Building for the Future NOVEMBER MARKETING

Transcription

1 Building for the Future NOVEMBER MARKETING 1

2 FORWARD-LOOKING STATEMENTS Certain statements in this presentation contain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 including, without limitation, expectations, beliefs, plans and objectives regarding anticipated financial and operating results, asset divestitures, estimated reserves, drilling locations, capital expenditures, price estimates, typical well results and well profiles, type curve, and production and operating expense guidance included in this presentation. Any matters that are not historical facts are forward looking and, accordingly, involve estimates, assumptions, risks and uncertainties, including, without limitation, risks, uncertainties and other factors discussed in our most recently filed Annual Report on Form 10-K, recently filed Quarterly Reports on Form 10-Q, recently filed Current Reports on Form 8-K available on our website, and in our other public filings and press releases. These forward-looking statements are based on Apache Corporation s (Apache) current expectations, estimates and projections about the company, its industry, its management s beliefs, and certain assumptions made by management. No assurance can be given that such expectations, estimates, or projections will prove to have been correct. A number of factors could cause actual results to differ materially from the projections, anticipated results, or other expectations expressed in this presentation, including, Apache s ability to meet its production targets, successfully manage its capital expenditures and to complete, test, and produce the wells and prospects identified in this presentation, to successfully plan, secure necessary government approvals, finance, build, and operate the necessary infrastructure, and to achieve its production and budget expectations on its projects. Whenever possible, these forward-looking statements are identified by words such as expects, believes, anticipates, projects, guidance, outlook, will, and similar phrases. Because such statements involve risks and uncertainties, Apache s actual results and performance may differ materially from the results expressed or implied by such forward-looking statements. Given these risks and uncertainties, you are cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date hereof. Unless legally required, we assume no duty to update these statements as of any future date. However, you should review carefully reports and documents that Apache files periodically with the Securities and Exchange Commission. Cautionary Note to Investors: The United States Securities and Exchange Commission (SEC) permits oil and gas companies, in their filings with the SEC, to disclose only proved, probable, and possible reserves that meet the SEC's definitions for such terms. Apache may use certain terms in this presentation, such as resource, resource potential, net resource potential, potential resource, resource base, identified resources, potential net recoverable, potential reserves, unbooked resources, economic resources, net resources, undeveloped resource, net risked resources, inventory, upside, and other similar terms that the SEC guidelines strictly prohibit Apache from including in filings with the SEC. Such terms do not take into account the certainty of resource recovery, which is contingent on exploration success, technical improvements in drilling access, commerciality, and other factors, and are therefore not indicative of expected future resource recovery and should not be relied upon. Investors are urged to consider carefully the disclosure in Apache s Annual Report on Form 10-K for the fiscal year ended December 31, 2017 available from Apache at or by writing Apache at: 2000 Post Oak Blvd., Suite 100, Houston, Texas (Attn: Corporate Secretary). You can also obtain this report from the SEC by calling SEC-0330 or from the SEC's website at Certain information may be provided in this presentation that includes financial measurements that are not required by, or presented in accordance with, generally accepted accounting principles (GAAP). These non- GAAP measures should not be considered as alternatives to GAAP measures, such as net income or net cash provided by operating activities, and may be calculated differently from, and therefore may not be comparable to, similarly titled measures used at other companies. For a reconciliation to the most directly comparable GAAP financial measures, please refer to Apache s third quarter 2018 earnings release and third quarter 2018 Financial & Operational Supplement at None of the information contained in this document has been audited by any independent auditor. This presentation is prepared as a convenience for securities analysts and investors and may be useful as a reference tool. Apache may elect to modify the format or discontinue publication at any time, without notice to securities analysts or investors. 2

3 TABLE OF CONTENTS Apache Overview Portfolio Review Permian Basin Alpine High / Altus Midstream International 3Q 18 Highlights & 2019 Preview Guidance Appendix 3

4 APACHE TRANSFORMATION Focusing the Portfolio, Growing the Permian, Improving Returns Current Portfolio Q 2018 Total Production (Reported) (1) 647 Mboe/d 476 Mboe/d Permian Production 159 Mboe/d 222 Mboe/d US / Int l Production Mix (Reported) (1) 45% / 55% 57% / 43% Oil Production Mix (Reported) (1) 50% 51% Capital Investment (FY) $10.7 billion $3.45 billion Rig Count 119 rigs 33 rigs Net Debt (Period End) $10.5 billion $7.6 billion Shares Outstanding MM MM Annualized Dividend (Period End) $1.00/Shr $1.00/Shr (1) 2014 production includes Australia production 1Q 2015 April 2015 June 2015 September 2016 June 2017 November 2018 CEO / CFO Announcement Canada & Australia LNG Exit Australia Exit Announced Alpine High Discovery Canada Exit Closed Altus Midstream Transaction 4

5 APACHE TODAY DISCIPLINED FINANCIAL APPROACH BALANCED, RETURNS-FOCUSED PORTFOLIO Strong balance sheet, steady dividend, no shareholder dilution Free cash flow visibility / returning capital to shareholders Formation of Altus Midstream to fund Alpine High buildout On Track to Achieve Long-Term, Sustainable Double-Digit ROCE Top-tier Permian Basin position delivering strong growth and returns Robust free-cash-flow generating assets in Egypt & North Sea Differential Exploration Opportunities (Lower 48 & Suriname) CASH FLOW GROWTH DRIVERS Double-Digit U.S. Production Growth Material exposure to Brent crude oil pricing Strong momentum in North Sea beginning in 4Q 2018 Alpine High cryo installation to drive liquids and margin uplift in

6 A LEADER IN ESG ENGAGEMENT AND SUSTAINABILITY REPORTING DISCLOSING THE FACTS 1 tco2e/mboe = metric tons of carbon dioxide equivalent per thousands of barrels of oil equivalent 2 The 2016 value was revised based on updated data 3 Bbls/Boe = barrels of water withdrawn per barrel of oil equivalent produced 4 Workforce TRIR (Total Recordable Incident Rate) includes Apache employees at all levels and contractors 5 Total Recordable Incident Rate is calculated by multiplying total number of recordable injuries by 200,000 hours and then dividing by total person-hours worked The 2017 Disclosing the Facts questionnaire focused on the issue of methane emissions while previous questionnaires covered the following topics: toxic chemicals, water and waste management, air emissions, community impacts, and management and accountability. 6

7 PORTFOLIO REVIEW 7

8 PERMIAN BASIN Returns-Focused Growth Strong production growth with flat rig count Efficiencies driving shorter cycle times and lower costs Expanding inventory with strategic testing Upward bias to 2019 guidance Production & Rig Count Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q MM Net Acres in the Permian Basin Avg. Production (Mboe/d) Avg. Rigs 8

9 MIDLAND AND DELAWARE BASIN OIL PRODUCTION Growth to Continue into 2019 Strong well performance Increasing efficiencies, multi-well pads / longer laterals Key Focus Areas Midland & Delaware Basin Oil Production (Mbo/d) Pecos Bend Dixieland Alpine High Wildfire Powell Azalea 2Q17A 3Q17A 4Q17A 1Q18A 2Q18A 3Q18A 9

10 ALPINE HIGH Developing a World-Class Rich Gas Play Unprecedented hydrocarbon column > 5,000 ft. Alpine High Acreage Map Vertically stacked oil, rich gas and dry gas fairways Scale 5,000+ locations identified 3 billion bbls / 75 Tcf of resource in place (Woodford & Barnett) Large operated position / economies of scale Execution Strategically positioned to deliver NGLs and gas in scale to the Gulf Coast Nearly tripling the number of producing wells from YE 2017 to YE 2018 Guided 2019 Alpine High volumes to upper end of Mboe/d range Economics Highly economic rich gas play; proven oil upside Liquids uplift combined with low F&D and operating costs strong recycle ratios ~340,000 Net Acres (1) (1) Acreage as of July 1,

11 SIGNIFICANT INDUSTRY ACTIVITY INCREASE FOLLOWING ALPINE HIGH ANNOUNCEMENT PETRA 8/28/2018 4:23:00 PM September 2016 August 2018 WARD CULBERSON REEVES PECOS 20 Miles JEFF DAVIS Drilled/ Drilling Count: 203 Current Permit Count: 85 Total well count: Miles Miles BREWSTER APA Operated Rig PRESIDIO Competitor Permit Wells Competitor Wells Drilled/Drilling Apache Acreage Outline Source: Drilling Info. 11

12 ALPINE HIGH: TRANSITIONING TO FULL-FIELD DEVELOPMENT Apache s long-term methodical approach to developing Alpine High and Beyond Formulation of concept, concept testing and confirmation + Areal and vertical delineation = Transition to full field development Optimized Spacing, Patterns & Completions Drilling Efficiencies Lifting Cost Efficiencies Focus on reducing costs, increasing efficiency and maximizing recovery 12

13 ALPINE HIGH PLAY EVOLUTION September 2016 November (Est.) Rig Count Cum. Wells Drilled at year-end Cum. Wells on Production Net Production (Mboe/d) at year-end Nm ~ Location Count 2,000 3,000+ 5,000+ Ongoing Testing Confirmed Landing Zones Altus Midstream 2 13 Ongoing Testing Rich gas processing capacity: 380 MMcf/d Rich gas processing capacity: ~1,380 MMcf/d Nm Lean treating & compression: 400 MMcf/d Lean treating & compression: 480 MMcf/d Initial cryo under construction Five cryo plants at year end 13

14 ALTUS MIDSTREAM: TRANSACTION OVERVIEW Newly Formed Pure Play Permian Basin Midstream Company Transaction closed November 9, 2018 (Ticker Symbol: ALTM) Publicly traded C-Corp with 325MM shares outstanding (79% owned by Apache) ~$625MM in cash and zero debt, as of October 1 effective date Future EBITDA ~ 50% Gathering & Processing and 50% pipeline ownership 14

15 ALTUS MIDSTREAM: GATHERING & PROCESSING OVERVIEW Pipeline Map Rich Gas Processing: 380 MMcf/d of capacity in service Lean Gas Treating / Compression: 400 MMcf/d of capacity in service Gathering Pipelines: ~125 miles in service Current Asset Highlights Primarily inch pipe Residue Pipelines / Market Connections: ~55 miles in service with 3 market connections (Comanche Trail, El Paso Line 1600 and Trans- Pecos Pipeline) Key Additions by YE Bcf/d of cryo processing capacity 80 MMcf/d of lean gas treating and compression capacity > 80 miles of gathering pipeline 1 additional market connection expected to be in service (Roadrunner) (1) Acreage footprint depicted on map is as of July 1,

16 Crude NGLs Nat Gas ALTUS MIDSTREAM: JOINT VENTURE PIPELINES OVERVIEW Pipeline Map Altus will own options to participate in five joint venture pipelines Commentary 15% (1) of KMI s Gulf Coast Express 33% (2) of KMI s Permian Highway 33% of EPD s Shin Oak 50% of Salt Creek NGL Pipelines in service by YE % of EPIC Crude Altus to invest ~$1.5 - $1.8 billion of capital in JV pipeline projects No promote paid above construction cost for any JV pipeline project Very attractive projects for Altus (~7x build multiple of EBITDA, on average) (1) Altus may have the option to acquire an additional 1% interest in GCX subject to certain conditions precedent, including having less than 30% equity in PHP following the exercise of the PHP option. (2) Subject to reduction in the event that other options to acquire equity in Permian Highway held by third parties are exercised. Altus ownership expected to be no less than ~27%. 16

17 ALTUS MIDSTREAM: CONSERVATIVE FINANCIAL PLAN Through the end of 2020, Altus Midstream capital investment estimated at $2.5 billion. Funding sources include: Approximately $625 MM cash at effective date, October 1 Estimated operating cash flow of $390 MM through 2020 $800MM 5-year credit facility, with initial availability of $450 MM and eventual ability to upsize to $1.5 billion Access to other credit accretive capital sources: preferred equity, asset level financing and structured equity Altus Midstream leverage ratio forecasted at less than 3x by year-end 2020 Apache will fully consolidate Altus Midstream, but its future debt is planned to remain non-recourse to Apache 17

18 ALTUS MIDSTREAM: BENEFITS OF TRANSACTION TO APACHE Demonstrates Value At $9 - $10/share, APA s 79% ownership valued at ~$2.3 - $2.5 billion Equity position to benefit from long-term Alpine High growth plan Maintain control of future Alpine High midstream buildout Funds Future Midstream Investment Estimated Altus Midstream gathering and processing investment: ~$180 MM in 4Q 2018 / $320 MM in 2019 / $330 MM in 2020 Planned JV pipeline investment of ~$1.5 - $1.8 billion Lower cost of capital Enhances Capital Optionality Incremental investments / share repurchases / debt retirement 18

19 EGYPT Preparing for Future Growth Country s largest oil producer; stable gross production Running 12 rigs High-density 3-D seismic program across 4 basins Apache Egypt Acreage: ~6.2 million acres 2.6 million acres; ~ 38% complete State-of-the-art technology provides improved fault definition and enhanced deep imaging Initiated seismic acquisition in new Northwest Razzak concession Production (Mboe/d) Brent Crude ($/Bbl) Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q New concessions expand acreage position by more than 50% Adjusted Production Gross Production Brent Crude Pricing 19

20 IMPACT OF RISING OIL PRICE ON EGYPT PSC S Cash Flow Increases, Adjusted Production Declines Production (Mboe/d) 400 Stable Gross Production Brent Crude / ($/Bbl) 80 Cash Flow ($/Boe) Brent Up 58% Cash Flow/Boe Up 73% Adj. Production Down 13% - 2Q 17 3Q 17 4Q 17 1Q 18 2Q 18 3Q 18 - Adjusted Production Gross Production Egypt Cash Flow per Boe Brent Pricing (1) Excludes tax barrels and noncontrolling interest 20

21 EGYPT: STATE OF THE ART 3-D Dramatic Improvement in Sub-Surface Imaging 2013 Vintage Seismic 2018 Vintage Seismic 21

22 NORTH SEA High Margins, High Returns, Free Cash Flow Strong leverage to premium Brent crude pricing Apache North Sea Acreage Best-in-class operator 3 rigs operating (2 platform, 1 semi-submersible) Improving base oil production profile at Forties with water flood management programs Beryl production poised to increase Fourth Callater well (CC2) online in 3Q 2018 First Garten well online in 4Q 2018 North Sea Production (Mboe/d) Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 22

23 NORTH SEA: GARTEN Large Commercial Discovery in Beryl Area North Sea Beryl Area Garten discovery well encountered more than 700 of net oil pay in Block 9/18a Area-W Recoverable resource is expected to exceed 10 million barrels of light oil Apache holds a 100% working interest Drilling, completion, and tieback costs are estimated at $80 million Tied back to the Beryl Alpha platform, 6 kilometres north Apache s fourth commercial exploration discovery in the Beryl area in the past three years 23

24 SURINAME: HIGH IMPACT OIL EXPLORATION Massive acreage blocks near proven oil province Block 58 seismic processing complete, identifying and ranking prospects Exploration well to spud on Block 58 by year-end 2019 Block 58 Block MM acres 0.87 MM acres 24

25 3Q HIGHLIGHTS & 2019 PREVIEW 25

26 3Q 2018 KEY METRICS Reported Production 476 Mboe/d Adjusted Production (1) 401 Mboe/d Cost Incurred and GTP Capital Investment $1 Billion Upstream Oil and Gas Capital Investment (2) $844 Million Midstream Oil and Gas Capital Investment (2) $122 Million Net Cash provided by Operating Activities $1 Billion Adjusted EBITDAX (2) $1.4 Billion Earnings Per Share $0.21 Adjusted Earnings Per Share (2)(3) $0.63 (1) Excludes production attributable to Egypt tax barrels and noncontrolling interest. (2) For a reconciliation to the most directly comparable GAAP financial measure please refer to the third quarter 2018 Financial & Operational Supplement. (3) Includes $(0.04) per share of dry hole expense (net of tax). 26

27 3Q 2018 HIGHLIGHTS Net cash from operating activities up 82% year-over-year to $1 billion Strong oil price leverage: 79% of revenue from oil, nearly 70% of oil production received Brent- or Gulf Coast-linked pricing Adjusted production of 401 Mboe/d exceeded guidance by 3 Mboe/d Delivering sustained quarterly production growth Mboe/d 3Q 17 4Q 17 1Q 18 2Q 18 3Q 18 US International Total (1) Excludes production attributable to divested assets and Egypt tax barrels and noncontrolling interest. Cash return on invested capital of 23% on an annualized basis through the first three quarters of 2018 Share buybacks Repurchased 0.9 MM of common stock in September; continued into 4Q 2018 Announcing new share repurchase authorization of an additional 40 MM shares 27

28 UPSTREAM OPERATIONAL HIGHLIGHTS 3Q adjusted total production growth of 13% and Permian oil production growth of 16%, year over year Full-pattern development in the Midland/Delaware basin generating significant cost and productivity improvements Alpine High progress: Drilling, completion and equipment costs per lateral foot down approximately 25% year to date from 2017, in-line with our goal Drilled first multi-well Bone Spring / Wolfcamp oil pad Expanding Egypt inventory: fast-track processing of ongoing seismic shoot is delivering very promising results Accelerating development of the Garten oil discovery in the North Sea into the fourth quarter 28

29 QUARTERLY PRODUCTION GROWTH Delivering Growth on Stabilized Activity Set Adjusted Production (Mboe/d) Permian Oil Production (Mboe/d) Int l U.S Q17 4Q17 1Q18 2Q18 3Q18 4Q18E 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18E Note: Adjusted Production excludes production attributable to divested assets and Egypt tax barrels & noncontrolling interest. 29

30 QUARTERLY OIL & GAS CAPITAL INVESTMENT Operating at a Stable and Efficient Activity Level 1, Quarterly Capital Investment ($MM) Stabilized Rig Count (33 to 36) ) Consistent upstream capital investment level over prior 4 quarters 2) 3Q 18 upstream capital increase reflects: (1) (2) 844 (3) 800 (4) 750 3Q 17 4Q 17 1Q 18 2Q 18 3Q 18 4Q 18E 2019E Qtrly Upstream Capital Midstream Capital Timing of capital activity Incremental lease acquisitions & extensions 3) 4Q 18E upstream capital lower Note: Excludes noncontrolling interest in Egypt; 4Q 2018 and 2019 Alpine High midstream capital expected to be funded by Altus upon closing. Includes ~$65MM of ongoing lease acquisition investments 4) 2019 quarterly upstream capital run rate expected to average $750MM 30

31 WHAT TO EXPECT FROM APACHE IN 2019 Upstream capital investment of ~$3.0 billion Adjusted production at high end of Mboe/d guidance range 15% growth in the U.S. and 10% growth overall Continue to return capital to shareholders Flex activity levels with commodity price, overarching goal to achieve positive free cash flow (inclusive of dividend) 31

32 CURRENT GUIDANCE 32

33 ADJUSTED PRODUCTION OUTLOOK 2018 Production Guidance Update (Mboe/d) Annual Quarterly FY 2018 guidance increased to 395 Mboe/d representing 13% growth from FY 2017, including 27% growth in the US 4Q 18 guidance established at 421 Mboe/d representing 5% growth from 3Q 18 FY18E 1Q18A 2Q18A 3Q18A 4Q18E Note: Excludes production attributable to Egypt tax barrels and noncontrolling interest. 33

34 ADJUSTED PRODUCTION OUTLOOK 2018 FY & Quarterly Production Guidance Update (Mboe/d) TOTAL COMPANY Establishing 4Q 18 guidance of 421 Mboe/d Increasing 2018 guidance by 1 Mboe/d to 395 Mboe/d FY18E 1Q18A 2Q18A 3Q18A 4Q18E 262 U.S Establishing 4Q 18 guidance of 288 Mboe/d Increasing 2018 guidance by 2 Mboe/d to 262 Mboe/d FY18E 1Q18A 2Q18A 3Q18A 4Q18E INTERNATIONAL Establishing 4Q 18 guidance of 133 Mboe/d Decreasing 2018 guidance by 1 Mboe/d to 133 Mboe/d FY18E 1Q18A 2Q18A 3Q18A 4Q18E Note: Total Company and International excludes production attributable to Egypt tax barrels and noncontrolling interest. 34

35 PERMIAN PRODUCTION OUTLOOK 2018 FY & Quarterly Production Guidance Update (Mboe/d) 212 PERMIAN Establishing 4Q 18 guidance of 241 Mboe/d Increasing 2018 guidance by 2 Mboe/d to 212 Mboe/d FY18E 1Q18A 2Q18A 3Q18A 4Q18E PERMIAN OIL Establishing 4Q 18 guidance of 95 Mboe/d 85 Establishing 2018 guidance of 90 Mboe/d FY18E 1Q18A 2Q18A 3Q18A 4Q18E ALPINE HIGH 68 Establishing 4Q 18 guidance of 68 Mboe/d Decreasing 2018 guidance by 1 Mboe/d to 44 Mboe/d 2018 guidance decrease attributable to facilities downtime in early 4Q FY18E 1Q18A 2Q18A 3Q18A 4Q18E 35

36 APA ADJUSTED PRODUCTION AND RETURNS Outlook (Mboe/d) % CROIC 20% CROIC 22% CROIC 2017A 2018E 2019E 2020E See Glossary of Referenced Terms in Appendix for a definition of Cash Return on Capital Invested (CROIC) 36

37 PERMIAN PRODUCTION Outlook (Mboe/d) A 2018E 2019E 2020E 37

38 ALPINE HIGH PRODUCTION Outlook (Mboe/d) A 2018E 2019E 2020E 38

39 INT L ADJUSTED PRODUCTION Outlook (Mboe/d) Shallow Decline A 2018E 2019E 2020E Note: Adjusted production excludes Egypt tax barrels and noncontrolling interest. Comprises North Sea and Egypt production. 39

40 APPENDIX 40

41 ALPINE HIGH: DISTINCT SOURCE ROCK AND PARASEQUENCE INTERVALS Source Rock Parasequences High frequency, rapidly rising and falling sea level environment 3 rd BONE SPRINGS WOLFCAMP UNCONFORMITY PENNSYLVANIAN Tranquil marine environment, gradually rising worldwide sea level conditions BARNETT WOODFORD DEVONIAN ORGANIC SHALE PARASEQUENCE CARBONATE DEBRIS FLOW ORGANIC SHALE Woodford + Barnett + Penn Thick, laterally continuous deposition Oil, wet gas and dry gas windows Minimal in-situ water Indigenous, organic shale 3 rd Bone Springs + Wolfcamp Higher variability with sweet spots Oil and wet gas windows Water wet rock Indigenous shale and migrated hydrocarbons 41

42 ALPINE HIGH: STRUCTURAL CROSS SECTION NORTHERN FLANK CREST SOUTHERN FLANK Evaporites 7,500 Transgressive Parasequences 8,500 OIL 9,500 10,500??? Transgressive Source Interval 11,500 WET GAS ,500 Devonian High Stand 13, DRY GAS ~60 miles Note Vertical and horizontal scales are not equivalent. 42

43 ALPINE HIGH: GEOLOGY OF THE SOUTHERN DELAWARE BASIN IMMATURE South West Alpine High North East 5,000 Evaporites 10,000 OIL Bone Springs / Wolfcamp Penn / Barnett / Woodford Bone Springs / Wolfcamp WET GAS 15,000 20,000 25,000 DRY GAS Alpine High: Stable shelf (Paleo high) Prospective section in the wet gas and oil window Thermal maturation controlled by depth of burial Low clay content and low ductility 30,000 15% CLAY CONTENT 40% 43

44 ALPINE HIGH: ATTRACTIVE RICH GAS ECONOMICS Representative fully burdened economics for rich gas wells in a development scenario (4,400 lateral) Typical Well EUR (Bcfe) 9-15 Well Cost ($MM) $4 - $6 Product Mix % Oil 3% - 15% % NGL 51% - 56% Fully Burdened $65 WTI / $3.00 HH BTAX NPV-10 ($MM) $7 - $9 BTAX IRR % 50% - 100% Fully Burdened $50 WTI / $2.50 HH BTAX NPV-10 ($MM) $4 - $6 BTAX IRR % 29% - 66% Single Well Economic Assumptions: Prices: $65 WTI / $3.00 Henry Hub / NGL($/GAL) C2: $0.28, C3: $0.83, C4: $0.94, C5: $1.42 $50 WTI / $2.50 Henry Hub / NGL($/GAL) C2: $0.28, C3: $0.75, C4: $0.90, C5: $1.22 Waha basis / Transport to US Gulf Coast markets = $0.50/MMbtu; midstream fee = $0.87/Mcf Upper Range Well EUR (Bcfe) Well Cost ($MM) $4 - $6 Product Mix % Oil 0% - 8% % NGL 41% - 54% Fully Burdened $65 WTI / $3.00 HH BTAX NPV-10 ($MM) $6 - $13 BTAX IRR % 78% - 300% Fully Burdened $50 WTI / $2.50 HH BTAX NPV-10 ($MM) $3 - $9 BTAX IRR % 38% - 158% Crude basis: $2.25 NGL yields and midstream fees assume cryogenic processing Economics include overhead, workover, abandonment and E&P facility burdens 44

45 ALPINE HIGH: PREMIUM CAPITAL EFFICIENCY Top-tier recycle ratios highlight ability to generate cash and re-invest Typical Well Upper Range Well $/BOE $62.75 OIL % recycle ratio $ % recycle ratio 15 $24.33 NGL $ $2.84 GAS $ Revenue Opex Cash Margin F&D - Revenue Opex Cash Margin F&D Highly prolific wells and low costs result in impressive recycle ratios Assumptions: Prices: $65 WTI; $3.00 Henry Hub; Waha basis ($0.50); NGL($/GAL) C2: $0.28, C3: $0.83, C4: $0.94, C5+: $1.42 Opex includes LOE, Gathering, Transportation & Processing, and Production taxes F&D reflects drilling, completion, and equipping Recycle Ratio: Cash Margin/F&D 45

46 ALPINE HIGH: DOGWOOD SPACING TEST (NOT TO SCALE) WELLBORES COLORED BY BATCH PAD 46

47 ALPINE HIGH: BLACKFOOT PATTERN & SPACING TEST (NOT TO SCALE) To Be Drilled WELLBORES COLORED BY BATCH PAD 47

48 PERMIAN BASIN GAS POSITIONING Production Flow Risk Price Exposure Uncommitted Production 12% Firm Transport 9% Contracts / Dedicated Sales 79% Uncommitted Production 20% Firm Transport 21% Contracts / Dedicated Sales 59% EP Perm / Waha Index 65% Firm Transport 8% Basis Hedges 20% Other Basin 7% EP Perm / Waha Index 60% Firm Transport 21% Basis Hedges 15% Other Basin 4% Firm transport and other basin-based contracts generally access Gulf Coast Pricing Waha basis hedges average approximately $0.51 per MMBtu for 4Q

49 PERMIAN BASIN OIL POSITIONING Production Flow Risk Price Exposure Basis Hedges 4% Term Sales 52% West Texas Sour 29% Diversified Evergreen Sales 19% Term Sales 49% West Texas Sour 26% Diversified Evergreen Sales 25% GC/Cushing Based 38% Midland Based 58% Basis Hedges 24% GC/Cushing Based 14% Midland Based 62% Term sales backed by customers firm transport West Texas Sour less subject to oversupply and takeaway capacity constraints than WTI Diversified evergreen sales represent agreements with multiple buyers across multiple systems (1) Contracts provide various options for higher of Gulf Coast/Cushing/Midland pricing In 3Q, added 12,000 bbls/d WTI Midland basis swaps for Q Q (1) Consists of approximately 22 contracts with 10 counterparties of varying term lengths; subject to cancellation, but only with a minimum of 30 days notice. 49

50 GLOSSARY OF REFERENCED TERMS Capital Investment Budget: Includes exploration and production capital, gathering, transmission, and processing capital, capitalized general and administrative expenses, capitalized interest and asset retirement obligations settled. Excludes non-cash asset retirement additions and revisions and noncontrolling interest CROIC (Cash Return On Invested Capital): Calculated with the numerator as cash flow from operations before changes in working capital, excluding noncontrolling interest, with financing costs added back; and the denominator as average debt plus average Apache shareholders equity Net Debt: Total debt (long-term and short-term) less cash and cash equivalents ROCE (Return on Capital Employed): Calculated with the numerator as adjusted earnings plus financing costs and taxes (excluding Egypt taxes); and the denominator as average debt plus average Apache shareholders equity In addition to the terms above, a list of commonly used definitions and abbreviations can be found in Apache s form 10-K for the year ended December 31,