Investor Presentation May 2017 Forward-Looking Statements This - - PowerPoint PPT Presentation

Investor Presentation

May 2017

Forward-Looking Statements

This presentation contains forward-looking statements within the meaning of the federal Securities laws. All statements included in this presentation, other than statements of historical fact, regarding the Company’s strategy, goals, future operations, financial position, estimated revenues and losses, projected costs, prospects, plans and objectives of management are forward-looking statements. When used in this presentation, the words ‘‘could,’’ ‘‘believe,’’ ‘‘anticipate,’’ ‘‘intend,’’ ‘‘estimate,’’ ‘‘expect,’’ ‘‘may,’’ ‘‘continue,’’ ‘‘predict,’’ ‘‘potential,’’ ‘‘project,’’ “guidance,” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. Without limiting the generality of the foregoing, these statements are based on certain assumptions made by the Company based on management’s experience, expectations and perception

• f historical trends, current conditions, anticipated future developments and other factors believed to be appropriate. Although the Company believes that its plans, intentions and

expectations reflected in or suggested by the forward-looking statements made in this presentation are reasonable, the Company gives no assurance that actual future results will not differ materially from those forecasted in this presentation. Moreover, such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Company, which may cause actual results to differ materially from those implied or expressed by the forward-looking statements. Each investor must assess and bear the risk of uncertainty inherent in the forward looking statements in this presentation. The Company discloses important factors that could cause its actual results to differ materially from its expectations in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the Company’s Form 10-K for the year ended December 31, 2016 and Form 10-Q for the quarter ended March 31, 2017, filed with the Securities and Exchange Commission (“SEC”); and its other filings with the SEC. These factors include risks or liabilities assumed as a result of acquisitions, increases in our indebtedness, ability to complete any divestitures or other strategic transactions, ability to meet financial and operating guidance, ability to achieve production targets, successfully manage capital expenditures, and to complete and to test and produce the wells and prospects identified in this presentation; risks related to variations in the market demand for, and prices of, oil and natural gas; uncertainties related to commodity prices, uncertainties about the Company’s estimated quantities of oil and natural gas reserves or potential locations; infrastructure for produced water disposal and electricity and current and future ability to dispose of produced water; the adequacy of the Company’s capital resources; general economic and business conditions; failure to realize expected value creation from property acquisitions; uncertainties about the Company’s ability to replace reserves and economically develop its current reserves; risks related to the concentration of the Company’s

• perations; drilling results; pending litigation; and potential financial losses or earnings reductions from the Company’s commodity derivative positions.

Accordingly, you should not place undue reliance on any of the Company’s forward-looking statements. All forward-looking statements speak only as of the date on which such statements are made and the Company undertakes no obligation to correct or update any forward-looking statement, whether as a result of new information, future events or

• therwise, except as required by applicable law

Midstates Petroleum Company, Inc. l NYSE: MPO 2

Reserve and Non-GAAP Information

This presentation also includes financial measures that are not in accordance with generally accepted accounting principles (“GAAP”), including Adjusted EBITDA and PV-10. While management believes such measures are useful for investors because they allow for greater transparency with respect to key financial metrics, they should not be used as a replacement for financial measures that are in accordance with GAAP. The SEC permits oil and gas companies, in their filings with the SEC, to disclose proved reserves, which are those quantities of oil and gas, which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible—from a given date forward, from known reservoirs, and under existing economic conditions, operating methods, and government regulations—prior to the time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain, regardless of whether deterministic or probabilistic methods are used for the estimation. SEC rules also permit the disclosure of “probable” and “possible” reserves. We disclose proved reserves but do not disclose probable or possible reserves. We may use certain broader terms such as “EUR” (as defined below) and other descriptions of volumes of potentially recoverable hydrocarbon resources throughout this presentation that the SEC does not permit to be included in SEC filings. These broader classifications do not constitute "reserves" as defined by the SEC, and we do not attempt to distinguish these classifications from probable or possible reserves as defined by SEC guidelines. We define EUR as the cumulative oil and gas production expected to be economically recovered from a reservoir or individual well from initial production until the end of its useful life. Our estimates of EURs and resource potential have been prepared internally by our engineers and management without review by independent engineers. These estimates are, by their nature, more speculative than estimates of proved, probable and possible reserves and accordingly are subject to substantially greater risk of being actually realized. We include these estimates to demonstrate what we believe to be the potential for future drilling and production by the Company. Actual locations drilled and quantities that may be ultimately recovered from our properties could differ substantially. In addition, we have made no commitment to drill all of the drilling locations which have been attributed to these quantities. Ultimate recoveries will be dependent upon numerous factors including actual encountered geological conditions, the impact of future oil and gas pricing, exploration and development costs, and future drilling decisions and budgets based upon our future evaluation of risk, returns and the availability of capital and, in many areas, the outcome of negotiation of drilling arrangements with holders of adjacent or fractional interest leases. Estimates of resource potential and other figures may change significantly as development of our properties provides additional data. Our forecast and expectations for future periods are dependent upon many assumptions, including estimates of production decline rates from existing wells, the undertaking and

• utcome of future drilling activity, including the type curve utilized in evaluating our proved undeveloped locations and reserves, and activity that may be affected by significant

commodity price declines or drilling and completion cost increases. The Company’s estimates of total proved reserves at December 31, 2016 are based on reports provided by Cawley, Gillespie & Associates, Inc., independent petroleum engineers.

Midstates Petroleum Company, Inc. l NYSE: MPO 3

Q1 2017 & Recent Highlights

• Reported net income of approximately $18 million
• Generated adjusted EBITDA of $35 million, outpacing operational

CAPEX by $3 million

• Reinstated hedging program, with ~55% and ~60% forecast oil and

natural gas production, respectively, hedged at attractive prices through year-end 2017

• Uplisted the Company’s common stock to the NYSE Big Board on

May 4, 2017

• Expect to add second rig in Miss Lime during summer 2017

Midstates Petroleum Company, Inc. l NYSE: MPO 4

Continue To Effectively Execute On Business Plan

Midstates Petroleum Overview

Midstates Petroleum Company, Inc. l NYSE: MPO 5

Mississippian Lime(1)

• Premier position in high-return core
• 19,539 Boed net production(2)(3)
• ~98,000 net acres(4)
• ~1,500 Potential Locations(5)

Anadarko Basin

• Multi-zone horizontal inventory
• 4,023 Boed net production(2)
• ~102,000 net acres(4)
• ~1,300 Potential Locations(5)
• Premier Mississippian Lime position
• Substantial development runway
• Attractive IRR’s at current strip
• Optionality in large Anadarko Basin position

(1) Excludes Hunton play in Lincoln County, OK (2) Q1 2017 Net Production (3) Includes ~750 Boed from Hunton play in Lincoln County, OK (4) As of 05.05.2017; includes acreage capable of being earned under farm-ins

Return Driven, Mid-Continent Focused Company

(5) As of year-end 2016

Mississippian Lime “Miss-Perceptions”

Midstates Petroleum Company, Inc. l NYSE: MPO 6

These challenges present opportunities

• Uncertain SWD Capacity
• Added nine non-Arbuckle wells to our dynamic water handling system
• Limited Acreage and Locations
• Opportunistically acquired additional acreage in core area of Woods and Alfalfa counties
• Competitive Well Economics
• Generating attractive IRRs that are competitive with other basins

Highly Efficient and Cost Effective SWD System

Midstates Petroleum Company, Inc. l NYSE: MPO 7

Dynamic Water Handling System Provides Operating Advantage And Disposal Optionality

SWD System

Current looped system utilizes 19 injection wells: 10 Arbuckle, 9 non-Arbuckle

• Looped nature allows for optimization of injection rates across the system/wells
• Total permitted injection capacity of 312,000(1) barrels of water per day

» Total Non-Arbuckle permitted injection capacity of 180,000(1) barrels of water per day

• Current total injection rate of approximately 185,000 barrels of water per day

Future SWD wells will be in non-Arbuckle horizons

• A combination of new drills and conversions of non-producing vertical wells

Permitting additional non-Arbuckle disposal wells to enable a quick response to any future Arbuckle injection restriction requests Operating costs of non-Arbuckle wells are not materially more than Arbuckle wells

• $0.05 - $0.08/Bbl of water disposed versus ~$0.03 - $0.05/Bbl in the Arbuckle

Midstates Petroleum Company, Inc. l NYSE: MPO 8

Demonstrated Ability To Proactively Manage SWD Landscape Without Production Impact

(1) Permitted injection capacity may differ from actual injection capacity due to operational constraints

Mississippian Lime Acreage Overview

Midstates Petroleum Company, Inc. l NYSE: MPO 9

2017 Focus Areas

Premier Position Of 98,000(1) Net Acres In The High-Return Core Of The Miss Lime

(1) Excludes Hunton play in Lincoln County and includes acreage capable of being earned under farm-ins

Acreage Update

Midstates Petroleum Company, Inc. l NYSE: MPO 10

Core Miss Lime Acreage Position Woods and Alfalfa Counties, Oklahoma

• 2017 acreage decline primarily due to high grading of farm-in opportunities

– Potential to re-acquire lost acreage going forward

Optimized Well Costs

Midstates Petroleum Company, Inc. l NYSE: MPO 11

Drilling Days – Rig Release to Rig Release

• Anticipate well cost reductions achieved over the last two years to largely

stay in place

• Savings from 2014 to 2016 were 65% efficiency gains and 35% service cost reductions
• Locked in stimulation services and tubular costs for 2017

DC&F(1) Well Costs

(1) Drilling, completion, and related facilities

2014 – 2017 Well Performance

Midstates Petroleum Company, Inc. l NYSE: MPO 12

Multi-Year Program Results Firmly Endorse Midstates’ PUD Type Curve

Normalized Flowing Time (days)

Well Production vs. YE 2016 PUD Type Curve 2014 - 2017 Wells

2014 - 2017 Wells Actual Production 2016 YE PUD Type Curve 2014 – 2017 Wells Average Production

Generating Highly Attractive Returns In An Overlooked Basin

Midstates Petroleum Company, Inc. l NYSE: MPO 13 Source: Simmons & Company “E&P Perspectives: Well Economics For L48 Oil & Liquid Levered Regions” – 01.04.2017; Midstates calculated based on CGAPUD type curve at $2.8mm DC&F cost Note: Assumes flat $55 WTI and $3.00 HHUB; product realizations vary by region

Understanding Of Miss Lime Acreage Enhances Midstates’ Differentiated Returns

Anadarko Basin

Midstates Petroleum Company, Inc. l NYSE: MPO 14

Farm-out agreement signed in late 2016 to explore NW Stack

Strong Acreage Position In A Proven Basin Provides Future Value Optionality

Pristine Balance Sheet

Key Takeaways

Midstates Petroleum Company, Inc. l NYSE: MPO 15

• Restructured balance sheet provides a strong platform for future growth
• Strong current liquidity position of ~$85mm; ~$43mm of net debt (RBL)
• Capability to substantially grow production within existing funding sources
• Maintained reduced well costs and cycle times and increased efficiencies
• Highly attractive core acreage position of 98,000(1) net acres
• Best in play results driving strong IRRs of greater than 35%(2) at current strip

Top Tier Position in Mississippian Lime

• Very effective management of dynamic water handling system
• High grading of all drilling opportunities
• Maximizing margins by controlling operating expenses

Continue Operational Excellence

(1) Excludes Hunton play in Lincoln County and includes acreage capable of being earned under farm-ins (2) MPO PUD Type Curve, $2.8mm well cost, and 05.05.2017 Strip Pricing

Appendix

Midstates Petroleum Company, Inc. l NYSE: MPO 16

2017 Operating Scenarios

Midstates Petroleum Company, Inc. l NYSE: MPO 17

• 20,000 – 23,000 Boe/d
• $90-$100mm of CAPEX(1)
• $125-$145mm of EBITDAX

1-Rig Option

• 21,000 – 24,000 Boe/d
• $120-$140mm of CAPEX(1)
• $130-$150mm of EBITDAX

2-Rig Option(2)

• Meaningful production

growth starting in 2018

• Faster growth in reserve

base/NAV

• Capitalize on well cost

efficiencies

• Build cash position
• HBP additional core

Miss Lime acreage

• Stabilize production

base in 2018

(1) RBL amendment required (2) Assumes 2nd Rig starts on 07.01.2017

2017 Guidance – 1 Rig Program

Midstates Petroleum Company, Inc. l NYSE: MPO 18

1) RBL amendment required 2) Includes expense workover 3) Adjusted G&A – Cash is a non-GAAP financial measure as it excludes from G&A non-cash compensation and other non-recurring items, but includes capitalized general and administrative costs. The most directly comparable GAAP measure for Adjusted G&A – cash is General and Administrative Expense.

Operational CAPEX Guidance(1) $MM

D,C&F $62 - $66 Infrastructure (Incl. SWD Wells) $14 - $18 Land & G&G $5 - $6 Workover $9 - $10

Total Capital Expenditures $90 - $100 Production Guidance

Production (Boe/d) 20,000 – 23,000

Cost Guidance per BOE

Lease Operating Expense(2) $8.00 - $9.25 Severance & Other Taxes $0.75 - $1.25 Gathering and Transportation $1.75 - $2.25 Adjusted G&A - Cash(3) $2.75 - $3.25

Hedging Update

Midstates Petroleum Company, Inc. l NYSE: MPO 19

Strongly Hedged Oil and Gas Position Through 2017

Quarter Ended Quarter Ended Quarter Ended Quarter Ended Quarter Ended Quarter Ended June 30, 2017 September 30, 2017 December 31, 2017 March 31, 2018 June 30, 2018 September 30, 2018

NYMEX WTI Fixed swaps Hedge position (Bbls) 227,500 207,000 207,000 — — — Weighted average strike price $ 55.12 $ 55.29 $ 55.29 $ — $ — $ — Collars Hedge position (Bbls) 136,500 46,000 46,000 — — — Weighted average ceiling price $ 59.73 $ 60.00 $ 60.00 $ — $ — $ — Weighted average floor price $ 50.00 $ 50.00 $ 50.00 $ — $ — $ — Three way collars Hedge position (Bbls) — 115,000 115,000 225,000 182,000 138,000 Weighted average ceiling price $ — $ 62.80 $ 62.80 $ 62.14 $ 60.65 $ 61.00 Weighted average floor price $ — $ 50.00 $ 50.00 $ 50.00 $ 50.00 $ 50.00 Weighted average sub-floor price $ — $ 40.00 $ 40.00 $ 40.00 $ 40.00 $ 40.00 NYMEX HENRY HUB Fixed swaps Hedge position (MMBtu) 2,912,000 2,944,000 1,907,000 1,350,000 — — Weighted average strike price $ 3.38 $ 3.38 $ 3.43 $ 3.47 $ — $ — Collars Hedge position (MMBtu) 244,000 368,000 551,000 — — — Weighted average ceiling price $ 3.63 $ 3.63 $ 3.84 $ — $ — $ — Weighted average floor price $ 3.15 $ 3.15 $ 3.23 $ — $ — $ — Three way collars Hedge position (MMBtu) — — 610,000 1,530,000 — — Weighted average ceiling price $ — $ — $ 4.30 $ 4.38 $ — $ — Weighted average floor price $ — $ — $ 3.25 $ 3.25 $ — $ — Weighted average sub-floor price $ — $ — $ 2.50 $ 2.50 $ — $ —

Miss Lime PUD Type Curve

Midstates Petroleum Company, Inc. l NYSE: MPO 20

Miss Lime IRRs at Various Well Costs(2) and Prices(3)

(1) Includes facilities cost (2) Gas prices held flat at $3.00/MMBtu

PUD Type Curve: Gross EUR Summary (Mboe): 501 % Oil 41% Gross 30-Day IP Rate (Boe/d): 517 Initial 24-hr IP - Gas (Bbl/d) 1700 Initial Annual Decline, Di 67% Terminal Decline, Dmin 5% Initial 24-hr IP - Oil (Bbl/d) 315 Initial Annual Decline, Di 79% Terminal Decline, Dmin 5% Hyperbolic Exponent, b Factor (Oil/Gas) 1.42 Gas Shrinkage 23% NGL Yield (Bb/MMcf) 60 Mississippian Lime

2016 and Q1 2017 Performance

Midstates Petroleum Company, Inc. l NYSE: MPO 21

Actual Net Production (Boe/d) Actual Adjusted EBITDA(1) ($MM)

32,018 30,164 28,059 25,259 23,562

• 5,000

10,000 15,000 20,000 25,000 30,000 35,000 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Oil NGL Gas

$19.7 $36.1 $37.4 $34.6 $34.9

$- $5.0 $10.0 $15.0 $20.0 $25.0 $30.0 $35.0 $40.0 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017

(1) See reconciliation in the appendix

Adjusted EBITDA Reconciliation

Midstates Petroleum Company, Inc. l NYSE: MPO 22

Quarter Ended March 31, Quarter Ended December 31, Quarter Ended September 30, Quarter Ended June 30, Quarter Ended March 31, 2017 2016 2016 2016 2016 Adjusted EBITDA reconciliation to net income (loss): Net income (loss) $ 18,485 $ 1,541,705 $ (38,384) $ 8,962 $ (179,274) Depreciation, depletion and amortization 15,342 16,047 15,756 18,638 24,835 Impairment in carrying value of oil and gas properties

• 7,524

33,887 62,963 127,734 Loss on sale/impairment of field inventory

• -
• (Gain)/Losses on commodity derivative contracts — net

(4,865)

• Net cash received (paid) for commodity derivative

contracts not designated as hedging instruments 811

• Income tax expense (benefit)
• Reorganization items, net
• (1,536,517)

22,772 (80,536)

• Interest income
• (24)

(57) Interest expense, net of amounts capitalized 977 1,384 2,668 18,839 44,212 Asset retirement obligation accretion 276 308 452 444 420 Share-based compensation 3,337 4,198 279 311 685 Adjusted EBITDA $ 34,363 $ 34,649 $ 37,430 $ 29,597 $ 18,555 Acquisition, transaction, advisory and debt restructuring costs 557

• 6,472

1,117 Adjusted EBITDA, before acquisition, transaction, advisory and debt restructuring costs $ 34,920 $ 34,649 $ 37,430 $ 36,069 $ 19,672

Year-End 2016 Reserves

Midstates Petroleum Company, Inc. l NYSE: MPO 23

(1) 02.06.2017 Strip Pricing (2) YE 2016 SEC Pricing

Robust Reserve Value of ~$1.1 Billion(1)(3) vs. Enterprise Value of ~$489 Million(4)

(3) PV-10 is considered a non-GAAP financial measure as defined by the

• SEC. Please see the reconciliation to the most directly comparable GAAP

financial measure included in the Appendix to this presentation. (4) EV Value = Mkt Cap of ~$446mm (25mm shares @ $17.84/share) & $43mm of Net Debt

Miss Lime:

PDP 16.4 177.0 13.8 59.7 470.8 306.6 PDNP 1.7 23.3 1.8 7.4 35.8 20.6 PUD (274 locations) 43.1 280.5 21.2 111.1 513.9 216.5

Total Miss Lime Proved 61.2 480.8 36.9 178.2 $1,020.5 $543.7 Anadarko:

PDP 3.4 23.0 2.6 9.8 70.8 34.5

Total Anadarko Proved 3.4 23.0 2.6 9.8 $70.8 $34.5 Total MPO:

PDP 19.8 200.1 16.4 69.6 541.6 341.1 PDNP 1.7 23.3 1.8 7.4 35.8 20.6 PUD 43.1 280.5 21.2 111.1 513.9 216.5

Total MPO Proved 64.6 503.8 39.5 188.1 $1,091.3 $578.2

Reserve Category Oil (MMboe) Gas (Bcf) NGL (MMboe) Total (MMboe)(1) PV-10 Strip Pricing(1)(3) (MM) PV-10 SEC Pricing(2)(3) (MM)

Reconciliation of PV-10 to the Standardized Measure

Midstates Petroleum Company, Inc. l NYSE: MPO 24

Midstates refers to PV-10 as the present value of estimated future net cash flows of estimated proved reserves as calculated in the respective reserve report using a discount rate of 10%. This amount includes projected revenues, estimated production costs and estimated future development costs and estimated cash flows related to future asset retirement obligations (“ARO”). PV-10 is a financial measure defined under

• GAAP. Accordingly, the following table reconciles total PV-10 to the standardized measure of discounted future net cash flows, which is the most

directly comparable GAAP financial measure. Midstates believes the presentation of PV-10 provides useful information because it is widely used by investors in evaluating oil and natural gas companies without regard to specific income tax characteristics of such entities. PV-10 is not a measure of financial or operating performance under GAAP, nor is it intended to represent the current market value of our estimated proved

• reserves. PV-10 should not be considered in isolation or as a substitute for the standardized measure of discounted future net cash flows as

defined under US GAAP. Additionally, standardized measure is based on proved reserves as of fiscal year end calculated using unweighted arithmetic average first-day-of-the-month prices for the prior 12 months. GAAP does not prescribe any corresponding GAAP measure for PV-10

• f reserves adjusted for pricing sensitivities. For these reasons, it is not practicable for us to reconcile PV-10 at strip pricing to GAAP

Standardized Measure. The following table provides a reconciliation of PV-10 to the standardized measure of discounted cash flows (in thousands):

Midstates Petroleum Company, Inc. l NYSE: MPO 25