San Juan Basin Energy Conference April 2 5 , 2 0 1 9 Farm ington, - PowerPoint PPT Presentation

San Juan Basin Energy Conference April 2 5 , 2 0 1 9 Farm ington, New Mexico CONFIDENTIAL INFORMATION

• DJR Operating LLC, is a fully owned entity of DJR Energy. • DJR Energy, LLC, is a private upstream oil and gas company utilizing technical expertise and strong financial partnerships to develop it’s resources in the San Juan Basin. • DJR entered the San Juan Basin in April 2017 with the acquisition of the New Mexico portion of Elm Ridge and Beeline assets. • DJR further enhanced our basin portfolio and position with the acquisition of Encana’s San Juan assets in December 2018 • DJR activities in the San Juan Basin are managed by an experienced technical and operational staff from offices in Denver, Colorado and Aztec, New Mexico. • Current Aztec, NM based staff of 41 DJR & 17 contract employees. • DJR Energy holds ~350,000 net acres in the San Juan Basin

DJR Energy – Corp. History DJ Resources w as focused in the DJ Basin from 2 0 0 4 to 2 0 1 4  DJ Basin was the initial target  Oily basin  Low barrier to entry  New technology not yet applied DJR Energy w as form ed to target the oil rim of San Juan Basin  Started with a Basin wide geologic evaluation − Detailed analysis of the rocks − Review of industry frac techniques  Gallup Formation is similar to the Turner sand in the Powder River Basin and Codell in the DJ Basin  Early in life of play − ~ 290 Gallup horizontal wells drilled by industry (2017)  Robust economics, with potential for further improvement − Longer laterals, pad drilling, improved infrastructure and further D&C cost reduction CONFIDENTIAL INFORMATION

DJR – Elm Ridge Acquisition (2017) Current status • ~175,000 acres • 599 vertical wells • ~310 miles of midstream pipeline • Five compression stations

DJR Energy, LLC: Elm Ridge Acquisition 2017 Key Focus to Date • Focused restoration of six large facilities and numerous individual well sites • Returned 300+ wells to production • Midstream mechanical integrity and improved operational reliability • Cathodic protection • Pipeline liquids removal • Repaired and returned inactive pipelines to service • Compression upgrades and repairs Planning for development • APDs in Bisti area (location built) • APDs in progress in Jicarilla area CONFIDENTIAL INFORMATION

C e ntra l Bisti Unit Ya rd ( Be fo re )

C e ntra l Bisti Unit Ya rd ( A fte r)

C a rso n Ta nk Ba tte ry ( Be fo re )

C a rso n Ta nk Ba tte ry ( A fte r)

C e ntra l Bisti Unit Ta nk Ba tte ry ( Be fo re )

C e ntra l Bisti Unit Ta nk Ba tte ry ( A fte r)

BE F ORE BE F ORE MART IN WHIT AKE R 57 AF T E R AF T E R

CHACON AMI GOS 19

Current DJR Operations Area Acquisition of Encana San Juan Assets • Additional ~175,000 acres • 96 horizontal wells • ~44 miles of gas pipeline CONFIDENTIAL INFORMATION

December 2018 Acquisition Our strategy going forward • Link synergies of upstream and midstream • Midstream with multiple pipes in corridor • Establish strong relationships with Tribal, State & Federal agencies • Bias for local cost competitive contractors • Transition to central liquids facilities • Smaller upstream facility footprint • Minimize trucking to move liquids • Lower per BOE emissions Development action • APDs in progress for first 23 wells • Facility near completion for 2 wells • Pipeline RoWs to support strategy in progress • Drilling to begin in summer 2019 CONFIDENTIAL INFORMATION

C urre nt Fa c ility La y o ut 16

Fu tu re W e llp a d to C e n tra l Liq u id s Fa c ility 17

Im p le m e nta tio n o f Stra te g y ha s b e g un… . 18

Lessons Learned After 1 5 years of independent E&P operations, DJR Energy’s m anagem ent team has learned som e key lessons  Technology is key − Good Geology − Good Engineering  Good people and strong teamwork  Alignment with capital providers  Have a plan − When and how to enter a basin − Development / value creation  Change the plan when circumstances dictate  Staying power is critical CONFIDENTIAL INFORMATION

In C o nc lusio n DJR is pr oud to be an industr y par tne r in the San Juan Basin DJR is looking for war d to de ve loping the natur al r e sour c e s within our pr e mie r position in a safe , e c onomic and e nvir onme ntally pr ude nt manne r 20