APACHE IN AUSTRALIA: EXPLORING WHAT S POSSIBLE

Transcription

1 APACHE IN AUSTRALIA: EXPLORING WHAT S POSSIBLE CITI INVESTOR GROUP TOM MAHER MANAGING DIRECTOR MARCH 23, 2012

2 FORWARD LOOKING STATEMENTS Certain statements in this presentation contain "forward looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995 including, without limitation, expectations, beliefs, plans and objectives regarding production and exploration activities. 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, recent Quarterly Reports on Form 10 Q, recent 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. Whenever possible, these forward looking statements are identified by words such as expects, believes, anticipates 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. 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. Any reserve estimates provided in this presentation that are not specifically designated as being estimates of proved reserves may include estimated reserves not necessarily calculated in accordance with, or contemplated by, the SEC's latest reserve reporting guidelines. Investors are urged to consider closely the disclosure in Apache s most recently filed Annual Report on Form 10 K, 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 2

3 APACHE CORPORATION: KEY FACTS Apache Corporation is an independent energy company that explores for, develops and produces natural gas, crude oil and natural gas liquids. Founded 1954 Based in Houston, Texas US$41Bn market capitalisation (12Mar2012) 10 regions in 6 countries, 5,300 employees Completed acquisitions worth US$14Bn in last two years MBOE/D, Net

4 LOOKING BACK; LOOKING AHEAD Apache achieved outstanding performance in 2011 Record production, revenues, earnings, cash flow Our business model delivers; 20+ years of proven effectiveness Opportunity set has never been richer Robust multi year growth inventory: Provides many ways to win Strong balance sheet; balanced portfolio; return focused International natural gas price upside Apache s evolving portfolio is designed for profitable long term growth with global exploration expansion 4

5 5 APACHE S UNIQUE CULTURE Relentless pursuit of opportunity Sense of urgency Responsible and accountable Best answers win Best people play Respect for the dignity of others Integrity 5

6 APACHE S WORLDWIDE OPERATIONS Canada Permian UK North Sea Central Gulf of Mexico Egypt Onshore Shelf Deepwater Australia Argentina Q represents APA s 3Q production combined with Mariner, Devon and BP Pro Forma estimates 6

7 APACHE S PORTFOLIO EVOLUTION MBOE/D Jan % 29% 8% 10% 17% 12% 2% 6% 9% 50% Liquids 46% North America Jan 2012 Combined 6% 20% 9% 12% 1% 13% 16% 4% 8% 11% 50% Liquids 53% North America Argentina Egypt Australia North Sea Deepwater GOM Shelf Canada GC Onshore Central Permian 7 January 2012 based on Outlook at strip prices, including Mobil North Sea and Cordillera as of 1/1/12. Includes Cordillera NGL volumes.

8 WORLDWIDE GROWTH ENGINE: DRILLING BACKLOG RUNNING ROOM FOR LONG TERM GROWTH North Sea GROSS ACRES BY COUNTRY Total Gross Acreage = 41 million acres Australia Argentina Egypt United States Canada Undeveloped Developed Region 2011 Capital ($MM)* 2012 Capital Plan ($MM)* % Change Australia $1,000 $1,800 80% Permian $1,200 $1,700 42% Central $500 $800 60% GOM Deep $300 $500 67% GC Onshore $200 $350 75% North Sea $800 $950 19% GOM Shelf $1,000 $1,000 0% Egypt $1,000 $1,000 0% Argentina $400 $250 38% Canada $1,000 $700 30% New Ventures $100 $ % TOTAL $7,500 $9,500 27% 8 * Includes P&A (Plugging and Abandonment) and GTP costs (Gathering, Transportation and Processing Facilities). Numbers rounded to nearest hundred thousand.

9 MEGA PROJECT PIPELINE +190 MBOE/D FROM CURRENT MEGA PROJECTS UNDER DEVELOPMENT 200 MBOE/D Julimar / Wheatstone Kitimat Heidelberg Qasr Compression Lucius Balnaves Varanus Island Compression Coniston Macedon Hydra Greater East Spar Phase II Forties Alpha Satellite Platform 9 Red colored text indicates Australia Region projects.

10 EXPLORATION SUCCESS FUELS PROJECT PIPELINE Apache: 74% $80/bbl Brent from new field exploration in

11 AUSTRALIA REGION BACKGROUND Total Employees: ~360 Total Contractors: ~600 Regional Office: Field Offices: Perth Varanus Island Stag Platform Ningaloo Vision Dampier Port Devil Creek GP 11 Significant Region Events: Devil Creek Gas Plant officially opened (Feb. 25, 2012) Julimar / Wheatstone LNG Project 1 st company LNG Project (FID Sept. 26, 2011) Van Gogh & Pyrenees Devt 1 st company FPSO Developments ( first oil Feb 2010) Varanus Island Oil & Gas Processing Hub 1 st offshore infrastructure sharing agreement in Australia (1996)

12 AUSTRALIA REGION REVIEW Apache Indian Ocean #3 acreage holder in Carnarvon Basin 6.7 MM gross acres in Carnarvon Prolific area Similar size to GOM, only 5% of wells 69 MBOE/D average in 2011 Australia 20 mi Project pipeline from exploration Projects feed a proven growth engine +50 MBOE/D estimated by 2014 Continue to add through drillbit: +60% Carnarvon acreage in significant 2011 discoveries Strong gas market fundamentals 12

13 AUSTRALIA LEADING OIL PRODUCERS APACHE #3 Oil Production MMBO per quarter Source: Energy Quest 13

14 AUSTRALIA LEADING DOMESTIC GAS PRODUCERS APACHE #6 PJ per quarter

15 APACHE AUSTRALIA INVESTMENT GROWTH HISTORICAL CAPITAL SPEND (MM$) $1,844 $550 $897 $670 $800 $1,010 $187 15

16 APACHE AUSTRALIA RESERVES GROWTH Reserves (MMBOE) Reserves (MMBOE)

17 APACHE 2011 PROJECT HIGHLIGHTS 1. Coniston Project sanctioned: Feb Halyard Project completed: May NV rectification sanctioned: Jul Macedon site works commenced: Sep Julimar / Wheatstone FID: Sep Balnaves Project FID: Sep Legendre Decommissioned: Sep Devil Creek RFSU: Nov Zola high level review completed: Nov 11 17

18 AUSTRALIA REGION S PROJECT PIPELINE Progress of projects 18 Start FEED Zola VI Compression Greater East Spar Moondyne Julimar Upper Pyrenees FID Balnaves Coniston Macedon Excellent Record of Project Delivery * Reindeer Halyard Project Completion Project 1 st Prod Comment Van Gogh Feb 2010 Paid out in 7 months Pyrenees Feb 2010 Paid out in 10 months Halyard June 2011 Producing at 90 MMcfpd Reindeer Dec 2011 Producing at 76 MMcfpd * 8 projects sanctioned since 2006, 4 delivered

19 AUSTRALIA GROWTH ENGINE: PROJECTS Spar / Halyard Balnaves Julimar Reindeer Varanus Is Hub Zola Coniston Van Gogh Devil Creek Gas Plant Pyrenees Macedon Wheatstone LNG & DomGas Plant Macedon Gas Plant 19

20 DEVIL CREEK DOMESTIC GAS PLANT First gas exported 2011 year end Officially opened by WA Premier, February 2012 First new domestic gas plant in WA in almost 20 years 20

21 AUSTRALIA GROWTH ENGINE: JULIMAR AND WHEATSTONE DEVELOPMENT Julimar and Brunello Field Development 2007 Carnarvon Basin discoveries Apache 65% (operator), KUFPEC 35% Estimated recoverable gas of 2.1 Tcf Provides natural gas feedstock for Wheatstone LNG plant LNG production pegged to world oil markets 21 Wheatstone LNG Facility Chevron 73.6% (operator), Apache 13%, KUFPEC 7%, Shell 6.4% Two LNG trains with combined capacity of 8.9 million tonnes per annum First LNG delivery expected in 2016 Scalable, allowing for development of future Carnarvon Basin discoveries

22 2011 DRILLING PROGRAM RECAP 10 Offshore Wells: 6 Wildcat Exploration 4 Development Exploration success rate of 33% with two significant gas discoveries (65.1 MMBOE APA net) 3x risked predrill prediction for 2011 program, equivalent to 255% of total 2010 region production LA ROCCA 1 Dry Hole LEGENDRE ABANDONMENTS EMERSONS 1 BALNAVES DEEP 1 Dry hole REINDEER T & C Gas Discovery STAG 40WI STAG 38H Oil producer STAG 39H STAG 43H Oil producer Chamois Oil producer ZOLA 1 Gas Discovery HANNAH 1 Dry hole FLOATER RIG CRUSADER 1 Dry Hole JACK UP RIG Gazelle

23 AUSTRALIA REGION EXPLORATION DRILLING PROGRAM Three rigs by 2012 year end Development drilling at Coniston, Balnaves and Julimar Continued Triassic gas exploration and appraisal Followup on Zola discovery (Olympus, Bianchi, Willier) TBD NORTHERN EXMOUTH PLATEAU) WA 351 P farmin with BHPB (Tallaganda) Balnaves Deep 2 Domgas exploration (Beam 1, Hurricane 3) Oil exploration and development in inner shelf JULIMAR DEVELOPMENT (5+1 wells) HURRICANE 3 BALNAVES DEVELOPMENT (4 wells) BALNAVES DEEP 2 STAG 42/43 (drilled) HOSS 1 CLARK 1 NIKE 1 STAG 44H W. ANCHOR 1 STAG 45H HOMEVALE (BHPB) TALLAGANDA 1 (BHPB) (spuds 28 Feb) OLYMPUS 1 BIANCHI 1 WILLIER 1 BEAM 1 (D&A) BAMBRA 10 MOOSE 1 TALLAGANDA Appraisal 1, + (BHPB) LADY ANN 1 ANTIOPE Farmins CONISTON DEVELOPMENT (7 wells) PALMERSTON 1 FLOATER RIG STICKLE 8H4 (BHPB) 2012 wells in yellow JACK UP RIG

24 APACHE IN AUSTRALIA: EXPLORING WHAT S POSSIBLE CITI INVESTOR GROUP TOM MAHER MANAGING DIRECTOR MARCH 23, 2012