Jefferies LLC Member SIPC

2016 Jefferies Energy Conference

November 29, 2016

Ralph Eads Vice Chairman

Important Disclaimer

This material has been prepared by Jefferies Group LLC or one of its affiliates as noted below (herein collectively referred to as “Jefferies”).

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© 2015 Jefferies LLC. Member SIPC.

i

Key Themes

1 Oil price likely to increase in intermediate term; could surprise on the upside

2

3

4

5

Asset level M&A activity has been very strong, driven largely by the Permian and SCOOP / STACK

Public company valuations underpinned by strong volume growth

Technological advances continue to improve recoveries ─ Bearish for natural gas prices

─ Shouldn’t drive oil prices lower

Permian Basin clearly becoming “center of gravity” for the oil industry

1

Global Oil Supply – Top 10 Global Oil Producers

Source: OPEC Annual Statistical Review 2016 Crude Oil.

2015 Global Daily Oil Production (MMBbls/d)

10,193 10,112

9,431

4,274

3,504 3,152 2,989 2,859 2,654 2,437

-

2,000

4,000

6,000

8,000

10,000

12,000

Saudi Arabia Russia United States China Iraq Iran United ArabEmirates

Kuwait Venezuela Brazil

2014-2015 % Growth 4.9% 0.2% 8.3% 1.6% 12.7% 1.1% 7.0% -0.3% -1.1% 8.1%

2

Global Oil Demand Continues to Trend Upward

Annual Global Oil Demand History Since 1970 (MMBbls/d)

0

10

20

30

40

50

60

70

80

90

100

19

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71

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11

20

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20

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15

Source: BP Statistical Review of World Energy, 2016.

3

U.S. Oil Production – Unprecedented Growth

Annual U.S. Oil Production History Since 1970 (MMBbls/d)

Source: EIA U.S. Field Production of Crude Oil, October 2016.

0

2

4

6

8

10

12

19

70

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71

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72

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16

4

U.S. Natural Gas Production – Sustained Growth Opening New Markets

Annual U.S. Natural Gas Production History Since 1997 (Bcf/d)

Source: EIA U.S. Dry Natural Gas Production, October 2016.

0

10

20

30

40

50

60

70

80

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

5

China, India and Other Energy Emerging Economies

1 China and India are the two key drivers for future energy demand

2

3

4

5

GDP per capita expected to triple

Other key energy growth economies which will drive 30% of energy growth include:

According to Brookings Institute, number of people considered middle class will rise from 2 billion in 2014 to 5 billion in 2030, with most of the growth in India and China

Natural gas is the largest growing energy supply, increasing 40%

Brazil Egypt Indonesia Iran Mexico

Nigeria Saudi Arabia South Africa Thailand Turkey

6

Global Demand for Energy Projected to Rise by 25 Percent from 2014 – 2040 – But Energy Efficiency Vastly Lowers Energy Per GDP Energy Demand (Quadrillion BTUs)

Source: ExxonMobil - The Outlook for Energy: A View to 2040.

7

Liquids Trade Balance by Region

North America Swings to a Net Exporter as Shale Growth Continues

Conventional crude and condensate Deepwater Demand Oil sands Tight oil NGLs Other

Source: ExxonMobil - The Outlook for Energy: A View to 2040.

8

Gas Trade Balance by Region

By 2040, Unconventional Gas Will Account for ~1/3 of Global Gas Production

Conventional production Unconventional production Demand

Source: ExxonMobil - The Outlook for Energy: A View to 2040.

9

Projected Global Fuel Demand in 2040 (Quadrillion BTUs)

Oil Remains the World’s Top Fuel, But Natural Gas Grows the Most

Source: ExxonMobil - The Outlook for Energy: A View to 2040.

10

Projected Oil Supply / Demand Dynamics (MMBbls/d)

Oil Supply Needed to Meet Future Demand

Source: ExxonMobil - The Outlook for Energy: A View to 2040 and IEA Oil Market Report, November 2016.

12.8 MMBbls/d

23.5 MMBbls/d

33.1 MMBbls/d

Projected Undersupply

Q4’16 Estimated Global Production Capacity:

99.5 MMBbls/d

Q4’16 Estimated Global Oil Demand:

97.1 MMBbls/d

60

65

70

75

80

85

90

95

100

105

2016 2017 2018 2019 2020 2021

Estimated Global Oil Demand (0.7% Annual Growth) Estimated Global Production Capacity (2.5% Annual Decline)

Estimated Global Production Capacity (5.0% Annual Decline) Estimated Global Production Capacity (7.5% Annual Decline)

11

Permian Projected To Be The Largest Oil Field In The World

Clear Folk

U. Spraberry

M. Spraberry

Jo Mill

L. Spraberry

Dean

Wolfcamp A

Wolfcamp B

Wolfcamp C

Wolfcamp D “Cline”

Strawn

Atoka

Barnett Miss Lime Woodford

(1) Jefferies estimate. (2) Source: Pioneer Natural Resources June 2015 Investor Presentation.

Estimated Recoverable Resource (BBo)

Pay Thickness Comparison – Major Onshore Resource Plays

212 BBo

160 BBo

28 BBo

13 BBo

10 BBo

2 BBo

0 50 100 150 200 250

Permian Basin

Ghawar (Saudi Arabia)

Eagle Ford Shale

Prudhoe Bay

Bakken Shale

Thunder Horse (GoM)

Eagle Ford Barnett Combo Niobrara Bakken Marcellus

(1)

(2)

(2)

(2)

(2)

(2)

350 ft 100 – 500 ft 275 – 600 ft 30 – 120 ft 50 – 600 ft

Pay Thickness Comparison

Midland

Gross Thickness Up to 6,000 ft

12

Permian Basin Crude Production

Forecasted Permian Basin Production

Crude Production Assumptions

Production forecast based on assumed “basin-wide” type curves

─ 1,000 MBoe type curve for new horizontal wells(1)

Our base case forecasts no change in horizontal rigs from the current 186 rigs(2)

─ The 350 Rig and 400 Rig Cases assume 350 rigs and 400 rigs by 2018 and beyond

─ 1,000 Rig Case provides illustrative “upper bound” to potential production

(1) Represents processed EUR. (2) As of 11/23/2016 per Baker Hughes International.

-

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026

Per

mia

n B

asin

Oil

Pro

duct

ion

(MB

bl/d

)

Historical Production Base Case 350 Rig Case 400 Rig Case 1,000 Rig Case

13

Permian Basin Resource Summary

Key Points

Jefferies estimates a total resource potential of approximately 325 BBoe (212 BBo) across the productive core of the Midland and Delaware Basins

─ Delaware: 218 BBoe (128 BBo)

─ Midland: 106 BBoe (84 BBo)

Spacing assumptions:

─ Delaware:

Wolfcamp A: 15 wells / section(1)

Wolfcamp B: 15 wells / section

2nd Bone Spring: 8 wells / section

3rd Bone Spring: 8 wells / section

Avalon: 8 wells / section

─ Midland:

Wolfcamp A: 15 wells / section

Wolfcamp B: 15 wells / section

Mid. Spraberry: 10 wells / section

Lower Spraberry: 10 wells / section

(1) Assumes development of 8 wells / section for the Wolfcamp A-X/Y Sand in southern Eddy County, NM and northern Loving County, TX.

Total Core Surface Acreage ~7,700,000 acres

Total Core “Effective” Acreage ~20,100,000 acres

Productive Benches 5 (Delaware) 4 (Midland)

Assumed Spacing 8-15 wells / section

Number of Wells to Develop ~316,000 wells

Average EUR / Well 1,137 MBoe (730 MBo)

Total Recoverable Resource ~325 BBoe (~212 BBo)

Peak Oil Production (400 Rig Ramp)

~11,000 MBo/d

Oil Reserves Half Life (400 Rig Ramp)

~32 Years

Total Capital Needed ~$1.9 Trillion

Based on Productive Core of the Midland and Delaware Basins

14

Top 10 Permian Operators

Operator Net Acres Current Production Active Permian Rigs

~2,000,000 ~174 MBoe/d 8 rigs

~1,700,000 ~159 MBoe/d 6 rigs

~1,500,000 ~115 MBoe/d 7 rigs

~1,400,000 ~144 MBoe/d 6 rigs

~710,000 ~179 MBoe/d 15 rigs

~705,000 ~153 MBoe/d 18 rigs

~560,000 NA 6 rigs

~300,000 ~67 MBoe/d 5 rigs

~235,000 ~50 MBoe/d 8 rigs

~220,000 ~86 MBoe/d 5 rigs

Top 10 Total ~9,330,000 ~1,127 MBoe/d (35% of total)

84 rigs (37% of total)

Permian Basin Total ~3,250 MBoe/d (1) 228 rigs

Note: Acreage includes non-core Delaware and Midland Basin, Central Basin Platform and New Mexico Shelf. Source: Company filings and investor presentations, EIA and Baker Hughes. (1) Represents 2-stream production.

15

E&P Deal Volume Since 2010

$7 $3

$9 $8

$16

$7

$24

$64 $64

$72

$40

$80

$23

$33

$43

$13

$49

$68

$53

$126

$31

$114

$79

$131

$117

$149

$157

$88

2010 2011 2012 2013 2014 2015 YTD 2016

Permian Other US International

Global E&P M&A Landscape

Source: PLS M&A Database.

Transactions over $50 MM ($ Billions)

16

U.S. Onshore E&P Deal Volume Since 2010

2016 U.S. Onshore Activity Accelerating After a Slow Start

Source: PLS M&A Database.

$57

$64

$46 $43

$75

$30

$54

-

20

40

60

80

100

120

140

160

180

$-

$25

$50

$75

$100

$125

$150

2010 2011 2012 2013 2014 2015 YTD 2016

Num

ber

of D

eals

Dea

l Val

ue

Asset Corporate JV Deals

Transactions over $50 MM ($ Billions)

17

Total E&P A&D Transactions by Buyer Type

A&D Market Participation by Sector – Who’s Buying?

Source: Jefferies internal transactions database.

0%

10%

20%

30%

40%

50%

60%

2011 2012 2013 2014 2015 2016 YTD

Public Private Private Equity MLP Majors/Int'ls Other

18

US Upstream M&A Market Overview

Key Points

M&A market experiencing a recovery due to:

─ Optimism that prices have bottomed has emerged, and many believe now is an optimal time to play ”offense”

─ Financial markets have shown material improvement in 2016

─ Strategic buyers upgrading portfolios and “equitizing” balance sheets

─ Large companies fortifying liquidity via asset sales

─ Private-equity backed companies see a “window”

Jefferies Transaction

July 2016 to Date (Transactions over $500 MM)

Date Buyer Seller Amount ($MM) Location

11/28/2016 $855 Delaware Basin

11/18/2016 $1,000 East Texas

10/31/2016 J. Cleo /

Multiple Sellers $1,765 Delaware Basin

10/25/2016 Multiple Sellers $683 Appalachia

10/18/2016 $1,600 Midland Basin

10/18/2016 $785 Bakken

10/14/2016 $742 California

10/13/2016 $2,400 Delaware Basin

9/26/2016 $2,700 Appalachia, Barnett

9/12/2016 $2,000 Gulf of Mexico

9/6/2016 $2,451 Delaware Basin

8/23/2016 $1,505 Delaware Basin

8/15/2016 $1,625 Midland Basin

8/8/2016 $980 Midland Basin

7/13/2016 $560 Delaware Basin

7/07/2016 Riverstone / Silver Run $1,735(1) Delaware Basin

(1) $1,735 MM reflects firm value per Company disclosure.

19

Acreage Map

Selected Delaware Basin Precedent Transactions

Source: PLSX, press releases, company filings, Jefferies estimates and other publicly available information. (1) Adjusted for value of production at $30,000 / Boe/d to the extent PDP value is not disclosed. (2) Total transaction value excludes $100 MM allocated to midstream infrastructure and $235 MM purchase of Marathon’s non-operated CO2 and waterflood assets. (3) Transaction includes 186,000 net acres in the Delaware Basin, 138,000 net acres on the Northwestern Shelf, 200,000 net acres in the Powder River Basin, and 1.1 million net acres in other major western basins.

Concho / Reliance

Parsley / BTA

SM / Rock Oil

QEP / RK

Pioneer / Devon

Ajax Resources

Date Buyer Seller

Trans. Value ($MM)

Net Acres

Prod. (MBoe/d)

Adjusted $ / Net Acre

11/28/2016 $855 35,195 3.5 $21,309

11/21/2016 $430 16,400 2.5 $21,646

10/31/16 $1,665(2) 35,000 7.0 $41,571

10/13/16 $2,400 41,000 15.0 $47,561

10/04/16 $135 3,293 1.2 $30,064

09/06/16 $2,451 1,624,000 29.6 NA

08/23/16 $1,505 57,000 7.0 $22,179

07/13/16 $560 19,180 1.0 $27,633

07/07/16 Riverstone / Silver Run $1,735 42,500 7.2 $35,741

Mean $30,963

Median $28,849

(1)

SM / QStar

J Cleo

(3)

Centennial / Silverback

Concho / Endurance

Diamondback / Luxe

EOG / Yates

Oxy / J. Cleo

PDC / Arris

Resolute / FireWheel

RSP / Silver Hill

Riverstone / Centennial

20

Acreage Map

Selected Midland Basin Precedent Transactions (1)

(1) Source: PLSX, press releases, company filings, Jefferies estimates and other publicly available information. (2) Adjusted for value of production at $30,000 / Boe/d to the extent PDP value is not disclosed. (3) Acquisition included ORRI in 1,440 gross acres in addition to 5,667 net acres. (4) Reflects acquisition of 15,000 net acres in the core Sale Ranch area in Martin and Midland counties. Total of 28,000 net acres acquired.

Concho / Reliance

Parsley / BTA

SM / Rock Oil

QEP / RK

Pioneer / Devon

Date Buyer Seller

Trans. Value ($MM)

Net Acres

Prod. (MBoe/d)

Adjusted $ / Net Acre

10/18/16 $1,600 35,700 2.4 $42,801

09/06/16 $327 5,667 2.3 $47,556

08/15/16 $1,625 40,000 10.0 $28,125

08/15/16 $400 9,140 0.3 $42,877

08/08/16 $980 24,783 4.9 $33,612

06/21/16 $600 9,400 1.4 $59,362

06/15/16 $435 15,000 1.0 $27,000

Mean $40,190

Median $42,801

(2)

(4)

(3)

Callon / Element

SM / QStar

21

PV-15 @ NYMEX ($ / Undeveloped Net Acre)(1)

What’s a Permian Acre Worth?

Note: Represents ~520 gross locations in the Middle Spraberry, Lower Spraberry, Wolfcamp A and Wolfcamp B across 10,000 net acres in Midland Co. (1) Assumes NYMEX strip pricing as of November 28, 2016.

$177,452

$150,595

$129,458

$113,073

$100,031

$-

$50,000

$100,000

$150,000

$200,000

10 15 20 25 30

Project Development Time Frame (Years)

Illustrative Example: 10,000 Acre Midland Basin Development Program

22

Market Reaction to Recent Strategic Acquisitions Recently Announced Strategic Acquisitions Have Been Received Extremely Well by the Market

Stock Price Performance ($ / Share)

$29.30

$31.06

08/05/16 08/08/16

Stock Price Performance ($ / Share)

$13.16

$14.48

06/17/16 06/20/16

Description of Asset

Date June 20, 2016

Size / Basin $888 MM / STACK

Net Acres 61,000 acres

Production 9.0 MBoe/d

Total Resource 700 MMBoe

Description of Asset

Date August 8, 2016

Size / Basin $980 MM / Midland

Net Acres 24,783 acres

Production 4.9 MBoe/d

PDP Reserves 6 MMBoe

Description of Asset

Date April 19, 2016

Size / Basin $301 MM / Midland

Net Acres 14,089 acres

Production 1.9 MBoe/d

PDP Reserves 4 MMBoe

Stock Price Performance ($ / Share)

$8.92

$10.00

4/19/2016 4/20/2016

Buyer Seller Buyer Seller Buyer Seller

23

E&P Debt Performance

Source: CapIQ as of 11/21/16. (1) Yield indices illustrate weighted average yield based on size of issuance. (2) A Index includes issues from COP and OXY. (3) BBB Index includes issues from APA, APC, DVN, ECA, EOG, EQT, HES, MRO, MUR, NBL, PXD and XEC. (4) BB Index includes issues from the following : AR, CXO, CLR, EGN, FANG, NFX, PDCE, QEP and SWN. (5) B Index includes issues from the following: CRZO, CrownRock, GPOR, LPI, MRD, MTDR, OAS, RICE, RSPP, SM, SN, WLL, and WPX. (6) CCC Index includes issues from the following : ALTA, AREX, BBG, CRC, CWEI, DNR, EVEP, LGCY, LNR and NOG. (7) Permian comps include AREX, CPE, CXO, FANG, EGN, LPI, MTDR, PE, PXD, REI, CWEI and RSPP.

Capital Markets Environment Is Improving

E&P Equity Index Performance LTM Performance Performance Since 02/15/16

1.9%

5.4% 3.0%

14.8% 6.6% 5.8%

43% 50% 12% 11%

(1)%

2%

(15)%

13%

(51)% (60)%

183%

124%

61% 86% 84%

115%

46% 23%

(6)% (30)%

Permian Small Caps Appalachia Large Caps Bakken Mid-Con Niobrara Majors MLPs GOM

0%

10%

20%

30%

40%

50%

60%

Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16

A Index BBB Index BB Index B Index CCC Index Permian Comps(2) (3) (4) (5) (6) (7)

Peak Yield %

54.3

23.7%

12.5%

8.1%

4.0%

11.2%

24

Public Debt Issuances ($MM)

Public Common Equity Issuances ($MM)

Upstream Public Market New Issue Activity

Note: Analysis excludes private company issuances, private placements, and exchange offers.

Equity and Debt Capital Markets Still Willing to Participate for High Quality Assets and Operators

# of Issues 0 1 9 7 10 5 5 1 0 0 2 1 3 4 8 0 2 5 1 7 12 2 1

$5,544

$996

$3,044

$5,511

$792

$1,529 $1,415

$303 $176

$1,286

$466 $116 $256

$2,119

$6,900

$972

$1,463 $1,533

$2,824 $2,319 $2,084

$2,460

$72 $-

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16

Tran

sact

ion

Valu

e ($

MM

)

$- $350

$6,100

$3,050

$4,845

$3,400

$2,789

$200 $- $-

$1,530 $850

$1,250 $1,520

$7,425

$-

$711

$1,656

$142

$3,488

$7,461

$1,150 $500

$-

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16

Tran

sact

ion

Valu

e ($

MM

)

# of Issues 3 6 12 3 6 4 1 1 3 2 1 1 4 8 4 5 6 5 6 4 5 4 1

1H 2015: ~$13.4 B (34 deals)

2H 2015: ~$2.6 B (9 deals)

2016 YTD: ~$28.3 B (52 deals)

1H 2015: ~$17.7 B (32 deals)

2H 2015: ~$5.4 B (9 deals)

2016 YTD: ~$25.3 B (45 deals)

25

Selected Permian Focused E&P Companies

Company Equity Value

Enterprise Value

EV / EBITDA Production Growth LTM Stock Price % Change 2017 2018 2016-2018

$2,429 $2,487 9.5x 5.7x 66% 60%

$19,203 $22,038 12.5x 9.8x 34% 20%

$7,604 $6,789 12.4x 7.7x 58% 25%

$7,130 $8,224 13.8x 8.5x 68% 79%

$29,386 $30,004 12.4x 8.8x 33% 20%

$6,295 $7,382 12.7x 8.2x 61% 41%

Mean $12,008 $12,821 12.2x 8.1x 53% 41%

As of September 30, 2016 ($ Millions)

(1)

(1) Pro Forma for October 2016 notes issuance and Howard County acquisitions of 5,952 net acres (closed 10/20/2016). (2) Pro forma for acquisition of 16,400 acres in Eddy and Lea Counties, New Mexico on 11/21/2016. (3) Pro forma for 10/20/2016 debt issuances and 10/27/2016 tender offer. (4) Pro forma for closing of Glasscock County acquisition (closed 10/4/2016). (5) Pro forma for Silver Hill Acquisition (41,000 net acres in southern Delaware Basin) on 10/13/2016.

(2)

(3)

(5)

(4)

26

Normalized EUR Evolution

1.4

2.0

2.7

2014 2015 Current

Improvement in EURs for Selected Plays

Haynesville Shale (Bcf / 1,000’) (3)

121 132

158

2014 2015 Current

Delaware Basin (MBoe / 1,000’) (4)

103

151 159

2014 2015 Current

Eagle Ford Shale (MBoe / 1,000’) (1)

62

77 82

2014 2015 Current

Williston Basin (MBoe / 1,000’) (2)

(1) Metrics include publicly available data from the following operators: CHK, CRZO, CWEI (Eastern Eagle Ford), ECA, EOG, EPE, MRO, NBL, PXD, SFY and SM. “Current” represents the most recent publicly reported data for each operator. Public disclosures represent Lower Eagle Ford completions. EURs represent type wells across all phase windows, including wet gas.

(2) Metrics include publicly available data from the following operators: CLR, HES, EOG, ERF, MRO, OAS, QEP, SM, WLL and WPX. “Current” represents the most recent publicly reported data for each operator. Public disclosures represent Middle Bakken and Three Forks completions.

(3) Metrics include publicly available data from the following operators: CHK, ECA and EPE. (4) Metrics include publicly available data from the following operators: APA, APC, CWEI, CXO, EGN, EOG, MTDR, OXY, REN, WPX, XEC. “Current” represents the most recent publicly reported data for each

operator. Public disclosures represent Bone Spring and Wolfcamp completions. 27