Investor Day New York City May 17, 2011 AUSTRALIA ARGENTINA CANADA EGYPT NORTH SEA U.S. CENTRAL U.S. GULF. Permian

Transcription

1 Investor Day New York City May 17, 2011 AUSTRALIA ARGENTINA CANADA EGYPT NORTH SEA U.S. CENTRAL U.S. GULF Permian Permian

2 Overview 3 MM acres 84 MBOE/D net (68% oil+ngls) #2 industry player Strong free cash flow generator (2011: investing 55% of projected lease level income) Diverse asset base and exposure to every play >5,000 location inventory Focus on disciplined growth 24 rigs, up from 5 in 2010 Have inventory to run 50+ rigs Pacing our ramp up, expanding inventory Leader in horizontal redevelopment of Central Basin Platform waterfloods 15

3 A Contrarian Path WTI $/BBL APA s Permian Acquisitions Anadarko Mariner Hess Marathon BP Exxon WTI

4 Current Inventory Summary Play Central+North Basin Platform Horizontals Eunice Area Deadwood BP & Mariner Spraberry Formations Avg 2011 Rigs 2011 Locations Locations Spacing (Acres) Locations Downspacing Grayburg, S. Andres, Clearfork, Tubb Grayburg, Blinebry, Tubb, Drinkard / Wolfcamp, Cline, Strawn, Fusselman / Spraberry, Dean, Wolfcamp, Penn Additional Locations Additional 40 acre spacing locations Empire Yeso Yeso / Empire Abo Abo CO2 Enhanced Oil Recovery New Ventures S. Andres, Wolfcamp /10 Wolfcamp, Abo, Cline, Strawn Additional 20 acre spacing locations Other Total ,277 2,652 17

5 Central+North Basin Platform Horizontals Central Basin Platform TXL South Unit % NRI North Basin Platform North McElroy Unit Base waterflood business: steady opportunity stream 5 fields tested horizontally, 100% success 23 horiz. wells = 5% of region oil prod. Well economics: Locations ( 11 / 12+) 42 / 513 IP (BOE/D) 400 EUR MBOE (% Liquids) 160 (85%) Well Cost $MM 4.0 WI / NRI 90% / 77% AT ROR at Plan / Strip 20% / 46% Shafter Lake Unit Upsides: Secondary horizontal reserves Stacked horizontal targets Pad drilling 18

6 Central and North Basin Platform Horizontals TXL South Unit North McElroy Unit Shafter Lake Unit Active Clearfork Waterflood (10,200 acres, 77.0% WI, 70.5% NRI) Active Grayburg Waterflood (11,400 acres, 97.6% WI, 85.0% NRI) Active SanAndres Waterflood (13,000 acres, 81.4% WI, 68.7% NRI) BO/D Horizontals Producing Locations (20s) Targets 3,500 3,000 2,500 2,000 1,500 1, Stacked: U.Clearfork, Tubb, L.Clearfork 3,500 3,000 2,500 2,000 1,500 1, Grayburg San Andres TVD 5,800 6,300 3,000 4,500 Laterals 5,000 5,000 5,000 IP (BO/D) ,400 1,200 1,

7 Eunice Area Type Log Blinebry 7 major operated fields Gained additional WI in Warren Unit and Federal Unit via BP acquisition WBDU, NEDU, EBDU Units Tubb Drinkard Well economics: Locations ( 11 / 12+) 91 / 900 IP (BOE/D) 95 EUR MBOE (% Liquids) 102 (54%) Well Cost $MM 1.5 WI / NRI 79% / 68% AT ROR at Plan / Strip 21% / 39% WBDU NEDU EBDU Upsides: 10 acre waterflood development Horizontal drilling Abo formation 2011 Wells 10 Acre Locations 20

8 Deadwood Wolfcamp Type Log 103,000 gross acres Wolfcamp Trends Deadwood ~1,000 Wolfcamp 11 rigs operating 11,000 wells: Wolfcamp, Cline, Strawn, Fusselman acre spacing L. Wolfcamp Well economics (Deadwood only): Locations ( 11 / 12+) 150 / 1,000 IP (BOE/D) 105 Deadwood EUR MBOE (% Liquids) 141 (77%) Well Cost $MM 2.0 U. Cline WI / NRI % / 37 80% L. Cline AT ROR at Plan / Strip 17% / 35% 2011 Wells 1,000 locations on 40 acre spacing Strawn Upsides: Horizontal Cline Shale: first test now completing Other Wolfcamp fields in fairways Peer spacing guidance: acre Fusselman 21

9 BP & Mariner Spraberry ~1,000 Type Log Spraberry 518,000 acres in trend Large inventory across fields: Wilshire, Pegasus, Core Spraberry, Powell, Scottish Rites, Tamarack, Aldwell Unit, Benedum 8,500 to 11,000 verticals 40 acre spacing Well economics (Spraberry pay only): Wolfcamp Locations ( 11 / 12+) 63 / 943 IP (BOE/D) 75 Example: Wilshire Field EUR MBOE (% Liquids) 125 (83%) Well Cost $MM 1.7 WI / NRI 71% / 58% AT ROR at Plan / Strip 17% / 33% Strawn & Atoka Upsides: Wolfcamp, Strawn, Atoka Horizontal targets Peer guidance: 67% higher EURs, 20 acre spacing 22

10 Empire Yeso Type Log Yeso Vertical Yeso development (Joint Venture with Concho Res.) Building infrastructure: SWD, batteries, electrical, compression Well economics: Locations ( 11 / 12+) 55 / 1,569 Abo IP (BOE/D) 118 EUR MBOE (% Liquids) 83 (82%) Well Cost $MM 1.6 Empire Yeso WI / NRI 60% / 51% 2011 Locations 5 Year Plan Wells (dot equals 2 wells) AT ROR at Plan / Strip 34% / 65% Upsides: Untested acreage Horizontal drilling 23

11 Empire Abo Type Log Redevelopment of field with 200MM BBL cum production Last well drilled in 1984 Abo Upper Million barrel wells not offset Abo Reef Main Well economics: Locations ( 11 / 12+) 21 / Wells 5 Year Plan Vertical Location 5 Year Plan Horizontal Location 703 MBO EUR Empire Abo Unit 959 MBO EUR EAU G 341 Added Perfs 129 BOPD EAU F 364 Added Perfs 131 BOPD 830 MBO EUR IP (BOE/D) 70 EUR MBOE (% Liquids) 115 (88%) Well Cost $MM 1.2 WI / NRI 38% / 32% AT ROR at Plan / Strip 53% / 100% Upsides: Horizontal development in Abo Reef Main and Upper Abo Upper Abo recompletions Edge development 24

12 CO2 EOR New Mexico Roberts 1 Roberts 2 Roberts 3 CO2 EOR Projects Maple Wilson GMK Roberts Projects Producing Development Future Projects Round Top 6 producing CO2 projects: 7,360 BOPD, 87 MMCFD CO2 injection Current Development: Roberts Phase 1 P1 Net: 13.8 MMBOE Future Project Pipeline: Roberts Phase 2 and 3 GMK Maple Wilson Round Top Well Economics: Locations ( 11 / 12+) 51 / 234 IP (BOE/D) 30 EUR MBOE (% Liquids) 50 (92%) Well Cost $MM 0.9 WI / NRI 99% / 89% AT ROR at Plan / Strip 16% / 33% 25

13 New Ventures Abo Horizontal Play 39K net acres leased + BP and Mariner acreage 13 AMI s with 50% WI Spudding 2 nd horizontal well Bone Spring/Wolfcamp Horizontal Play Identified several targets 6K gross acres leased + BP minerals Working to firm up new acreage through JV s, farm ins and leasing Wolfcamp Horizontal Play 7.5K acres leased/optioned 3 well commitment 1st year Additional 4,640 HBP acres Spud 1st horizontal well in 2011 Deadwood/Cline Shale Play 103K gross acres from ME Drilled 1st horizontal shale well Resource play covers the entire area Galaxy Penn Reefs 26K gross acres leased/optioned >50 undrilled leads identified Shear 3D acquisition in 2011 New technologies applied to conventional plays 26

14 Impact of Horizontal Drilling 3,250 3,000 2,750 2,500 2,250 2,000 1,750 1,500 1,250 1,000 BO/D Well Count horizontal wells on production Current oil rate >3,100 BO/D 4.7% of Region s gross operated oil (from less than 1% of gross operated wells) Jan 10 Feb 10 Mar 10 Apr 10 May 10 Jun 10 Jul 10 Aug 10 Sep 10 Oct 10 Nov 10 Dec 10 Jan 11 Feb 11 Mar 11 Apr

15 Pad Drilling Example: TXLU (Central Basin Platform Waterflood) 1 drill site, 4 wells with a small surface footprint to develop thick reservoirs with multi lateral targets Savings: Drill cost: Common location, pits, drill fluids Operating efficiencies Frac cost: Improved logistics Equipment+personnel efficiencies Facilities, lease operating expense: Common battery 28

16 Drilling Inventory Composition Distribution of Current Location Inventory 39% Mariner 34% BP 27% 2010 acquisitions represent 61% of current inventory Dynamic inventory based on technical analysis of individual projects: Continually expanding and highgrading >5 years of drilling inventory even if rig count doubles Primary focus is operations: Executing 24 rig program for 2011 (up from 5 rigs in 2010) Continue to evaluate additional projects in APA s 3MM gross acres 29

17 Limiting Factors Personnel Regional office from 0 to 175 employees Field from 298 to 430 employees 60 vacancies (2/3 office, 1/3 field) Regulatory 80 to 100 Federal drilling permits pending in Well completion constraints Rolling inventory of 50 to 60 wells pending completion Frac crews: 3 full time dedicated ramping to 6 by mid year Gas+NGLs processing and takeaway capacity Ramp up for Deadwood and Yeso dependent on timing of gas processing and NGL takeaway expansion projects 30