Samson Resources Corp - FORM 8-K - EX-99.1

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8-K - 8-K - Samson Resources Corp	d821269d8k.htm

Q3 2014 Conference Call

November 17, 2014

Supplemental Materials

Exhibit 99.1

Cautionary Statement Regarding Forward-Looking Statements

Non-GAAP Disclosures

Forward-Looking & Other Cautionary Statements

The information in this presentation by Samson Resources Corporation (the “Company,” “we” or “our”) includes “forward-looking statements” within the

meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements

included in this presentation, other than statements of historical fact, may constitute forward-looking statements, including, but not limited to, statements

or information regarding our future growth, results of operations, operational and financial performance, business prospects and opportunities and future

events. Words such as, but not limited to, “anticipate,” “continue,” “estimate,” “expect,” “may,” “might,” “will,” “project,” “should,” “believe,” “intend,”

“continue,” “could,” “plan,” “predict,” “potential,” “goal,” “foresee” and negatives of these words and similar expressions are intended to identify forward-

looking statements. In particular, statements about our expectations, beliefs, plans, objectives, assumptions or future events or performance contained in

this presentation are forward-looking statements.

All forward-looking statements involve risks and uncertainties. The occurrence of the events described and the achievement of the expected results depend

on many events and assumptions, some or all of which are not predictable or within our control. Factors that may cause actual results to differ from

expected results include, but are not limited to: (i) fluctuations in oil and natural gas prices; (ii) the uncertainty inherent in estimating our reserves, future

net revenues and PV-10; (iii) the timing and amount of future production of oil and natural gas; (iv) cash flow and changes in the availability and cost of

capital; (v) environmental, drilling and other operating risks, including liability claims as a result of our oil and natural gas operations; (vi) proved and

unproved drilling locations and future drilling plans; (vii) the effects of existing and future laws and governmental regulations, including environmental,

hydraulic fracturing and climate change regulation; (viii) restrictions contained in our debt agreements; (ix) our ability to generate sufficient cash to service

our indebtedness; (x) our ability to make acquisitions and divestitures on favorable terms or at all; and (xi) any of the risk factors and other cautionary

statements described in, including under the heading “Risk Factors,” the prospectus relating to the exchange offer of our senior notes, dated as of and filed

with the Securities and Exchange Commission pursuant to Rule 424(b) under the Securities Act of 1933, as amended, on July 22, 2014, and in the other

documents and reports we file from time to time with the Securities and Exchange Commission.

Readers are cautioned not to place undue reliance on forward-looking statements. Should one or more of the risks or uncertainties referenced above occur,

or should underlying assumptions prove incorrect, our actual results and plans could differ materially from those expressed in any forward-looking

statements. Further, new factors that could cause actual results to differ materially from those described in forward-looking statements emerge from time

to time, and it is not possible to predict all such factors, or the extent to which any such factor or combination of factors may cause actual results to differ

from those contained in any forward-looking statement.

Each forward-looking statement speaks only as of the date of this presentation, and, except as otherwise required by applicable law, we disclaim any duty to

update any forward-looking statements, all of which are expressly qualified by the statements in this section, to reflect events or circumstances after the

date of this presentation.

This presentation refers to certain non-GAAP financial measures. Definitions of these measures and reconciliation between U.S. GAAP and non-GAAP

financial measures are included at the end of this presentation.

Current Strategy –

Focus the Asset Base

Core

Assess

Divest/Monetize

Ft. Union

Powder River

Mid-Con

East Texas

Williston

Arkoma

San Juan

Wamsutter

Targeted Acquisition (New Cores Areas)

Executing on the Strategy

Material Acquisitions

Bolt-On Acquisitions

Potential Material Divestitures

Targeted Less Material Divestitures

Efforts ongoing

Focused on Eagle Ford and Permian Basin

PSA executed with Goodrich Petroleum (GDP)

to acquire Taylor producing properties and

acreage in Rusk County, Texas

Acquired additional 5,000 net acres in East

Texas (excluding GDP)

Williston –

Data room process underway

Dry

Gas

Assets

–

San

Juan,

Wamsutter,

and

Arkoma –

exploring monetization

alternatives for assets

Total 2014 divestiture proceeds expected to

exceed $150 MM for FY 2014

$114 MM closed through 9/30

Deal Overview

(1)

Samson agreed to acquire 38,000 net acres from

Goodrich Petroleum

Substantial and contiguous acreage block directly

offsetting our Oakhill Field in Rusk County

98% operated with over 200 gross wells currently

producing

Expected to close on December 22

Deal Statistics

Purchase Price

(2)

: $61MM

$ per Proved Reserves: $1.61

$ per Mcfe/d: $4,800

Acreage: Gross 41,000 / Net 38,000

Net Production

(3)

: 12.8 MMcfe/d (20% Liquids)

Proved Reserves

(4)

: 38 Bcfe

Net Resource Potential: 100+ Bcfe

East Texas –

Bolt-On Acquisition

(1)

The closing of the transaction is subject to certain customary terms and conditions

(2)

Subject to certain customary purchase price adjustment provisions

(3)

Three-stream production as of 10/15/2014

(4)

SEC Pricing as of 9/30/2014

Acquisition Map –

Overview

HARRISON

PANOLA

RUSK

GREGG

Texas

Oklahoma

Acquired Acreage

% Liquids Pro Forma

(2)

Total Company Pro Forma

(2)

Q3’14 Production Summary

(MMcfe/d)

(1)

Reflects certain non-core assets located throughout the United States

(2)

Excludes all divested production since 1/1/2013

Q1'14

Q2'14

Q3'14

9ME '14

9ME '13

West Division

Williston

Powder River

Greater Green River

San Juan

East Division

Mid-con West

Mid-con East

110

103

104

East Texas

148

157

169

158

176

Other

(1)

Total Company

529

543

530

533

589

516

531

525

524

556

30%

29%

Bakken –

Encouraging results from first operated

4-well pad on increased spacing with plug & perf

completion

PRB –

Focused on drilling 2 mile Sussex laterals

and assessment of upside potential in Mowry and

Frontier

Ft. Union –

2014/2015 drilling program underway

with two rigs

Taylor –

Strong results with five wells flowing to

sales with average IP30 of 6.5 MMcfe/d and D&C

$7.9MM

(7%

Liquids

(2)

)

Mississippi

Lime

–

Positive

results

with

five

wells

flowing to sales with average IP30 of 340 Boe/d

and

D&C

$4.9MM

(77%

Liquids

(2)

)

Granite Wash –

Two rigs running as of mid-

November set to test multiple horizons through

single well pad drilling

Q3’14 Operations Update

First Sales Activity

YTD D&C by Business Unit

(1)

Gross operated well count

(2)

Two-stream

(3)

Excludes Tubular oil and gas equipment, prepaid drilling costs and other

(1)

Total $429 MM

(3)

West Division

East Division

Williston

$53

PRB $129

GGR

$32

SJ $4

MCW

$40

MCE $81

ET $90

Q1'14

Q2'14

Q3'14

9ME'14

Williston

GGR

PRB

YTD

Q1'14

Q2'14

Q3'14

9ME'14

Production (MMcfe/d)

529

543

530

533

Realized Price ($/Mcfe)

$5.67

$5.34

$5.61

$5.54

Operating Expenses ($/Mcfe)

LOE

$0.95

$1.14

$1.12

$1.07

Production Tax

$0.43

$0.44

$0.45

$0.44

Cash G&A

$0.65

$0.58

$0.60

$0.61

Total

$2.03

$2.16

$2.17

$2.12

Cash Operating Margin ($/Mcfe)

$3.64

$3.18

$3.44

$3.42

Adjusted EBITDA ($MM)

$175

$516

Q3’14 Financial & Operating Metrics

(1)

Including realized derivatives

(2)

(3)

Cash operating margin is a non-GAAP financial measure. A description of cash operating margin is included at the end of this presentation and the calculation of the measure is provided

above

(4)

Adjusted EBITDA is a non-GAAP financial measure. A reconciliation to its nearest GAAP financial measure is included at the end of this presentation

(2)

(3)

(4)

(1)

Income Statement G&A excluding stock-based G&A compensation expenses of $0.21, $0.19 and $0.24 per Mcfe for the three months ended March 31, June 30 and September 30, 2014,

respectively, and $0.21 per Mcfe for the nine months ended September 30, 2014

Q1'14

Q2'14

Q3'14

9ME'14

Cash Flow From Operations

$103

$157

$103

$363

Divestiture Proceeds

$48

$61

$114

Total

$109

$205

$164

$477

Cash Capital Expenditures:

Drilling and Completion

$131

$199

$121

$452

LGG, Facility & Other

$11

$23

Capitalized Cash Interest & Internal Costs

$131

$20

$109

$260

Total

$269

$226

$241

$736

Free Cash Flow before Financing Activities

($160)

($20)

($78)

($258)

Net Debt

$3,815

Liquidity

$433

Q3’14 Financial Position & Liquidity

(1)

($MM)

(2)

Note: Totals may not sum due to independent rounding

(3)

(1)

Includes Tubular oil and gas equipment, prepaid drilling costs and other

(2)

Reflects net cash provided by operating activities plus net cash used in investing activities

(3)

Long-term debt less cash and cash equivalents

As of November 12, 2014

(1)

Volumes are rounded

(2)

2015 includes 20,000 MMBtu/d of Cal ’15 collars and 10,000 MMBtu/d of Q1’15 collars

(3)

2016 includes 30,000 MMBtu/d of natural gas collars to the extent our counterparty elects to exercise their collar options

Note: 2014 includes balance of the year only

Year

Bbls/d

(1)

Swap Price

2014

15,000

$90.62

2015

3,500

$90.91

Year

Bbls/d

(1)

Swap Price

2014

7,500

$35.42

2015

750

$37.07

Year

MMBtu/d

(1)

Wtd Avg

Floor

2014

306,000

$4.15

2015

(2)

192,000

$4.05

2016

(3)

161,000

$4.04

2017

40,000

$3.92

NGL Swaps

Oil Swaps

Natural Gas Swaps & Collars

Current Hedge Position

Non-GAAP Disclosures

Cash operating margin, EBITDA, Adjusted EBITDA and Covenant Adjusted EBITDA are non-GAAP financial measures. We believe that the presentation of

these non-GAAP financial measures will provide useful information to investors in assessing our financial condition and results of operations.

Cash operating margin represents our average realized sales price per Mcfe, including the effect of realized derivatives, less (i) lease operating expenses

per Mcfe, (ii) production and ad valorem taxes per Mcfe and (iii) general and administrative expenses per Mcfe, excluding stock based compensation

expenses. The per unit components of cash operating margin are determined by dividing the applicable component by our total production on a natural

gas equivalent basis. We believe that cash operating margin is an important measure that can facilitate comparisons of our performance between periods

and to the performance of our peer companies.

EBITDA is defined as net income (loss) before interest expense, income tax expense (benefit), depreciation and amortization. Adjusted EBITDA represents

EBITDA adjusted as applicable in the relevant period for select items specified in the credit agreement governing our revolving credit facility, including

unrealized hedging losses (gains), non-cash stock compensation expenses, management and similar fees paid to our sponsors, costs associated with the

preparation and implementation of certain public company compliance obligations, losses (gains) on non-ordinary course asset dispositions, ceiling test

charges and certain unusual and non-recurring charges. We define Covenant Adjusted EBITDA as total Adjusted EBITDA less the Adjusted EBITDA

attributable to any assets or businesses disposed of during the relevant period. We believe that the presentation of EBITDA, Adjusted EBITDA and

Covenant Adjusted EBITDA is important to provide management and investors with (i) additional information to evaluate our ability to service and comply

with our debt obligations, adjusting for certain items required or permitted in calculating covenant compliance under the credit agreement governing our

revolving credit facility, (ii) a supplemental indicator of the operational performance and value of our business, (iii) an additional criterion for evaluating

our performance relative to peer companies and (iv) supplemental information about certain material non-cash and other items that may not continue at

the same level in the future.

Net income (loss) is the GAAP financial measure most directly comparable to each of EBITDA, Adjusted EBITDA and Covenant Adjusted EBITDA. Our non-

GAAP financial measures should not be considered as alternatives to the most directly comparable GAAP financial measures. Each of these non-GAAP

financial measures has important limitations as an analytical tool because it excludes some, but not all, items that affect the most directly comparable

GAAP financial measure. You should not consider these non-GAAP financial measures in isolation or as a substitute for analysis of our results as reported

under GAAP. Because cash operating margin, EBITDA, Adjusted EBITDA and Covenant Adjusted EBITDA may be defined differently by other companies in

our industry, our definitions of these non-GAAP financial measures may not be comparable to similarly titled measures of other companies, thereby

diminishing their utility.

Management compensates for the limitations of these non-GAAP financial measures as an analytical tool by reviewing the comparable GAAP financial

measures, understanding the difference between the non-GAAP financial measures, on the one hand, and each of their respective most directly

comparable GAAP financial measures, on the other hand, and incorporating this knowledge into its decision-making processes. We believe that investors

benefit from having access to the same financial measures that our management uses in evaluating our financial condition and results of operations.

The following table presents reconciliations of EBITDA, Adjusted EBITDA and Covenant Adjusted EBITDA to net income (loss) for each of the periods

indicated.

Q3 2014 Adjusted EBITDA Reconciliation

(1)

(2)

(3)

(4)

Note: Calculated as of 9/30/14 with respect to Samson Resources Corporation and its consolidated subsidiaries by reference to the applicable terms of the credit agreement governing our

revolving credit facility

Three Months

Nine Months

Twelve Months

Ended

September 30, 2014

September 30,2014

September 30, 2014

(dollars in thousands)

Net loss

(261,813)

(470,657)

(1,607,503)

Interest expense, net

23,776

65,695

Benefit for income taxes

(145,267)

(260,862)

(892,577)

122,711

370,244

542,490

EBITDA

(260,593)

(295,580)

(1,891,895)

Adjustment for unrealized hedging gains

(68,315)

(45,399)

(18,299)

Adjustment for non-cash stock compensation expense

11,206

34,835

44,244

5,513

16,538

21,788

Adjustment for fees paid for public company compliance

934

1,693

2,215

Loss on sale of other property and equipment

790

1,047

1,155

Provision to reduce carrying value of oil and gas properties

478,467

790,537

2,527,877

Unusual or non-recurring charges described in credit agreement

7,365

11,935

21,304

Adjusted EBITDA

175,367

515,606

708,389

693,876

Covenant Adjusted EBITDA

Adjustment for fees paid to co-investors

Depreciation, depletion and amortization

(1)

Includes depreciation, depletion and amortization of oil and gas properties and depreciation and amortization of other property and equipment and accretion of asset retirement

obligations

(2)

Stock compensation expense recognized in earnings, net of capitalization

(3)

Quarterly management fee

(4)

Excludes sold Adjusted EBITDA of approximately $14.5 MM per the credit agreement governing our revolving credit facility. Covenant Adjusted EBITDA measured on a rolling four-

quarters basis is used to determine our compliance with the financial performance covenant in the credit agreement governing our revolving credit facility

Samson Resources Corp - FORM 8-K - EX-99.1 - November 14, 2014

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