09.09.2015 RIGHT PEOPLE. RIGHT ACREAGE. RIGHT STRATEGY
KEY MESSAGES Repositioned for new price environment Strong balance sheet and liquidity Realigned the organization and streamlined the portfolio Returns and net present value focus Upside and growth potential Remaining flexible and…
REPOSITIONED FOR THE FUTURE Significant leadership, portfolio and capability changes over the last 18 months. Strategic Organizational Changes 2014 North American Update CEO succession & new Unconventional resources CFO announced…
1H 2015 ACCOMPLISHMENTS Strategic initiatives Exited LNG and Australia upstream business Strengthened the balance sheet by 5.3 billion dollars(1) Attacked the cost structure at every level Implementing a multi-year, multi-scenario…
GREATLY ENHANCED BALANCE SHEET (in billions) 14 5.3 14,000 billion reduction in net debt Only 700 million of debt maturing 12 12,000 through 2020 10 10,000 3.5 billion of liquidity from undrawn 28% 8 8,000 revolver extended to…
MIRRORING ACTIVITY LEVEL TO CURRENT PRICE ENVIRONMENT Aligned activity with 50 WTI price environment Rig Count Price per Bbl WTI Oil Price Apache International Rigs 120 120 Apache North American Rigs 100 100 60% Capital…
CONTINUING TO ATTACK THE COST STRUCTURE Average Well Cost Gross G&A Lease Operating North America (1) Cash Cost(2) Expense Per BOE(3) 0% -10% -20% 13% -30% North American Capital25% General and Lease Operating Expense 25%…
CAPITAL EFFICIENCY DRIVING 2015 PERFORMANCE Raised FY 2015 production guidance in both North America and International / GOM Delivered correspondingly strong adjusted earnings and cash flow that exceeded analyst consensus…
STREAMLINED PORTFOLIO Well balanced portfolio with diversified opportunity set Extensive resource base in North America, anchored by Permian Free cash flow generating assets with growth potential in Egypt and North Sea 9
NORTH AMERICA OVERVIEW Large acreage positon across multiple oil- prone plays: Permian, Eagle Ford, Woodford and Duvernay All key plays have economic drilling opportunities at 50 oil Relatively low base decline rate reduces…
PERMIAN: THE PREMIER U.S. OIL BASIN Industrys 3rd largest acreage position (3.2 MM gross) 2Q production of 172 Mboe/d, second largest in the Permian Relatively low decline rate of 22% reduces capital needed to replace…
DELAWARE BASIN: HIGH RETURNS SUB 50 WTI Reduced average well cost by 34% from 8 million projected on Nov. 2014 Targeting 5 million per well Expanding drilling inventory Confirmed second economic target zone in 3rd Bone Spring…
MIDLAND BASIN: MULTIPLE STACKED PAYS Focused on core acreage - increasing average IP rates Reduced well cost 25% from 7.9 million projected in Nov. 2014 Acquired 3-D seismic over 88% of acreage in focus area Expanding inventory…
CENTRAL BASIN PLATFORM / NW SHELF Legacy asset continues to deliver Asset Characteristics Advantage 77,000 Boe/d net production YTD 2015 Provides flexibility Diverse set of capital projects in low, volatile price environment…
CENTRAL BASIN PLATFORM / NW SHELF Diverse set of capital projects CBP/NW Shelf Vertical and Secondary and Tansil Yates Horizontal Drilling Tertiary Oil Recovery Seven Rivers Guadalupe Queen Grayburg 17 producing formations…
CENTRAL BASIN PLATFORM / NW SHELF Low production base decline rates 180 60% Annual Decline Rates 47% Permian Production 150 50% 120 14% (Boe/d) 40% of total Permian production 90 30% base decline 20% 60 CBP / 10% NW…
EAST TEXAS EAGLE FORD: UNLOCKING VALUE Delineation and completion optimization in Area A is enabling significant improvement in well performance Adding 1 rig in second half of 2015 Completing wells in Lee County to further…
WOODFORD Legacy acreage position and infrastructure availability leads to highly economic full-cycle returns Early stages of delineating operated acreage but have participated in 30+ non-operated wells APA running 2 rigs in 2H…
DUVERNAY AND MONTNEY Duvernay offers tremendous longer term growth potential Considering JV partner to develop Montney and reduce up front infrastructure cost to APA Near term, plan is for Canada to live within internally generated…
INTERNATIONAL U.K. NORTH SEA EGYPT 12 year track record of 20+ year track record of strong returns at Forties success Most efficient and Tremendous free cash lowest cost operator flow generation Excellent reserve and Multiple…
NORTH SEA: PREMIUM ASSETS WITH STRONG FUTURE POTENTIAL Two primary areas, Forties and Beryl Generates free cash flow in low price environment Industry leading production efficiency, 90% Operating costs less than 15 per boe 10+ year…
EGYPT: FREE CASH FLOW MACHINE 7 billion of free cash flow to APA over last 6 years Increased gross production 12% annually since 1996 Oil represented 59% of total production and 83% of total revenue in 2Q 15 Leading explorer…
SUMMARY Repositioned for new price environment Greatly enhanced balance sheet Realigned the organization and streamlined portfolio Relentless focus on returns and net present value Aggressively reducing all facets of the cost…
KEY INVESTMENT ATTRIBUTES Attractive EBITDA multiple relative to peer group 2Q net debt to consensus 2015 EBITDA less than 2.0x(1) Early-mover in cost reduction initiatives, more to cut Strong North American resource position and…
APPENDIX
APACHE IS DELIVERING 2015 second-quarter highlights Strong onshore North American production, 3% increase sequentially Driven by a 13,500 boe/d increase in the Permian Basin Egypt gross oil production increased 2% sequentially driven…
2015 NORTH AMERICA ONSHORE GUIDANCE Production Region Guidance YOY Permian 400 41% Gulf Coast Oil Central 44% Canada 43% 45% Oil Total NA MBOE/D Oil Oil +1% - 2% Relatively Onshore 302 Flat 305 - 308 200 2014…
2015 INTERNATIONAL + GOM GUIDANCE Production Region Guidance YOY 200 Egypt Gross = 69% Egypt Net 41% Oil Oil North Sea = 69% 61% GOM Oil Oil 164 - 168 Total Intl +5% - 8% MBOE/D 156 Egypt Tax Barrels &…
2Q 2015 NET DEBT RECONCILIATION 16,000 95 54 36 58 69 14,000 1,391 1,090 5,677 12,044 12,000 10,000 8,000 6,726 6,000 4,000 2,000 0 Net Debt E&P and GTP Dividends Other Leasehold & Cash Flow From Changes in…
DELAWARE BASIN Acres 230,000 net Lea Planned 2H15 Rigs 4-5 rigs Eddy Inventory 1,400 Hz locations WAHA Focusing primarily on Bone Loving Winkler Spring and Wolfcamp Reeves Ward Positive results from new Pecos Bend interval…
MIDLAND BASIN FOCUS AREA Acres 200,000 net Azalea Planned 2H15 Rigs 3-4 rigs Glasscock Wildfire Inventory 2,900 locations Midland Powell- Multiple landing zones Miller Realizing 25% well cost Upton Reagan reduction from…
EAGLE FORD Robertson Acres 288,000 net Brazos Planned 2015 Rigs 1 rig Inventory(1) 3,000 Hz locations Burleson Improving completion techniques Grimes Advancing knowledge of different Lee geologic subsettings Ferguson…
EGYPT: STRONG FREE CASH FLOW In Millions 3,000 2,500 2,000 1,500 1,000 500 0 2009 2010 2011 2012 2013 2014 CAPEX Cash Flow 7+ Billion Free Cash Flow in Last 6 Years Note: Free cash flow equals cash flow from operations…
EGYPT: LEADING EXPLORER ONSHORE Wells Drilled Success Rate 350 332 80% New Field Wildcats by Operator (2004-2015) 70% 300 63% 54% 55% 60% 250 51% 50% 44% 50% 200 178 40% 150 30% 100 81 20% 49 54 50 41 27 24 30 27 17 10%…
EGYPT: WESTERN DESERT OFFERS MULTIPLE STACKED PAYS Depth 12 potential pay zones 3,000 Balanced portfolio of lower and higher risk targets Productive Reservoirs Shallow bailout zones reduce dry hole risk on deeper exploratory…
NORTH SEA: STRONG FREE CASH FLOW In Millions 1,600 1,400 1,200 1,000 800 600 400 200 0 2010 2011 2012 2013 2014 CAPEX Cash Flow 2 Billion Free Cash Flow in Last 5 Years Note: Free cash flow equals cash flow from operations…
NORTH SEA: EXCEPTIONAL FIELD REVIVAL AT FORTIES Apache acquires MBD Gross Forties from BP 1000 At Acquisition Forties Field - BP (2003) 2014 Forties Field - Apache Satellite Fields Gross Production 41 50 (MBOE/D) Net Proved…
NORTH SEA: BERYL AREA OPPORTUNITY Apache acquires Beryl from ExxonMobil Base Platform At Acquisition production (2012) 2014 Base Satellite production Gross Production 58 37 (MBOE/D) Added platform and satellite production…
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