Apache Cordillera 20120123

8/2/2019 Apache Cordillera 20120123

1/20

THECORDILLERA

ENERGYPARTNERSIII,

LLCACQUISITION

ARESOURCEPLAYINTHEAPACHE

WAY

JANUARY23,2012


2/20


3/20

CordilleraEnergyPartnersIII,LLCmergesintoanApachesubsidiary

Fullstepupintaxbasis

Transactionvalue:$2.85billion

Consideration:

$2.25billionincash

6.273millionsharesofcommonstock(fixed);~$0.6billion

Timing:

EffectiveSeptember1,2011

Estimatedclosingearlysecondquarter2012

SUMMARYOFTERMS

3


4/20

254,000netacresinaprolific

fairway

Liquidsrich

stacked

pays

>60productivehorizons across

5,000+ofsection

>14,000potentiallocations

~50%held

by

production

Opportunitytopurchaseupto

$100MMinadditionalacreage

18,000boe/dnetproduction*

71.5MMboe Proved

Reserves

88MMboe withNGLs

306MMboe 3PResource

390MMboe withNGLs

SUBSTANTIALOPERATIONSWITH

EXCEPTIONALACREAGE

POSITION

4

20mi

APACHE 233,000net

acres

CORDILLERA 254,000netacres

TOTAL 487,000netacres

COMPOSITEFAIRWAY

*Asof12/12/2011.ExcludesNGLs.


5/20

Uniqueboltonopportunity moreofwhatweknowandlike

50+yearsexperienceintheAnadarkoBasin

Drilled>2,500

wells

in

the

area;

including

~500

in

the

Granite

Wash

Existingstaffabletoexecutegrowthplansimmediately

Richinventorywithpremiumeconomics

Horizontaldrilling

brings

step

change

to

play

returns

Multiple,stackedhorizontaltargets

Attractiveeconomicsatcurrentprices:liquidsgenerate80%ofrevenue

Visiblegrowthinlowrisk,repeatableplay

Decadesofrunningroomwith>14,000potentiallocations

Selffundingdevelopmentprogram

Immediatelyaccretivetoallmetrics

MORETHANDOUBLESOURPOSITION

INA

LIQUIDS

RICH

PLAY

5


6/20

MANYWAYSTOWINACROSSVASTACREAGEPRIMARYTARGETEDPLAYS

6

APACHE

CORDILLERA

Plays Evaluated (000sofnetacres) Apache Cordillera CombinedGraniteWash 125 191 316

Tonkawa 90 152 242

Cleveland 89 173 262

Marmaton 82 140 222

20mi

TONKAWA

MARMATON

GRANITEWASH

CLEVELAND

COMPOSITEFAIRWAY

APACHE 233,000netacres

CORDILLERA 254,000netacres

TOTAL487,000netacres


7/20

THEGRANITEWASHANDMORE

7

Estimated recoveryperwell*

Plays EvaluatedEUR

(MBOE)

Gas

(BCF)

Oil

(MBO)

NGLs

(MB) Liquids

GraniteWash

(liquidsrich)

1,117 3.5 134 400 48%

Tonkawa(oil) 268 0.5 130 60 71%

Cleveland(oil) 181 0.3 100 31 72%

Marmaton(oil) 228 0.4 105 64 74%

*Basedonevaluationeconomics


8/20

010,000

20,000

30,000

40,000

50,000

60,000

70,000

Dec.2011 Dec.2011 Dec.2012*

BO

E/D

ApacheCentralRegion Cordillera

ESTIMATEDCENTRALREGION2012GROWTH

8*December2012forecastbasedonacquisitioneconomics


9/20

53%ofproductionisliquids 80%ofrevenuefromliquids

30%

23%

47% OilNGL

Gas

51%

29%

20%

OilNGL*

Gas

CORDILLERA:ALIQUIDSGROWTHPLAY

9*NGLvaluecapturedasgasrevenueundercurrentpercentageofproceedscontracts. Notegasvolumesareshrunk.

Basedonproductionasof12/12/2011 Revenuebasedon2012forecast

6,200BO/D

4,800BNGL/D*

58MMCF/D*


10/20

$0.00

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00

$7.00

$8.00

DryGasWell GWWetGasWell

AddedNGLValue

DryGasValue

$6.95/MCF*

$3.00/MCF

Wetgaspricerealizationis>2xdrygasatcurrentprices

NGLs PROVIDEROBUSTGASREALIZATIONS

10*Typicalprocessinguplift; assumes$3/Mcf,$45/bbl NGLs


11/20

HITTINGTHEGROUNDRUNNING

50+yearsofdrilling,operatingandbusinessknowledge

Personnel,capitalandexpertisetoimplementdevelopment

programimmediately

104operatedhorizontalwellsdrilledwithnodryholes11

Apache wells (2,500)

Apache District office

Apache field office

Cordillera field office

20mi

CurrentStaffing:

Tulsa 109

Field 147

Region 256


12/20

0%

10%

20%

30%

40%

50%

60%70%

80%

90%

100%

1/09 4/09 7/09 10/09 1/10 4/10 7/10 10/10 1/11 4/11 7/11 10/11 0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

APACHESGROWTHTHROUGHHORIZONTALDRILLING

PercentLiqu

ids

BOE/D*

CentralRegionBOEproductionup26%in2011

Liquidsproductionincreased133%in2011

Productionfrom

planned

2012

drilling:

50%

liquids

Verticals: 11

Horizontals: 53

Verticals: 13

Horizontals: 44

Verticalproduction:1,571wells

Horizontalproduction:121wells

Operatedwells:

Verticals: 96

Horizontals: 7

20092010 2011

12*Includesnonoperatedwells.2011productionnumbersarepreliminary.Productionnumbersexclude4th quarterdivestitures.


13/20

UNLOCKINGGRANITEWASHVALUETHROUGH

HORIZONTALDRILLING

VERTICAL HORIZONTAL

Well Cost: $4.3MM $8.5MM

InitialRate: 1.3MMCF/D

150BNGL/D

50BC/D

6MMCF/D

710BNGL/D

225BC/D

417BOE/D 1,935BOE/D

GROSS EUR: 320MBOE 853

MBOE

(48%

liquids)

BFITPV10($90/$3): $0.453MM $5.1MM

BFITROR($90/$3): 14% 42%

TypicalStilesRanchhorizontalGraniteWashwellwith5,000

lateraland

20

stage

frac

can

cost

2X

avertical

but

may

recover

3Xthereservesat5Xtheinitialrate13


14/20

UNLOCKINGVALUETHROUGHHORIZONTALDRILLING

GRANITEWASH*

Well Cost: $8.5MM

InitialRate: 6MMCF/D

710BNGL/D

225BC/D

1,935BOE/D

GROSS EUR: 853MBOE

BFITPV10($90/$3): $5.1MM

ROR($90/$3): 42%

14

TONKAWA*

Well Cost: $5.0MM

InitialRate: 260BO/D

610MCF/D

78BNGL/D

440BOE/D

GROSS EUR: 268MBOE

BFITPV10($90/$3): $2.4MM

ROR($90/$3): 32%

CLEVELAND*

Well Cost: $4.1MM


375 MCF/D

50BNGL/D

362BOE/D

GROSS EUR: 181MBOE

BFITPV10($90/$3): $1.2MM

ROR($90/$3): 26%

MARMATON*

Well Cost: $4.4MM


350MCF/D

61BNGL/D

359BOE/D

GROSS EUR: 228MBOE

BFITPV10($90/$3): $1.1MM

ROR($90/$3): 25%

Horizontal

wells

with

multi

stage

completions

are

ideally

suited

forthelowpermeability,clastic reservoirsoftheAnadarkoBasin

*Basedonevaluationeconomics.GraniteWashvaluesbasedontypicalStilesRanchwell.


15/20

APACHES2011HZWASHHIGHLIGHTS

15

20mi

Stiles1116H

7.6MMCFD,185BOPD

Weatherly41H

7.1MMCFD,720BOPD

Brown859H

11.3MMCFD,

675

BOPD

Tyler455H

9.0MMCFD,430BOPD

Thetford423H

4.2MMCFD,1,564BOPD

Smith117H

10.6MMCFD,1,064BOPD

Smith116H

9.1MMCFD,966BOPD

McGarraugh 138#7H

674BOPD,825MCFD

Jines 100#2H

449BOPD,403MCFD

Adams138#2H

398

BOPD,

486

MCFD

Wheat6783H

248BOPD,574MCFD

APACHE

CORDILLERA

APAGW

APACLV

APAMAR


16/20

9,500

10,000

10,500

11,000

11,500

12,000

12,500

13,000

13,500

14,000

14,500

MORETHANONEMILEOFSTACKEDPAYS

SkinnerWash

GraniteWashCaldwell

GraniteWash

A

GraniteWashC

GraniteWashB

Tonkawa

Hogshooter

Checkerboard

Cleveland

Apache Elk City #1-23

AtokaWash

Shawnee

CottageGrove

Marmaton

Oil

Condensate

Gas16Industryhasdrilled~3,000HZwellstotheseformations,

ofwhich,ApacheandCordillera havedrilled~200


17/20

$

$250,000

$500,000

$750,000

$1,000,000

2012 2013 2014 2015 2016 2017

LeaseLevelIncome,M$ Capex,M$

SELFFUNDINGDEVELOPMENTPROGRAM*

17

Selffundingfrom2013forward

*ProgramforCordilleraassetsonly.ProjectionsasofJanuary2012.


18/20

0

10

20

30

40

50

60

2012 2013 2014 2015 2016 2017 2018 2019

N

ETPRODUCT

ION(MBOE/

D)

VISIBLEGROWTHPROFILEONACQUIREDACREAGE

18

DrillingProgram

PDP

Acquisitioneconomicsonlyinclude~2,000ofthe

potential14,000+identifiedlocations

Est.Wells

Drilled:

159

194

243

234

220

325

263

176

*Basedoncurrentproductionof18,000BOE/D


19/20

Uniqueboltonopportunity moreofwhatweknowandlike

Richinventorywithpremiumeconomics

Visiblegrowthinlowrisk,repeatableplay

Immediatelyaccretivetoallmetrics

AclassicApachetransaction:Negotiated.

Conservatively

financed.

Returnsfocused.Accretive.

SUMMARY

19


20/20

QUESTIONS

Apache Cordillera 20120123

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