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DUG Executive Conference – Apache Corp

Apache Corp · Feb 26, 2018 · 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. DUG Executive Conference – Apache Corp – slide 1
    DUG EXECUTIVE CONFERENCE JOHN CHRISTMANN, CEO & PRESIDENT 02.26.18
  2. DUG Executive Conference – Apache Corp – slide 2
    APACHE STRATEGIC APPROACH: 2015-2017 Repositioning the Business Aligned capital spend with cash flow Financial Discipline Reduced debt, protected investment grade credit rating Sustained dividend, did not issue equity Exited…
  3. DUG Executive Conference – Apache Corp – slide 3
    APACHES INVESTMENT EVOLUTION Capital as % of APA Total Permian Basin now attracting the majority of 100% Other Apaches capital investment 80% Other Int'l 60% Driving profitable growth for years to come 40% Permian Int'l 20%…
  4. DUG Executive Conference – Apache Corp – slide 4
    APACHES PORTFOLIO TODAY United States International Anadarko Woodford UK North Sea SCOOP Eagle Ford S. LA Minerals Suriname Gulf of Mexico Egypt Permian Growth Engine Positive Free Cash Flow Generator +…
  5. DUG Executive Conference – Apache Corp – slide 5
    PERMIAN BASIN OVERVIEW Production Growth Resumed in 2H17 Production & Rig Count Mboe/d Avg Rig Count 177 171 30 165 161 159 25 160 149 148 146 20 New 15 Mexico 130 17 17 16 10 13 5 6 4 5 7 100 0 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17…
  6. DUG Executive Conference – Apache Corp – slide 6
    MIDLAND AND DELAWARE BASIN 2017 Step Change in Performance Consolidating and accelerating 2015/2016 learnings Key Focus Areas Increased efficiencies and operating performance Multi-well pads / longer laterals Few retention wells…
  7. DUG Executive Conference – Apache Corp – slide 7
    ALPINE HIGH 8
  8. DUG Executive Conference – Apache Corp – slide 8
    ALPINE HIGH: UPSTREAM Developing a World-Class Wet Gas Play Unprecedented hydrocarbon column up to 6,000 ft. Vertically stacked oil, wet gas and dry gas fairways Scale 340,000 contiguous leasehold acres 5,000+ locations identified…
  9. DUG Executive Conference – Apache Corp – slide 9
    INDUSTRY ACTIVITY HAS INCREASED SIGNIFICANTLY SINCE ANNOUNCEMENT September 2016 February 2018 WARD CULBERSON REEVES PECOS JEFF DAVIS Mil es 0 5 10 20 20 Miles 20 Miles BREWSTER PRESIDIO APA Operated Rig…
  10. DUG Executive Conference – Apache Corp – slide 10
    DISTINCT SOURCE ROCK AND PARASEQUENCE INTERVALS 3rd BONE SPRINGS Parasequences High frequency, rapidly rising and falling sea level environment WOLFCAMP UNCONFORMITY PENNSYLVANIAN Tranquil marine Source Rock BARNETT…
  11. DUG Executive Conference – Apache Corp – slide 11
    STRUCTURAL CROSS SECTION OF ALPINE HIGH NORTHERN FLANK CREST SOUTHERN FLANK Evaporites Transgressive Parasequences 7,500 8,500 OIL 8720 9,500 9210 9420 9130 9700 9760 9925 10820 10215 Transgressive Source…
  12. DUG Executive Conference – Apache Corp – slide 12
    CURRENT LOCATION COUNT OF 5,000+ Location Distribution Formation Wet Gas Dry Gas Oil Parasequences Transgressive Bone Spring 500+ Wolfcamp Additional Location Potential Additional Location Pennsylvanian Potential Source…
  13. DUG Executive Conference – Apache Corp – slide 13
    ALPINE HIGH: MIDSTREAM Foundational Delaware Basin Midstream Enterprise Cherokee CPF Greenfield, fit-for-purpose system enables optimal wet gas development 700 mm invested through year-end 2017 Targeting 830 MMcf/d of gross…
  14. DUG Executive Conference – Apache Corp – slide 14
    ACCESS TO SALES LINES WITH 4 BCF PER DAY OF CAPACITY Constructing 70 Miles of 30 Trunkline Through the Play Northern Sales Connection 1 Trunkline segments 3 and 4 in service 2 around mid 2018 3 4 5 Southern Sales…
  15. DUG Executive Conference – Apache Corp – slide 15
    WET GAS PLAY: FULLY BURDENED ECONOMICS Development Scenario (4,400 Lateral) Typical Well Upper Range Well Single Well Economic Assumptions: Note: end points shown for EUR, NPV, Product Prices: 50 WTI / 3.00HH / NGL = 60% WTI Mix…
  16. DUG Executive Conference – Apache Corp – slide 16
    NORTHERN FLANK DEVELOPMENT EXAMPLE 17
  17. DUG Executive Conference – Apache Corp – slide 17
    WATER RATE COMPARISON Alpine High Source Rock Versus Pecos Bend Area 10,000 1,000 Water Rate, BWPD 100 10 1 10 100 1,000 Producing Time, Days Alpine High Water Production Pecos Bend Wolfcamp/Bone Springs 18
  18. DUG Executive Conference – Apache Corp – slide 18
    ALPINE HIGH PRODUCTION 2018-2020 Outlook (Mboe/d) 160-180 85 85 - 100 40 - 50 9 2017A 2018E 2019E 2020E 19
  19. DUG Executive Conference – Apache Corp – slide 19
    RAMPING A LARGE-SCALE GREENFIELD PLAY 4Q 18 Outlook Today Versus a Year Ago Reservoir and well performance continues to be very strong Proven oil potential Some of volume ramp deferred due to less capital and fewer wells in…
  20. DUG Executive Conference – Apache Corp – slide 20
    RAMPING A LARGE-SCALE GREENFIELD PLAY Comparison of Feb. 17 and Feb. 18 Alpine High Outlook Previous 4Q18 production target shifted to 2H 2019 37% fewer wells online at year-end 2017 than previously expected, 42 versus 70 23% fewer…
  21. DUG Executive Conference – Apache Corp – slide 21
    APACHES STRATEGIC APPROACH: 2018-2020 Maintain strong balance sheet; protect capital program Financial Target living within cash flow Discipline Relentless cost focus Expand and high-grade Permian inventory Portfolio Sustain…
  22. DUG Executive Conference – Apache Corp – slide 22
    INVESTMENT HIGHLIGHTS Financial discipline manage to cash flow neutrality / strong balance sheet Dividend yield currently 2% Free cash flow from high-margin International businesses Returns focused, long-term growth in the Midland…
  23. DUG Executive Conference – Apache Corp – slide 23
    APPENDIX 24
  24. DUG Executive Conference – Apache Corp – slide 24
    APA ADJUSTED PRODUCTION AND RETURNS 2018-2020 Outlook (Mboe/d) 475 - 510 410 - 440 375 - 395 350 20% 22% 18% CROIC CROIC CROIC 2017A 2018E 2019E 2020E See Glossary of Referenced Terms in Appendix for a definition of…
  25. DUG Executive Conference – Apache Corp – slide 25
    PERMIAN PRODUCTION 2018-2020 Outlook (Mboe/d) 315 - 335 245 - 260 195 - 205 158 2017A 2018E 2019E 2020E 26
  26. DUG Executive Conference – Apache Corp – slide 26
    INTL ADJUSTED PRODUCTION 2018-2020 Outlook (Mboe/d) Shallow Decline 144 130 - 140 125 - 140 125 140 2017A 2018E 2019E 2020E Note: Adjusted production excludes Egypt tax barrels and noncontrolling interest. Comprises North Sea…
  27. DUG Executive Conference – Apache Corp – slide 27
    NON-GAAP RECONCILIATION Regional Cash Flows (1) Includes non-controlling interest in Egypt. 28
  28. DUG Executive Conference – Apache Corp – slide 28
    ALPINE HIGH Middle Permian Paleostructure Map Critical Aspects Regional anomaly Stable Devonian shelf Subsiding eastern limb Later thrust of Davis Mountains 10 Miles 29
  29. DUG Executive Conference – Apache Corp – slide 29
    PALEOGEOGRAPHIC RECONSTRUCTION Woodford Time Same geologic age as Arkoma Woodford and SCOOP / STACK Similar depositional environment 30
  30. DUG Executive Conference – Apache Corp – slide 30
    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…
  31. DUG Executive Conference – Apache Corp – slide 31
    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…
  32. DUG Executive Conference – Apache Corp – slide 32
    DIVIDING ALPINE HIGH INTO THREE SETTINGS ALPINE HIGH FAIRWAY 56% of Alpine High acreage Northern Activity driven primarily by lease expiration Flank Over-pressured Initiated parasequence testing 16% of Alpine High acreage…
  33. DUG Executive Conference – Apache Corp – slide 33
    MARKETING Selling into Mexico via Comanche Trails pipeline Expanding marketing periphery Natural Gas Transport away from Waha Selling on alternative basis Selling at Midland index Oil Less: transport costs just under…
  34. DUG Executive Conference – Apache Corp – slide 34
    ENVIRONMENTAL, SOCIAL AND GOVERNANCE Apache is an Industry Leader in Prioritizing ESG Methane Water Safety Emissions Usage We seek to use alternatives to potable fresh watersuch as recycled produced waterin all By 2025, Apache is…
  35. DUG Executive Conference – Apache Corp – slide 35
    APACHE INCENTIVE COMPENSATION STRUCTURE Short and Long-Term Compensation Aligned for Returns-Focused Outcomes Annual Incentive Long-Term Incentive(1) 2018 Plan Performance Shares Drilling Rate of Return Health, Safety, Security…
  36. DUG Executive Conference – Apache Corp – slide 36
    GLOSSARY OF REFERENCED TERMS Capital Budget: Includes exploration and production capital, gathering, transportation and processing capital, capitalized general and administrative expenses, capitalized interest; excludes non-oil & gas…

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