all permits issued from //7 to /0/8, that have not been spudded

3 Track Record of Company-Building and Generating Investor Returns Name Position Years of Industry Experience Background Matt Eagleston President & CEO 0+ Co-founded the first in 005, serving as President and CEO of Fairway I and Fairway II Former President of The Wiser Oil Company + years of experience in various engineering and production capacities across Snyder Oil Corporation, Fina Oil and Chemical, Natural Resources Management and Petro-Lewis Corporation BS from Texas Tech University Les Stephens Chairman & CFO 0+ Co-founded the first in 005, serving as Chairman and CFO of Fairway I and Fairway II Former Vice President and CFO of Stroud Energy, Ltd 0 years of banking experience, including years as an energy banker with Crocker National Bank and Bank of America Former Managing Director in Bank of America s Project Finance Group BS from Oregon State University; MBA from Stanford Graduate School of Business Joe Small Executive Vice President 0+ Partnered with Matt and Les in June 005 as Vice President Land for Fairway I and Fairway II Former Landman for Lyco Energy Corporation BBA in Business from Texas Tech University; certified Professional Landman Geoff Ice Vice President - Geosciences 0+ Former Vice President of Geology for Rosewood Resources Former geologist for Mobil Oil Corporation BA in Geology from Trinity University; MS in Geology from University of Texas at Arlington Rick Tompkins Vice President - Operations 0+ Former Regional Vice President for Halliburton s Eurasia region located in Moscow, Russia Former Corporate Business Director for JSC TNK-BP Management and General Manager of Operations for EF Energy LLC BS from Oklahoma State University

4 Potential of the NW Stack Extension and Similarities to Established STACK Positions Normal Pressure STACK NW STACK Extension Stratigraphic Column Early stage development of Meramec and Woodford with development in the Oswego and Osage Value play with characteristically low D&C costs Stratigraphic Column Large prospect area in the early stages of delineation Thick hydrocarbon column with multiple targets in the early stages of delineation Two key benches Two key benches Meramec and Osage Meramec and Osage Operators transitioning to full-field development Ample development potential with low D&C costs Co-development viability unclear Oswego Modern completions allowing operators to capture value accretion M C Manning Oswego WDFD Osage Meramec Type Curve IRR (%) Chester 00% 90% 80% 70% 60% 50% 0% 0% 0% 00% 00% 00% 00% 88% 85% 85% 6% 56% % 0% % W L. Osage U. Osage Type Curve IRR (%) 00% 90% 80% 70% 60% 50% 0% 0% 0% >00% 7% 6% 60% 9% % % % 0% 0%. Based on WFS type curves 0% Cana WFD Black Oil Vol Oil Cond Wet Gas Meramec Meramec Meramec Meramec Cond WFD Over Shallow Oil WFD Dry Gas Dry Gas Black Oil Press Bl Vol Oil Meramec WFD WFD Oil Meramec Meramec 0% Fairway (Gen III) NW Gas WFD NW STACK Volatile Oil Fairway (Gen II) NW STACK Condensate Fairway (Gen I) NW Gas MISS NW Volat WFD

5 Consistent Thickness and Reservoir Properties Allow Repeatability in Production Results NW STACK North to South Cross-Section Commentary A A Big Lime Oswego Red Fork Inola Chester Numerous operators testing viability of Chester across NW STACK which presents significant upside potential Manning Meramec has consistent thickness across Fairway s southern acreage and is proving to be a solid producer Meramec Osage Data Point Fairway Acreage A Woodford Hunton Osage is carbonate rich section with thickness of 50 ft with significant well control and two target benches A Source: IHS log data 5

6 Position in Regional Bright Spots Based on Subsurface Quality Meramec WFS Quality Index Map Osage WFS Quality Index Map Meramec quality index mapping shows the Meramec to be of appreciable thickness with high reservoir quality 90-Day CUM Fairway Acreage Increasing Composite Subsurface Quality Fairway has a unique position with high quality Osage that has high liquids yield 90-Day CUM Fairway Acreage Increasing Composite Subsurface Quality Contours are Meramec TVD,000 CI 8 Contours are Osage TVD 500 CI Dora Bell Bach -5H IP0: 679 Boepd % Oil: 86% Prop/ft:,9 lbs/ft Sandridge Campbell 05-6H IP0: 85 Boepd % Oil: 85% Prop/ft:, lbs/ft Nickel -6H IP0: 68 Boepd % Oil: 70% Prop/ft:,78 lbs/ft Chesapeake Hoskins 5-9- H IP0: 989 Boepd % Oil: 58% Prop/ft:,6 lbs/ft Red Bluff Boehs 7-MH IP0:,60 Boepd % Oil: 5% Prop/ft:,07 lbs/ft Sandridge Medill 05-7H IP0: 907 Boepd % Oil: 8% Prop/ft:,050 lbs/ft Staghorn Eric Matthews 0-- IP0: 906 Boepd % Oil: 8% Prop/ft:,695 lbs/ft Red Bluff Burrell 5-MH IP0:,8 Boepd % Oil: 56% Prop/ft:,08 lbs/ft Burson -H IP0:,005 Boepd % Oil: 8% Prop/ft:, lbs/ft Red Bluff Martens 5-5H IP0:,08 Boepd % Oil: 67% Prop/ft:,07 lbs/ft Edwards -H IP0: 57 Boepd % Oil: 7% Prop/ft:,08 lbs/ft Comanche Shepherd -5-H IP0: 60 Boepd % Oil: 6% Prop/ft: 599 lbs/ft Reiger 7-H IP0: 59 Boepd % Oil: 7% Prop/ft: 50 lbs/ft Comanche Condreay -H IP0: Boepd % Oil: 70% Prop/ft: 68 lbs/ft Dietz 5-H IP0: 68 Boepd % Oil: 79% Prop/ft: 97 lbs/ft Newton -H IP0: 597 Boepd % Oil: 7% Prop/ft:,7 lbs/ft Source: Production data pulled from IHS. Reservoir Quality Index maps derived from WFS proprietary reservoir characterization and mapping. 6

7 Recent Well Results Compete with Best Performers in Normal Pressure STACK Select IP Results Recent NW STACK Well Results Rank Operator WellName IP0 IP0 /,000' LatLen Formation (Boepd) (Boepd) (Ft) Marathon Firestone -6Mh,8 7,9 Meramec Red Bluff Martens 5-5,08 70,8 Lower Osage Red Bluff Boehs 7-Mh,60 5,67 Meramec Alta Mesa Drilling first Major County well Osage Flying Monkey Red Bluff Burrell 5- Mh,8 6,67 Meramec 5 Chisholm O&G Vadder H,09 9,6 Osage 6 Newfield Nancy 809H-R 99 5,0 Meramec 7 Burson -H,005,76 Osage 8 Alta Mesa Todd Mh, ,09 Osage 9 Husky Ventures Skywalker -H 57 9,95 Osage 0 Dora Bell Bach -5H 679 5,66 Meramec Dietz 5-H 68,6 Osage Alta Mesa Boecher 706-9Mh 677 6,99 Osage Edwards -H 57 08,85 Osage Regier 7-H 59 96,76 Osage 5 Chesapeake Citra 9&-0- H ,7 Meramec One of the things that will help inform that, our first Major County well -- the Flying Monkey...There's a lot of other activity in Major County that is encouraging to us. -Harlan Chappelle CEO, /9/8 the Northwest STACK extension is turning out to be a really, really strong positive, and we're drilling some exciting wells in there right now. - Lee K. Boothby President & CEO, 5//8 Source: IHS, RigData as of 0/7/8, Press releases, Derrick Fairway wells Resources 7

8 Disclaimer This document and any other materials accompanying this document (collectively, the Materials ) are provided for general informational purposes. By accepting any Materials, the recipient thereof acknowledges and agrees to the matters set forth below in this notice. This presentation has been prepared by Wells Fargo Securities, LLC ( WFS ) on the basis of information obtained from ( Fairway ) and other public sources, as of the specified date. WFS nor undertake any duty or obligation to update the information. Neither WFS nor Fairway makes or gives any representation, warranty or guarantee, whether express or implied, that the information contained in this presentation or otherwise supplied to the recipient, at any time by or on behalf of WFS or Fairway whether in writing or not, relating to the information discussed herein is complete or accurate or that it has been or will be audited or independently verified, or that reasonable care has been taken in compiling, preparing or furnishing the information. This presentation provides a guide only and it is not intended to be exhaustive and, in particular, does not contain disclosure of any of the risks associated with the opportunity. This presentation is not to be construed as investment, tax or legal advice in relation to the relevant subject matter. You must seek your own legal or other professional advice. The Materials are not an offer to sell, or a solicitation of an offer to buy, the securities or instruments named or described herein. Wells Fargo Securities is the trade name for the capital markets and investment banking services of Wells Fargo & Company and its subsidiaries, including but not limited to Wells Fargo Securities, LLC, a member of NYSE, FINRA, NFA and SIPC, Wells Fargo Prime Services, LLC, a member of FINRA, NFA and SIPC, and Wells Fargo Bank, N.A. Wells Fargo Securities, LLC and Wells Fargo Prime Services, LLC are distinct entities from affiliated banks and thrifts. 08 Wells Fargo Securities. All rights reserved. 8