The Oil & Gas Conference
DUG EAST– JUNE 5, 2014 1 Whipkey Drilling Pad, Marshall County, West Virginia
Disclaimer This presentation contains “forward-looking statements” within the meaning of section 21E of the United States Securities Exchange Act of 1934, as amended (the “Exchange Act”) which represent our expectations or beliefs about future events. These statements can be identified generally by forward-looking words such as “expect”, “believe”, “anticipate”, “plan”, “intend”, “estimate”, “may”, “will” or similar words. Forward-looking statements are statements about the future and are inherently uncertain, and our actual achievements or other future events or conditions may differ materially from those reflected in the forward-looking statements due to a variety of risks, uncertainties and other factors, including, without limitation, those described in Item 1A of the company’s annual report on form 10-K for the year ended December 31, 2013 under the heading, “Risk Factors”, and elsewhere in the annual report and our filings with the Securities and Exchange Commission. These risks and uncertainties include, but are not limited to: 1. The risks of the oil and gas industry, such as operational risks in exploring for, developing and producing crude oil and natural gas; 2. market demand; 3. risks and uncertainties involving geology of oil and gas deposits; 4. the uncertainty of reserves estimates and reserves life; 5. the uncertainty of estimates and projections relating to production, costs and expenses; potential delays or changes in plans with respect to exploration or development projects or capital expenditures; 6. fluctuations in oil and gas prices, foreign currency exchange rates and interest rates; 7. health, safety and environmental risks; 8. uncertainties as to the availability and cost of financing; 9. the possibility that government policies or laws may change or governmental approvals may be delayed or withheld; 10. other sections of this presentation may include additional factors that could adversely affect our business and financial performance. Moreover, we operate in a very competitive and rapidly changing environment. New risk factors emerge from time to time and it is not possible for our management to predict all risk factors, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Our forward-looking statements contained in this presentation are made as of the respective dates set forth in this presentation. Such forward-looking statements are based on the beliefs, expectations and opinions of management as of the date the statements are made. We do not intend to update these forward-looking statements. For the reasons set forth above, investors should not place undue reliance on forward-looking statements. Readers are encouraged to read our December 31, 2013 Annual Report on Form 10-K and any and all of our other documents filed with the SEC regarding information about Trans Energy, Inc. for meaningful cautionary language in respect of the forward-looking statements herein. Interested persons are able to obtain copies of filings containing information about Trans Energy, Inc., without charge, at the SEC’s internet site (http://www.sec.gov).
2
About Trans Energy Company Overview
Trans Energy: (OTCQB: TENG)
Pure Play Marcellus Shale
PD Reserves: 48.0 Bcfe
Area of Operation
(12/31/2014 Wright & Co. Estimates - Marcellus only)
Recent Daily Production: 16,700 Mcfe
52-Week Range: $2.50 - $4.25
3-Month Avg. Daily Volume – 4,548 Shares
Shares Outstanding: 13.6 Million
Market Capitalization: $56.1 million Experienced Management Team
Selected Financial Information 12/31/2013 (est.) LTM Revenue
$18.4 million
Net Debt (as of 5/30/14)
$102.3 million
Recent Stock Price (TENG)
$4.12
Shares Outstanding (5/23/2014)
13.6 million
Market Capitalization
$56.1 million
Enterprise Value
$158.4 million
3
Why Invest in Trans Energy?
Marcellus Shale pure play
Predictable and repeatable inventory Marshall
Prominent land position with strong upside potential
Trades at a significant discount to NAV
Experienced Management Team
Tyler
Pleasants
Ritchie
Marcellus Shale Pure Play
Taylor
DRY GAS
400/500 + potential drilling locations (204/307 drillable today) (1)
3+ Tcfe gross upside potential (including JV & royalty partners) Significant portion of acreage HBP (approx. 55%) Off-take agreements totaling more than 45,000 MMBtu per day
(1) At 750 ft / 500 ft spacing
WET GAS
Harrison
Experienced Management w/ Technical Expertise
Doddridge
Production Growing
Marion
Over 45,000 gross acres in core of the Marcellus Shale Utica Shale potential Upper Devonian upside potential High-BTU, liquid-rich focus 200
Wells Drillable Today: 88 / 128 (2)
6 wells planned for drilling in 2014
(1)
Excludes Hart 28H
(2)
At 750 ft / 500 ft spacing 18
Marion County
JV has 19,673 gross acres of leased and owned minerals (7,512 net to ASD)
Marcellus gains thickness relative to Wetzel
BTU between 1050 and 1100
Total Potential Wells: ~200
Total Wells Drillable Today: 62 / 94 (1)
Marion County
Marshall Monongalia
Wetzel
Tyler
Marion
4 wells recently turned into sales Doddridge
9 wells planned for drilling in 2014
(1)
At 750 ft / 500 ft spacing
Harrison
19
Drilling Program – Recap
24 Hz wells online
2013 drilling program included 8 wells
2014 drilling program includes drilling 19 wells, of which 15 are expected to be completed by year end
Completed (Online): Anderson 5H, 7H Beatty 1H, 2H Dewhurst 110H, 111H Doman 1H, 2H Freeland 1H, 2H Goshorn 1H, 2H, 3H, 4H Groves 1H Hart 28H Keaton 1H Lucey 1H, 2H Martinez 1H Stout 2H Whipkey 1H, 2H, 3H
Marshall
Completed (Resting): Woodruff 1H, 2H Blackshere 200H, 201H
Monongalia
Wetzel
Drilled, waiting on Frac: Jones 2H, 3H Scheduled to Drill: Anderson 8H, 9H Sivert 1H, 2H Dewhurst 300H, 301H, 400H, 401H Shaver 1H, 2H Michaels 1H, 2H Wright 1H, 2H
Tyler
Marion
Harrison Pleasants Doddridge Ritchie
20
IP Rates - Recent Marcellus Completions Incremental 30 Day Average Production/ 1000' Lateral 30
60
90
120
2,500
Average Production, MCF
2,000
1,500
1,000
500
0 Hart 28H Whipkey Whipkey Stout 2H 1H 2H
Keaton 1H
Groves 1H
Lucey 1H Whipkey Lucey 2H Goshorn Goshorn Anderson Anderson Dewhurst Dewhurst Doman 3H 1H 2H 5H 7H 110H 111H 1H
Doman 2H
Martinez Freeland Freeland Goshorn Goshorn 1H 2H 1H 3H 4H
Note: The Martinez 1H and the Freeland 1H, 2H were under significant flow restrictions due to pipeline constraints. The Goshorn 3H reflects actual results; Over half of the wellbore is believed to be shut off due to completion issues.
21
West Virginia Peer Well Performance TENG is drilling some of the best wells in the wet gas window of the Marcellus
2,500
2.50
2,000
2.00
1,500
1.50
1,000
1.00
500
0.50
-
1. 2. 3. 4.
EUR per 1,000’ Lateral(1)
Bcfe
Mcfe/d
30-Day IP Rates per 1,000’ Lateral(1)
(2)
(3)
(4)
(4)
Peer data compiled and estimated from public investor materials by EnerCom, Inc.. Peer Group includes: Antero Resources, EQT, Gastar and Magnum Hunter. Based on the Freeland #2H Based on the Doman 1H, 2H and Martinez #1H (Note: well was choked back due to constraints imposed at the pipeline interconnect) Excludes Hart 28H
22
Comparative Well Performance 90-Day IP Rates per 1,000’ Lateral(1) 2,500
TENG Wells 2,000
Rice Energy Avg. 6/12 - IPO
TENG Wells Turned In to Sales from 6/12 -12/13 Using New Completion Techniques
Mcfe/d
1,500
1,000
500
-
1. 2.
Rice Energy data from IPO Prospectus. Martinez 1H and Freeland 2H were restricted due to pipeline constraints. Data represents first 90 days for Freeland 2H; It was further restricted after first 60 days.
23
Trading At a Significant Discount to Net Asset Value (NAV) NAV based on PDP PV10, PV40 of drillable locations plus other acreage
$20.00 $2.90
$18.00 $4.10
$16.00 $14.00 $11.32
$12.00
$11.84 $(5.67)
$(0.80)
$10.00
$8.00
Unrealized Value
$6.00
$4.00
$4.12
$2.00
$0.00 Share Price (5/30/14)
Wells PDP PV10 Drillable Value Today (PV40)
Other Acreage
See Appendix for the assumptions behind the per share calculations shown above
less Net Debt (5/30/14)
less NPI
Value per TENG Share
24
Why Invest in Trans Energy?
Marcellus Shale Pure Play
Extensive Organic Drilling Inventory w/ Large Acreage Position
Production Growing Experienced Management w/ Technical Expertise
(1) At 750 ft / 500 ft spacing
Over 45,000 gross acres in core of the Marcellus Shale
Utica Shale potential
Upper Devonian upside potential
High-BTU, liquid-rich focus
Disclaimer This presentation contains “forward-looking statements” within the meaning of section 21E of the United States Securities Exchange Act of 1934, as amended (the “Exchange Act”) which represent our expectations or beliefs about future events. These statements can be identified generally by forward-looking words such as “expect”, “believe”, “anticipate”, “plan”, “intend”, “estimate”, “may”, “will” or similar words. Forward-looking statements are statements about the future and are inherently uncertain, and our actual achievements or other future events or conditions may differ materially from those reflected in the forward-looking statements due to a variety of risks, uncertainties and other factors, including, without limitation, those described in Item 1A of the company’s annual report on form 10-K for the year ended December 31, 2013 under the heading, “Risk Factors”, and elsewhere in the annual report and our filings with the Securities and Exchange Commission. These risks and uncertainties include, but are not limited to: 1. The risks of the oil and gas industry, such as operational risks in exploring for, developing and producing crude oil and natural gas; 2. market demand; 3. risks and uncertainties involving geology of oil and gas deposits; 4. the uncertainty of reserves estimates and reserves life; 5. the uncertainty of estimates and projections relating to production, costs and expenses; potential delays or changes in plans with respect to exploration or development projects or capital expenditures; 6. fluctuations in oil and gas prices, foreign currency exchange rates and interest rates; 7. health, safety and environmental risks; 8. uncertainties as to the availability and cost of financing; 9. the possibility that government policies or laws may change or governmental approvals may be delayed or withheld; 10. other sections of this presentation may include additional factors that could adversely affect our business and financial performance. Moreover, we operate in a very competitive and rapidly changing environment. New risk factors emerge from time to time and it is not possible for our management to predict all risk factors, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Our forward-looking statements contained in this presentation are made as of the respective dates set forth in this presentation. Such forward-looking statements are based on the beliefs, expectations and opinions of management as of the date the statements are made. We do not intend to update these forward-looking statements. For the reasons set forth above, investors should not place undue reliance on forward-looking statements. Readers are encouraged to read our December 31, 2013 Annual Report on Form 10-K and any and all of our other documents filed with the SEC regarding information about Trans Energy, Inc. for meaningful cautionary language in respect of the forward-looking statements herein. Interested persons are able to obtain copies of filings containing information about Trans Energy, Inc., without charge, at the SEC’s internet site (http://www.sec.gov).
2
About Trans Energy Company Overview
Trans Energy: (OTCQB: TENG)
Pure Play Marcellus Shale
PD Reserves: 48.0 Bcfe
Area of Operation
(12/31/2014 Wright & Co. Estimates - Marcellus only)
Recent Daily Production: 16,700 Mcfe
52-Week Range: $2.50 - $4.25
3-Month Avg. Daily Volume – 4,548 Shares
Shares Outstanding: 13.6 Million
Market Capitalization: $56.1 million Experienced Management Team
Selected Financial Information 12/31/2013 (est.) LTM Revenue
$18.4 million
Net Debt (as of 5/30/14)
$102.3 million
Recent Stock Price (TENG)
$4.12
Shares Outstanding (5/23/2014)
13.6 million
Market Capitalization
$56.1 million
Enterprise Value
$158.4 million
3
Why Invest in Trans Energy?
Marcellus Shale pure play
Predictable and repeatable inventory Marshall
Prominent land position with strong upside potential
Trades at a significant discount to NAV
Experienced Management Team
Tyler
Pleasants
Ritchie
Marcellus Shale Pure Play
Taylor
DRY GAS
400/500 + potential drilling locations (204/307 drillable today) (1)
3+ Tcfe gross upside potential (including JV & royalty partners) Significant portion of acreage HBP (approx. 55%) Off-take agreements totaling more than 45,000 MMBtu per day
(1) At 750 ft / 500 ft spacing
WET GAS
Harrison
Experienced Management w/ Technical Expertise
Doddridge
Production Growing
Marion
Over 45,000 gross acres in core of the Marcellus Shale Utica Shale potential Upper Devonian upside potential High-BTU, liquid-rich focus 200
Wells Drillable Today: 88 / 128 (2)
6 wells planned for drilling in 2014
(1)
Excludes Hart 28H
(2)
At 750 ft / 500 ft spacing 18
Marion County
JV has 19,673 gross acres of leased and owned minerals (7,512 net to ASD)
Marcellus gains thickness relative to Wetzel
BTU between 1050 and 1100
Total Potential Wells: ~200
Total Wells Drillable Today: 62 / 94 (1)
Marion County
Marshall Monongalia
Wetzel
Tyler
Marion
4 wells recently turned into sales Doddridge
9 wells planned for drilling in 2014
(1)
At 750 ft / 500 ft spacing
Harrison
19
Drilling Program – Recap
24 Hz wells online
2013 drilling program included 8 wells
2014 drilling program includes drilling 19 wells, of which 15 are expected to be completed by year end
Completed (Online): Anderson 5H, 7H Beatty 1H, 2H Dewhurst 110H, 111H Doman 1H, 2H Freeland 1H, 2H Goshorn 1H, 2H, 3H, 4H Groves 1H Hart 28H Keaton 1H Lucey 1H, 2H Martinez 1H Stout 2H Whipkey 1H, 2H, 3H
Marshall
Completed (Resting): Woodruff 1H, 2H Blackshere 200H, 201H
Monongalia
Wetzel
Drilled, waiting on Frac: Jones 2H, 3H Scheduled to Drill: Anderson 8H, 9H Sivert 1H, 2H Dewhurst 300H, 301H, 400H, 401H Shaver 1H, 2H Michaels 1H, 2H Wright 1H, 2H
Tyler
Marion
Harrison Pleasants Doddridge Ritchie
20
IP Rates - Recent Marcellus Completions Incremental 30 Day Average Production/ 1000' Lateral 30
60
90
120
2,500
Average Production, MCF
2,000
1,500
1,000
500
0 Hart 28H Whipkey Whipkey Stout 2H 1H 2H
Keaton 1H
Groves 1H
Lucey 1H Whipkey Lucey 2H Goshorn Goshorn Anderson Anderson Dewhurst Dewhurst Doman 3H 1H 2H 5H 7H 110H 111H 1H
Doman 2H
Martinez Freeland Freeland Goshorn Goshorn 1H 2H 1H 3H 4H
Note: The Martinez 1H and the Freeland 1H, 2H were under significant flow restrictions due to pipeline constraints. The Goshorn 3H reflects actual results; Over half of the wellbore is believed to be shut off due to completion issues.
21
West Virginia Peer Well Performance TENG is drilling some of the best wells in the wet gas window of the Marcellus
2,500
2.50
2,000
2.00
1,500
1.50
1,000
1.00
500
0.50
-
1. 2. 3. 4.
EUR per 1,000’ Lateral(1)
Bcfe
Mcfe/d
30-Day IP Rates per 1,000’ Lateral(1)
(2)
(3)
(4)
(4)
Peer data compiled and estimated from public investor materials by EnerCom, Inc.. Peer Group includes: Antero Resources, EQT, Gastar and Magnum Hunter. Based on the Freeland #2H Based on the Doman 1H, 2H and Martinez #1H (Note: well was choked back due to constraints imposed at the pipeline interconnect) Excludes Hart 28H
22
Comparative Well Performance 90-Day IP Rates per 1,000’ Lateral(1) 2,500
TENG Wells 2,000
Rice Energy Avg. 6/12 - IPO
TENG Wells Turned In to Sales from 6/12 -12/13 Using New Completion Techniques
Mcfe/d
1,500
1,000
500
-
1. 2.
Rice Energy data from IPO Prospectus. Martinez 1H and Freeland 2H were restricted due to pipeline constraints. Data represents first 90 days for Freeland 2H; It was further restricted after first 60 days.
23
Trading At a Significant Discount to Net Asset Value (NAV) NAV based on PDP PV10, PV40 of drillable locations plus other acreage
$20.00 $2.90
$18.00 $4.10
$16.00 $14.00 $11.32
$12.00
$11.84 $(5.67)
$(0.80)
$10.00
$8.00
Unrealized Value
$6.00
$4.00
$4.12
$2.00
$0.00 Share Price (5/30/14)
Wells PDP PV10 Drillable Value Today (PV40)
Other Acreage
See Appendix for the assumptions behind the per share calculations shown above
less Net Debt (5/30/14)
less NPI
Value per TENG Share
24
Why Invest in Trans Energy?
Marcellus Shale Pure Play
Extensive Organic Drilling Inventory w/ Large Acreage Position
Production Growing Experienced Management w/ Technical Expertise
(1) At 750 ft / 500 ft spacing
Over 45,000 gross acres in core of the Marcellus Shale
Utica Shale potential
Upper Devonian upside potential
High-BTU, liquid-rich focus
