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Jefferies Energy Conference STACK / SCOOP Technical Overview

November 2015 / Confidential

Jefferies LLC Member SIPC

Jefferies LLC November 2015 /

Table of Contents

STACK 1

Cana Woodford 15

SCOOP 19

i


STACK

1


STACK Since 2011, operators have been

delineating the STACK The Meramec play is a carbonate shale

where operators are drilling discrete stacked targets

Keys to well performance are drilling higher porosity targets, maintaining well path within target and large proppant slickwater completions

The Woodford wells drilled in north central Canadian County are far more liquids-rich than the traditional Cana Woodford

Core of higher performing wells has higher GOR

Well performance has improved rapidly as large independents test learnings from similar basins

CNOW The oil-prone CNOW is being

developed in north central Oklahoma The play has Woodford and

Mississippian targets The shallow depth (<5000 ft TVD) of

the CNOW helps operators realize low D&C capex costs

Overview of New North Central Oklahoma Mississippian Plays

TOM Footprint Area

2


Blaine

Kingfisher

Canadian

17N 6W

14N 6W 14N 7W

13N 6W

17N 7W

18N 6W

13N 5W

15N 6W 15N 7W

14N 5W

17N 5W

13N 7W

15N 5W

17N 8W

18N 9W 18N 7W 18N 5W 18N 8W

14N 9W

17N 9W

15N 9W

14N 8W

15N 8W

16N 9W 16N 7W 16N 6W 16N 8W

13N 8W

16N 5W

13N 9W

15N 11W

14N 11W

17N 11W

18N 11W

16N 11W

18N 10W

15N 12W

14N 12W

17N 10W

18N 12W

14N 10W

15N 10W

16N 10W

17N 12W

16N 12W

19N 9W 19N 8W

14N 13W

13N 11W 13N 10W

15N 13W

19N 7W

16N 13W

19N 6W

13N 12W

19N 12W 19N 11W 19N 5W

13N 13W

17N 13W

19N 10W

18N 13W

19N 13W

18N 4W

17N 4W

16N 4W

15N 4W

14N 4W

13N 4W

19N 4W

NFX Corbin 1H-5X

IP30: 1,138 Boe/d 9,701’ lateral

NFX John 1H-5X

IP30: 781 Boe/d 10,028’ lateral

FELIX Northstar 0706 1H IP30: 701 Boe/d

9,482’ lateral

NFX Willms 1H-2X


NFX Scheffler 1H-9X

IP30: 1,641 Boe/d 10,150’ lateral

NFX Connie 1H-15X


NFX Maybel


FELIX Safari 0706 3AH IP30: 950 Boe/d 10,087’ lateral

FELIX Hornsilver 0334-4H


PayRock Cerny 1607 1-35MH IP30: 1,031 Boe/d

4,805’ lateral

PayRock Stiles 14 07 1-4H IP30: 605 Boe/d

4,587’ lateral

NFX Slash C 1H-17X IP30: 840 Boe/d 10,076’ lateral

PayRock Eve 1506 1-17MH IP30: 864 Boe/d 4,930’ lateral

NFX RPM

IP30: 1,129 Boe/d 10,227’ lateral

NFX Okarche 1H-12X IP30: 896 Boe/d 10,217’ lateral

XEC Clark-Karl 1-23H IP30: 693Boe/d 4,748’ lateral

XEC Miller 1-4H


MRO Murray 1-33H


XEC Wort 1-21H


NFX Peters 1H-15X


MRO Mike Stroud 1-28H IP30: 1,878 Boe/d

4,263’ lateral

CLR Ludwig 1-22-15XH IP30: 2,076 Boe/d

9,711’ lateral

XEC Peoples 1-29H


CLR Toms 1-21XH


Operator Play/Formation Outline

Cimarex Energy

Continental Resources

Devon Energy

Felix Energy

Marathon Oil

Newfield Exploration

PayRock Energy

Other

Producing Well

Permit

Meramec

Woodford

Cana

STACK

STACK Activity Map

3


Rig Map Key Points

Most STACK operators have concentrated their Meramec drilling in the Core Volatile Oil Area near the Kingfisher/Blaine County border

Felix has ramped up their activity to three rigs in the core of the STACK delineating both Woodford and Meramec

Newfield is delineating the Meramec in central Kingfisher County and has just ramped up from five to seven rigs

Chaparral is drilling Mississippian age rock in northern Kingfisher County after realizing strong oil production in its Dover Unit

PayRock recently ramped up to two rigs; and is delivering superior results vs early generation 2-mile lateral wells

Marathon and Cimarex continue testing the Meramec as part of their ongoing drilling activities

Rig Counts as of October 2015

Active Rigs Currently in the STACK

Operator Name Total Operator Name Total

Newfield 7 Continental 5

Devon Energy 5 Longfellow Energy 1

Cimarex Energy 4 Chaparral Energy 1

PayRock Energy 2 Chesapeake Energy 1

Felix Energy 3 Gastar 1

Oklahoma Energy 2

Blaine, Kingfisher and Canadian Counties

Core Volatile Oil Area

4


STACK Stratigraphic Column and Type Log

Key Points

Meramec

Silty, shale reservoir sourced from the Woodford

Highly varying areal distribution

Found at depths of 6,000 – 12,000 ft

Normal to slightly overpressured

Gross Meramec thickness of ~150 – 500 ft

Average porosity around 5%

Average water saturation of 40% - entirely bound water

Chester shale is regional seal

OOIP estimates range from 13 to 30 MMBO/sec

Woodford

Siliceous, source rock

Organic-rich

Natural and induced fractures

Hunton and Osage horizontal plays are emerging

KINGFISHER

CANADIAN

KINGFISHER

CANADIAN

5


Stratigraphic Cross Section, North-South

S N

Key Points

Meramec and Woodford thicken to the south

Supports two-bench development when gross thickness > 250’

6


Stratigraphic Cross Section, East-West

W E

Key Points

Woodford thins to the NE, away from core Cana area

Meramec thickness remains fairly consistent

7


STACK Reservoir Fluid Overview

Key Points

The Meramec formation is primarily sourced from the Woodford formation

One indicator of reservoir fluid type is vitrinite reflectance (Ro)

Lower Ro values are indicative of oiler fluid in the reservoir

The peak month oil % & Ro data show how the Meramec & Woodford formations go from dry gas in the southwest to black oil in the northeast

1.2

1.0

0.8

0.6

8


STACK Reservoir Fluid Type Informs Fluid Type Curve Areas

Key Points

Formation type curve areas for the Meramec were primarily determined by reservoir fluid type demarcation, reservoir thickness, depth & pressure

The Meramec formation thins to the southeast and may necessitate a separate Meramec Black Oil South type curve area

Meramec Type Curve Areas

9


STACK Reservoir Fluid Type Informs Fluid Type Curve Areas

Key Points

Type curve areas for the Woodford were primarily determined by reservoir fluid type demarcation, reservoir thickness, depth and pressure

The Cana Woodford area is well-delineated in the gas window of the Woodford

The Woodford formation thins to the north, which is why operators have concentrated in Blaine & Canadian Counties

The Woodford fluid is immature and has lower reservoir pressure in the east

Woodford Type Curve Areas

10


Jefferies STACK Type Curve Methodology

Key Points

Only horizontal wells with first production after January 2012 are shown

In total, four type curve areas represent the performance of STACK wells

Type curve wells shown with an “X” were selected because they represent the best drilling and completion practices that have been implemented by STACK producers

11


Type Curve

STACK Meramec Volatile Oil Type Curve

Key Points

Each well’s production was normalized for its 1-mile equivalent production

70% of existing Meramec wells are 2-mile laterals but strong 1-mile lateral results support a move towards more 1-mile lateral length wells

High-proppant slickwater completion jobs generaly deliver superior well results

1-Mile Horizontal

Months

First Month 30-day IP (per day) 1st-day IP (per day) Di (%) Df (%) b GOR (Mcf/bbl) Yield (Bbl/MMcf) Shrink NGL (bbl/MMcf)

Oil (Bbl) 15,154 498 620 80 6 1.50

Gas (Mcf) 39,458 1,297 1,364 51 6 1.50

EUR Oil (Mbbl)EUR Wellhead Gas

(Bcf)

EUR Sales

Gas (Bcf)

EUR NGL

(Mbbl)

EUR

MboeEUR Bcfe Oil Exp Switch (Yrs)

Gas Exp

Switch (Yrs)EUR Time (Yrs)

398.1 2.337 1.636 233.7 904.5 5.43 10.7 10.3 50.0

5.9 170.4 70% 100.00

0

6

12

18

100

1,000

10,000

100,000

0 6 12 18

Wel

l Co

un

t

Bb

l/m

o

MONTH_OIL

MIKE STROUD 1-28H 1027lbs/ft SCHEFFLER 1H-9X 1524lbs/ft

JOHN 1H-5X 1416lbs/ft ROSEMARY 1-14H lbs/ft

WILDCARD 2215-1H 1604lbs/ft KENNETH 1H-30X lbs/ft

CLARK-KARL 1-23H 1339lbs/ft ZINGER 31-1HR lbs/ft

MURRAY 1-33H lbs/ft SAFARI 0706 0 lbs/ft

Oil Type Curve Avg All Wells

Well Count

12


Type Curve

STACK Meramec Black Oil Type Curve

Key Points

Each well’s production was normalized for its 1-mile equivalent production

Felix and PayRock wells are used because of their more optimized completion design

1-Mile Horizontal

Months


Oil (Bbl) 20,041 659 900 85 6 1.50

Gas (Mcf) 38,091 1,252 1,350 60 6 1.50


(Bcf)

EUR Sales

Gas (Bcf)

EUR NGL

(Mbbl)

EUR


Gas Exp


434.0 1.810 1.810 0.0 735.7 4.41 10.7 10.4 50.0

4.2 239.7 100% 0.00

100

1,000

10,000

100,000

0 6 12 18 24

Bb

l/M

o

MONTH_OIL

Avg High Prop CERNY 1607 1-35MH 1800lbs/ft

HORNSILVER 0334-4H 1621lbs/ft EVE 1506 1-17MH 1694lbs/ft

NORTHSTAR 0706 0 2100lbs/ft Oil Type Curve

Avg All Wells

13


SCOOP Thicker Woodford section with highest

hydrocarbons-in-place along trend Combination of thick, high-quality reservoir

with depth and pressure delivers highest performing wells in Woodford

─ Higher GOR windows are outperforming the oil window

Operators have stacked staggered laterals in pilot tests in the SCOOP

Fairly tightly held by MRO, CLR, Newfield, and Vitruvian

Springer Sand has recently shown high potential (67% oil)

Compared to other basins, the SCOOP has had little completions progression

Cana Most mature Woodford play with well-

defined core area in the thick portion of the condensate window

Recently Cimarex has had success applying optimized high-proppant thin-fluid fracs that outperform offset older-vintage fracs

This stimulation may be applicable to other less economic parts of the Woodford as well as the SCOOP

Overview of Anadarko Basin Woodford Plays

Source: Company SEC filings, Earnings call transcripts, company presentations, broker research reports and industry publications. (1) Represents Q3 2013 production (latest publicly disclosed SCOOP production).

14


Cana Woodford

15


Overview of All Cana Woodford Wells since 2010

Key Points

All Cana Woodford horizontal wells since 2010

Bubbles in the map are sized by average 6-month gas rate and colored by well vintage

The top two graphs show operator activity by year in two different formats

─ Only Devon (DVN) and Cimarex (XEC) have new wells in 2014

There is clearly higher gas production in northwestern Canadian County

─ In a lower gas price environment (post 2012) it is the only place anyone has had the willingness to drill new gas wells

Filter Settings AllHeaders - State: (OK) - County: (BLAINE, CADDO, CANADIAN) - Reservoir: (WOODFORD, WOODFORD / HUNTON, WOODFORD / MISSISSIP30PIAN) - Well Orientation: (H) - Rate - Gas 6mo Avg: (0.00 <= Rate - Gas 6mo Avg <= 113369.26) without empty values - Play - Sub-region: (Traditional Cana) - Date - Vintage: (1/1/2010 <= Date - Vintage <= 10/29/2014) without empty values

16


Average 6 Month Gas Rate per 5,000’ Lateral vs. Vintage by Operator Key Points

Cimarex and Devon have increased the productivity of their most recent Cana Woodford wells by increasing the amount of proppant and stages in each well and by optimizing landing zone from petrophysical facies interpretation

More recent highly-propped wells (>1,200 lbs/ft) outperform similar lower-propped older wells wells even when controlled for geographic area in the Cana Woodford.

Jefferies Cana Completions Optimization Study - Cana Sweet Spot

Average 6 Month Gas Rate per 5,000’ Lateral vs. Vintage by Operator

17


Cimarex Cana Woodford Type Curve – Base vs. Optimized Key Points

Cimarex perfected their horizontal completion technique in the Delaware Basin and has now implemented their optimized design in the Cana Woodford

Frac design has increased stimulation from 12 stages / 4 mm lbs of sand to 20 stages / 6 mm lbs of sand

IP30 has increased from 3.3 MMcf/d to 5.4 MMcf/d for gas and from 198 Bbl/d to 324 Bbl/d for oil

Increasing frac size by 50% plus decreasing stage/cluster spacing increased their Woodford type curve by 80% but this completion improvement has delivered wells with 100% improved EUR

Jefferies Cana Completions Optimization Study - Type Curve Comparison

Source: Cimarex September 2014 investors presentation.

1-Mile Horizontal

Peak Month 30-day IP (per day) 1st-day IP (per day) Di (%) Df (%) b Yield (bbl/MMcf) Gas Shrink NGL (bbl/MMcf)

Gas (Mcf) 100,252 3,296 3,781

Oil (Bbl) 3,008 99 113


(Bcf)

EUR Sales

Gas (Bcf)

EUR NGL

(Mbbl)EUR Mboe EUR Bcfe

Exponential

Switch (Yrs)

111.9 3.730 3.730 0 734 4.40 9.9

71 6.0 1.60 30 100% 0

0

100

200

300

400

1,000

10,000

100,000

1,000,000

0 6 12 18 24 30 36 42 48 54 60

We

ll C

ou

nt

Gas

, Mcf

/mo

Months

Old Cimarex Type Curve

New Cimarex Optimized Type Curve

Top 2 Operators Cana Core (2010-2013)

Top 2 operators 2014 wells (Proppant > 1200 lbs/ft)

Well Count 2010-2013

Well Count 2014 (Proppant > 1200 lbs/ft)

Optimized Completion :

IP30: 5,400 Mcf/d, 204 Bbl/dDi: 67% b-factor: 1.6EUR: 201 MBO & 6.9 BCF

18


SCOOP

19


The SCOOP has High Momentum and Impactful Results in the Woodford Shale Based on 24-hour IP Rate

Key Points

The SCOOP is located towards the very south of the Anadarko Basin

The SCOOP has recently seen high momentum and is the top liquids-producing area in the Woodford Shale

Operators are continuing to delineate the play extent, and are testing spacing and the potential for stacked laterals in the SCOOP

Beckham 1-27H 856 Boe/d IP30

21% oil

Boles 1H-14X

1,466 Boe/d IP30 57% oil

Carson 1-2H

1,524 Boe/d IP24 57% liquids

Hunter 1H-13X

1,420 Boe/d IP24 65% oil

Jo Ann 1H-18

1,231 Boe/d IP24 11% oil

Mashburn 1H-33 1,444 Boe/d IP24

33% oil

Riddle 14-32H 825 Boe/d IP30

28% oil

Singer 1-18-7XH 1,688 Boe/d IP30

33% oil

Vesta Marie 1-29H 1,530 Boe/d IP24

61% liquids

Wilson 1H-3

1,168 Boe/d IP24 22% oil

Campbell 1-36XH 1,063 Boe/d IP30

56% oil

Tina 1H-26X

1,855 Boe/d IP24 47% oil

Healey 1-12H

670 Boe/d IP24 86% liquids

Mills 1-21H


Simms 1-32H


Sparks 1-27H

775 Boe/d IP24 71% oil

Arrington 1-23H

1,040 Boe/d IP24 32% oil

Dawkins 1-20H 808 Boe/d IP24

58% liquids

Dicksion 1-21H

1,590 Boe/d IP24 45% oil

Poteet 1-17H


Branch Pad

1H-16: 1,245 Boe/d IP30

2H-16X: 1,510 Boe/d IP30

3H-16X: 1,579 Boe/d IP30

4H-16X: 1,557 Boe/d IP30

5H-16X: 1,610 Boe/d IP30

6H-16X: 1,577 Boe/d IP30

Casados 1H-21X

1,795 Boe/d IP30 19% oil

Vanarkel 1-15H

2,045 Boe/d IP24 44% oil

Sublette 1H-22

1,052 Boe/d IP24 56% oil

Chalfant 1-7H

2,700 Boe/d IP24 16.2 MMcfe/d IP24

13% Oil

Gregory 1H-28 1,688 Boe/d IP24

35% oil

Hansell

973 Boe/d IP24 90% oil

Floyd 1H-3X

1,466 Boe/d IP30 57% oil

Claudine 1-29-32XH 3,017 Boe/d IP24

18.1 MMcfe/d IP24 8% oil

Auld 1-10H


20


Cana / STACK Core

Mature Woodford play with core area (250’ thick) in the thick portion of the condensate window

SCOOP Combination of thick (350’ in core area) high-quality reservoir with depth and pressure delivers highest

performing Woodford wells

NW-SE Stratigraphic Cross Section – Anadarko Basin

NW Cana SCOOP

SE

Canadian

Caddo

Stephens

Grady McClain

Garvin

21


Stratigraphic Column and Type Log

SCOOP Stratigraphic Column and Type Log

Key Points

World-class source rock

─ Oil-Prone Type II Kerogen

Found at depths of 8,000 – 16,000 ft. and overpressured (0.6 – 0.7 psi/ft.)

Vitrinite Reflectance 0.6 – 1.2%

Gross thickness of Woodford SCOOP ~ 150 – 420 ft.

Porosity ranges from 5 to 10%

Resource base estimated at 150 to 200 BCF/section

Recent economic success from horizontal drilling in the Springer Shale substantially increased the potential for the SCOOP to be a stacked play

CANEY

GODDARD M-1

HUNTON

SYCAMORE

WOODFORD

GODDARD M-2

GODDARD M-3

CANEY

GODDARD M-1

HUNTON

SYCAMORE

WOODFORD

GODDARD M-2

GODDARD M-3

22


SCOOP Well Spacing Trials

Key Points

SCOOP well spacing trials have been on-line since September 2013

The first spacing trials were drilled in the core wet gas and condensate windows

The SCOOP core area is greater than 300 ft. thick and is thus being tested with staggered wellbore placement in both Upper and Lower Woodford

The oil window is being tested at 660-ft. spacing in the Upper Woodford only. CLR has announced that the Good Martin spacing test well production is exceeding that of offset wells and their type curve

The wet gas window has been tested with CLR’s 513-ft staggered spacing test. Both the Honeycutt & Poteet spacing tests have exceeded CLR’s type curve

*First production estimates per Continental Investor Presentation September 2014

SCOOP Core Area

Fluid Phase Window Continental

Wet Gas

Continental Wet Gas

Newfield Wet Gas

Newfield Condensate

Continental Oil

Well Spacing, ft. 660 513 880 880 660

Woodford Thickness, ft. 310 380 350 350 160

Wellbore Placement Staggered Staggered Staggered Staggered Upper Woodford

# of Wells 4 10 6 5 8

First Production Q4 - 2013 Q4 – 2014* Q3 - 2013 Q4 - 2013 Q1 – 2015*

23


Oklahoma Oil Production Data Vetting

Key Points

In Oklahoma, oil and gas production data is reported to the Oklahoma Corporation Commission (OCC)

Operators and the OCC often lag in reporting oil production for each well, often showing zero production or anomalously low numbers

─ Errors are apparent when comparing public OCC data to large IP30, IP60 and IP90 oil production numbers in operators’ investor presentations

Jefferies compiled a vetted public production database using a proprietary data mining procedure

In the example above the same 6 SCOOP wells in Stephens County are trend-plotted using public OCC data (left) and Jefferies vetted database (right)

Jefferies is now able to verify well results reported by operators and has carried out in-depth analysis of production trends throughout the SCOOP, the Springer and the Stack plays

This method ultimately provides Jefferies engineers a high-quality data set from which to provide valuable insights in a rapidly-evolving liquids-rich play

Avg Oil IP30 from Investor Presentation

Avg Oil IP30 from Investor Presentation

Public Production Data from OCC Jefferies Vetted Public Production Data

24


Jefferies Identified Type Curve Areas

1 2 3 4

5 6 7 8

10 11 12 9

SCOOP Type Curve Areas

Key Points

Jefferies has analyzed all publicly-available horizontal wells in the SCOOP and has identified multiple type curve areas

The core SCOOP area is located in type curve areas 2-4. The area benefits from increased reservoir thickness, higher reservoir pressure and better thermal maturity

Operators are actively testing spacing and the potential for stacked laterals in the SCOOP

25


SCOOP Area 3 (Rich Gas Core) Type Curve

Key Points

Type curve production is normalized to 7500 ft lateral length

Oil & gas streams are forecasted individually

Forecast parameters (b-factor & Df) are informed by publicly available data and RF% on expected spacing of 10 wells per section

Type curve parameters:

─ Wellhead EUR of 11.8 Bcf and 242 MBbl assuming 7,500’ lateral

─ Initial rate (30-day) gas production of 8,700 Mcf/d

─ B factor: 1.30

─ Terminal decline rate of 6%

EUR is for 50-year production life


Oil (Bbl) 9,429 310 310 74 6 1.3

Gas (Mcf) 258,542 8,500 8,500 56 6 1.3


(Bcf)

EUR Sales

Gas (Bcf)

EUR NGL

(Mbbl)

EUR


Gas Exp


242.1 11.820 10.298 620.6 2,578.9 15.47 12.2 11.9 50.0

49 20 87% 53

10

100

1,000

10,000

0 6 12 18 24 30 36 42

Oil,

Bb

l/d

G

as, M

cf/d

Months

Oil Gas

26

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