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BAML Global Energy Conference – Apache Corp

Apache Corp · Nov 16, 2016 · 40 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. BAML Global Energy Conference – Apache Corp – slide 1
    November 18, 2016 BANK OF AMERICA/MERRILL LYNCH GLOBAL ENERGY CONFERENCE TIM SULLIVAN, EVP OPERATIONS SUPPORT
  2. BAML Global Energy Conference – Apache Corp – slide 2
    AGENDA I. Corporate Strategy II. Permian Basin III. Alpine High IV. Questions and Answers 3
  3. BAML Global Energy Conference – Apache Corp – slide 3
    CORPORATE STRATEGY 4
  4. BAML Global Energy Conference – Apache Corp – slide 4
    APACHES STRATEGY FOR VALUE CREATION Robust portfolio of global assets Operational Strategic objective to live within cash flow Flexibility Dynamic planning and centralized capital allocation process Growth from Extensive economic…
  5. BAML Global Energy Conference – Apache Corp – slide 5
    APACHES STRATEGIC TRANSFORMATION Legacy: Acquire and Exploit Current: Organic Growth Focus Growth through acquisition, Growth driven by North America with a exploitation and step-out exploration Permian Basin focus Free cash flow…
  6. BAML Global Energy Conference – Apache Corp – slide 6
    POSITIONING APACHE FOR THE UPCYCLE Steps Taken Through the Downturn Completed strategic portfolio review, closed asset sales and significantly deleveraged Responded quickly and aggressively to the commodity downturn by reducing…
  7. BAML Global Energy Conference – Apache Corp – slide 7
    BALANCED PORTFOLIO Focused on North American Growth North America Onshore International & Offshore Conventional Canada Anadarko Woodford UK North Sea Montney & SCOOP Duvernay Eagle Ford S. LA Minerals GoM Suriname…
  8. BAML Global Energy Conference – Apache Corp – slide 8
    APACHE 2016 REGIONAL CAPITAL MIX Initial 2016 Capital Guidance Updated Capital Guidance(1) 1.4 - 1.8 Billion 2 Billion Other Other 7% 29% Canada & 4% Midcon/GulfCoast 10% Canada & Permian Midcon/Gulfcoast Permian 11% 24%…
  9. BAML Global Energy Conference – Apache Corp – slide 9
    2017 PREVIEW Actively manage the portfolio; further streamlining is possible Strategy Capital budgeting based on conservative price assumptions Maintain operational flexibility to respond to market changes Return onshore North…
  10. BAML Global Energy Conference – Apache Corp – slide 10
    PERMIAN BASIN UPDATE 11
  11. BAML Global Energy Conference – Apache Corp – slide 11
    PERMIAN BASIN OVERVIEW 1.7 Million Net Acres APA Permian Basin Acreage Position 3 acreage holder and producer Within the 95%+ HBP acreage position, excluding Basin new Alpine High acreage 3Q16 production of 159,000 boe/d (40%…
  12. BAML Global Energy Conference – Apache Corp – slide 12
    PERMIAN BASIN SPOTLIGHT Midland Basin: 193,000 Net Acres in the Core Base Case Inventory Apache Core County Acreage Spraberry APA acreage Wolfcamp Shale Recent peer transactions Glasscock Zones 3 1 Midland Spacing 6x 8x Locations…
  13. BAML Global Energy Conference – Apache Corp – slide 13
    APACHE CORE MIDLAND BASIN WOLFCAMP Strong Well Performance Cumulative Production: APA vs. Peer Type Curves Mboe 200 APA Improved Targeting & New Completion APA Improved 150 Targeting 100 50 APA Improved Targeting &…
  14. BAML Global Energy Conference – Apache Corp – slide 14
    PERMIAN BASIN SPOTLIGHT Delaware Basin: 433,000 Net Acres Pecos Bend Well Results Apache Delaware Basin Acreage Mboe 200 APA Improved Completion with Integrated 3D Seismic 150 Pecos Bend Dixieland APA Improved Waha…
  15. BAML Global Energy Conference – Apache Corp – slide 15
    THE NEXT RESOURCE PLAY Alpine High DELAWARE BASIN 16
  16. BAML Global Energy Conference – Apache Corp – slide 16
    ALPINE HIGH KEY HIGHLIGHTS World Class Resource Play Methodically accumulated over the last 18 months, 20% of Reeves Co. 320,000 Apache controls 356,000 gross acres, the vast majority of the play Contiguous Net Acres 1,300/net acre…
  17. BAML Global Energy Conference – Apache Corp – slide 17
    APACHES DIFFERENTIATED VIEW Southern Delaware Basin Historical Drilling Activity Key Alpine High Technical Parameters Perception Reality Structural Uplifted & Relatively Stable History Complex Paleo High Thermal Dry Gas Wet Gas…
  18. BAML Global Energy Conference – Apache Corp – slide 18
    PALEOGEOGRAPHIC RECONSTRUCTION Woodford Time Same geologic age as Arkoma Woodford and SCOOP / STACK Similar depositional environment 19
  19. BAML Global Energy Conference – Apache Corp – slide 19
    GEOLOGY OF THE SOUTHERN DELAWARE BASIN IMMATURE South West Alpine High North East Evaporites 5,000 OIL Bone Springs / Wolfcamp 10,000 Penn / Barnett / Woodford Bone Springs / Wolfcamp WET GAS 15,000 20,000 Alpine…
  20. BAML Global Energy Conference – Apache Corp – slide 20
    EXTENSIVE LATERAL CONTINUITY IDEAL FOR A RESOURCE PLAY Well Logs Across Alpine High Source Interval Transgressive Interval 65 Miles Regional reservoir consistency and continuity Barnett Formation Mississippian Lime…
  21. BAML Global Energy Conference – Apache Corp – slide 21
    4,000-5,000 OF STACKED POTENTIAL PAY MONT BLANC 1H SPANISH TRAIL 1H 20 Miles Delaware Basin Stratigraphy TRANSGRESSIVE PARASEQUENCES TRANSGRESSIVE PARASEQUENCES Oil Oil Brushy Canyon Penn Wet Gas…
  22. BAML Global Energy Conference – Apache Corp – slide 22
    FAVORABLE COMPARATIVE PARAMETERS Alpine High vs. Established Resource Plays Alpine High SCOOP Marcellus Eagle Ford Parameter (Woodford/Barnett) (Woodford) (Wet Gas) (Condensate) TOC (weight %) 4%-10% 4%-10% 1%-5% 1%-7% Primary…
  23. BAML Global Energy Conference – Apache Corp – slide 23
    STRONG WELL RESULTS Woodford and Barnett Producers Alpine High (Short Lateral) Well Results(1) Alpine High Acreage 24-Hour IP Rates NGL Estimates(2) Gross Yield Well Name Target Zone Mcf/d bo/d bbl/d bbl/MMcf 4 1 Spanish Trail 1H…
  24. BAML Global Energy Conference – Apache Corp – slide 24
    ALPINE HIGH AND NORTH AMERICAN PLAYS P-50 Production Curves 100000 100,000 P-50 Curves for the following plays: 2,782 Marcellus wells (2014-2016) 1,367 Utica wells (2014-2016) 10000 871 Scoop wells (2014-2016) Gas Rate, MCF/D…
  25. BAML Global Energy Conference – Apache Corp – slide 25
    ALPINE HIGH WATER PRODUCTION RATES Barnett and Woodford Wells Water, bbls/d 7,000 6,000 Declining water rates 5,000 result in lower opex and increased recoveries 4,000 3,000 2,000 1,000 0 0 20 40 60 80 100 120 140 160…
  26. BAML Global Energy Conference – Apache Corp – slide 26
    SUCCESSFUL OIL TESTS Wolfcamp and Bone Springs Redwood 1P Alpine High Acreage Wolfcamp Vertical DST 700 Bo/d; 4.5 MMcf/d 45 degree API; 1,300 BTU Mont Blanc 2H(1) 3rd Bone Spring 854 Bo/d; 1.5 MMcf/d 43 degree API; 1,350…
  27. BAML Global Energy Conference – Apache Corp – slide 27
    BONE SPRINGS OIL PRODUCER Alpine High Mont Blanc 2H 10,000 Stable GOR Oil, BOPD Gas, Mcf/D Water, BWPD GOR, scf/stb 1,000 ESP 580 MCFD Gas Lift Install 275 BWPD 220 BOPD 43 API 100 10 0 20 40 60 80 100…
  28. BAML Global Energy Conference – Apache Corp – slide 28
    ALPINE HIGH OIL SAMPLES Confirms Thermal Maturity Model 29
  29. BAML Global Energy Conference – Apache Corp – slide 29
    ALPINE HIGH: NEXT STEPS Continue to test oil-bearing zones above Woodford / Barnett Delineation Define geographic and stratigraphic extent of the play 2H 2016: Install temporary processing capacity, evaluate midstream development…
  30. BAML Global Energy Conference – Apache Corp – slide 30
    APACHE IS IDEALLY POSITIONED FOR THE FUTURE Technical Successfully Positioned World class expertise & Strong navigating for strong people & organic financial the returns and assets growth position downturn growth potential…
  31. BAML Global Energy Conference – Apache Corp – slide 31
    APPENDIX
  32. BAML Global Energy Conference – Apache Corp – slide 32
    3Q 2016 OPERATING CASH MARGINS EgyptEgypt North Sea(1) North Sea Permian Permian Other NANA Other 40.00 41 / Boe 35.00 35 / Boe 30.00 25.00 26 27 / Boe 20.00 28 Per Boe Per Boe 17 19 / Boe 15.00 15 / Boe Per…
  33. BAML Global Energy Conference – Apache Corp – slide 33
    ALPINE HIGH: WOODFORD/BARNETT HIGH QUALITY OIL Oil Chromatogram Mole Fraction % 18% 92% refined gasoline / diesel 16% 58% gasoline 14% 20% jet fuel and kerosene 12% 14% diesel 8% vacuum gasoline oil 10% 8% 6% 4% 2%…
  34. BAML Global Energy Conference – Apache Corp – slide 34
    ALPINE HIGH PRODUCTION CURVES 100,000 10,000 Gas Rate, Mcf/d 1,000 100 Ortler sand plug remediation 10 0 10 20 30 40 50 60 70 80 90 100 110 120 130 140 150 160 Normalized Time from First Gas, Days Black Hawk 1H…
  35. BAML Global Energy Conference – Apache Corp – slide 35
    LARGE SCALE, HIGH RETURN POTENTIAL Woodford and Barnett Economics (4,100 laterals) Single Well (Short Lateral) Assumptions Low - High D,C&E Costs ( MM) To Date Expected in Development 5.5 4.0 - - 8.0 6.0 2,000-3,000+…
  36. BAML Global Energy Conference – Apache Corp – slide 36
    MIDCONTINENT: SCOOP/STACK PLAY 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…
  37. BAML Global Energy Conference – Apache Corp – slide 37
    CANADA Duvernay and Montney offers significant longer term growth potential 3Q 2016 Lower Montney well tested at initial rate of 10.6 MMcf of natural gas and 2,000 barrels of condensate per day Near term, plan is for Canada to live…
  38. BAML Global Energy Conference – Apache Corp – slide 38
    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 15 per boe 10+ year drilling…
  39. BAML Global Energy Conference – Apache Corp – slide 39
    EGYPT: FREE CASH FLOW MACHINE EGYPT KEY STATS THIRD-QUARTER 2016 Reported Production: 179,575 Boe/d Drilled & Completed Wells*: 9 gross, 9 net Rigs: Avg 5 rigs *Operated wells completed but not necessarily placed onto…
  40. BAML Global Energy Conference – Apache Corp – slide 40
    APACHE: OFFSHORE SURINAME POSITION Drilling exploration prospect on Block 53 in Q1 2017 Recently completed seismic shoot across Block 58; currently processing 41

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