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OPERATIONS OVERVIEW – XTO Energy Inc.

XTO Energy Inc. · Feb 27, 2009 · 35 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. OPERATIONS OVERVIEW – XTO Energy Inc. – slide 1
  2. OPERATIONS OVERVIEW – XTO Energy Inc. – slide 2
    A Strategy of Measured Production Growth AVERAGE DAILY PRODUCTION 3000 8 2,660 7 2500 2,335 6 2000 2009 Growth Target: 14% 1,821 2008 Growth: 28% 5 CFE/SHARE MMCFEPD 1,528 1500 4 1,330 1,016 3 1000 785 623…
  3. OPERATIONS OVERVIEW – XTO Energy Inc. – slide 3
    A Proven Strategy to Build RESERVES 16000 PROVED RESERVES* 13,862 14000 12000 Compound Annual Growth Rate: 29% 11,289 10000 8,549 BCFE 7,622 8000 5,860 6000 4,185 4000 3,372 2,682 2,023 2,252 1,639 2000…
  4. OPERATIONS OVERVIEW – XTO Energy Inc. – slide 4
    A Good Acquisition Company Must be a GREAT Development Company 40,000 1986 2008 RESERVES PERSPECTIVE 35,000 33,392 30,000 Low-risk drilling inventory 14,200 268% 25,000 BCFE 20,000 15,000 Delivered Growth 10,122…
  5. OPERATIONS OVERVIEW – XTO Energy Inc. – slide 5
    Managing Franchise Efficiency 10 3 Optimum Inventory Measured Drilling 8 Hedging 7.69 7.50 7.81 7.50 7.04 Drill Bit Finding Cost (/MCFE) Realized Gas Price (/MCF) 6.11 2 5.80 - 6.00 6.07 6 6.32 5.04 5.90 1.70…
  6. OPERATIONS OVERVIEW – XTO Energy Inc. – slide 6
    The Dynamics of Gas Price and Drilling Cost 30 20 Shale Growth 25 Enthused by 150% Investment U.S. Gas Rig Count (00) & Day rate (M/day) 16 of Sectors Cash Flow 20 Growth Basins 20% Jonah/Pinedale Gas Price (/MCF)…
  7. OPERATIONS OVERVIEW – XTO Energy Inc. – slide 7
    Scope of Drilling Rigs and Production Efficiency WELL TYPE vs. DRILLING DAYS vs. IP RATE* 1 horizontal Haynesville well 50 days = 8 MM 1 horizontal Barnett well 18 days = 3 MM 1 vertical Freestone well 18 days = 2 - 3 MM 1…
  8. OPERATIONS OVERVIEW – XTO Energy Inc. – slide 8
    2008: Bold ActionsSwift Reaction Acquisitions expand dominant positions and establish long-term development plays Hedge volumes at high commodity prices Integrate operations and divisions Scale back budget, rigs and growth…
  9. OPERATIONS OVERVIEW – XTO Energy Inc. – slide 9
    2008 Event Impact Hunt Petroleum Acquired Significant expansion of East Texas, Haynesville Shale, Gulf Coast Cash Cows, Bakken Headington Oil Properties Dominant Bakken Shale producer; Three Forks/Sanish discoveries, oil volume…
  10. OPERATIONS OVERVIEW – XTO Energy Inc. – slide 10
    Why Commit to the Shale Basins in such Scale and Scope Home-grown, scientific conviction Core consortium, reservoir assessment, adequate well data Reservoir and recovery confidence Done it before Resource in place Act when the…
  11. OPERATIONS OVERVIEW – XTO Energy Inc. – slide 11
    Our Overriding Motivation to Compel XTO Investment Across the basins, for 5 to 7 natural gas prices, we project a 1.00 to 1.60 finding cost per MCFE to realize economic returns of 30% to 100% on our capital. 11
  12. OPERATIONS OVERVIEW – XTO Energy Inc. – slide 12
    Shale Gas Basin Economics for XTOs Premier Acreage Gross Nat Gas Nat Gas Well Cost EUR F&D Costs 7.50 5.00* Play million BCFE per MCFE ROR ROR Barnett Core 2.8 3.3 1.13 92% 47% Fayetteville 2.7 2.2 1.46 65% 36% Woodford 5.0 3.8…
  13. OPERATIONS OVERVIEW – XTO Energy Inc. – slide 13
    2009: Focusing the Operational Engine - Managing Growth - Throttling production Long-lived shallow decline Optimum drilling - Economic Returns - Hedged prices Falling costs Low drill-bit F&D - High Impact Expansive…
  14. OPERATIONS OVERVIEW – XTO Energy Inc. – slide 14
    2009: The Era for Exploitation - Drill, Develop and Grow - 3.2 billion development and infrastructure budget 14% production increase - Operational Focus - Pacing Growth Delineating for the Future Freestone Trend Haynesville…
  15. OPERATIONS OVERVIEW – XTO Energy Inc. – slide 15
    2010 Positioning for Growth Acceleration Setting the stage operationally for 10% production growth XTOs shallow production profile substantiates our ability to grow Amplify economic returns with lowest drilling costs into rising…
  16. OPERATIONS OVERVIEW – XTO Energy Inc. – slide 16
    Ownership and Opportunities Expand Bakken Shale Trend Building Identify the target Powder River Basin Test the theory Green River Basin Expand the position Uinta Basin Piceance Basin Raton Basin Marcellus Shale NW…
  17. OPERATIONS OVERVIEW – XTO Energy Inc. – slide 17
    Tight Gas Basins Williston Wind River 45% of DAILY GAS PRODUCTION Green River Denver Uinta Appalachian Piceance Anadarko Arkoma San Juan Arkla Permian ETX Gulf Coast XTO basins Tight Gas Regions 17
  18. OPERATIONS OVERVIEW – XTO Energy Inc. – slide 18
    Eastern Region - Freestone Trend 10 TCFE Potential Daily Production: 20 MMCF to 775 MMCF Productive area PRODUCTION GROWTH 3,400 mi2 MMCFEPD (gross operated) / Rig Count Rischer Store 800 40 Navarro Limestone 600 30 Reed…
  19. OPERATIONS OVERVIEW – XTO Energy Inc. – slide 19
    Shale Basins Bakken Shale 30% of DAILY GAS PRODUCTION Net Production: 10,000 BOEPD 450,000 net acres Reserves/well Marcellus Shale 300 - 600 MBOE Net Production: 26 MMCFPD 280,000 net acres Reserves/well 2.0 4.0 BCF…
  20. OPERATIONS OVERVIEW – XTO Energy Inc. – slide 20
    Fort Worth Basin Barnett Shale Growth 280,000 net acres 800 PRODUCTION GROWTH 40 JACK WISE DENTON MMCFEPD (gross operated) / Rig Count 600 30 CORE PARKER TARRANT DALLAS 400 20 TIER 1 200 10 Cumulative Production…
  21. OPERATIONS OVERVIEW – XTO Energy Inc. – slide 21
    Fayetteville: Leasehold Position and Producing Wells Pope Van Buren Entire play producing 800 MMCFPD Cleburne XTO Barbara XTO 2.0 MMCFPD XTO Deltic McFalls XTO 2.5 MMCFPD 3.0 MMCFPD Neiheisel XTO 2.2 MMCFPD Black 2.0 MMCFPD…
  22. OPERATIONS OVERVIEW – XTO Energy Inc. – slide 22
    Woodford Shale Play -Southeastern Oklahoma Entire play producing 550 MMCFPD 35 - 40 wells for 2009 Woodford 3 4 operated rigs Shale 4.5 5.5 million/well 2.5 5.0 BCF/well XTO Pale Moon 1-31 XTO 6.0 MMCFPD Churchill 1-26 4.3…
  23. OPERATIONS OVERVIEW – XTO Energy Inc. – slide 23
    Haynesville Shale Overview Pay Zones James Lime Rodessa XTO 100,000 acres Pettet XTO New Horizons 1 Travis Peak 8.5 MMCFPD (Hosston) Cotton Valley Sand Bossier Haynesville Shale 150 - 300 feet Cotton Valley Lime…
  24. OPERATIONS OVERVIEW – XTO Energy Inc. – slide 24
    Marcellus Shale Overview North Marcellus Shale 70,000 net acres Epsilon 4.6 MMCFPD, Horizontal Cabot 5 MMCFPD, 5 Verticals 1 Horizontal 6.4 MMCFPD Chief Range 6.0 MMCFPD, Horizontal 7.3 MMCFPD, 10 Avg. Horizontals one…
  25. OPERATIONS OVERVIEW – XTO Energy Inc. – slide 25
    Bakken Shale: Americas New Oil Giant 450,000 net acres Primary Reservoir Objectives Middle Bakken Montana North Dakota Three Forks/Sanish Nesson Anticline Bakken pay section: 50 - 150 Three Forks/Sanish pay section: 50 -100…
  26. OPERATIONS OVERVIEW – XTO Energy Inc. – slide 26
    Coal Bed Methane Basins 11% of XTO Gas Production Growing to 350+ MMCFPD (net) Powder River Focusing on Rockies Basin Higher gas content and better deliverability Uinta Basin Large hydrocarbon resource San Juan Production…
  27. OPERATIONS OVERVIEW – XTO Energy Inc. – slide 27
    Natural Buttes Overview RBU 17-10E Extending producing trends IP 1.3 MMCFPD RBU 18-19F IP 1.3 MMCFPD Others testing deep zone potential Mancos/Blackhawk/Dakota LCU 9-36H Green River IP 1.5 MMCFPD 4,000 5,000 LCU 8-8H IP 1.4…
  28. OPERATIONS OVERVIEW – XTO Energy Inc. – slide 28
    Tight Oil Properties Utilizing tight formation techniques to enhance production and recovery Optimizing field operations Horizontal drilling Improved completion techniques NE Prentice Unit Vacuum Mahoney High margin production…
  29. OPERATIONS OVERVIEW – XTO Energy Inc. – slide 29
    High Impact Oil Development GOLDSMITH CVX ACQUISITION BOPD (gross) XTO revitalizes legacy fields 8,000 Enhances reserves by 200 - 500% 80 RESERVES 6,000 MMBOE 70 60 22 Upsides 4,000 40 5X Re-engineering volumetrics 20 35…
  30. OPERATIONS OVERVIEW – XTO Energy Inc. – slide 30
    South Texas & Gulf Coast Texas Louisiana Mississippi Mobile Bay Sheridan Speaks Bonus World Class Reservoir: Old Ocean 300 B/well Fashing Provident City Washburn Austin West Cameron 485/507 SMI 40, 41, 44 T-Bird Bob…
  31. OPERATIONS OVERVIEW – XTO Energy Inc. – slide 31
    2009 Development, Exploration & Operations Budget Permian Region Exploration 10% 3% Development Eastern Region SJB, Raton & Uinta 6% 32% and Exploration Bakken, Gulf Coast & Offshore 2.75 Billion 9% Midstream and M id…
  32. OPERATIONS OVERVIEW – XTO Energy Inc. – slide 32
    2009 Inventory for Development XTO Reserve Estimated Drill Well Potential F&D Cost Inventory (BCFE, net) (/MCFE) Eastern Region/Freestone 2,300 2,500 4,300 0.80 1.70 Barnett Shale 2,400 2,600 4,700 0.80 1.80 Fayetteville Shale 1,600…
  33. OPERATIONS OVERVIEW – XTO Energy Inc. – slide 33
    SHALE GAS: Expanding the Resource Potential Increasing Potential Barnett Shale +2 3 TCFE 20-acre spacing in the CORE Further success in Tier 1/40-acre spacing Woodford/Fayetteville +2 4 TCFE Further delineation on acreage…
  34. OPERATIONS OVERVIEW – XTO Energy Inc. – slide 34
    TIGHT GAS: Expanding the Resource Potential Increasing Potential East Texas: Freestone Trend +2 - 3 TCFE Continued down spacing to 20-acre wells Horizontal well inventory Acreage delineation: North and South Natural Buttes +1 - 2…
  35. OPERATIONS OVERVIEW – XTO Energy Inc. – slide 35
    Captured Resource Builds Future Value 1/1/2007 1/1/2008 1/1/2009 Resource 37% Resource 30% Resource 14.2 TCFE 13.9 TCFE 7.3 TCFE 11.3 TCFE Low-Risk 8.55 TCFE 11.29 TCFE Proved Low-Risk Low-Risk Upsides Upsides Proved Proved…

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