2008 Analyst Review Jon Jeppesen Senior Vice President Gulf Coast Region The following discussions contain certain forward looking statements as defined by the Private Securities Litigation Reform Act of 1995 including, without limitation, estimates, expectations, plans and goals regarding Apache s production, reserves, financings, acquisitions, exploration and exploitation prospects, energy prices, operating costs, and results of operations. Such forward looking statements involve estimates, assumptions and uncertainties. No assurance can be given that Apache s expectations or goals will be realized, and actual results may differ materially from those expressed in the forward looking statements. For reconciliations of non GAAP financial measures, see our web site www.apachecorp.com.
Gulf Coast Region Operating Philosophy Generate excess cash flow to fund other activities Explore / exploit high-quality multi-zone opportunities Utilize existing infrastructure to reduce costs, accelerate production, increase 3 rd party processing revenue and increase exposure to 3 rd party prospects Acquire properties and exploit overlooked opportunities benefiting ng from technology and seasoned workforce Upgrade / expand 3D seismic coverage over both shelf and deep water acreage Expand exploration opportunities into deep water and new resource plays Continue to operate with sense of urgency by capitalizing on flat management / organization structure
Gulf Coast Region Properties 2008 Gulf Coast Operations Dry Land / Marsh / Offshore Onshore 783 Producing Wells Offshore 459 Operated Platforms 803 Producing Wells HOUSTON L O U I S I A N A Lafayette MISS. New Orleans Mboe/d 150 125 100 75 50 25 0 92 94 99 04 07 T E X A S M E X I C O Corpus Christi Gulf of Mexico Apache Properties Apache Minerals Gulf Coast Region Gross Operated Daily Production* Onshore 81 MMcf/d + 7,300 bopd Offshore 590 MMcf/d + 70,000 bopd Total Net Daily Production 440 MMcf/d 62,000 bopd *Pre-Hurricane
Total Net Oil Production Actual bopd 70,000 60,000 Hurricane Ivan 50,000 40,000 Hurricanes Katrina / Rita Current Prod Rate 37,200 bopd X 30,000 20,000 10,000 Actual Forecast Hurricanes Gustav / Ike 0 2003 2004 2005 2006 2007 2008
Total Net Gas Production Actual Mcf/d 600,000 500,000 400,000 Hurricane Ivan Hurricanes Katrina / Rita 300,000 Current Prod Rate 249 MMcf/d X 200,000 100,000 Actual Forecast Hurricanes Gustav / Ike 0 2003 2004 2005 2006 2007 2008
Hurricane Gustav / Ike Damage Summary Hurricane Gustav No major damage to facilities Fair amount of minor damages in central GOM and onshore Louisiana Hurricane Ike Major Platform Damage Gross Prod Net Prod bopd Mcf/d bopd Mcf/d EI 175 E (Toppled) 0 0 0 0 EI 296 B (Fire) 175 7,900 115 5,300 VR 284 A (Toppled) 350 400 200 230 SS 291 (Toppled) 0 200 0 115 Operated TOTAL 525 8,500 315 5,645 Non - Operated EI 330 A & C (Toppled) 900 2,000 Extensive minor damage to platforms and producing infrastructure in west central GOM and onshore Louisiana
Significant Excess Cash Generation 3,500 3,000 LLI Capital Lease Level Income vs. Capex 3,063 CENTRAL REGIION 2,500 2,214 2,000 $MM 1,500 1,318 1,468 1,596 1,532 1,700 1,000 1,160 1,423 500 0 762 568 327 2003 2004 2005 2006 2007 2008(E) Note: Lease level income = revenue - operating expense transportation expense - severance taxes
Gulf Coast Region Acquisitions Offshore - Shell - 1999 / 2003 - Oxy - 2000 - BP - 2003 / 2006 - Anadarko - 2004 Onshore - Castex - 2002 Activity - Drill exploration / development targets in fields with existing production infrastructure - Accelerate identified projects - Evaluate exploration potential / monetize undeveloped properties
Major GOM Acquisitions Summary Investment MMboe Cost / boe As of Acquisition $3,199 378.9 $8.44 Production (9,111) (262.3) 34.73 Strategic Acquisitions 46 5.5 8.47 Asset Sales (191) (10.8) 17.73 Capital Investment 4,689 152.0 30.86 As of 6/30/08 ($1,368) 263.3 ($5.19) Investment Returned 143% Remaining Reserves 69% June 2008 Average Rates: 58,620 bopd 354.5 MMcf/d Includes Shell 1999, OXY 2000, BP & Shell 2003, Anadarko 2004, & BP 2006 (Reduced for VPPs)
Gulf Coast Region Lease Holdings Largest HBP leaseholder in GOM water depth <1200' 2 nd largest Mineral Lease owner in South Louisiana Provide opportunities to : - Leverage into more drilling opportunities - Take advantage of ORRI / royalty positions on marginal capital projects - Access to potential resource plays / reserves
Gulf Coast Region Properties 2008 District T E X A S Wells Offshore 67 Onshore 56 Total 123 Giddings (Eagleford) HOUSTON L O U I S I A N A Lafayette New Orleans MISS. ALA. Golden Meadow Corpus Christi M E X I C O Garden Banks 462 462 Geauxpher Ewing Banks 826 826 Gulf of Mexico Apache Properties Apache Minerals Gulf Coast Region
Geauxpher Prospect GB 462 Apache acquired interest in GB 462 from 2004 Anadarko acquisition (ENI - operator 45%, Apache 45%, Hydro 10%) Remington (Helix) announced Noonan Prospect discovery in Block 506 in spring 2007 at least 100 Bcfe Water depth 2,820 Apache evaluated and called partner meeting no interest by partners in pursuing Both partners non-consented Apache s s AFE proposal and forfeited their lease ownership Lease expiration 12/31/07 needed operator with toys (semi-submersible rig, subsea trees, etc) Apache brought in Mariner to operate field 60% WI / Apache 40% WI
Geauxpher Prospect GB 462 40 mile 8 8 pipeline Garden Banks Banks 72 72 Host Host Platform Garden Banks Banks 462 462
Geauxpher Prospect GB 462 Apache GB 463 AMP AMP 11 UPTHROWN UPTHROWN DEEP DEEP AMPS AMPS Schematic Cross-Section 18,000 18,000 SDS SDS GB GB 462 462 #3 #3 PBHL PBHL GB GB 462 462 #2 #2 ST1 ST1 GB GB 462 462 #1 #1 BP BP GB GB 506 506 #3 #3 GB 506 GB GB 506 506 #1 #1 AMP AMP 1 1 GB 507 2000
Geauxpher Schematic Cross Section W GB 462 GB 462 #4 #5 GB 462 #2ST1 GB 462 #3 E -16000' Amp 1-18000' PBHL 18000' Sd. -20000' PBHL Amp 1-22000' Deep Amps Proposed Wells PBHL
Geauxpher Prospect GB 462 Currently installing equipment Pipeline installation: 08/08 09/08 Umbilical installation: 11/08 Well #1 and #2 completions: 08/08 11/08 Platform production equipment: 05/08 12/08 Geauxpher: First well drilled 05/08 First production 1Q09 Forecast Economics: $115.3 MM AFIT PV10 34.5% AFIT ROR
Ewing Bank 826 Field Profile Discovery Date: 1986 Water Depth: 483 APA WI / NRI 100.0% / 83.3% Operator Apache Active Wells: 12 Gross Cum Production 8/08: Gross Daily Production (Base): 18.8 MMbo 55 Bcf 700 bopd 2.0 MMcf/d Gross Daily Production: 4,500 bopd (A-17, A-18, A-19 BP1, A-20) 5.0 MMcf/d Reserves: 7.1 MMbo (A-17, A-18, A-19 BP1, A-20, A-21BP3) 13 Bcf Economics: $44.7 MM AFIT PV10 87% AFIT ROR 11 Additional Drilling Locations Ewing Ewing Bank Bank 826 826
Ewing Bank 826 A-1 B-1 C-1 C-8 D-1 CP-1 A-18 A-1 A-2 B-1 B-2 D-1 D-2 F H-1 H-2 A-19 A K-3 781 Prop Loc APA #A-25 823 A-20 A Sd. S A L T A-19 Sd. A-21 A-18-12400 Prop Loc APA #A-22-12600 A-19 A-18 Sd. -13000 Prop Loc APA #A-24 L Sd. A-20 I Sd. 826 783 827 MP-2 A-17 Arb Line 1 K-3 L-1 A-21 MP-3 L-1 L-2 K-3 L-2 M N C1 C2 A-17-14400 -15000-15200 2,435 bopd 1.9 MMcf/d 0 bwpd L-1 L-2 1,476 bopd 1.4 MMcf/d 0 bwpd 1,882 bopd 1.5 MMcf/d 38 bwpd MP-3 Sd. 2,291 bopd 2.7 MMcf/d 0 bwpd
Ewing Bank 826 Arb Line 1 APA A-20 AA-20 APA APA -18 AA-18 APA AAPA -19 AA-19 APA A- APA A-17 AA-17 APA
Ewing Bank 826 Oil Production 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 Jun-07 Jul-07 Aug-07 Sep-07 Oct-07 Nov-07 Dec-07 Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 A-20 A-18 A-19BP1 A-17 Base Hurricane Downtime A-21 A-22 bopd
Golden Meadow Field Field Profile Discovery Date: 1938 Operator: Apache WI / Avg NRI: 100.0% / 79.0% All Laterre Wells: 98% NRI Active Wells: 40 Gross Cum Production 12/07: 102 MMbo 284 Bcf Gross Daily Production (Base): 790 bopd 4.2 MMcf/d Golden Golden Meadow Meadow Field Field Economics: $31.5 MM AFIT PV10 100% AFIT ROR 2700 Sand Wide variance in production due to coning Previously watered out wells produced oil several years later Replacement well drilled in 1988 50 away original oil water contact Poor recovery efficiency
2700 Sd Structure Map Wells Drilled Wells to be Drilled Laterre 305 Laterre 303 Laterre 306 SL 378 Catfish Lake #144 ST1 2700 2700 2700 2700 SL SL 378 378 #144 #144 Laterre 313 313 Laterre 305 305 Laterre 309 309 Laterre 307 307 Laterre 303 303 Laterre 306 306 Laterre 310 310 Laterre 307-2650 Laterre 309 2700 SHALE OUT 2700-2700
Golden Meadow Oil Production bopd 3500 3500 3000 3000 2700 Sand Project Gross Daily Production (8 wells): 2,150 bopd 450 Mcf/d Hurricane Downtime 2500 2500 2000 2000 Reserves: Current Activity: Completing 3,952 Mbo 600 MMcf S/L 378 #144ST LL&E #234 1500 1500 1000 1000 2008 2008 Drilling Drilling Program Program 500 500 Base 0 0 6/1/2007 12/1/2007 6/1/2008 12/1/2008 6/1/2007 12/1/2007 6/1/2008 12/1/2008
Golden Meadow 2700 Sd Structure Wells Drilled Wells to be Drilled Apache Leasehold LL&E 234 2700 Laterre 306 306 SL SL 378 378 #144 #144 Laterre 313 313 Laterre 305 305 Laterre 303 303 LL&E LL&E 234 234 Laterre 307 307 Laterre 309 309 Laterre 310 310
Eagleford Shale Play
Eagleford Shale Play Type Log Shale Characteristics Hot GR High Resistivity Mud log shows
+52 miles Eagleford Shale Continuity MILAM ROBERTSON MADISON BRAZOS GRIMES LEE BURLESON +116 miles WASHINGTON BASTROP FAYETTE WALLER COLORADO Area Area of of Interest Interest Apache Properties EnerVest Acreage
Eagleford Drilling Activity Horizontal Well Drilled Horizontal Completed & Frac d Horizontal Currently Drilling ROBERTSON BRAZOS MADISON MILAM Chachere 2H Childers 3H Giesenschlag-Groce 2H Giesenschlag C 3H BURLESON LEE Reser-Sanders E-1 Myers Cattle E-1 GRIMES WASHINGTON BASTROP WALLER FAYETTE AUSTIN Apache Properties EnerVest Acreage COLORADO
Eagleford Production Profile Well Name Giesenschlag Groce 2H Childers 3H Giesenschlag C 3H Chachere 2H Production Frac Type / Size 9 stage hybrid / 1,333,000# sand 4 stage hybrid / 660,000# sand 4 stage hybrid / 495,000# sand 5 stage hybrid / 789,000# sand Initial Rate bopd 305 170 345 285 bopd 350 350 300 300 250 250 200 200 150 150 100 100 50 50 0 0 0 0 10 10 20 20 30 30 40 40 50 50 60 60 70 70 80 80 90 90 100 100 110 110 120 120 130 130 140 140 Days of Production Giesenschlag - Groce 2H Childers 3H Giesenschlag C 3H Chachere 2H
Eagleford Work Progress Improved acreage position Recovered multiple sets of whole cores Drilled grass roots horizontal wells with increasing lateral length Optimizing fracture stimulation Continuing on steep learning curve Testing in different areas Monitor economics
Future Cost Savings: Economy of Scale Multi-well pads Multi-well facilities Centrally located water pits for multiple pad usage Re-use of flowback water for fracs Reduction in KCL concentration for frac water Estimated Well Cost Saving: 20% = $1.6 MM / Well
Eagleford Oil Production Economics AFIT PV10 Breakeven Price vs. Reserves Breakeven Price $/bbl 160 160 140 140 120 120 100 100 80 80 60 60 40 40 20 20 Current Cost ($8.1 MM) 20% Cost Reduction 40% Cost Reduction 0 0 50 50 100 100 150 150 200 200 250 250 300 300 350 350 400 400 450 450 Reserves MBO
Eagleford Potential Apache will earn deep right under EnerVest s 425,000 HBP acres through identified 2009 drilling program Apache will control over 450,000 acres of Eagleford play With a 50% minimum productive area, Eagleford play would generate over 700 potential drilling locations @ 320 acre spacing Reserve potential 105 MMboe (700 wells @ 150 Mboe / well) Upside reserve potential 315 MMboe (1,400 wells @ 160 acre spacing and 225 Mboe / well)
Gulf Coast Growth Strategy Exploit & Explore 3D Coverage Acreage Position Deep Shelf Potential Experienced Technical Teams Technology Application Acquire Multi-pay Plays Geologically Complex Production Enhancement Cash Generation Consistent Results Dependable Market Premium Prices Excess Cash Flow Fund Corporate Ventures Nearly $8 Billion Lease Level Income Over Last 5 Yrs
2008 Analyst Review Jon Jeppesen Senior Vice President Gulf Coast Region The following discussions contain certain forward looking statements as defined by the Private Securities Litigation Reform Act of 1995 including, without limitation, estimates, expectations, plans and goals regarding Apache s production, reserves, financings, acquisitions, exploration and exploitation prospects, energy prices, operating costs, and results of operations. Such forward looking statements involve estimates, assumptions and uncertainties. No assurance can be given that Apache s expectations or goals will be realized, and actual results may differ materially from those expressed in the forward looking statements. For reconciliations of non GAAP financial measures, see our web site www.apachecorp.com.