Alta Mesa Holdings, LP -...

Alta Mesa Holdings, LP

November 18, 2014 Confidential

Example:

Acquisition Evaluation of

Conventional Stacked Play

Goals and Challenges

Evaluate multiple scenarios quickly for an

acquisition evaluation.

Economic results.

Conventional pays:

– Type curve vs. Volumetric Estimate.

– Or, maybe BOTH.

Model recompletion program.

– Include dual completions.

– Include through tubing recompletions.

– Include single completions.

Shotgun Opportunity Summary

Shotgun field – Conventional stacked oil

pay

– 4 producing wells:

• Remington

• Weatherby

• Beretta

• Ithaca

– Ten idle wellbores and abandonment liability

– Salt Water Disposal

– Facility with gas lift capability

Opportunity – Current production

– Identified behind pipe:

• Benelli (4 zones)

• Browning (2 zones)

• Beretta (10 zones)

– Potential additional locations to be identified with 3D seismic

Challenges: – Model zone variety.

– Should wells be twinned?

– Development options.

Example Log

Evaluation Summary

1) 2Twins: 30% Probability of Occurrence – Currently identified with

2 twins of Beretta

– Seismic upside: expected prospect count and success.

2) High: 25% Probability of Occurrence – Currently identified with

2 twins of Beretta

– Seismic upside: High prospect count and success.

3) 1 twin: 30% Probability of Occurrence – Currently identified with

1 twin of Beretta

– Seismic upside: expected prospect count and success

4) Low: 15% Probability of Occurrence – Currently identified with

no twins.

– Seismic upside: no prospects found.

Volumetric Results: Zone by Zone

Well List

Well Name Top Bottom EUR, Oil mbbl GOR, mcf/bbl

Benelli 2 4734 4750 21.7 9.313841037

Benelli 1 SS 5424 5440 21.2 9.435991075

Benelli 1 LS 7994 8113 64.5 7.255664416

Benelli 3 1366 2748 5 1

Browning SS 2158 2240 11.5 1

Browning LS 3829 4162 39.7 0.6

Beretta Twin Shallow3 1204 1283 10.9 1.417

Beretta Twin Shallow2 1912 1948 35 0.619898236

Beretta Twin Shallow1 2254 2311 17.8 1.092688136

Beretta 2 SS Sleeve 3166 3180 50 2

Beretta 2 SS 3550 3604 8.4 1.417

Beretta 2 LS 3935 4015 62.5 1.019504768

Beretta Sleeve 4812 4864 44.5 1.004647157

Beretta Twin Deep RC 978 1006 20.6 0.6

Beretta Twin Deep LS 5356 5416 75 2

Beretta Twin Deep SS 5146 5270 100 2

Beretta 4915 4961

User Data

Conventional Type Curve

Performance trend type curve: Initial production flat for 3 months

2nd 3 months decline @ 65%

3rd segment declines exponentially to EUR

Water hit at 6 months: ramp from 0.05 bbl/bbl

to 20 bbl/bbl

Functions in type curve reference user data

for EUR, IP, and GOR

=@Scalar('EUR, Oil mbbl')

=@Scalar('EUR, Oil mbbl')*.004

= @Scalar('GOR, mcf/bbl')

Scheduler Set-up

“Wait for:” is the function that controls completion order.

Multiple triggers available. Oil rate used in this model.

Recompletion Program Design

Well List

Completion

Name

Wellbore

Group

Controls

Order

User Data

Vary Costs and Time, Group Operations,

Control Timing

Producing well included with Well Count: -1

Well Name Well Count Template NameFlows To Wait For Task API NumberTop Bottom

EUR,

Oil

mbbl

GOR,

mcf/bbl RSV_CAT

Step 1

Is

Active

Step 1 Start

Date

(mm/dd/yyyy)

Step 1

Duration

(Days)

Step 1 By

Step

Group

Step 1

Fixed

Costs1

Step 2

Is

Active

Step 2 Start

Date

(mm/dd/yyyy)

Step 2

Duration

(Days)

Step 2 By

Step

Group

Step 2

Fixed

Costs1

Beretta Twin Shallow3 1 Recompletion (Single)Beretta Well

Beretta Twin

Shallow2 17-000-00000-001204 1283 10.9 1.417 3PUD 400

Beretta Twin Shallow2 1 Recompletion (Single)Beretta Well

Beretta Twin

Shallow1 17-000-00000-001912 1948 35 0.61989824 3PUD 400

Beretta Twin Shallow1 1 Recompletion (Single)Beretta Well 17-000-00000-002254 2311 17.8 1.09268814 3PUD 1600

Beretta 2 SS Sleeve 1 Recompletion (Single)Beretta Well Beretta 2 SS 17-000-00000-003166 3180 50 2 2PDNP 200 TTRC 70

Beretta 2 SS 1 Recompletion (Single)Beretta Well Beretta Sleeve 17-000-00000-003550 3604 8.4 1.417 2PDNP

Beretta

RC 600 Beretta RC

Beretta 2 LS 1 Recompletion (Single)Beretta Well Beretta Sleeve 17-000-00000-003935 4015 62.5 1.01950477 2PDNP

Beretta

RC 600 Beretta RC

Beretta Sleeve 1 Recompletion (Single)Beretta Well 17-000-00000-004812 4864 44.5 1.00464716 2PDNP 75

Beretta Twin Deep RC 1 Recompletion (Single)Beretta Well

Beretta Twin

Deep SS 17-000-00000-00978 1006 20.6 0.6 3PUD 300

Beretta Twin Deep LS 1 Recompletion (Single)Beretta Well 17-000-00000-005356 5416 75 2 3PUD 12

Beretta

Twin 1750

Beretta

Twin

Beretta Twin Deep SS 1 Recompletion (Single)Beretta Well 17-000-00000-005146 5270 100 2 3PUD 12

Beretta

Twin 1750

Beretta

Twin

Beretta -1 BerettaBeretta Well 17-000-00000-004915 4961 1PDP n n Beretta

Benelli 2 1 Recompletion (Single)Benelli Well Benelli 1 LS 17-000-00000-004734 4750 21.7 9.31384104 2PDNP 700

Benelli 1 SS 1 Recompletion (Single)Benelli Well 17-000-00000-005424 5440 21.2 9.43599108 2PDNP Benelli 1 600 Benelli 1

Benelli 1 LS 1 Recompletion (Single)Benelli Well 17-000-00000-007994 8113 64.5 7.25566442 2PDNP Benelli 1 600 Benelli 1

Benelli 3 1 Recompletion (Single)Benelli Well Benelli 2 17-000-00000-001366 2748 5 1 2PDNP 200

Browning SS 1 Recompletion (Single)Browning Well 17-000-00000-002158 2240 11.5 1 2PDNP Brownin 500 Browning

Browning LS 1 Recompletion (Single)Browning Well 17-000-00000-003829 4162 39.7 0.6 2PDNP Brownin 500 Browning

Recompletion Program Results

Asset Name Asset Reserve Category Prop_ID Spud Date (Start) TD (End) Frac Start Frac End On Prod

Benel l i 1 LS,7994-8113 Benel l i 1 LS,7994-8113 2PDNP 3/18/2015 3/24/2015 No Data No Data 3/25/2015

Benel l i 1 SS,5424-5440 Benel l i 1 SS,5424-5440 2PDNP 3/11/2015 3/17/2015 No Data No Data 3/25/2015

Benel l i 2,4734-4750 Benel l i 2,4734-4750 2PDNP 1/1/2017 1/7/2017 No Data No Data 1/8/2017

Benel l i 3,1366-2748 Benel l i 3,1366-2748 2PDNP 7/1/2018 7/7/2018 No Data No Data 7/8/2018

Beretta 2 LS,3935-4015 Beretta 2 LS,3935-4015 2PDNP 10/8/2016 10/14/2016 No Data No Data 10/15/2016

Beretta 2 SS Sleeve,3166-3180 Beretta 2 SS Sleeve,3166-3180 2PDNP 1/1/2018 1/7/2018 No Data No Data 1/8/2018

Beretta 2 SS,3550-3604 Beretta 2 SS,3550-3604 2PDNP 10/1/2016 10/7/2016 No Data No Data 10/15/2016

Beretta Sleeve,4812-4864 Beretta Sleeve,4812-4864 2PDNP 2/8/2015 2/14/2015 No Data No Data 2/15/2015

Beretta Twin Deep LS,5356-5416 Beretta Twin Deep LS,5356-5416 3PUD 2/15/2015 2/26/2015 No Data No Data 3/11/2015

Beretta Twin Deep RC,978-1006 Beretta Twin Deep RC,978-1006 3PUD 2/1/2017 2/7/2017 No Data No Data 2/8/2017

Beretta Twin Deep SS,5146-5270 Beretta Twin Deep SS,5146-5270 3PUD 2/27/2015 3/10/2015 No Data No Data 3/11/2015

Beretta Twin Shal low1,2254-2311 Beretta Twin Shal low1,2254-2311 3PUD 2/1/2015 2/7/2015 No Data No Data 2/8/2015



Browning LS,3829-4162 Browning LS,3829-4162 2PDNP 4/1/2015 4/7/2015 No Data No Data 4/8/2015

Browning SS,2158-2240 Browning SS,2158-2240 2PDNP 3/25/2015 3/31/2015 No Data No Data 4/8/2015

Activity Information

Activity SummaryProject: Shotgun Stacked Pay

Scenario: Filtered Results

10/24/2014 10:26

Economic Results

Net

Gross Wet Gas 3,668.17 mmcf

ASSET: 1-Jan-14 Dry Gas 3,668.17 mmcf

SCENARIO: 1-Jan-14 Oil 1,216.99 mbbl

PROJECT: 1-Nov-14 NGL 0 mbbl

COMPANY: Base MBOE 1,583.81 mbbl

Gross 0% 10% 20% Gross IRR Payout Net F&D Cost Initial Average Final

BT Cash 106,573.60 74,973.20 54,821.80 m$ % months 0% 10% 20% $/BOE WI Opcost (%) 50 50 50

Capital 66,068.50 57,084.00 50,220.40 m$ Before Tax 207.92 21 2.61 2.31 2.09 20.86 WI Capital (%) 50 50 50

NRI BOE (%) 42.79 42.9 42.91

Oil Gas NGL BOE Oil Gas NGL BOE Oil Gas NGL Well Working

Production Production Production Production Production Production Production Production Price Price Price Count Interest

Date bbl/d mcf/d bbl/d bbl/d _ _ _ _ _ _ bbl mcf bbl bbl $/bbl $/mcf $/bbl %

2014 134.3 320.1 0 187.7 49,025 116,850 0 68,500 93.5 2.17 0 4 50

2015 968.4 1,911.80 0 1,287.10 353,481 697,806 0 469,782 93.5 2.17 0 12 50

2016 1,631.80 2,898.10 0 2,114.80 597,228 1,060,723 0 774,015 93.5 2.17 0 15 50

2017 2,209.60 4,030.90 0 2,881.40 806,487 1,471,283 0 1,051,701 93.5 2.17 0 15 50

2018 1,488.00 2,481.00 0 1,901.60 543,137 905,573 0 694,066 93.5 2.17 0 14 50

2019 663.7 1,194.70 0 862.9 242,262 436,073 0 314,941 93.5 2.17 0 10 50

2020 346.2 623.1 0 450 126,699 228,059 0 164,709 93.5 2.17 0 10 50

2021 180.5 324.9 0 234.7 65,888 118,598 0 85,654 93.5 2.17 0 10 50

2022 94.2 169.6 0 122.5 34,392 61,905 0 44,709 93.5 2.17 0 10 50

2023 49.1 88.3 0 63.8 17,910 32,238 0 23,283 93.5 2.17 0 10 50

2,836,510 5,129,107 0 3,691,361

Oil Gas NGL Total Total Total Operating Total BT Cum Op Cum Cum BT YOY Undisc.

Revenue Revenue Revenue Revenue Opcosts Royalties Income Capital Cash Flow Income Capital Cash Cash Growth

Date m$ m$ m$ m$ m$ m$ m$ m$ m$ m$ m$ m$ %

2014 4,583.88 422.03 0 5,005.91 5,172.00 722.54 -1,424.05 0 -1,424.05 -1,424.10 0 -1,424.10 -100

2015 33,050.47 2,520.27 0 35,570.74 6,598.47 5,055.25 20,102.58 16,655.00 3,447.58 18,678.50 16,655.00 2,023.50 -342.1

2016 55,840.81 3,831.01 0 59,671.82 7,692.73 8,465.45 37,112.84 35,805.00 1,307.84 55,791.40 52,460.00 3,331.40 -62.1

2017 75,406.54 5,313.84 0 80,720.37 8,528.20 11,447.31 52,085.72 11,960.00 40,125.72 107,877.10 64,420.00 43,457.10 2,968.10

2018 50,783.36 3,270.66 0 54,054.02 7,731.44 7,664.86 32,859.07 1,288.50 31,570.57 140,736.20 65,708.50 75,027.70 -21.3

2019 22,651.54 1,574.96 0 24,226.51 1,399.24 3,435.32 16,793.05 0 16,793.05 157,529.20 65,708.50 91,820.70 -46.8

2020 11,846.40 823.68 0 12,670.08 1,029.44 1,796.62 8,484.84 0 8,484.84 166,014.10 65,708.50 100,305.60 -49.5

2021 6,160.51 428.34 0 6,588.85 834.84 934.3 4,112.89 200 3,912.89 170,126.90 65,908.50 104,218.40 -53.9

2022 3,215.62 223.58 0 3,439.20 734.05 487.68 1,848.53 100 1,748.53 171,975.50 66,008.50 105,967.00 -55.3

2023 1,674.59 116.43 0 1,791.02 678.31 253.97 666.61 60 606.61 172,642.10 66,068.50 106,573.60 -65.3

265,213.71 18,524.81 0 283,738.52 40,398.74 40,263.29 172,642.08 66,068.50 106,573.58

Disc. Profit Index (Cash Flow Multiple)

Production Rates Production Volumes Realized Prices

Cash Flows Cumulative Cash Flows

Alta Mesa Holdings RISK SETTING: 3,691.36 1,845.68

NPV Economic Indicators Company Interest

EVALUATION DATE: 2,836.51 1,418.25

Shotgun Stacked Pay DISCOUNT DATE: 0 0

REPORT WI TYPE: 8,548.51 4,274.26

Shotgun Stacked Pay ASSET START DATE: 8,548.51 4,274.26

Reserves

Gross WI

BT Economic Summary

As Produced

10/24/2014 10:56

Scenario Cash Flow and Capital Compare

Cumulative Cash Flow Compare

Production Compare

Sensitivity Tornado

Run Label Command Argument #1 MC Seed ATNPV@ 0% BTNPV@ 0% Capital@ 0% Opcost@ 0% Oil Volume Gas Volume

Seed m$ m$ m$ m$ mbbl mmcf

1 Base Base 776950014 -4,358.70 -5,517.30 20,175.00 28,472.90 572.1 1,103.00

2 Price - Low Risk:Price 0.8 1568750741 -11,173.30 -14,143.40 20,175.00 28,472.90 572.1 1,103.00

3 Price - High Risk:Price 1.2 400339575 2,456.00 3,108.80 20,175.00 28,472.90 572.1 1,103.00

4 RR - Low Risk:RateAndReserves 0.8 1414866721 -10,537.00 -13,338.00 20,175.00 28,208.00 465.8 871.6

5 RR - High Risk:RateAndReserves 1.2 1766238612 1,769.50 2,239.90 20,175.00 29,212.30 684.1 1,336.70

6 Cap - Low Risk:CapitalAll 0.8 1787511411 -1,171.00 -1,482.30 16,140.00 28,472.90 572.1 1,103.00

7 Cap - High Risk:CapitalAll 1.2 1738933133 -7,546.30 -9,552.30 24,210.00 28,472.90 572.1 1,103.00

8 Opcost - Low Risk:Opcost 0.8 1507048850 140.1 177.3 20,175.00 22,778.30 572.1 1,103.00

9 Opcost - High Risk:Opcost 1.2 432886744 -8,857.40 -11,211.90 20,175.00 34,167.50 572.1 1,103.00

Conclusions

Able to evaluate multiple potential outcomes with very little duplication of work.

Scenarios and sensitivities could be created and evaluated in a collaborative environment since results and comparisons are within the tool.

Determined that field that is currently negative cash flow could be economic with some exploitation. In addition, potential existed to grow the field through 3D seismic evaluation.

Bid was made and accepted for the asset, but transaction has not yet closed.

Methodology could also be used to plan and manage a similar asset.

The workflow will scale well into much larger assets.

Alta Mesa Holdings, LP -...

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