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SPE January Meeting – Apache Corp

Apache Corp · Jan 27, 2016 · 36 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. SPE January Meeting – Apache Corp – slide 1
    01.27.2016 ADAPTING TO THE OIL PRICE DECLINE SPE JANUARY MEETING
  2. SPE January Meeting – Apache Corp – slide 2
    KEY MESSAGES Aggressively reduced activity and spending levels to align with falling price environment Strong balance sheet and liquidity, minimal near- term debt maturities Realigned the organization and streamlined the portfolio…
  3. SPE January Meeting – Apache Corp – slide 3
    2015 ACCOMPLISHMENTS (1) Strategic initiatives Exited LNG and Australia upstream business Strengthened the balance sheet by 4.9 billion dollars(2) Attacked the cost structure at every level Implementing a multi-year,…
  4. SPE January Meeting – Apache Corp – slide 4
    REPOSITIONED FOR THE FUTURE Significant leadership, portfolio and capability changes over the last 2 years. Strategic Organizational Changes 2014 North 2015 North Sea American Update Update Unconventional resources CEO succession &…
  5. SPE January Meeting – Apache Corp – slide 5
    GREATLY ENHANCED BALANCE SHEET (in billions) 14 4.9 14,000 billion reduction in net debt (1) 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…
  6. SPE January Meeting – Apache Corp – slide 6
    MIRRORING ACTIVITY LEVEL TO FALLING PRICE ENVIRONMENT Rig Count Price per Bbl WTI Oil Price Apache International Rigs 120 120 Apache North American Rigs 100 100 70% Capital reduction 80 80 3Q15 from 3Q14 60 60 40 40 86…
  7. SPE January Meeting – Apache Corp – slide 7
    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% 18% -30% North American Capital 30% General and Lease Operating Expense 26%…
  8. SPE January Meeting – Apache Corp – slide 8
    STREAMLINED PORTFOLIO Well balanced portfolio with diversified opportunity set Extensive resource base in North America, anchored by Permian, will drive future growth Free cash flow generating assets with years of exploration and…
  9. SPE January Meeting – Apache Corp – slide 9
    NORTH AMERICA OVERVIEW Large acreage positon across multiple oil- prone plays: Permian, Eagle Ford, Woodford and Duvernay/Montney All key plays have economic drilling opportunities at 40 oil Relatively low base decline rate…
  10. SPE January Meeting – Apache Corp – slide 10
    PERMIAN: THE PREMIER U.S. OIL BASIN Industrys 3rd largest acreage position (3.2 MM gross) 3Q production of 170 Mboe/d, third largest in the Permian Relatively low decline rate of 22% reduces capital needed to replace…
  11. SPE January Meeting – Apache Corp – slide 11
    DELAWARE BASIN: HIGH RETURNS SUB 40 WTI Reduced average well cost by 40% from 8 million projected on Nov. 2014…
  12. SPE January Meeting – Apache Corp – slide 12
    MIDLAND BASIN: MULTIPLE STACKED PAYS Focused on core acreage - increasing average IP rates Reduced well cost 32% from 7.9 million projected in Nov. 2014 Approximately 90% of wells drilled using 3-D seismic Expanding inventory…
  13. SPE January Meeting – Apache Corp – slide 13
    CENTRAL BASIN PLATFORM / NW SHELF Legacy asset continues to deliver Asset Characteristics Advantage 76,400 Boe/d net avg. production through 3Q 2015 Provides flexibility Diverse set of capital projects in low, volatile price…
  14. SPE January Meeting – Apache Corp – slide 14
    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…
  15. SPE January Meeting – Apache Corp – slide 15
    CENTRAL BASIN PLATFORM / NW SHELF Low production base decline rates 180 60% Annual Decline Rates 46% Permian Production 150 50% 120 14% (Boe/d) 40% of total Permian production 90 30% base decline 20% 60 CBP / 10% NW…
  16. SPE January Meeting – Apache Corp – slide 16
    EAST TEXAS EAGLE FORD: UNLOCKING VALUE Delineation and completion optimization in Area A has enabled significant improvement in well performance Averaged 1 rig in second half of 2015 Further delineation needed in southern portion…
  17. SPE January Meeting – Apache Corp – slide 17
    WOODFORD Legacy acreage position and infrastructure availability leads to highly economic full-cycle returns Approximately 200,000 gross (50,000 net) acres Early stages of delineating operated acreage but have participated in 30+…
  18. SPE January Meeting – Apache Corp – slide 18
    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…
  19. SPE January Meeting – Apache Corp – slide 19
    INTERNATIONAL U.K. NORTH SEA EGYPT Most efficient and 20+ year track record of lowest cost operator success 12 year track record of Strong free cash flow strong returns at Forties generation Excellent reserve and Multiple stacked…
  20. SPE January Meeting – Apache Corp – slide 20
    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…
  21. SPE January Meeting – Apache Corp – slide 21
    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 60% of total production and 80% of total revenue in 3Q 15 Leading explorer…
  22. SPE January Meeting – Apache Corp – slide 22
    SUMMARY Aligned activity and spending to lower for longer oil prices Greatly enhanced balance sheet Realigned the organization and streamlined portfolio Relentless focus on returns and net present value Aggressively reducing all…
  23. SPE January Meeting – Apache Corp – slide 23
    APPENDIX
  24. SPE January Meeting – Apache Corp – slide 24
    2015 NORTH AMERICA ONSHORE GUIDANCE Production Region Guidance (YOY) Permian Midcontinent/ Gulf Coast 400 Canada 41% Oil 43% 44% Oil 44% Oil Oil MBOE/D 305 308 307 309 302 1% - 2% 2% 200 2014 Adjusted…
  25. SPE January Meeting – Apache Corp – slide 25
    2015 INTERNATIONAL + GOM GUIDANCE Production Region Guidance (YOY) Egypt Gross Egypt Net North Sea 200 Gulf of Mexico 69% 41% Oil 69% Oil Oil 70% Oil 172 174 164 - 168 MBOE/D 156 10% - 12% 5% - 8% 100 2014…
  26. SPE January Meeting – Apache Corp – slide 26
    3Q 2015 NET DEBT RECONCILIATION 9,000 94 6 29 8,000 164 126 829 876 7,122 7,000 6,726 6,000 5,000 4,000 3,000 2,000 1,000 0 Net Debt E&P and Other Leasehold & Dividends Changes in Asset Sales Cash Flow Net Debt 6/30/15 GTP…
  27. SPE January Meeting – Apache Corp – slide 27
    DELAWARE BASIN Acres 230,000 net Lea Planned 2H15 Rigs 4 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…
  28. SPE January Meeting – Apache Corp – slide 28
    MIDLAND BASIN FOCUS AREA Acres 200,000 net Azalea Planned 2H15 Rigs 3 rigs Glasscock Wildfire Inventory 2,900 locations Midland Powell- Multiple landing zones Miller Realizing 32% well cost Upton Reagan reduction from 2014…
  29. SPE January Meeting – Apache Corp – slide 29
    EAGLE FORD Robertson Acres 288,000 net Brazos Planned 2H15 Rigs 1 rig Inventory(1) 3,000 Hz locations Burleson Improving completion techniques Grimes Advancing knowledge of different Lee geologic subsettings Ferguson…
  30. SPE January Meeting – Apache Corp – slide 30
    EGYPT: TRACK RECORD OF LONG-TERM PRODUCTION GROWTH Gross Prod. Mboe/d 375 348 350 325 300 275 43% 250 225 200 175 150 125 100 57% 75 50 25 0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010…
  31. SPE January Meeting – Apache Corp – slide 31
    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…
  32. SPE January Meeting – Apache Corp – slide 32
    EGYPT: LEADING EXPLORER ONSHORE Wells Drilled Success Rate 350 332 80% New Field Wildcats by Operator (2004 2Q 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…
  33. SPE January Meeting – Apache Corp – slide 33
    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…
  34. SPE January Meeting – Apache Corp – slide 34
    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…
  35. SPE January Meeting – Apache Corp – slide 35
    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…
  36. SPE January Meeting – Apache Corp – slide 36
    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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