01.30.2016 SHALE OIL AT BELOW 40 A BARREL VAIL GLOBAL ENERGY FORUM
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 &…
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…
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…
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…
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…
2016 & A SUB-40 PRICE ENVIRONMENT What are the options for an E&P With less cash flow to work with, E&Ps can: Reduce activity to mirror cash flow, OR Outspend cash flow and issue equity, issue debt, and/or sell assets to fund the…
APACHES BALANCED PORTFOLIO Ranking our opportunities at 40 Oil CONVENTIONALS UNCONVENTIONALS 1 2 SHORT CORE CYCLE 3 4 LONG NON- CYCLE CORE CONVENTIONALS UNCONVENTIONALS 10
CONTRASTING CONVENTIONAL & UNCONVENTIONAL Understanding the Difference UNCONVENTIONAL CONVENTIONAL Hydrocarbon accumulations are controlled by: Hydrocarbon accumulations are controlled by: In place conversion of organic material to…
CONTRASTING CONVENTIONAL & UNCONVENTIONAL Understanding the Difference UNCONVENTIONAL CONVENTIONAL RESERVOIRS RESERVOIRS DYNAMIC system STATIC system Forces of Forces of EXPULSION OPERATIVE BUOYANCY COMPLEX Flow System SIMPLE…
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…
UNCONVENTIONAL PLAYS ARE NOT CREATED EQUAL Resource Play 1 does not necessarily = Resource Play 2 North American Resource Plays Wolfcamp Duvernay Canyon Lime Eagle Ford Eagle Ford Bakken (North) (South) Depth (FT) 5,800 - 8,500…
NORTH AMERICA UNCONVENTIONALS Break-Even Economics at 40 Oil Hurdle Rate 18
STRATEGIC OPERATING OBJECTIVE: Maximize NPV and ROR (even at 40) Technology Stage Level Innovations Completions Maximize With 3D NPV and Geosteering ROR With 3D Integrated Economic Metrics Team Solutions Global Supply and…
NORTH AMERICA UNCONVENTIONALS Apache is adapting to 40 Oil (Illustration) 2014 2016 +25% -40% -25% Total Well Cost, MM Lifting Cost, /BOE EUR, MBOE Technology & Efficiencies Reduced Total Well Cost by 40% SHALE OIL PLAY A…
NORTH AMERICA UNCONVENTIONALS Industry MUST adapt to 40 Oil Impact of low oil prices reduces cash flow to reinvest, which will have a negative impact on production To be successful at low oil prices Requires aggressive reduction in…
Loading...
