Gulf of Mexico Regions

Transcription

1 Investor Day New York City May 17, 2011 AUSTRALIA ARGENTINA CANADA EGYPT NORTH SEA U.S. CENTRAL U.S. GULF Gulf of Mexico Regions Gulf of Mexico Canada Central / Gulf Coast

2 GOM Shelf Texas Proven Returns Machine, Reloaded MS AL FL Louisiana Gulf of Mexico Profile: #1 industry player by production, acreage 695 OCS blocks, 111 MBOE/D High ROR, quick payback $ MM free cash/year* Multi Year Objectives: Offset most natural decline by drilling wells/year Unlock reserve upside of Mariner, Devon assets Exploration drive supported by new regional 3D seismic set * annual range of lease level income minus capex (including P&A). 2 years excluded: 2006 (hurricane repairs) and 2009 (prices). 57

3 GOM Shelf Drilling Returns Machine Wells (bar) 70 Predictable Attractive Activity, Cash Returns Success Success (line) 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 300% 250% 200% 150% 100% 50% 0% Clear Reserve Expansion Record Reserves Added by APA Reserves upon Acquisition Shell 2003 APC 2004 BP % 30% 25% 20% 15% 10% 5% 0% Attractive Cash Returns After Tax Cash ROR Drilling Capital ROR All Costs ROR $ BN Strong Free Cash Flow ($BN) After P&A After New Investment 58

4 GOM Shelf Reloaded with Years of Inventory Legacy APA New: Mariner New: Devon YE2009 Growth YE2010 % Growth Total Blocks % Operated Blocks % Structures % Largest expansion to date of Shelf opportunity set Dec. MBOE/D % P1 MMBOE % Note: P1 Acquired To be converted into upside over coming years 59

5 GOM Shelf Average Well Profiles Exploitation #1 production asset base on Shelf provides steady pace of opportunities to drill from existing facilities: Well economics: Locations ( 11 / 12 15) 27 / Day Avg IP BOE/D 500 EUR MBOE (% Liquids) 850 (45%) Well Cost $MM 16 WI / NRI 68% / 57% AT ROR at Plan / Strip 31% / 48% Exploration #1 acreage base +APA s experience create predictable success (Ps = 51%) Access to APA s 754 structures Well economics (Risked): Locations ( 11 / 12 15) 14 / Day Avg IP BOE/D 1,100 EUR MMBOE (% Liquids) 1.6 (55%) Well Cost $MM 24 WI / NRI 59% / 48% AT ROR at Plan / Strip 30% / 40% Upsides: Capitalize on 2010 portfolio steps: largest shelf expansion to date, underworked assets Continuing asset additions Upsides: Ongoing new block licensing Deep shelf exploration 3 rd party prospects (preferred partner) Downdip stratigraphic plays, non amplitude leads 60

6 GOM Shelf Current Near Term Drilling Inventory Drilling inventory constantly regenerated, highgraded prospects/leads for last 5 years 4 Years of normal (50 60 well) drilling in current inventory Will unlock opportunities from Mariner/Devon assets for years Deep Shelf potential not included CURRENT NEAR TERM INVENTORY Prospects Mariner +Leads +Devon % Exploitation % Exploration 89 65% Total % 61

7 GOM Shelf Regional 3D Seismic Coverage Regional 3D seismic set built over last 5 years supports our exploration drive 3x seismic footprint expansion 62

8 Deepwater Fit for APA s Value Creation Area SHELF DEEPWATER AREA MATURITY Production Growth 5 Yr CAGR (%) 1% 8% 4% AREA OILINESS Oil % of Production 26% 36% 72% AREA RUNNING ROOM 2P Resources Added Last 10 Years (BN BOE) NA 11.5 APA s SHARE APA as % of Area Production <1% 21% <1% * Production represents gross operated production. Deepwater production based on EIA definition (greater than 1000 water depth). All data refers to Gulf of Mexico. Data source: IHS. 63

9 Deepwater New Growth Business for Producing North Black Widow VK 821 Swordfish Discovery Marquette/Jolliet Black Widow Mandy Prospect NW Nansen Zircon Bimini Backslice Wide Berth Cerveza Atrip EW 998 Geauxpher Bushwood Kakuna Lyell Balboa Parmer Booneville Lucius Heidelberg Owls Nest Pardner Cognac Rigel Refugio Mitchell Bass Lite King Kong/Yosemite Daniel Boone Spartacus Entry position through Mariner: 17 MBOE/D (Q1 11) Multi 100 MMBL oil discoveries: Lucius, Heidelberg Complete, experienced deepwater team with record of success 110 exploration blocks Positioned to capture increased project/asset opportunities 64

10 Deepwater Development Inventory Producing Discovery Balboa Wide Berth Mandy Bushwood EW 998 Lucius Heidelberg Project First Production IP Rate MBOE/D PMean MMBOE % Liquids APA WI Balboa Producing 3 (current) 4 61% 50% EW 998 Producing 5 (current) 2 79% 50% Wide Berth % 56.25% Mandy % 50% Bushwood % 50% Lucius % 16.67% Heidelberg % 12.5% Total ~88% ~17% Current View: $800MM aggregate net APA investment (project life, 80% in 2012+) 25 35% weighted AT Rate of Return at Strip 65

11 Deepwater Lucius, Heidelberg Caesar Buckskin Lucius Tonga Hadrian Heidelberg Gulf of Mexico Lucius 2 wells, 1 sidetrack drilled to date. Oil found in Pliocene, Miocene sands MM barrels of oil potential #1 well completion in progress followed by a flow test Hadrian unit negotiations in progress Development: multi well spar FID expected 4Q 11 1Q 12 Significant exploration position in the area Heidelberg Discovery well found 200+' of high quality oil in Miocene sands MM barrels of oil potential Appraisal well planned for late block exploratory unit negotiations in progress Development: multi well spar FID target TBD Significant exploration position in the area 66

12 Deepwater Near Term Exploration Inventory Bimini: 34 MMBOE, 41% NRI Mitchell: 152 MMBOE, 40% NRI Backslice: 32 MMBOE, 83% NRI Zircon: 7 MMBOE, 54% NRI Atrip: 41 MMBOE, 54% NRI Refugio: 143 MMBOE, 40% NRI Booneville: 80 MMBOE, 40% NRI Kakuna: 176 MMBOE, 5% NRI Parmer: 25 MMBOE, 41% NRI Owls Nest: 73 MMBOE, 9% NRI Lyell: 170 MMBOE, 9% NRI Spartacus: 96 MMBOE, 31% NRI Initial aim: continue Mariner s generation of 1 2 development projects/year Combination of spar and tie back projects Retain higher NRI through development phase Expand footprint+inventory, be partner of choice Gross potential estimates. Average Pg = 30% 67

13 GOM Business Environment Permitting APA has submitted 3 deepwater Exploration Plans year to date. First approval anticipated in June. Sector context: 2 deepwater Exploration Plans approved since Macondo. 14 deepwater Drilling Permits have been approved. All but 1 are continuation of wells in progress when Macondo occurred. Containment Systems APA has joined MWCC System (10 major deepwater operators) 100,000 BO/D, 250 MMCF/D capacity Fully operational mid 2012 APA has joined Helix HWCG System (24 participants) 55,000 BO/D, 95 MMCF/D capacity Currently operational Partner Issues More selective in choosing partners. Need to be large, financially fit. Opportunity for. 68

14 Gulf Coast Onshore Area of New Focus Region created Q Material land position 790,000 net acres, including 270,000 mineral acres (South Louisiana) Lease acreage mostly held by production 22 MBOE/D (45% oil+ngls) Extensive infrastructure Strategy: Focus on known depositional fairways Expand regional 3D seismic database Pursue under explored deep formations Texas 10 mi Gulf of Mexico Louisiana Mississippi 69

15 Gulf Coast Onshore Focus on Prolific Depositional Fairways Strategy Expand Regional 3D Seismic Database Lower Miocene Pursue Underexplored Deep Formations All Wells Below 17,000 70