investor book - amazon s3book.pdf · investor book september 2016. | nyse: apc anadarko petroleum...

w w w . a n a d a r k o . c o m | N Y S E : A P C

A N A D A R K O P E T R O L E U M C O R P O R A T I O N

JOHN COLGLAZIERSenior Vice President

832 636 2306

ROBIN FIELDERVice President832 636 1462

PETE ZAGRZECKIDirector

832 636 7727

I N V E S T O RR E L A T I O N S

INVESTOR BOOKSeptember 2016

w w w . a n a d a r k o . c o m | N Y S E : A P C A N A D A R K O P E T R O L E U M C O R P O R A T I O NA N A D A R K O P E T R O L E U M C O R P O R A T I O Nw w w . a n a d a r k o . c o m | N Y S E : A P C

Cautionary LanguageRegarding Forward-Looking Statements and Other Matters

This presentation contains 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. Other than historical facts included in this presentation, all information and statements, including but not limited to information regarding planned capital expenditures, estimated reserves, estimated production targets, drilling and development plans, the timing of production, planned capital expenditures, and other plans and objectives for future operations, are forward-looking statements. We believe that our expectations are based on reasonable assumptions. No assurance, however, can be given that such expectations 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 our ability to realize our expectations regarding performance in this challenging economic environment and meet financial and operating guidance; timely complete and commercially operate the projects and drilling prospects identified in this presentation; reduce our net debt; consummate the transactions described in this presentation and identify and complete additional transactions; achieve further drilling cost reductions and efficiencies; successfully plan, secure necessary government approvals, enter into long-term sales contracts, finance, build, and operate the necessary infrastructure and LNG park in Mozambique; and achieve production expectations on our projects. See “Risk Factors” in our Form 10-K for the year ended December 31, 2015, any subsequent quarterly report on Form 10-Q and any of our other public filings for a discussion of other factors that may cause actual results to vary. We undertake no obligation to publicly update or revise any forward-looking statements.

This presentation has been prepared by us and includes market data and other statistical information from sources believed by us to be reliable, including independent industry publications, government publications or other published independent sources. Some data are also based on our good faith estimates, which are derived from our review of internal sources as well as the independent sources described above. Although we believe these sources are reliable, it has not independently verified the information and cannot guarantee its accuracy and completeness.

Cautionary Note to Investors - The U.S. 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. We may use terms in this presentation, such as “resources,” “net resources,” “net discovered resources,” “recoverable resources”, and similar terms and quantities of “estimated proved reserves” using underlying management assumptions that the SEC’s guidelines strictly prohibit us from including in filings with the SEC. These quantities may not constitute "reserves" within the meaning of the SEC’s rules. Actual quantities that may be ultimately recovered from our interests may differ substantially. Factors affecting ultimate recovery include the scope of our ongoing drilling program, which will be directly affected by the availability of capital, drilling and production costs, availability of drilling services and equipment, drilling results, lease expirations, transportation constraints, regulatory approvals and other factors; and our actual drilling results, including geological and mechanical factors affecting recovery rates. Such estimates may change significantly as development of our oil and gas assets provide additional data.

U.S. Investors are urged to consider closely the oil and gas disclosures in our Form 10-K for the year ended December 31, 2015, File No. 001-08968, available from us at www.anadarko.com or by writing to us at: Anadarko Petroleum Corporation, 1201 Lake Robbins Drive, The Woodlands, Texas 77380 Attn: Investor Relations. You can also obtain this form from the SEC by calling 1-800-SEC-0330.

Actual quantities that may be ultimately recovered from our interests may differ substantially from the estimates in this presentation. Factors affecting ultimate recovery include the scope of our ongoing drilling program, which will be directly affected by commodity prices, the availability of capital, drilling and production costs, availability of drilling services and equipment, drilling risks, lease expirations, transportation constraints, regulatory approvals and other factors, and actual drilling results, including geological and mechanical factors affecting recovery rates.

2


Relative Resource Size

Accelerate World-Class Delaware & DJ BasinsGrow Higher-Margin GOM Oil Volumes & Free Cash Flow1

Redeploy Algeria & Ghana Free Cash Flow1

Create Option Value with Exploration & MozambiqueLeverage Midstream as a Competitive Advantage

Managing the Portfolio to Maximize Value

* Excludes Corporate and Midstream1. See Appendix for non-GAAP definitions and reconciliations

Gulf of Mexico$0.5

Exploration /Mozambique

$0.5

International$0.3 U.S. Onshore

$1.3

2016E E&P CAPITAL ALLOCATION*($ BILLIONS)

3


2015 (Divestiture-Adjusted)3 284

Positioned for Growth & Enhancing ValueBest-in-Class Capital AllocationOn Track to Exceed $3.5 Billion Monetizations in 2016Building Cash and Reducing DebtImproved Cost Structure by $800 Million per AnnumDriving Efficiency Gains and Improving MarginsAccelerating Oil Growth with Accretive Bolt-On Transaction: Expected to Close by Year End

1 Excludes East Chalk2 Excludes East Chalk and Wamsutter3 Excludes East Chalk, Wamsutter and prior year divestitures

2016 EXPECTATIONS TOTAL SALES VOLUMES (MMBOE)

March 1, 20161 282 - 286

March 1, 2016 Divestiture-Adjusted2 275 - 2792Q 2016 Updated Guidance2 277 - 281 2 MMBOE

4


Compelling GOM Acquisition Catalyzes Oil GrowthImmediately and Significantly Accretive with Very Attractive Valuation MetricsDoubles APC Ownership in LuciusGenerates ~$3 Billion Incremental GOM FCF1 (2017-21) at Current Commodity Strip Increases to ~$4 Billion at $60/Bbl and $2.75/Mcf

Incremental FCF1 Accelerates Delaware and DJ Growth, More Than Doubling Production by 2021

E S T I M AT E D A C C R E T I O N P E R N E T D E B T 1- A D J U S T E D S H A R E

2017 2018

EBITDAX1 22-26% 27-31%

PRODUCTION 10-12% 11-13%

E S T I M AT E D P R O P E R T YVA L U AT I O N M E T R I C S

2 0 1 7 E B I T D A X 1 M U L T I P L E P R O V E D R E S E R V E S

1.5x ~$13.50/ BOE

P R O D U C T I O N

~$21,000/ BOE

E B I T D A X 1

~$36.00/ BOE

Note: Assumes commodity strip prices as of 9/9/20161. See Appendix for non-GAAP definitions and reconciliations

5


U.S. Onshore Activity: Accelerating 2 World-Class AssetsD J B A S I N

1.5+ BBOE Net Resources4,000+ Drilling LocationsLeveraging Existing InfrastructureMinerals-Interest Ownership BenefitBreakeven BTAX PV-10 Price <$30/Bbl*

D E L A W A R E B A S I N

2+ BBOE Net Resources: Wolfcamp A Only7,000+ Wolfcamp A Drilling LocationsSignificant Existing & Expanding InfrastructureExpect Upside From Other Zones, Stacked PayBreakeven BTAX PV-10 Price <$35/Bbl*

~280

600+

2016E 2017E 2018E 2019E 2020E 2021E

Delaware & DJ BasinsSales-Volume Growth

(MBOE/d)

* New Drill, BTAX PV-10, assuming $2.30/Mcf

6


AVALON A & B 1,450 BOE/d

2ND BONE SPRING

2,050 BOE/d

UPPER WOLFCAMP4,000 BOE/d

LOWER WOLFCAMP

Testing

Achieved 24 Hour IPs*:

~40% 5-Year Oil Production CAGR Expect to Surpass 130,000 BOPD by 2021

Enhancing Margins and Returns Approaching 1 MMBOE EUR per well: ~60% Oil Driving Well Costs to <$5 Million per SLE Break-Even BTAX PV-10 <$35/Bbl* Optimizing Targeting, Spacing & Completions Average Cost for Basin Position ~$500/Acre

Largest Midstream Presence in Basin WES to Lever APC and Third-Party Volumes Rapidly Expanding Infrastructure Including Water

Delaware Basin: Accelerating Multi-Billion Barrel Oil Play

OV

ER

P

RE

SS

UR

ED

-Z

ON

ES

TO

TA

L T

HIC

KN

ES

S 8

,500

’

DELINEATING 8,500-FOOT STACK

Potential perSection Development

*Assumes 4,500’ SLE

YEAR-END 2016E WES/APC INFRASTRUCTURE

GAS GATHERING PIPELINES ~1,000 Miles

OIL GATHERING PIPELINES ~150 Miles

PROCESSING CAPACITY 1,025 MMcf/d

COMPRESSION 190,000+ HP

WATER GATHERING PIPELINES 100+ Miles

CULBERSON

REEVES

NEW MEXICO

TEXAS

WARD

WINKLER

LOVING

10 MILES

APC Acreage Gas Gathering Oil GatheringWES/APC Production Facility WES/APC Processing Plant

Top-Tier AcreageDefined by Over-Pressure,

Porosity and Organic Content

~580,000 GROSS ACRES IN HEART OF THE PLAY


7


Approaching 400,000 BOE/d by 20211.5+ BBOE Net Resources ~4,000 Identified Drilling Locations

Enhancing Margins and Returns Driving Well Costs to <$2.4 Million per SLE Break-Even BTAX PV-10 <$30/Bbl* Legacy Acreage Position

Leveraging Competitive Advantages Minerals-Interest Ownership Infrastructure in Place

DJ Basin: Integrated Approach Enables Continued GrowthCONSOLIDATED CORE ACREAGE

WITH MINERALS-INTEREST UPLIFT

Y E A R - E N D 2 0 1 5 I N F R A S T R U C T U R E

G A S G A T H E R I N G P I P E L I N E S 3,100+ Miles

O I L G A T H E R I N G P I P E L I N E S ~250 Miles

P R O C E S S I N G C A P A C I T Y 1,175 MMcf/d

C O M P R E S S I O N 270,000+ HP

OILLIGHT OIL

5 MILES

APC Acreage APC Mineral InterestOil Pipelines Gas Gathering WES/APC Processing Plant

0

100

200

300

$0

$1

$2

$3

Net

Sal

es V

olum

es (M

BO

PD)

Bill

ions

Growth Within FCF(E&P Only)

EBITDAX Capital MonetizationsAdj. FCF (Cumulative) Net Sales Volumes

2011 2012 2013 2014 2015 2016E*

Note: EBITDAX excludes corporate G&A; see Appendix for non-GAAP definitions Based on strip prices as of 9/9/2016

350,000 Net Acres


8

w w w . a n a d a r k o . c o m | N Y S E : A P C A N A D A R K O P E T R O L E U M C O R P O R A T I O N

M I S S I S S I P P I C A N Y O N

A T W A T E R V A L L E Y

W A L K E R R I D G E

G R E E N C A N Y O N

K E A T H L E Y C A N Y O N

G A R D E N B A N K SE A S T B R E A K S

A L A M I N O S C A N Y O N

L U N D

A M E R Y T E R R A C ES I G S B E E E S C A R P M E N T

Enhanced Premier GOM Position with Acquisition

NANSEN

CONSTITUTION

HEIDELBERG

BOOMVANGCaesar Tonga K2 Complex

BLIND FAITH

Conger

Power Play

LUCIUS

MARCO POLO

BALDPATE

F C X A S S E T S

Acreage (115 WI Blocks)

Exploration Opportunity

HOLSTEIN

HOOVER

MARLIN

HORN MOUNTAIN

RAM POWELL

Attractive Valuation: 1.5x 2017E EBITDAX1 Multiple*Doubled Ownership in Lucius to ~49%Doubled GOM Production to ~155,000 BOE/d (~85% Oil)Added ~20 Tieback Opportunities: 50+% BTAX ROR at StripAdded 15+ Identified Exploration Prospects

A N A D A R K O A S S E T S

Acreage (269 WI Blocks)

Recent Discovery

Note: Pro Forma WI and Blocks* Based on purchased property value and 2017 estimates and current commodity strip pricing as of 9/9/20161 See Appendix for non-GAAP definitions and reconciliations

2 0 1 6 E A P C A C T I V I T Y

7 Capital-Efficient Tiebacks 3 Appraisal Wells 1 Exploration Well

9


3 MILES

948

904903

860859

Heidelberg


Heidelberg Unit44% WI

APC WI BlockOil FieldSuccessful WellPlanned DrillingSubsea Tie BackSalt

-

50

100

150

2014 2016E 2022E

Caesar/Tonga Gross Production Forecast (MBOE/d)

Gulf of Mexico: Enhancing Value Through Tiebacks

771

768

726

680

770

679

724

Ticonderoga50% WI

Constitution100% WI

TahitiORRI 3+% 640

683

727

Caesar/Tonga33.8% WI

3 MILES


HEIDELBERG2 0 1 6 P L A N N E D A C T I V I T Y

Achieved First Oil2 Additional Phase 1 Wells

APC WI BlockOil FieldPhase 1 Oil ProducerPhase 2 Oil ProducerSubsea Tie BackSalt

Phase 1 Phase 2 Phase 1 Phase 2 Equity Tieback Potential

TIE-BACK ECONOMICS

30+ Opportunities

Gross EUR/Well 20 - 25 MMBOE

Development Cost <$12/Bbl

Cycle-Time ~6 Months

BTAX10 Breakeven <$15/Bbl

Facility Economics FurtherEnhanced Through PHAs

-

50

100

150

200

2015 2024E

Lucius Gross Production Forecast (MBOE/d)

-

50

100

150

2016E 2022E

Heidelberg Gross Production Forecast (MBOE/d)

Lucius Third-Party Fee Equity Tieback Potential

K E A T H L E Y C A N Y O N

S I G S B E E E S C A R P M E N T

793 794

877

918

Hadrian SouthGas Field

82 83

41

84

39 40

874

920919

876875

Lucius Unit49% WI

3 MILES

Lucius

38

Phobos100% WI APC WI Block

Oil FieldSuccessful WellPlanned DrillingSubsea Tie Back

921

965

Hannibal Prospect100% WI

-

4

8

12

Year 1 Year 5

Tie-Back Type-CaseGross Production Forecast (MBOE/d)

2016E

LUCIUS2 0 1 6 P L A N N E D A C T I V I T Y

1 Tieback

CAESAR/TONGA2 0 1 6 P L A N N E D A C T I V I T Y

2 TiebacksPhase 2 Facility Work

Pro Forma WI and Blocks

Pro Forma WI

10


A F R I C A

Ghana & Algeria: Higher-Margin Oil

Algeria 2+ Billion Barrels Cumulative Gross Production Flat YOY Volumes for <$40 Million Capital

Ghana TEN: First Oil Achieved 3Q16 Jubilee: Turret Solution Underway

APC WI BlockOil FieldGas CondensateExport Pipeline

BLOCK 404A

PK0

BLOCK208

10 MILES

16 KMS

OURHOUD CPF

HBNS CPF

EL MERK CPF

A L G E R I A

WEST CAPE THREE POINTS

MAHOGANY

TEAK

Jubilee Unit24% WI

20 MILES32 KMS

DEEPWATER TANO

NTOMME

Planned FPSO Location

TWENEBOA

WAWA

ENYENRA

TEN Complex17% WI

G H A N A

G H A N A &A L G E R I A

11


FID WHEN UNCERTAINTY

REMOVED

Mozambique LNG: Working Parallel Processes

APPROVE PLAN OF DEVELOPMENT

SECURE 8+ MMTPA SPAs

ADVANCE TOWARD ~2/3 LEVERAGE

Legal &Contractual Framework

OfftakeAgreements

Project Financing

MINIMAL 2016 CAPITAL REQUIRED

12


Net Discovered Resources

~6.5 BBOE

~$14 Billion

Monetized

~5 BBOE ~250 MBOE/d

Resources RetainedNet Production

Exploration: Creating Unmatched Value with Optionality

~$10 Billion Capital Invested

G u l f o f M e x i c o2 0 1 6 A C T I V I T Y

SHENANDOAHAppraisal Wells

WARRIORExploration Well

PHOBOSAppraisal Well

C O L O M B I A2 0 1 6 A C T I V I T Y

PURPLE ANGEL-1 Exploration Well GRAND COL

3D Seismic Acquisition

C Ô T E D ’ I V O I R E2 0 1 6 A C T I V I T Y

PAON Appraisal Well

PELICAN Exploration WellROSSIGNOL

Exploration Well

2 0 1 6 P L A N N E D A C T I V I T Y

C A P I T A L D R I L LT A R G E T N E T D I S C O V E R E D R E S O U R C E S

~$500Million

~8Wells

~250Million

13


-

200

400

600

2016E 2017E 2018E 2019E 2020E

Enhancing Value & Positioned for GrowthMaintain Financial Discipline and Invest Within Cash InflowsContinue Active Monetization ProgramContinue to Drive Cost Savings and Realize Efficiency GainsAccelerate Oil Growth from World-Class Assets

Double-Digit 5-Year Oil CAGR Within Cash FlowAPC Pro Forma Oil-Growth Profile

(MBOPD)

$50 Crude Oil Pricing

$60 Crude Oil Pricing

14

investor book - amazon s3book.pdf · investor book september 2016. | nyse: apc anadarko petroleum...

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