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BP Acquisition of BHPs Us Onshore Assets – BP Plc

BP Plc · Jul 27, 2018 · 20 slides

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Slides

  1. BP Acquisition of BHPs Us Onshore Assets – BP Plc – slide 1
  2. BP Acquisition of BHPs Us Onshore Assets – BP Plc – slide 2
  3. BP Acquisition of BHPs Us Onshore Assets – BP Plc – slide 3
  4. BP Acquisition of BHPs Us Onshore Assets – BP Plc – slide 4
    Progressing our strategic agenda Growing sustainable free cash flow and distributions to shareholders over the long-term THE BP PROPOSITION Building on proven operating capability and adding to incumbent positions Safe, reliable…
  5. BP Acquisition of BHPs Us Onshore Assets – BP Plc – slide 5
    Acquisition of BHP’s US onshore assets (1) $55/bbl Brent price (2017 real), $3.00/mmBtu Henry Hub (2017 real), $14/bbl RMM (flat) (2) Earnings per share, operating cash flow per share and free cash flow per share are accretive post…
  6. BP Acquisition of BHPs Us Onshore Assets – BP Plc – slide 6
    $45 WTI $2.25 HH $65 WTI $3.25 HH $55 WTI $2.75 HH BHP US onshore assets (1) NPV = Net present value at 10% discount rate, $55/bblWTI, with a midland discount of $7/bbl near term and around $2/bbl longer term, $2.75/mmBtu Henry…
  7. BP Acquisition of BHPs Us Onshore Assets – BP Plc – slide 7
    Fully accommodated within BP’s existing financial framework (1) $55/bbl Brent price (2017 real), $3.00/mmBtu Henry Hub (2017 real), $14/bbl RMM (flat) (2) Earnings per share, operating cash flow per share and free cash flow per share…
  8. BP Acquisition of BHPs Us Onshore Assets – BP Plc – slide 8
  9. BP Acquisition of BHPs Us Onshore Assets – BP Plc – slide 9
    Lower 48 acquisition – progressing Upstream strategy Onshore operating model Synergies >$350m Capital efficiency 200mbd oil business in mid-2020s SAFETY QUALITY EXECUTION GROWING GAS AND ADVANTAGED OIL RETURNS LED GROWTH…
  10. BP Acquisition of BHPs Us Onshore Assets – BP Plc – slide 10
    BP track record of performance improvement in Lower 48 Development costs $/bbl Unit production costs $/bbl Headcount ‘000s 35% 0 0.5 1 1.5 2 2.5 2013 2014 2015 2016 2017 1H2018 Thousands 54% 0 3 6 9 2013 2014 2015…
  11. BP Acquisition of BHPs Us Onshore Assets – BP Plc – slide 11
    Rapid and capital efficient growth 0 20 40 60 80 100 120 2016 2017 2018 2019 Gross production (mboed) Haynesville production Actuals Forecast (1) Post-tax IRR, calculated at $2.75/mmBtu Henry Hub (2018 real) BP Lower 48:…
  12. BP Acquisition of BHPs Us Onshore Assets – BP Plc – slide 12
    Material performance uplift (1) Post-tax IRR, calculated at $2.75/mmBtu Henry Hub, $55/bbl WTI (2014 real), (2) Normalized to 6,000’ long laterals Previous operator BP-Lewis Energy JV: Eagle Ford farm-out ? 22 wells drilled before…
  13. BP Acquisition of BHPs Us Onshore Assets – BP Plc – slide 13
    Upstream outlook upgraded (1) Free cash flow proxy = Underlying RCPBIT+DD&A+EWO-Organic capital expenditure, 2021 at $55/bbl Brent 2017 real (2) 2016-2021 compound annual growth rate 2016 2017 2021 14-15 Upstream Guidance Acquisition…
  14. BP Acquisition of BHPs Us Onshore Assets – BP Plc – slide 14
  15. BP Acquisition of BHPs Us Onshore Assets – BP Plc – slide 15
    Acquisition of BHP’s US onshore assets (1) $55/bbl Brent price (2017 real), $3.00/mmtBu Henry Hub (2017 real), $14/bbl RMM (flat) (2) Earnings per share, operating cash flow per share and free cash flow per share are accretive post…
  16. BP Acquisition of BHPs Us Onshore Assets – BP Plc – slide 16
  17. BP Acquisition of BHPs Us Onshore Assets – BP Plc – slide 17
  18. BP Acquisition of BHPs Us Onshore Assets – BP Plc – slide 18
    Acquired asset – Permian Delaware Current production ~40 Post-tax IRRs1 25-50% Gross drilling locations Acreage 83k ~3,400 mboed (~70% liquids) Material position in heart of Delaware’s over-pressured and liquids-rich window ?…
  19. BP Acquisition of BHPs Us Onshore Assets – BP Plc – slide 19
    Acquired asset – Liquids-rich Eagle Ford Core acreage in both the liquids-rich Karnes Trough and Eagle Ford wet gas window ? Builds on BP Lower 48’s experience in the Eagle Ford ? Opportunity to develop with multilaterals in…
  20. BP Acquisition of BHPs Us Onshore Assets – BP Plc – slide 20
    Acquired asset – Haynesville (1) Estimated post-tax IRRs for new wells at $55/bbl WTI, $2.75/mmBtu Henry Hub (2018 real) Current production ~60 Post-tax IRRs1 15-25% Gross drilling locations Acreage 194k ~720 (100% gas) Doubles…

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