Patina Oil & Gas — Merger or Acquisition (December 2004)
37 slides from Patina Oil & Gas's merger presentation, Dec 21, 2004
Slide 1: Noble Energy Acquisition of Patina Oil & Gas Corporation
December 16, 2004 High-Graded Assets Focused Exploration Expanding Production Monetizing Stranded Natural Gas Transitioning to a Cash Generator Noble Energy, Inc. Acquisition of Patina Oil & Gas Corporation
Slide 2: Forward-looking Statement
This communication contains statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on Noble Energy’s and Patina Oil & Gas’ current expectations and beliefs and are subject to a number of risks, unce
Slide 3: Additional Information and Proxy Solicitation
In connection with the proposed acquisition by Noble Energy of Patina Oil & Gas, Noble Energy and Patina Oil & Gas will file relevant materials with the SEC, including one or more registration statement(s) that contain a prospectus and a joint proxy statement. Investors and security holders of Noble
Slide 4: A Significant Transformation
* Year-end A Significant Transformation International Reserves 70% 28% 1998* 2003* International Production 32% 8% 1998 2003 Reserve Life (Years) 7.8 12.3 1998* 2003* GOM Production 63% 39% 1998 2003
Slide 5: Transaction Summary
Transaction Value – $3.4 Billion $1.8 Billion Equity $1.1 Billion Debt $0.5 Billion Assumed Debt 60 Percent Stock / 40 Percent Cash New NBL Shares Issued – 27 Million Immediately Accretive to EPS and DCFPS Pro Forma Ownership 68 Percent NBL 32 Percent POG Board of Directors Five Current NBL Director
Slide 6: Transaction Summary: Key Terms and Conditions
Consideration: POG Shareholders Can, Subject to Proration, Elect: Cash or NBL Common Stock, in Either Case Having a Value Equal to $14.80, plus Value of 0.3751 NBL Shared During Specified Period Prior to Closing In Total, POG Shareholders Will Receive Consideration Comprised of 60 Percent of NBL Com
Slide 7: Substantial Financial and Operating Benefits
* See Appendix Transaction Summary Substantial Financial and Operating Benefits Reserves and Production Increase Over 50 Percent Lengthen Domestic Reserve Life Reserves Per Share Increase 12 Percent Establishes New Core Areas in Long-lived Basins Domestic Onshore Reserves Increase to 45 Percent of T
Slide 8: Benefits to POG's Shareholders
Immediate Exposure to High Impact Projects Overseas and in the Deep Water Gulf of Mexico Combined Companies Have Outstanding Portfolio Diversification 55% Domestic Reserves, 45% International Reserves Transaction Structure Allows POG’s Shareholders to Continue to Participate in the Growth of POG’s A
Slide 9: An Outstanding Combination of Assets
* Reserves As Of 12/31/03 Production As Of YTD 9/04 An Outstanding Combination of Assets Onshore US Pro Forma* US Reserves 320 MMBoe 320 Production 78 MBoepd North Sea* Reserves 11 MMBoe 11 Production 9 MBoepd Israel* Reserves 75 MMBoe 75 Production 7 MBoepd 7 of Reserves 68 MMBoe 68 Production 39 M
Slide 10: POG Adds Significant Assets in Key Growth Basins
NBL POG – Wattenberg 152 MMBoe Proved (2004E) 68% Gas 120 MMBoe Probable & Possible 8,700+ Projects POG – Mid-Continent 80 MMBoe Proved (2004E) 70% Gas 35 MMBoe Probable & Possible 800+ Projects POG – San Juan 16 MMBoe Proved (2004E) 97% Gas MMBoe Probable & Possible 500+ Projects POG – Central 15 M
Slide 11: Rebalance Reserve Mix
Total Reserves: 710 MMBoe Rebalance Reserve Mix Domestic Weighting Increases Significantly NBL YE 2003 Pro Forma International 70% Domestic 30% Total Reserves: 457 MMBoe Domestic 55% International 45%
Slide 12: Increased Domestic Onshore Contribution
160 MBoepd Increased Domestic Onshore Contribution More Stable, Longer-lived Production NBL Production 3Q04 Pro Forma 3Q04 Domestic Onshore 20% EG 15% Israel 12% North Sea 7% GOM 37% Other Int’l 9% Domestic Onshore 47% EG 10% Israel 8% North Sea 5% Other Int’l 6% GOM 24% 107 MBoepd
Slide 13: Why Patina Oil & Gas?
A Combination with POG Would Address Many of These Objectives • High-quality, Multi-year, Low-risk Inventory • Balances Risk Profile of Reserve Base EIncreases Domestic Onshore Reserves to 45 Percent of Total Reserves From 15 Percent EIncreases Domestic Exploitation EExtends Domestic Reserve Life •
Slide 14: Significant Progress Towards Long-term Goals
Total Debt/Book Capitalization Declined to 38 Percent Net Debt/Book Capitalization at 35 Percent Significant Progress Towards Long-term Goals NBL’s Long-term Corporate Objectives Growth Cost Reductions Reduce Financial Leverage Establish Organic Growth Platform Strategic Acquisitions Achievements Ma
Slide 15: D-J Basin – The Wattenberg Field
NBL POG D-J Basin – The Wattenberg Field A New Core Area with Running Room Wattenberg Field One of Ten Largest Gas Fields in US Over 500 MMBoe of Cumulative Production POG Currently Largest Operator in Field Stable, Predictable, Long-lived Production Resources – 2004 152 MMBoe of Proven Reserves 73
Slide 16: A Significantly Enhanced Domestic Business
[1] Average Total NBL Rates [2] Includes Acquisition Synergies [3] Includes Additional Borrowings [4] Includes Purchase Price Allocation A Significantly Enhanced Domestic Business Combination Drives Further Cost Improvements Year-to-Date 9/30/04, $/Boe Domestic Domestic Percent NBL POG Pro Forma Cha
Slide 17: 2005 Guidance
NBL Pro Forma Production Growth (%) 10 10 – 11 (175 – 180 MBoepd) LOE ($/Boe) 3.70 – 3.90 3.50 – 3.75 SG&A ( $/Boe) 1.45 – 1.65 1.15 – 1.35 DD&A ( $/Boe) 7.00 – 7.50 8.25 – 8.75 Exploration ($MM) 140 – 160 140 – 165 Capital Spending ($MM) 735 Effective Tax Rate (%) 42 40 % Deferred 20 – 30 25 – 35 2
Slide 18: 2003 Proved Reserves
Note: 2003 Reserve Figures Adjusted for Announced Asset Acquisitions and Divestitures Source: J.P. Morgan Chase 2003 Proved Reserves 2,500 2,000 MMBoe 1,500 1,000 APC DVN BR APA KMG PXD XTO EOG NBL PF CHK VPI PPP NFX MUR FST THX SGY
Slide 19: Enterprise Value
Source: J.P. Morgan Chase Enterprise Value Billions $7.7 $ 10 5 0 DVN APA BR APC KMG XTO EOG CHK PXD NBL PF MUR NFX PPP FST THX VPI SGY
Slide 20: Capitalization
Current NBL Pro Forma 12/31/04E 12/31/04 (Millions) (Millions) Amount Percent Amount Percent Credit Facility $ 85 4% $447 8% Current Term Loan 150 6% 150 3% Acquisition Loan - - 1,300 23% Sr. Unsecured Notes 644 28% 644 11% Total Debt $ 879 38% $2,541 45% Total Equity 1,443 62% 3,146 55% Total Capit
Slide 21: Financial Flexibility
Five-year Financing Provides Repayment Flexibility Combined Company Generates Substantial Free Cash Flow Available for Expanded Capital Projects Debt Reduced to Pre-acquisition Levels Within Three Years Hedges Ensure Free Cash Flow to Meet Goals Financial Flexibility
Slide 22: Hedging Strategy
Protects Cash Flow from Operations for Capital Needs and Debt Reduction New Production Hedges Through 2008 Natural Gas: 80 MMcfpd Crude Oil: 7,000 Boepd Layered into NBL’s Existing Production ETreated as Hedges Fixed Rate Swaps Hedging Strategy
Slide 23: NBL and POG: Accelerating Progress Towards Strategic Objectives
* See Appendix NBL and POG Accelerating Progress Towards Strategic Objectives Stronger and More Balanced Company Reserves and Production Increase Over 50 Percent Domestic Onshore Significantly Enhanced Domestic Growth Less Dependent on Exploration EA Larger Base to Support Major Projects Increased I
Slide 24: Deep Shelf Portfolio
EC 342 Deep Shelf Portfolio Exploration >15,000’ Texas Louisiana Planned 2004 / 2005 Portfolio Development Core Focus Area 25 Projects (Not All Shown on Map) Hornet (CA 18) Tomcat (MO 943/942) Lightning (CA 38/39) VK 341 MP 108 Mound Point WC 392 VR 227 ST EI 300 SMI 145 ST 62 MP 305/306 VR 228/235
Slide 25: Active Deepwater Exploration Portfolio
Livingston Active Deepwater Exploration Portfolio Two Focus Areas – Green Canyon and Mississippi Canyon / Atwater Fold Belt Discovery Planned 2004 / 2005 Active Projects Development Producing Core Focus Area 30 Projects (Not All Shown on Map) Texas Louisiana MS AL Ike / Gipper Lost Ark Curie Xena Al
Slide 26: Deepwater Becoming a Material Portion of Domestic Portfolio
Active Projects Development Producing Deepwater Becoming a Material Portion of Domestic Portfolio Deepwater Production 9 8 7 6 MBoepd 5 4 3 2 1 0 1999 2000 2001 2002 2003 Texas Lorien 2003 Discovery 20-30 MMBoe* 2030 WI: 60% Swordfish Est. Net IP: 10,000 Boepd . 20-25 MMBoe* WI: 60% Sable (Upper Pli
Slide 27: Deepwater Development Timeline
IP: 12,000 Boepd net IP: 12,000 Boepd net Deepwater Development Timeline Project / Phase Swordfish Project Drill and Complete Complete Well 2 and 3 Fabrication / Installation Initial Production Lorien Project Appraisal and Drilling Drill Well 2 & Completions Fabrication / Installation Initial Produc
Slide 28: 2005 Onshore Development Projects
Caspiana Field (Hosston / Cotton Valley) / 5 – 5 –7 well drilling program 7 Additional infill drilling potential 2005 Onshore Development Projects Emphasis on Exploitation Bowdoin Field 25 Well PUD Drilling Program 25 Gathering system improvements Small diameter coiled tubing replacements Pumping un
Slide 29: Impact of International Assets Continues To Grow
2000 2001 2002 2003 YTD Impact of International Assets Continues To Grow Year End Reserves MMBoe 300 200 1999 2000 2001 2002 2003 Proved Reserves Unbooked EG Natural Gas Resources 50 40 MBoepd 30 20 10 0 Average Production
Slide 30: North Sea: Important Producing Area With Growth Potential
North Sea Important Producing Area With Growth Potential Core International Asset 30% of 2003 International Production Opportunities to Expand Cook / Hanze Production Two Development Candidates
Slide 31: Natural Gas Sales Underway in Israel
Current Sales of 150+ MMcfpd, Gross Facilities Capacity 600 MMcfpd IEC Contract 630 Bcf (170 MMcfpd) Ashdod (Current) 250 MMcfpd Peak Demand E Tel Aviv (2005) 100 MMcfpd Peak Demand Low Cost Production $.50/Mcf DD&A $.40/Mcf Operating Costs New Potential Customers Bazan Refining Finalized E Desalini
Slide 32: Ecuador Natural Gas To Power Project
130 MW Capacity Low Cost Thermal Generator Growing Power Market Future Potential Combined Cycle Third Turbine Exploration Ecuador Natural Gas To Power Project
Slide 33: Ecuador Natural Gas To Power Project
130 MW Capacity Low Cost Thermal Generator Growing Power Market Future Potential Combined Cycle Third Turbine Exploration
Slide 34: Equatorial Guinea: Building a Solid Position
Alba Field – A “World-class” Asset 2004 Program ERamp Up Phase 2A EComplete Phase 2B (2Q05) One Billion BOE Gross Proved and Probable Resources New Exploration Block “O” Block “I” Equatorial Guinea Building a Solid Position
Slide 35: Disclosure & Reconciliation of Non-GAAP Measures
Disclosure & Reconciliation of Non-GAAP Measures Discretionary Cash Flow Net Income $ 241.3 78.0 Dosa 234.4 288.7 Power Project DD&A 154 214 Crude Oil and Natural Gas Exploration 824 148.8 Interest Capitalized @7) (144) Undistributed (Earnings)/Loss From Unconsol. Subs. (44.0) (40.6) Distribution fr
Slide 36: Discretionary Cash Flow Non-GAAP Note
(1) Discretionary cash flow is a forward-looking non-GAAP financial measure. The GAAP measure most comparable to discretionary cash flow is net cash provided by operating activities (net operating cash). Net operating cash is not accessible on a forward-looking basis and reconciling information is n
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