APA Corporation · NASDAQ:APA
APA — Apache — Investor Presentation (April 2013)
96 slides from APA's investor presentation, April 2013
Slide 1: Investor Relations Presentation
INVESTOR RELATIONS PRESENTATION April 2013
Slide 2: Forward-Looking Statements
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 and Exchange Act of 1934 including, without limitation, expectations, beliefs, plans and objective
Slide 3: 2012 in Review
2012 IN REVIEW Strong growth +5.4% to 779 MBOE/D* Record cash flow $10.2 BN Financial discipline cash flow = capital Dividend growth +13% Strategic steps Doubled position in Anadarko Basin horizontal drilling plays. Decades of drilling inventory. Kitimat: Increased position to 50%. Che
Slide 4: 2012 Highlights
2012 HIGHLIGHTS Repositioned portfolio with greater emphasis on North American oil and liquids growth Significantly expanded drilling inventory in the North Sea Sustained active operations while mitigating risks in Egypt Achieved record 2012 production (800 Mboe/d in Q4) Replaced 131% of p
Slide 5: 2013 Roadmap to Value Growth
2013 ROADMAP TO VALUE GROWTH Accelerate North America liquids growth Build the future: Advance major projects 2 world class LNG hubs: Decades of oil-linked free cash flow visibility Grow our dividend Optimize our portfolio focus Maintain our time-tested investment approach: cash rates
Slide 6: 2013 Plan
2013 PLAN Strong growth >25% North America onshore liquids growth +3 to 5% BOE growth Build the future $2.2BN capex in long term projects Financial discipline cash flow = capital Dividend growth +18% 6
Slide 7: Building Upon Apache's Strong Track Record
BUILDING UPON APACHE’S STRONG TRACK RECORD 7
Slide 8: Apache's Strong Track Record: Profitable Long-Term Growth
APACHE’S STRONG TRACK RECORD PROFITABLE LONG-TERM GROWTH MBOE/D, Net 850 800 750 700 650 600 550 500 450 400 350 300 250 200 150 100 50 0 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 8
Slide 9: Per-Share Production, Reserves, Cash Flow and Earnings
APACHE’S STRONG TRACK RECORD PROFITABLE LONG-TERM GROWTH Production per Share (BOE/share) Reserves per Share (BOE/share) 0.75 9.00 0.60 7.50 6.00 0.45 4.50 0.30 3.00 0.15 1.50 0.00 0.00 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Cash
Slide 10: Balanced Commodity Mix Drives Performance
APACHE’S STRONG TRACK RECORD UNIQUE, BALANCED COMMODITY MIX DRIVES PERFORMANCE 4Q ‘12 Production Breakout By Product 4Q ‘12 Revenue Breakout By Product 800 MBOE/D $4.4 B 26% 27% 46% 35% 17% 30% 7% 12% International Liquids International Natural Gas North American Liquids North American Natural Gas 1
Slide 11: International Gas Mix: Benefitting from Rising Prices
APACHE’S STRONG TRACK RECORD UNIQUE INT’L GAS MIX: BENEFITTING FROM RISING PRICES Realized Gas Price International Gas Revenue $/MCF $MM 7.00 350 6.00 300 North America 5.00 250 4.00 200 3.00 150 International 2.00 100 1.00 50 Un-hedged North America 0.00 0 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q
Slide 12: Consistently Delivering Top Tier Returns
APACHE’S STRONG TRACK RECORD CONSISTENTLY DELIVERING TOP TIER RETURNS ROACE: 3 Year Average ROE: 3 Year Average 16% 16% 14% 14% 12% 12% 10% 10% 8% 8% 6% 6% 4% 4% 2% 2% 0% 0% OXY A APA APA NBL C DVN D APC E EOG F A OXY APA C DVN NBL D E EOG APC F Weighted average for the 3-year period ending December
Slide 13: Built Portfolio of Leading Positions
BUILT PORTFOLIO OF LEADING POSITIONS #1 driller in the Permian Basin #1 in Liard, Horn basins (~10 BN BOE gross LNG resource) #1 independent operator in UK North Sea (Brent oil) #1 dom gas supplier in W. Australia by year-end (now $8/MCF) #1 in acreage holder and producer in GOM Shelf (54%
Slide 14: Accelerate North American Onshore Liquids Growth
ACCELERATE NORTH AMERICAN ONSHORE LIQUIDS GROWTH 14
Slide 15: Accelerate NA Onshore Liquids Growth
ACCELERATE NA ONSHORE LIQUIDS GROWTH Capital focus: 55% of 2013 E&D capital dedicated to NA Onshore regions Drilling focus: 75% of all 2013 wells will be drilled in NA Onshore 40% of all wells drilled in NA Onshore will be horizontal Commodity focus: Virtually no dry gas drilling in NA
Slide 16: 55% of 2013 E&D Capital Plan
ACCELERATE NA ONSHORE LIQUIDS GROWTH CONSTITUTES 55% OF 2013 E&D CAPITAL PLAN Total 2013 Capital: $10.5 B Region E&D Capital: $8.3 B* Central, $1.4B Projects, $2.2B 13% 21% New Ventures, $0.1B Argentina, $0.2B 1% 2% NA Onshore Permian, $2.4B 23% Total = $4.6B 9% (55% of $8.3B) North Sea, $0.9B 3% Au
Slide 17: Accelerating Value from Recent Acquisitions
ACCELERATE NA ONSHORE LIQUIDS GROWTH ACCELERATING VALUE FROM RECENT ACQUISITIONS Liquids Growth (Bbl/d) BOE Growth (Boe/d) 120,000 180,000 Permian Permian Central 160,000 Central 100,000 140,000 80,000 120,000 100,000 60,000 80,000 40,000 60,000 40,000 20,000 20,000 - - 2009 2010 2011 2012 2009 2010
Slide 18: Enhancing Returns by Cutting Costs
ACCELERATE NA ONSHORE LIQUIDS GROWTH 2013 OBJECTIVE: ENHANCING RETURNS BY CUTTING COSTS During 2012, day rates for vt rigs came down (5-7% drop) as did completion costs (as much as 30% drop) in Permian and Central APA focused on lowering drilling and completion costs through: Testing new well
Slide 19: Permian Region
19 PERMIAN REGION Apache
Slide 20: Apache Permian: Ramping Up Horizontal Development
APACHE PERMIAN RAMPING UP HZ DEVELOPMENT New Mexico Texas 2012 Highlights Production Growth +18% YoY (108 Mboe/d) Liquids Growth 25% YoY Production Replacement 262%* Midland Proved Reserves 800 MMboe Wells Drilled 104 Hz , 781 Total Drilling Success Rate 100% 20 mi 2013 Plans APA acreage E&D Capital
Slide 21: Accelerating Activity
ACCELERATING ACTIVITY 5X INVESTMENT, 6X OPERATED RIG COUNT IN 2 YEARS Apache Permian Evolution: 2010 2011 2012 Employees 345 662 816 Investment $0.4B $1.2B $2.3B Production 66.5 91.7 108.3 (MBOE/D) Rigs 5 25 32 Horizontal 20 40 104 Wells Drilled Wells Drilled 263 507 781 21
Slide 22: Permian Oil: Delivering Asset Upside
PERMIAN OIL: DELIVERING ASSET UPSIDE Net MBOE/D 120 40 Operated Rigs (Bar) (Line) Mariner 35 100 Closing BP Closing 30 80 APA Permian Region 25 Established 60 20 15 40 10 20 5 0 0 2010 2011 2012 22
Slide 23: Current Play Inventory
CURRENT PLAY INVENTORY* Net MMBOE 3,785 % of MMBOE PUD 6.2% Known Locations to Drill 34,518 New Mexico Texas Central Basin Platform + N/NW Shelf CBP + N/NW Shelf Midland Basin Midland Vertical Locations 9,798 Locations 17,816 Net MMBOE 691 Net MMBOE 1,714 Yeso Wolfcamp Yeso Shale Cline Shale Cline L
Slide 24: Midland Basin: Multi-Play Growth Engine
MIDLAND BASIN MULTI-PLAY GROWTH ENGINE Leonard Lime APA acreage Midland Vertical Target Cline Shale Target Midland Basin Leonard Wolfcamp Shale Target Cline Shale Leonard Upper Spraberry Wolfcamp Shale Lower Spraberry Dean Upper Wolfcamp Wolfcamp Middle Wolfcamp Lower Wolfcamp 21 mi Upper Cline Shal
Slide 25: Midland Basin Vertical: Multi-Stacked Vertical Pays
MIDLAND BASIN VERTICAL MULTI-STACKED VERTICAL PAYS ED Books 1B #11 Nichols #2206 (Wolfcamp/Strawn) 30-day IP BOE/D 280 (Fusselman) 30-day IP BOE/D 362 Keathley 46 #12 Acres (000) 1,100 (625 net) (Fusselman) EUR MBOE 147 EUR MBOE 186 30-day IP BOE/D 340 EUR MBOE 262 Net MBOE/D (Dec) 46.7 2012 New Wel
Slide 26: Midland Basin: Deadwood Growth
MIDLAND BASIN DEADWOOD: IMPACTIVE GROWTH Aggressive growth: production up 8.4x to 25.4MBOE/D in 28 months of APA as operator Wolf-Wood and targeted Fusselman play Developing 40 ac. vertical locations Initiating 20 ac. infill development locations 5.9K identified future vertical locations 2
Slide 27: Midland Basin Vertical: Drilling Inventory Economics
MIDLAND BASIN VERTICAL DRILLING INVENTORY ECONOMICS (JUNE 2012) BOE/D Midland Stacked Vertical Well* 120 D+C Cost $MM 2.0 100 EUR MBOE 144 80 % Liquids 82% 60 ROR 27% 40 WI / NRI 89% / 70% 20 Current Inventory 13,341 (5% PUD) 0 0 6 12 18 24 30 36 42 48 54 60 Month BOE/D Spraberry Vertical Well 7
Slide 28: Wolfcamp Shale: Proven Horizontal Opportunity
WOLFCAMP SHALE PROVEN HORIZONTAL OPPORTUNITY Apache Acreage in Play Fairway Acres (000) 450 (345 net) Net MBOE/D (Dec) 3.7 Wolfcamp 2012 New Wells 21 (17 producing wells) Shale Drilling Inventory 971 Locations 347 MMBOE net Industry proven resource, with world class OOIP Play identified in many
Slide 29: Wolfcamp Shale: 1400 Feet of Stacked Pay Sections
WOLFCAMP SHALE 1400 FEET OF STACKED PAY SECTIONS Midland Basin Apache Acreage Type Log Leonard Lime Gamma Ray Organic Indicator Reservoir Parameters Dean (Upper & Middle Wolfcamp) Leonard Prolific, Permian age organic shales Average thickness: 1400’+ gross Leonard Upper Upper Spraberry Wolfcamp
Slide 30: Barnhart Wolfcamp/Cline Activity & Resource Potential
BARNHART WOLFCAMP/CLINE ACTIVITY & RESOURCE POTENTIAL Basin(West) Apach Acreage (East)Shelf Clinch Bennie Scott-Sugg #1H Sugg 2829 #2H Sugg-Scott 1208E #1 Acreage Acreage Dean Upper Wolfcamp Middle Wolfcamp Lower Wolfcamp L Wolfcamp Clastics Cline Shale Ellenburger Penn? Flow Units Flow Units Micros
Slide 31: Wolfcamp Shale: Robust Activity & Upper Wolfcamp Results
WOLFCAMP SHALE ROBUST ACTIVITY & UPPER WOLFCAMP RESULTS Scott Sugg Lease: 4 Producers,4 Drilling Peak IP 30d Avg EUR Lateral Frac 1 Fracking Well Status (BOE/D) (BOE/D) (MBOE) (ft.) Stages Bennie Lease: Daily Prod: 869 BO + 6 Producers 1.4 MMCFG Daily Prod:1,817 BO + Scott Sugg #1H Prod 1255 726 682
Slide 32: Wolfcamp Shale: Drilling Inventory Economics
WOLFCAMP SHALE DRILLING INVENTORY ECONOMICS (JUNE 2012) BOE/D Wolfcamp Shale Well* 600 D+C Cost $MM 7.7 500 EUR MBOE 598 400 % Liquids 91% 300 ROR 44% 200 WI / NRI 79% / 60% 100 Current Inventory 971 (0% PUD) 0 0 6 12 18 24 30 36 42 48 54 60 Month 32 * Based on 7,200 ft lateral, 23 frac stages
Slide 33: Cline Shale: Horizontal Exploitation
CLINE SHALE HORIZONTAL EXPLOITATION Apache Acreage in Play Fairway Acres (000) 650 (520 net) Net MBOE/D (Dec) 0.8 Drilling Inventory 2,321 Locations Identified Resource 642MMBOE net 2013 Planned Hz Wells >20 Deadwood area Increased rig count to 4 in January 2013 Apache has one of the largest Cli
Slide 34: Cline Shale: Stacked Shale Horizontal Targets
CLINE SHALE STACKED SHALE HORIZONTAL TARGETS Midland Basin Reservoir Parameters (Lower Cline) Apache Acreage Type Log Leonard Lime Gamma Ray Organic Indicator Prolific, Pennsylvanian age organic shales Average thickness 350’ gross Leonard Net to gross shale pay: 40% Leonard Average porosity:
Slide 35: Cline Shale: Leading Glasscock Co. Cline Player
CLINE SHALE LEADING GLASSCOCK CO. CLINE PLAYER Marlin Lee Squire Spud Peak Well 30d Avg EUR Lateral Frac Stages Date IP (BOE/D) (MBOE) (ft.) (BOE/D) Mack 8-2H 11-Jun 384 329 394 4,400 10 Red Snapper Squire 9-2H 11-Aug 350 306 385 4,600 12 Bell 18-1H 11-May 575 469 356 3,800 10 Barracuda Huitt PhilMa
Slide 36: Cline Shale: Drilling Inventory Economics
CLINE SHALE DRILLING INVENTORY ECONOMICS (JUNE 2012) BOE/D Cline Shale Well* 450 D+C Cost $MM 7.6 400 350 EUR MBOE 423 300 % Liquids 87% 250 200 ROR 28% 150 WI / NRI 85% / 65% 100 Current Inventory 2,321 (3% PUD) 50 0 0 6 12 18 24 30 36 42 48 54 60 Month 36 * Based on 6,800 ft lateral, 15 frac sta
Slide 37: Central Basin Platform: Production Heart of the Basin
CENTRAL BASIN PLATFORM PRODUCTION HEART OF THE BASIN, WITH UPSIDE APA acreage Acres (000) 1,700 (780 net) North Shelf NET MBOE/D (Dec) 59.9 Northwest Shelf 2012 New Wells 149 Drilling Inventory 9,798 Locations Central Basin 691 MMBOE net Platform Stratigraphy Tansil Yates Target Formations Seven Riv
Slide 38: Central Basin Platform: Horizontal Redevelopment Results
CENTRAL BASIN PLATFORM HORIZONTAL REDEVELOPMENT RESULTS Slaughter (San Andres) 3Bar SU (Wichita Albany) Slaughter TBSU #101H 30-day IP BOE/D 1,042 EUR MBOE 602 3Bar TXL N. McElroy CS Dean A-264H TBSU #105H 30-day IP BOE/D 156 30-day IP BOE/D 1,198 Continued success drilling horizontals in EUR MBOE
Slide 39: Central Basin Platform: Drilling Inventory Economics
CENTRAL BASIN PLATFORM DRILLING INVENTORY ECONOMICS (JUNE 2012) BOE/D Vertical Well 60 D+C Cost $MM 1.5 50 EUR MBOE 83 40 % Liquids 80% 30 ROR 36% 20 WI / NRI 79% / 66% 10 Current Inventory 8,086 (9% PUD) 0 0 6 12 18 24 30 36 42 48 54 60 Month BOE/D Horizontal Well 250 D+C Cost $MM 4.2 200 EUR M
Slide 40: Yeso: Ramping Up Activity
YESO RAMPING UP ACTIVITY A State #40 Eddy Co. 30-day IP BOE/D 100 NFE Fed #12 Acres (000) 105 (70 net) EUR MBOE 119 30-day IP BOE/D 103 EUR MBOE 219 Net MBOE/D (Dec) 4.4 Washington 33 St #43 30-day IP BOE/D 110 Horizontal EUR MBOE 269 Program 2012 New Wells 110 Drilling Inventory 1,530 Locations 92
Slide 41: Yeso: Drilling Inventory Economics
YESO DRILLING INVENTORY ECONOMICS (JUNE 2012) BOE/D Vertical Well 120 D+C Cost $MM 1.7 100 EUR MBOE 128 80 % Liquids 82% 60 ROR 59% 40 WI / NRI 50% / 43% 20 Current Inventory 1,677 (31% PUD) 0 0 6 12 18 24 30 36 42 48 54 60 Month BOE/D Horizontal Well 400 D+C Cost $MM 5.5 EUR MBOE 328 300 % Liqu
Slide 42: Delaware Basin: Emerging Opportunities
DELAWARE BASIN EMERGING OPPORTUNITIES Acres (000) 609 (287 net) Net MBOE/D (Dec) 3.2 2012 New Wells 19 Avalon/ Bone Spring Drilling Inventory 1,823 Locations 284 MMBOE net Stratigraphy Bell Canyon Mountain Delaware Group Cherry Canyon APA acreage Wolfbone Target Formations Bushy Canyon Peer activity
Slide 43: Bone Spring/Wolfcamp: Net Pay Section with Multiple Targets
BONE SPRING/WOLFCAMP 2,500’ NET PAY SECTION WITH MULTIPLE TARGET Delaware Basin Apache Acreage Type Log Gamma Ray Organic Indicator Reservoir Parameters Bell Canyon Mountain Delaware (Avalon, 1st, +2nd, 3rd Bone Spring, Wolfcamp) Group Cherry Canyon Bushy Canyon Avalon Prolific, Permian age organi
Slide 44: Wolfbone: Vertical Shale Play with Horizontal Upside
WOLFBONE 2400’ VERTICAL SHALE PLAY WITH HORIZONTAL UPSIDE Delaware Basin Apache Acreage Type Log Gamma Ray Organic Indicator Reservoir Parameters Bell Canyon Mountain Delaware Prolific, organic-rich Bone Spring – Wolfcamp Group Cherry Canyon Bushy Canyon (Wolfbone) intervals throughout Delaware To
Slide 45: Delaware Basin: Drilling Inventory Economics
DELAWARE BASIN DRILLING INVENTORY ECONOMICS (JUNE 2012) BOE/D Vertical Well (Wolfbone) 250 D+C Cost $MM 3.6 200 EUR MBOE 280 150 % Liquids 61% ROR 37% 100 WI / NRI 64% / 49% 50 Current Inventory 1,419 (2% PUD) 0 0 6 12 18 24 30 36 42 48 54 60 Month BOE/D Horizontal Well (Avalon/Bone Spring) 600
Slide 46: Expanding Opportunity
EXPANDING OPPORTUNITY DRIVERS: SCALE+BREADTH, TECHNICAL WORK, HORIZONTALS All APA locations are specifically identified and technically supported May 2011: >5000 Locations Opportunity expansion expected: June 2012: 34,518 Locations Increased experience across APA’s 3.5MM Permian acres More h
Slide 47: Central Region
47 CENTRAL REGION Apache
Slide 48: Apache Central: Horizontal Drilling Fueling Growth
APACHE CENTRAL HZ DRILLING FUELING SIGNIFICANT GROWTH Kansas 2012 Highlights Production Growth +10% QoQ (79 Mboe/d in Q4) Liquids Growth +24% QoQ (31 Mboe/d in Q4) Texas Anadarko Basin Production 341% Replacement (644% including acquisitions)* Wells Drilled 192 Canyon Wash Drilling Success Rate 99%
Slide 49: Anadarko Basin: Over a Mile of Stacked Pay
ANADARKO BASIN BENEFIT FROM OVER A MILE OF STACKED PAY FORMATIONS Texas Panhandle Central Oklahoma Generalized Cross-Section of Anadarko Basin 49
Slide 50: Anadarko Basin: Stacked Opportunities
ANADARKO BASIN – STACKED OPPORTUNITIES Apache Elk City #1-23 9,500’ Tonkawa Cottage Grove 10,000’ Hogshooter 10,500’ Checkerboard 11,000’ Cleveland 11,500’ Marmaton Granite Wash ‘Caldwell’ 12,000’ Granite Wash ‘A’ Granite Wash ‘B’ 12,500’ Granite Wash ‘C’ 13,000’ 13,500’ Skinner Wash 14,000’ Atoka W
Slide 51: Current Play Inventory
CURRENT PLAY INVENTORY Net MMBOE 5,395 % of MMBOE PUD 1.5% Known Locations to Drill 32,546 Granite Wash Oklahoma Tonkawa Locations 22,823 Locations 2,795 Net MMBOE 4,535 Net MMBOE 202 Texas Cleveland Marmaton Locations 2,302 Locations 1,593 Net MMBOE 195 Net MMBOE 161 Canyon Wash Other Locations 1,0
Slide 52: Midcontinent Liquids: Delivering Upside
MIDCONTINENT LIQUIDS: DELIVERING UPSIDE Net MBOE/D 80 25 Operated Rigs (Bar) (Line) 70 20 60 Cordillera Closing 50 15 40 30 10 20 5 10 0 0 2010 2011 2012 52
Slide 53: Granite Wash: Consistency, Outstanding Economics, Running Room
GRANITE WASH CONSISTENCY, OUTSTANDING ECONOMICS, RUNNING ROOM Wright 151 #2H Granite Wash B Young Trust 4 #4H Granite Wash A Acres (000) 718 (349 net) 30-day IP BOE/D 2,489 30-day IP BOE/D 4,729 EUR MBOE 1,753 EUR MBOE 993 Net MBOE/D (Dec) 51.3 Smith 1-17H 2012 New Wells 79 Granite Wash C 30-day IP
Slide 54: Granite Wash: Drilling Inventory Economics
GRANITE WASH DRILLING INVENTORY ECONOMICS (JUNE 2012) Drilling Inventory Economics Recent Well Highlights BOE/D 1,400 Smith 1-17H Simon 1-11H 1,200 Granite Wash C Granite Wash C 30-day IP BOE/D 2,683 30-day IP BOE/D 2,271 1,000 EUR MBOE 2,583 EUR MBOE 1,499 800 600 400 200 0 0 6 12 18 24 30 36 42 48
Slide 55: Tonkawa: Generating Oil from a Bypassed Formation
TONKAWA GENERATING OIL FROM A BYPASSED FORMATION Lockhart B 405HB 30-day IP BOE/D 317 Leddy 1-19HB 30-day IP BOE/D 531 Acres (000) 634 (310 net) EUR MBOE 218 EUR MBOE 435 Net MBOE/D (Dec) 7.7 2012 New Wells 54 Drilling Inventory 2,795 Locations 202 MMBOE net Bradshaw 1-11HB 30-day IP BOE/D 570 EUR M
Slide 56: Tonkawa: Drilling Inventory Economics
TONKAWA DRILLING INVENTORY ECONOMICS (JUNE 2012) Drilling Inventory Economics Recent Well Highlights BOE/D 400 Calvert 1-22HB ODWC 1-6HB Williams 1-13HC 30-day IP BOE/D 400 30-day IP BOE/D 750 30-day IP BOE/D 1,312 350 EUR MBOE 350 EUR MBOE 535 EUR MBOE 800 300 250 Glass 1-25HB 200 30-day IP BOE/D 7
Slide 57: Marmaton: Continuous Sand from Shallow Shelf to Deep Basin
MARMATON CONTINUOUS SAND FROM SHALLOW SHELF TO DEEP BASIN Weinette 1078 #2H Marmaton Upper Acres (000) 662 (512 net) 30-day IP BOE/D 1,036 EUR MBOE 325 Net MBOE/D (Dec) 9.1 2012 New Wells 27 Pletcher 934 #1H Drilling Inventory 1,593 Locations Marmaton Upper 30-day IP BOE/D 570 161 MMBOE net EUR MBOE
Slide 58: Marmaton: Drilling Inventory Economics
MARMATON DRILLING INVENTORY ECONOMICS (JUNE 2012) Drilling Inventory Economics Recent Well Highlights BOE/D 500 Skyy 2-33 HC 30-day IP BOE/D 2,439 400 EUR MBOE 1,553 300 Bombay 3-32 HB Galileo 2-4 HA 30-day IP BOE/D 2,165 30-day IP BOE/D 679 200 EUR MBOE 1,305 EUR MBOE 794 100 0 0 6 12 18 24 30 36 4
Slide 59: Cleveland: Highest Average Recoveries in the Area
CLEVELAND APACHE RECOVERIES ARE THE HIGHEST AVERAGE IN THE AREA Allison 20 #3H Cleveland Gas Acres (000) 527 (268 net) 30-day IP BOE/D 689 EUR MBOE 378 Net MBOE/D (Dec) 3.8 2012 New Wells 35 Drilling Inventory 2,302 Locations 195 MMBOE net Daniels 138 #2H Taz 69 #3H Type Log Cleveland Oil Cleveland
Slide 60: Cleveland: Drilling Inventory Economics
CLEVELAND DRILLING INVENTORY ECONOMICS (JUNE 2012) Drilling Inventory Economics Recent Well Highlights BOE/D 350 300 250 Adams 138 #3H Wamble E #1H Cleveland Oil Cleveland Oil 30-day IP BOE/D 399 200 30-day IP BOE/D 783 EUR MBOE 300 EUR MBOE 278 150 100 50 0 0 6 12 18 24 30 36 42 48 54 60 McGarraugh
Slide 61: Canyon Wash: Apache-Led Exploration Play
CANYON WASH APACHE-LED EXPLORATION WASH PLAY Cheyenne Creek 30-day IP BOE/D 1,875 Acres (000) 141 (93 net) EUR MBOE 1,452 Net MBOE/D (Dec) 1.8 2012 New Wells 15 Existing Drilling Inventory 1,016 Locations 61 sq mi 3D 101 MMBOE net 244 sq mi Type Log GR Res NPhi DT Paint Ridge Apache 3D 6 wells Targe
Slide 62: Canyon Wash: Drilling Inventory Economics
CANYON WASH DRILLING INVENTORY ECONOMICS (JUNE 2012) Drilling Inventory Economics Recent Well Highlights BOE/D 400 Bivins-LIT 28-2 30-day IP BOE/D 315 350 EUR MBOE 200 300 250 200 Bivins-LIT 3-2 150 30-day IP BOE/D 1,001 EUR MBOE 736 100 50 Boys Ranch 116-1 30-day IP BOE/D 619 0 EUR MBOE 423 0 6 12
Slide 63: Central Region 2012 Drilling Highlights
CENTRAL REGION 2012 DRILLING HIGHLIGHTS Baker 5-15H Cherokee 427 BOPD, 500 MCFD Adams 137 4H Cleveland 295 BOPD, 274 MCFD Ramsey 58-15H Baumann 394 3H Karen 1-15HD GWB Cleveland Tonkawa 208 BOPD, 5746 MCFD 182 BOPD, 1726 MCFD 362 BOPD, 1224 MCFD Steward 1-20HD McGarraugh 154 2H Tonkawa Cleveland 800
Slide 64: Central Region Selected 2012 Oil Completions
CENTRAL REGION SELECTED 2012 OIL COMPLETIONS Well Name WI (%) County Formation TVD IP(30 Day Avg) Bivins-Lit 115 #5 73.5 Oldham Canyon Wash 9,174’ 1,210 Bo/d + 1,110 Mcf/d Boys Ranch 116 #1 73.5 Oldham Canyon Wash 8,980’ 707 Bo/d + 600 Mcf/d Boys Ranch 116 #3 73.5 Oldham Canyon Wash 9,700’* 631 Bo/d
Slide 65: Central Region Selected 2012 Liquid Rich Gas Completions
CENTRAL REGION SELECTED 2012 LIQUID RICH GAS COMPLETIONS Well Name WI (%) County Formation TVD IP(30 Day Avg) Baumann 394 3H 97.9 Ochiltree Cleveland 7,296’ 3,726 Mcf/d + 182 Bo/d Stiles 3 SL #21-3H 90 Wheeler GW 12,712’* 5,420 Mcf/d + 429 Bo/d + 639 Bngl/d Bartz 19 SL #20-19H 99.9 Wheeler GW 13,273
Slide 66: Canada Region
CANADA REGION TREMENDOUS ACREAGE WITH DIVERSE LIQUIDS OPPORTUNITIES LEASEHOLD: 6.9 MM gross acres 2012 Highlights 2013 Plans Liquids Production +9% (22 MBbls/d) Invest $0.5 Bn Total Production 122 MBoe/d Average Rigs 7 Average Rigs 5 Wells 150 Wells 169 Oil and Liquids- Sparky, Blue Sky, Beaver Hill
Slide 67: Building for the Future
67 BUILDING FOR THE FUTURE Apache
Slide 68: 21% of 2013 Capital for Mid to Long-Term Projects
BUILDING FOR THE FUTURE 21% OF 2013 CAPITAL FOR MID TO LONG-TERM PROJECTS 13’ Capex Total CAPEX: $10.5B Project ($MM) Online in 2014 Project CAPEX: $2.2B Balnaves 230 Coniston 170 Other E&D Varanus Comp 110 $3.7B Other 130 Australia 640 Projects $2.2B Lucius 110 NA Onshore E&D $4.6B Heidelberg 90 GO
Slide 69: Australia's Extensive Development Pipeline
BUILDING FOR THE FUTURE AUSTRALIA’S EXTENSIVE DEVELOPMENT PIPELINE 2012 Highlights Production 64.6 Mboe/d Wells Drilled 15 (10 exploration) Full year of production at Devil’s Creek Gas Plant; Operational Macedon Project over 90% complete 2013 Plans E&D Capital $1.9B Wells 16 (6 exploration) LEASEHOL
Slide 70: Macedon Gas Field and Plant
BUILDING FOR THE FUTURE MACEDON GAS FIELD AND PLANT Apache WI 28.57% Operator BHPB First Production 2013 WESTERN AUSTRALIA Net Production 35 MMCF/D MACEDON FIELD Ashburton North Strategic Industrial Area Includes construction of (LNG Site) ONSLOW onshore gas plant with 200 MMCF/D gross capacity Tu
Slide 71: Coniston Oil Field Development
BUILDING FOR THE FUTURE CONISTON OIL FIELD DEVELOPMENT Coniston Novara Development (New) Van Gogh Development (Existing) Ningaloo Vision FPSO Tie-back field development utilizing Apache’s Apache WI 52.50% (Operator) FPSO Ningaloo Vision Partner Inpex 7 multi-lateral producers, 2 water injectors
Slide 72: Balnaves Oil Field Development
BUILDING FOR THE FUTURE BALNAVES OIL FIELD DEVELOPMENT Apache WI 65% (Operator) Partner Kufpec First Production 2014 Net Production 18.7 MBO/D Subsea development through the FPSO Armada Claire Major equipment packages and installation contract in final stages of award Gas re-injected for later
Slide 73: North Sea: Accelerating Drilling on Expanded Footprint
BUILDING FOR THE FUTURE NORTH SEA: ACCELERATING DRILLING ON EXPANDED FOOTPRINT 2012 Highlights Production Growth +36% YoY (75 Mboe/d) Wells Drilled 21 Awarded 11 operated & 1 non-op new licenses; Installed jacket for Forties Operational Alpha Satellite platform; Commenced 3D seismic survey of Beryl
Slide 74: Forties Alpha Satellite Platform
BUILDING FOR THE FUTURE FORTIES ALPHA SATELLITE PLATFORM New 4-pile jacket & deck (17,000 tons) 18 new well slots allowing access to additional targets Increased processing capacity & power First oil expected 2H 2013 74
Slide 75: Deepwater Region
DEEPWATER REGION LONG TERM GROWTH AND EXPLORATION POTENTIAL LEASEHOLD: 900,000 gross acres 2012 Highlights 2013 Plans Production ~16 Mboe/d Invest $0.4 Bn Average Rigs <1 Rigs 2 under contract Wells 5 Wells 7 (including 3 exploration) Success Rate 60% San Marcos, Guadalupe and Exploration Prospects
Slide 76: Lucius Oil Field Development
BUILDING FOR THE FUTURE LUCIUS OIL FIELD DEVELOPMENT Apache WI 11.7% Operator Anadarko First Production 2014 Net Production 9.4 MBOE/D Net EUR 35.1+ MMBOE resource Proven Pliocene & Miocene subsalt oil development in 7,000’ WD Significant exploration position in the area Plan to Drill 4 Wells
Slide 77: Heidelberg Oil Field Development
BUILDING FOR THE FUTURE HEIDELBERG OIL FIELD DEVELOPMENT Tahiti Discovered Apache WI 12.5% Chevron, 2002 Resource 450+ MMBOE Operator Anadarko Caesar/Tonga Discovered First Production Mid-2016 (Pending FID) Anadarko, March 2012 Resource 200 – 400 MMBOE Net Production 10.0 MBOE/D Net EUR 25-50 MMBOE
Slide 78: LNG Developments with a Strategic Partner
BUILDING FOR THE FUTURE LNG DEVELOPMENTS WITH A STRATEGIC PARTNER Wheatstone LNG – NW Australia Kitimat LNG – NW Canada Construction underway 1st mover for Canadian exports 1st cargo projected ~YE16 Monetizes ~50 TCF Monetizes ~11 TCF Initial capacity up to 1.5 Initial capacity up to 1
Slide 79: Wheatstone LNG
WHEATSTONE LNG Apache WI 13% Operator Chevron First LNG Delivery 2016 Initial Gross Up to 1.25 BCF/D Capacity Site work has begun and major long lead items have been ordered with partial delivery of gas turbines Platform substructure fabrication to commence in 2013 80% of capacity contracted t
Slide 80: Kitimat LNG
KITIMAT LNG Apache WI 50% Partners CVX (50%) At 54 ̊ ̊ north, Kitimat First Delivery Pending FID is one of North America’s closest ports Initial Gross Up to 1.5 BCF/Day to Asian markets. Capacity Kitimat-Tokyo 3,988 nm, 10 days Qatar-Tokyo 6,500 nm, 16 days Upstream operated by Apache Prolific W
Slide 81: Liard Basin
LIARD BASIN 48 TCF, BEST UNCONVENTIONAL GAS RESERVOIR IN NORTH AMERICA Apache has unlocked and secured Horn River Liard the highest quality shale reservoir in North America 430,000 gross acres (50% CVX) 210 TCF net gas in place, 48 TCF net sales gas 21 MMCF/D IP on a 6-stage frac believed to
Slide 82: Liard Basin: Best Unconventional Gas Reservoir in North America
LIARD BASIN BEST UNCONVENTIONAL GAS RESERVOIR IN NORTH AMERICA ard NE-PA Marcellus Haynesville Reservoir ReservoirUnitsLiard LiardNE-PA Marcellus NE-PA Marcellus HaynesvilleHaynesville Units Uni 15000 7000 - 11000 10000Depth - 13000 Depth9500 (ft) - 150009500 - 150007000 - 11000 7000 - 11000 10000 -
Slide 83: Liard Basin: Continuous Gas Filled Porosity
LIARD BASIN CONTINUOUS GAS FILLED POROSITY APA C-86-F APA D-28-B APA D-34-K Top Besa River C-86-F D-28-B D-34-K 15 miles Gas Filled Porosity Net pay thickness 1,024 feet 708 feet 425 feet Porosity 6.4% 7.0% 7.6% OGIP BCF/section 502 365 290 Well Type Vertical Vertical Horizontal Fracs 1 1 6 MMCF/D (
Slide 84: Additional Operating Regions
ADDITIONAL OPERATING REGIONS 84
Slide 85: Gulf Coast Onshore Region
GULF COAST ONSHORE REGION APPLYING MODERN TECHNOLOGIES TO A MATURE AREA LEASEHOLD: 1.4 MM gross acres 2012 Highlights 2013 Plans Net Production 27.6 Mboe/d Invest $0.3 Bn Average Rigs 2 Rigs 3 operated and 1 non-operated Wells 35 Wells 39 Success Rate 86% Production Increase 7 – 9% 85 Oil production
Slide 86: GOM Shelf Region
GOM SHELF REGION HIGH RETURNS & CASH FLOW LEASEHOLD: 3 MM gross acres 2012 Highlights 2013 Plans Net Production 97.2 Mboe/d Invest $1.0 Bn Average Rigs 5 Wells 30 Wells 36 Exploit Low-risk, liquids-rich projects Success Rate 80% Expand Inventory of permitted drill prospects 86 Awarded ~60 blocks in
Slide 87: Egypt Region
EGYPT REGION OPERATIONS CONTINUE UNABATED LEASEHOLD: 9.7 MM gross acres 23 Concessions 2012 Highlights 2013 Plans Gross Production Over 363 Mboe/d Invest $1.1 Bn Average Rigs 25 Wells 270 Wells 198 Drilling Targets Bahariya, Abu Roash, Development Lease Turnaround 34 days Jurassic and AEB 87 Success
Slide 88: Argentina Region
ARGENTINA REGION VACA MUERTA – A WORLD CLASS SHALE PLAY 2012 Highlights Record Production Over 48 Mboe/d Average Gas Plus Volumes 73.2 MMcf/d Average Gas Plus Price $4.89/Mcf Wells Drilled 30 Success Rate 100% 2013 Plans Invest $0.2 Bn Wells (net) 20 (16) Development Focus Gas Plus Exploration Focus
Slide 89: Vaca Muerta Shale: #1 International Player
VACA MUERTA SHALE #1 INTERNATIONAL PLAYER 1.3 million net acres in Vaca Muerta; Neuquen 586,000 net acres in liquids window Basin 0.8 BN barrels potential net recoverable Vaca Muerta Recent YPF Technical evaluation of liquids: Shale Wells now transitioning drilling for oil Apache leads Neuqu
Slide 90: Closing
90 CLOSING Apache
Slide 91: Apache Continues to Deliver Strong Results
APACHE CONTINUES TO DELIVER STRONG RESULTS 2012 production up 5.4% to 779 Mboe/d* 51% oil and liquids Production growth in 32 out of last 34 years Strong production replacement 2012 cash margins at over $40 per Boe 2012 Adjusted Earnings: $3.8 billion – 3rd best in history** 2012 cash
Slide 92: Apache Trades at a Significant Discount to Competitors
AND YET… APACHE TRADES AT A SIGNIFICANT DISCOUNT TO COMPETITORS Price / Book Value Price / 2013E Earnings 3.0x 24.0x 2.6x 2.5x 21.6x 21.1x 2.5x 20.0x 17.7x 2.1x 15.6x 2.0x 16.0x 1.6x 1.5x 10.8x 1.1x 12.0x 1.0x 8.4x 1.0x 8.0x 0.5x 4.0x 0.0x 0.0x A B C D E APA A C B E D APA EV / 2013E EBITDA Price / 2
Slide 93: 2013 Roadmap to Value Growth
2013 ROADMAP TO VALUE GROWTH Accelerate North America liquids growth Build the future: Advance major projects 2 world class LNG hubs: Decades of oil-linked free cash flow visibility Grow our dividend Optimize our portfolio focus Maintain our time-tested investment approach: cash rates
Slide 94: Appendix
94 APPENDIX Apache
Slide 95: Recent Egyptian Discoveries Confirming Additional Exploration Opportunities
RECENT EGYPTIAN DISCOVERIES CONFIRMING ADDITIONAL EXPLORATION OPPORTUNITIES Amoun NE-1X Discovery on the north flank of Apache Conc. WD 33-5 Amoun NE-1X Khalda Ridge Karama-15 Tested at 3,186 Bo/d of condensate and 11 mmcf/d from two zones in the Jurassic-aged upper and lower Safa formations.
Slide 96: Economics Assumptions
ECONOMICS ASSUMPTIONS Production profiles: Gross sales volumes per well unless noted otherwise “D+C Cost”: Gross drill and complete cost per well Prices: Forward curve as of 25 May 2012 2013 2014 2015 2016 WTI 91.60 89.20 87.38 86.54 Brent 102.20 97.96 94.42 91.86 NYMEX Gas 3.52 3.92 4.15 4.37