2015 Anadarko Investor Conference Call Appendix

Transcription

1 INVESTOR RELATIONS John Colglazier Senior Vice President 832/ Robin Fielder Director 832/ Jeremy Smith Director 832/ Anadarko Investor Conference Call Appendix March 3, 2015

2 U.S. Onshore: $8+ Billion Capital Savings Since 2009 Enhancing Drilling Performance Optimizing Completion Performance ~$3.8 Billion Captured Drilling Savings ~$4.5 Billion Captured Completion Savings $300 $5 $1,000 $5 $4 $4 $3 $3 $/Foot $150 $2 Billions $/Foot $500 $2 Billions $1 $1 $ $0 $ $0 $/Drilled Foot Cumulative Savings $/Completed Foot Cumulative Savings 2

3 U.S. Onshore: Reducing Unit Costs & Increasing Liquids Mix $4 50% $3.67 $3.48 $3.57 LOE/BOE $3 $3.06 $3.01 $ % 30% Liquids Composition $ LOE/BOE Liquids Composition 20% 3

4 Wattenberg: Continued Optimization Expands Resources Optimizing Results Through Efficiencies 40+% Improvement in Drilling Cycle Time Maximizing Recovery Through Spacing Drill Wells per Section Days 20 Spud to Rig-Release Cycle Time ,000 13,000 12,000 11,000 Avg. MD (Feet) SCIENCE INCREASES CONFIDENCE ,000 BBOE E Midpoint Expanding Net Resources Expanded Well Opportunity Well Downspacing Performance Upside E Cumulative Oil (MBO) Enhanced Type-Well Performance Days On Line Structure Target Zone Lateral Length Well Spacing Completion Design Production Management 4

5 East Texas/North Louisiana: Efficiency Gains Drive Returns ~1 MMBOE EUR per Well 30+% Liquids Composition ~$7 Million Current Well Costs Upshur Marion Bossier E. TEXAS/N. LOUISIANA Gross Acres: ~300,000 Net Acres: ~210,000 Completed Lateral Length ($/Foot) Access to Premium Markets MBOE/d 2,000 1, Enhancing Margins and Recoveries Cost/Foot Average EUR Predictable Sales Volumes E 1, $800 $600 $400 $200 $0 MMBOE Millions Operated BTAX ROR Gregg Henderson 50% 40% 30% 20% 10% Rusk Harrison Carthage TEXAS SEC LOUISIANA Robust Returns Caddo De Soto Elm Grove Primary Targets: Red River Haynesville Cotton Valley 0% $2 $3 $4 Realized Gas Prices ($/Mcf) TEXAS APC Acreage 2015 Planned Activity Operate ~3 Rigs Drill 30+ Wells LA Volumes Net Capital Based on NYMEX strip oil prices as of 2/24/2015 5

6 Eaglebine: Short-Cycle Oil Opportunity 1,000+ Identified Drilling Locations ~300,000 BOE EUR per Well 90+% Oil Composition Core HBP Acreage Position Robertson EAGLEBINE Gross Acres: ~150,000 Net Acres: ~92,000 $442 Million Carry for 34% Interest Milam Existing Midstream Infrastructure TEXAS Increased Well Performance Brazos APC Acreage Wells in Progress Producing Wells 700 JV AMI 30-Day IP (BOPD) 350 Burleson Lee 2015 Planned Activity Operate ~1 Rig Drill ~20 Wells 0 1Q14 2Q14 3Q14 Most Recent Wells 5 Miles 6

7 Marcellus: Massive Resource Option Value 2015 Minimal Drilling Activity Ramp Activity with Improved Differentials ~4,500 Identified Drilling Locations at Higher Natural Gas Prices Core HBP Acreage Position NEW YORK PENNSYLVANIA Non-Operated Potter Tioga Bradford Sullivan Anadarko Operated Lycoming Clinton Centre MARCELLUS Gross Acres: ~654,000 Net Acres: ~254,000 PENNSYLVANIA APC Acreage 20 Miles Net Sales Volumes Marcellus Returns % MMcf/d BTAX ROR 50% E 0% $2 $3 $4 Realized Natural Gas Price ($/Mcf) 7

8 Greater Natural Buttes: Predictable Delivery Scalable Development Infrastructure in Place Focus on Margins and Efficiencies Low Cost Operation $3.36/BOE Uintah County GREATER NATURAL BUTTES Net Acres: ~196,000 Large Remaining Inventory UTAH UTAH Identified Drill Sites at Various Gas Prices Locations 10,000 5, Miles APC Acreage MBOE/d $3 $4 $5 $5+ Note: Identified drilling locations with a positive NPV-10 at various NYMEX gas prices and constant service costs. Assumed 10% capital reduction. Sales Volumes $600 $300 Millions Days Drilling Cycle-Time Improvement $1.3 $1.1 $0.9 Millions 2015 Planned Activity Operate ~1 Rig Drill ~60 Wells E $ E $0.7 Volumes Net Capital Drilling Cycle Time Drilling Cost Per Well 8

9 Minerals-Interest Ownership: Accelerating Value Anadarko s Land Grant Position WYOMING Silo Field WYOMING COLORADO LARAMIE COUNTY, WY 200,000 Net Acres ~8 Million Acres Concentrated Minerals-Interest Ownership APC Acreage Drilled Wells Moxa Monell Wamsutter Hereford Field Soda Ash Coal Laramie County Multi-Zone Oil Opportunity 1,000+ BOE/d 24-Hour IP Rates Minerals-Interest Uplift Advantage UTAH Wattenberg COLORADO Laramie County Economics Enhanced by Minerals-Interest Ownership BTAX NPV-10 (Millions) $1.9 $1.1 APC Mineral Ownership Advantage 2014 Minerals-Interest Royalty Revenues ~$675 Million Oil & Gas ~$100 Million Coal, Soda Ash & Other 40 Miles APC Land Grant Producing Fields Hard Rock Minerals $0.8 Based on NYMEX strip prices as of 2/24/2015 9

10 Midstream: Integrated with Upstream Activity Enables Asset Operational Control Ensures Timely Well Connections Improves Price Realizations GNB (MMcf/d) Year 2014 Processing Capacity 970 Wattenberg (MMcf/d) Year E Processing Capacity 875 1,175 Midstream Asset-Level EBITDA* & Throughput Volumes Chipeta Lancaster Wattenberg Platte Valley MAPL / Seminole Front Range OPPL White Cliffs Conway, KS NGL HUB Cushing, OK WTI HUB Processing Plant Market Center Oil Equity Pipeline NGL Equity Pipeline NGL Pipeline $1,200 9,000 Delaware Basin (MMcf/d) Texas Express Millions $800 $400 6,000 3,000 MMcf/d Year E Processing Capacity Ramsey Bones Mi Vida ETC Mt. Belvieu, TX NGL HUB Large-Scale Operations ~19,000 Miles Pipeline ~6 Bcf/d Throughput $ E EBITDA Throughput 0 Eagleford (MMcf/d) Year 2014 Processing Capacity 200 Brasada Enterprise 3+ Bcf/d Processing Capacity *Includes WES EBITDA Note: See appendix slides for non-gaap financial measures 10

11 Caesar/Tonga & K2: High-Value GOM Assets Caesar/Tonga MMBOE Gross Resources Leveraged Infrastructure: $1 Billion Capital Avoided First Oil Achieved in Planned Development Wells K2 Low-Risk, High-Margin, Oil Opportunities Leverage Existing Infrastructure Riser Gas Lift Project Approved 2 Planned Development Wells GULF OF MEXICO Gross Acres: ~2.3 Million Caesar/Tonga K2 Constitution 100% WI Tahiti 640 K2 Unit 41.8% WI Warrior 55% WI APC WI Block Successful Well Planned Drilling Oil Field Prospect Salt Subsea Tieback Caesar/Tonga 33.75% WI Ticonderoga 50% WI GREEN CANYON GREEN CANYON 608 Marco Polo 100% WI 11

12 Upgraded Deepwater Rig Fleet Enhances Efficiency Increased Capability Reduces Days on Location 2.5 Million Pound Hook Loads 2 BOP Stacks with Dual Activity Capability Rig Fleet Ensco 8500 Ocean BlackHornet Ensco 8506 Belford Dolphin Noble Bob Douglas* Rowan Resolute* Bolette Dolphin* Ocean BlackHawk* Ocean BlackHornet* Noble Bob Douglas Note: Excludes Spot Market Rigs * Rigs with 2 BOP stacks and 2.5 million pound hook loads 12

13 Shenandoah: Advancing Giant Discovery Toward Development Significant Value Creation Excellent Transmissibility High Permeability Thick and Continuous Reservoirs Low Fluid Viscosity Shenandoah-4 Shenandoah 30% WI Shenandoah-2 A 51 Shenandoah GULF OF MEXICO Gross Acres: ~2.3 Million 2015 Appraisal Well Up-Dip and Northwest of Shenandoah-2 YUCATAN-1 YUCATAN-2 SHEN-3 SHEN-2 SHEN-4 SHEN-1 Yucatan 25% WI A WALKER RIDGE APC WI Block APC Discovery Successful Well Planned Drilling Oil Field Salt A A Salt Lower Miocene Oligocene Upper Wilcox Lower Wilcox Shenandoah-3 Confirmed Depositional Model Lateral Sand Continuity and Quality Down-Dip Thickening Found ~50% More Net Sand Projected Oil-Water Contacts Cretaceous 13

14 Yeti: Drilling Under Way Miocene Subsalt 3-Way Trap Prolific Petroleum System High-Quality Reservoirs GREEN CANYON Bigfoot ~300 MMBOE GULF OF MEXICO Gross Acres: ~2.3 Million ~26,000 Feet TVD WALKER RIDGE A A YETI BIGFOOT A A Yeti 37.5% WI 117 APC WI Block Oil Field Salt Plio-Pleistocene Prospect Salt Industry Discovery Upper Miocene LM4 MM4 MM9 MM7 Miocene Cascade ~300 MMBOE Wilcox Mesozoic 14

15 Opal: New Play Concept Miocene Unconfined Fan System Large Upside Potential ~15,000 Feet TVD A Opal 50% WI 855 DESOTO CANYON GULF OF MEXICO Gross Acres: ~2.3 Million A Miocene Reservoir APC WI Block Planned Drilling Prospect Shale-Filled Channel A OPAL-1 A Migration Pathway Cretaceous Jurassic Jurassic Salt Source Rocks Basement 15

16 Thorvald: Opportunity in Proven Area Subsalt 3-Way Trap Prolific Miocene Sand Fairway ~30,500 Feet TVD A Tubular Bells ~150 MMBOE Kodiak ~60 MMBOE GULF OF MEXICO Gross Acres: ~2.3 Million A THORVALD-1 KODIAK POSEIDON TUBULAR BELLS Plio-Pleistocene Top Miocene UM1 MM9 A Kaikias ~75 MMBOE A MISSISSIPPI CANYON 814 Thorvald 50% WI APC WI Block Planned Drilling Oil Field Prospect Salt Industry Discovery Salt Pay Interval MM7 Gunflint ~60 MMBOE Miocene Sand-Rich Interval Oligocene Source Interval Mesozoic 16

17 Ivorian Basin: Advancing Paon Commerciality Planned Paon Appraisal Well and DST Evaluating Development Options Potential for Fast-Track Development CÔTE D IVOIRE Gross Acres: ~1.3 Million Maturing CI-528/529 Prospects Exploration Well Planned Paon-5A Paon-1X CI % WI CÔTE D IVOIRE AFRICA Paon-3AR Paon-4A Commercializing Paon Established Oil-Water Contact Verified Lateral Sand Continuity Reduced Uncertainty DST and Offset Monitoring Commercial Negotiations Transition to Development Paon 2A CI % WI CI % WI 10 miles 16 km APC WI Block APC Discovery Successful Well Planned Drilling Oil Field Prospects/Leads 17

18 Colombia: Drilling Under Way in Frontier Basin Premier Acreage Position Geologic Setting Similar to Mozambique Oil Potential GRAND COL AREA 100% WI COLOMBIA Gross Acres: ~16 Million 2015 Drilling Program Kronos: Large 3-Way Calasu: Multi-Target 4-Way Maturing Follow-On Prospects Large Resource Potential Grand Col Area Planned 3D Seismic Acquisition A Calasu A COLOMBIA SOUTH AMERICA APC WI Block Planned Drilling Prospects/Leads Seismic GRAND FUERTE AREA 50% WI B CALASU KRONOS A A B B Kronos B 50 miles 80 km Reservoir 18

19 Kenya: Applying Learnings to New Activity High-Quality Reservoir Sand Development Established Working Petroleum System KENYA Gross Acres: ~5.6 Million Multiple Large Traps Remain Untested KENYA L-05 45% WI AFRICA Drill Mlima: ~30,000-Acre 4-Way Kubwa L-07 45% WI MPAKA MLIMA-1 KIBOKO-1 A A Mbawa Discovery L-12 45% WI APC WI Block Planned Drilling Gas Field Prospects/Leads Industry Discovery Mpaka L-11A 45% WI Possible Source Rock Basement Possible Source Rock A 30 miles 48 km Mlima Kiboko L-11B 45% WI A 19

20 New Zealand Canterbury Basin: ~4 Million Acres Incorporating Drilling Results 3D Seismic Under Way Pegasus Basin: ~2 Million Acres NEW CALEDONIA BASIN 25% WI NEW ZEALAND NEW ZEALAND Gross Acres: ~42 Million AUSTRALIA New Caledonia Basin: ~36 Million Acres Petroleum Prospecting Permit Planned 2D and Multi-Beam Bathymetry PEGASUS BASIN 100% WI NEW ZEALAND APC WI Block Prospect/Leads Seismic Caravel 25 miles 40 km CANTERBURY BASIN 45% WI 20

21 Glossary of Terms AMI: Area of Mutual Interest Avg.: Average AXPC: American Exploration and Production Council B: Billion Bbl: Barrel BBl/d: Barrels of Liquid per Day BO: Barrel of Oil BOE: Barrel of Oil Equivalent BOE/d: Barrel of Oil Equivalent per Day BOPD: Barrels of Oil per Day BTAX: Before Tax cf: Cubic Feet of Natural Gas cf/d: Cubic Feet per Day CI: Côte d'ivoire CPF: Central Processing Facility DST: Drill Stem Test E&P: Exploration and Production EBITDA: Earnings Before Interest, Tax, Depreciation and Amortization EBITDAX: Earnings Before Interest, Tax, Depreciation, Amortization and Exploration Expense EUR: Estimated Ultimate Recovery EV: Enterprise Value F&D: Finding and Development Cost FCF: Free Cash Flow FEED: Front-End Engineering Design FID: Final Investment Decision FPSO: Floating Production Storage and Offloading Unit Ft: Feet G&G: Geology and Geophysics GAAP: Generally Accepted Accounting Principles GNB: Greater Natural Buttes GOM: Gulf of Mexico GP: General Partner HBNS: Hassi Berkine Sud (South) HBP: Held by Production HOA: Heads of Agreement HP: Horsepower HSE: Health, Safety and Environment HZ: Horizontal IP: Initial Production Rate IPA: Independent Producers of America JV: Joint Venture Km: Kilometers LNG: Liquefied Natural Gas LOE: Lease Operating Expense LP: Limited Partnership M: Thousands MD: Measured Depth MM: Equalized Millions Product Mix or Increase in Liquids? MTA: Mahogany, Teak, Akasa NGL: Natural Gas Liquids NPV: Net Present Value NYMEX: New York Mercantile Exchange PHA: Production-Handling Agreement PK0: Point Kilometrique 0 PSI: Pounds per Square Inch ROR: Rate of Return RR: Rig Release S&P: Standard & Poor s T: Trillion TEN: Tweneboa, Enyenra, Ntomme TPA: Tonnes per Annum TRIR: Total Recordable Incident Rate TVD: True Vertical Depth YE: Year End YOY: Year over Year WES: Western Gas Partners, LP WGP: Western Gas Equity Partners, LP WI: Working Interest WTI: West Texas Intermediate 21

22 Non-GAAP Financial Measure Definitions & Reconciliations This list of non-gaap financial measure definitions and related reconciliations is intended to satisfy the requirements of Regulation G of the Securities Exchange Act of 1934, as amended. This information is historical in nature. Anadarko Petroleum Corporation (the Company ) undertakes no obligation to publicly update or revise any non-gaap financial measure definitions and related reconciliations. 22

23 Non-GAAP Reconciliation Adjusted EBITDAX (EBITDAX) The Company defines Adjusted EBITDAX as income (loss) before income taxes; exploration expense; depreciation, depletion, and amortization; impairments; interest expense; total (gains) losses on derivatives, net, less net cash from settlement of commodity derivatives; and certain items not related to the Company s normal operations, less net income attributable to noncontrolling interests. During the periods presented, items not related to the Company s normal operations included Deepwater Horizon settlement and related costs, Algeria exceptional profits tax settlement, Tronox-related contingent loss, and certain other nonoperating items included in other (income) expenses, net. Management believes that the presentation of Adjusted EBITDAX provides information useful in assessing the Company s financial condition and results of operations and that Adjusted EBITDAX is a widely accepted financial indicator of a company s ability to incur and service debt, fund capital expenditures, and make distributions to stockholders. Adjusted EBITDAX as defined by Anadarko may not be comparable to similarly titled measures used by other companies and should be considered in conjunction with net income (loss) attributable to common stockholders and other performance measures prepared in accordance with GAAP, such as operating income or cash flows from operating activities. Adjusted EBITDAX has important limitations as an analytical tool because it excludes certain items that affect net income (loss) attributable to common stockholders and net cash provided by operating activities. Adjusted EBITDAX should not be considered in isolation or as a substitute for an analysis of Anadarko s results as reported under GAAP. Year Ended Millions December 31, 2014 Income (loss) before income taxes (GAAP) 54 Exploration expense 1,639 DD&A 4,550 Impairments 836 Interest Expense 772 Total (gains) losses on derivatives, net, less net cash received in settlement of commodity derivatives 578 Deepwater Horizon settlement and related costs 97 Algeria exceptional profits tax settlement -- Tronox-related contingent loss 4,360 Certain other nonoperating items 22 Less net income attributable to noncontrolling interests 187 Consolidated adjusted EBITDAX (Non-GAAP) 12,721 23

24 Non-GAAP Reconciliation Net Debt to Adjusted Capitalization The Company defines net debt as total debt less cash and cash equivalents. Net debt for Anadarko excluding Western Gas Equity Partners, LP (WGP) is Anadarko s Consolidated net debt, less WGP s net debt. The Company defines net debt to adjusted capitalization ratio as net debt / (net debt + total equity). Net debt to adjusted capitalization ratio for Anadarko excluding WGP excludes WGP s net debt and noncontrolling interest attributable to WGP. Management uses net debt as a measure of the Company s outstanding debt obligations that would not be readily satisfied by cash and cash equivalents on hand. Net Debt to Adjusted Capitalization Ratio December 31, 2014 Millions Anadarko Consolidated WGP* Consolidated Anadarko excluding WGP Total debt (GAAP) $ 15,092 $ 2,423 $ 12,669 Less cash and cash equivalents 7, ,302 Net debt (Non-GAAP) $ 7,723 $ 2,356 $ 5,367 Millions Anadarko Consolidated Anadarko excluding WGP Net debt $ 7,723 $ 5,367 Total Equity 22,318 19,725 Adjusted Capitalization (Non-GAAP) $ 30,041 $ 25,092 Net debt to adjusted capitalization ratio 26% 21% *Western Gas Equity Partners, LP (WGP) is a publicly traded consolidated subsidiary of Anadarko and WES is a consolidated subsidiary of WGP 24

25 Non-GAAP Reconciliation Discretionary Cash Flow from Operations, Free Cash Flow and Adjusted Free Cash Flow The Company defines discretionary cash flow from operations as net cash provided by operating activities before collections associated with the Algeria exceptional profits tax settlement, changes in accounts receivable, changes in accounts payable and accrued expenses, other items-net, certain nonoperating and other excluded items, and current taxes related to asset monetizations. The Company defines free cash flow as discretionary cash flow from operations less capital expenditures and the company defines adjusted free cash flow as defined above adjusted for the cash received from the Algeria Exceptional Profits Tax settlement. Also, the company defines Anadarko free cash flow as adjusted free cash flow excluding WES capital investments. Management uses discretionary cash flow from operations because it is useful in comparisons of oil and gas exploration and production companies as it excludes certain fluctuations in assets and liabilities and current taxes related to certain items affecting comparability. Management uses free cash flow to demonstrate the Company's ability to internally fund capital expenditures and to service or incur additional debt. Year Ended $ Millions December 31, 2014 Net cash provided by operating activities (GAAP) 8,466 Add back: Algeria exceptional profits tax settlement -- Increase (decrease) in accounts receivable (103) Increase (decrease) in accounts payable and accrued expenses (7) Other items net 81 Certain nonoperating and other excluded items 29 Current taxes related to asset monetizations 938 Discretionary cash flow from operations (Non-GAAP) 9,404 Less: Anadarko capital expenditures 8,560 Anadarko adjusted free cash flow (Non-GAAP)

26 Non-GAAP Reconciliation Finding and Development Costs The Company defines finding and development (F&D) costs as total costs incurred divided by reserve additions. In addition, the Company will use several variations of this calculation, including isolating development costs and incorporating price-related and non-price-related reserve additions. Management believes that the presentation of F&D costs provides useful information in assessing the Company s ability to efficiently manage its capital programs. Total Costs Incurred for the Year Ended December 31, 2014 ($ MM) 8,712 Asset Retirement Obligation Liabilities Incurred ($ MM) (347) Cash Expenditures for Asset Retirement Obligations ($ MM) 443 Oil and Natural Gas Exploration and Development Costs ($ MM) 8,808 Non-Price-Related Additions before Divestitures (MMBOE) 503 Finding & Development Costs ($/BOE) Additions Including Price-Related Revisions (MMBOE) 502 Finding & Development Costs Including Price-Related Revisions ($/BOE) *Includes Western Gas Partners, LP (WES) capital expenditures of $696 million for the year ended December 31,