02.23.2016 21ST ANNUAL CREDIT SUISSE ENERGY SUMMIT JOHN CHRISTMANN, CEO AND PRESIDENT
ADAPTING TO THE MARKET, POSITIONING FOR SUCCESS In 2015, Apache: Streamlined and simplified the portfolio Paid down debt and strengthened our financial position Aggressively reduced activity and spending levels to align with falling…
2015 ACCOMPLISHMENTS Strategic initiatives Exited LNG and Australia upstream business Improved our net debt position by 3.4 billion dollars(1) Attacked the cost structure at every level Implemented a multi-year, multi-scenario…
REPOSITIONED FOR THE FUTURE Significant leadership, portfolio and capability changes over the last 2 yrs. Strategic Organizational Changes 2014 North 2015 North Sea American Update Update Unconventional resources CEO succession &…
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…
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 General and Lease Operating Expense 26% Costs…
GREATLY ENHANCED FINANCIAL POSITION (in billions) 12 3.4 14,000 billion reduction in net debt (1) Only 700 million of debt maturing 10 12,000 through 2020 10,000 8 3.5 billion of liquidity from undrawn 22% 8,000 revolver…
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…
OPTIONS FOR A SUB 40 OIL WORLD With less cash flow, E&Ps can: Reduce activity to mirror cash flow , OR Access capital markets, cut the dividend or sell core assets to fund their outspending Apaches prudent approach: Reducing…
APACHES BALANCED PORTFOLIO Ranking our opportunities in a sub 40 oil world CONVENTIONALS UNCONVENTIONALS 1 2 SHORT CORE CYCLE 3 4 LONG NON- CYCLE CORE CONVENTIONALS UNCONVENTIONALS 11
CONVENTIONAL OPPORTUNITIES Providing balance to the portfolio Asset Characteristics Advantage Provides flexibility Diverse set of capital projects in low, volatile price environment Reduces Low base decline rate maintenance…
CONVENTIONAL PERMIAN PLAYS 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 Shelf…
CONVENTIONAL INTERNATIONAL PLAYS High quality, stacked pay reservoirs with high cash margins Significant exploration opportunity demonstrated with Ptah and Egypt Berenice oil fields PSC arrangement provides a buffer to declining oil…
UNCONVENTIONAL NORTH AMERICAN CORE Reduced average well cost by 32% from 7.9 million Midland projected on Nov. 2014…
UNCONVENTIONAL OPPORTUNITIES Industry must adapt to sub 40 oil Low prices reduce cash flows available for reinvestment; self-funding cannot sustain recent growth rates Cost structure is not yet synchronized with oil prices at these…
APACHES APPROACH TO 2016 Continuation of our 2015 strategy: Focus on cash flow neutrality Preserve our financial strength and liquidity Attack the cost structure and align it with the current environment In North America, focus on…
APPENDIX
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…
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…
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…
EAST TEXAS EAGLE FORD: UNLOCKING VALUE Delineation and completion optimization in Area A is enabling significant improvement in well performance Significant growth opportunity at 50 WTI 22
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 Most efficient operator 20+ year track record of success Apache operating costs half of industry Strong free cash flow generation 12 year track record of strong returns at Forties 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 represents 60% of total production and 80% of total revenue Leading explorer in Egypt:…
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