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  • 53a meaningful company doing meaningful work delivering meaningful results

    Exploration &Production Company

  • 54

    Todays Agenda

    Opening Thoughts

    E&P Overview

    2006 Comments

    Business Priorities

    Division Reviews

    2007 Plan Summary

  • 55

    Goal To Be Top E&P Performer

    Solid foundation of people and assets in place

    Ability to replace reserves from identified inventory

    Organization executing at higher level of activity

    Build credibility on performance

    Provide visibility on future growth

    Improve capital and operating efficiency

  • 56

    El Paso E&P: Top 10 IndependentTotal Company

    Total year production of 798 MMcfe/d

    Year-end reserves of 2,637 Bcfe*

    R/P: 9.1

    *Includes our 43.1% share of Four Star; all data 2006 unless noted

    Egypt

    Texas Gulf Coast

    Total year production of187 MMcfe/d

    Year-end reserves of406 Bcfe

    R/P: 6.0

    Onshore*

    Total year production of 413 MMcfe/d

    Year-end reserves of 1,711 Bcfe

    R/P: 11.3

    Brazil

    Total year productionof 24 MMcfe/d

    Year-end reserves of 248 Bcfe

    R/P: 28.7

    GOM/SLA

    Total year production of174 MMcfe/d

    Year-end reserves of272 Bcfe

    R/P: 4.3

    Egypt

    2 exploration blocks

    NileDelta

    Sinai

    EgyptGulf

    ofSuez

    Brazil

    Rio de Janeiro

  • 57

    2006 Production Mix798 MMcfe/d

    International24 MMcfe/d

    3%

    TGC187 MMcfe/d

    23%

    GOM174 MMcfe/d

    22%

    Onshore413 MMcfe/d

    52%

    2007 range: 800860 MMcfe/d500

    600

    700

    800

    900

    2005 2006

    MM

    cfe/

    d

    El Paso Production Trend

    Note: Includes our 43.1% share of Four Star

  • 58

    2006 YE Proved Reserves2.6 Tcfe

    Onshore1,711 Bcfe

    65%

    GOM272 Bcfe

    10%

    TGC406 Bcfe

    15%

    Int'l248 Bcfe

    10%PUD27%

    PDP62%PDNP

    11%

    Note: Includes our 43.1% share of Four Star; all data 2006 unless noted

  • 59*Includes our 43.1% share of Four Star; see appendix for further information

    Reserve Reconciliation*

    Beginning balance 12/31/2005

    Production

    Extensions and discoveries

    Sale of reserves in place

    Purchases of reserves in place

    Performance Revisions

    Reserves before Price Revision

    Price Revision

    Ending balance 12/31/2006

    2,668

    (291)

    299

    (20)

    2

    40

    2,698

    (61)

    2,637

    Equivalent(MMcfe)

  • 60

    2006 E&P Capital by Division$1.2 Billion

    2007 capital: $1.7 billion

    GOM$310 MM

    26%

    TGC$217 MM

    18%

    Int'l$83 MM

    6%

    Onshore$500 MM

    42%

    Admin. & Other$91 MM

    8%

  • 61

    2006 YE Project Inventory

    Unrisked Wells

    Gross well count

    Net Risked Resource

    Resource potential (Bcfe)

    Technically mature

    Technically immature

    2,389

    625

    500

    318

    310

    180

    159

    180

    650

    141

    660

    170

    3,007

    1,775*

    1,500

    Onshore TGCGOM/SLA Intl Total

    More than 5 years of project inventory

    *Includes 724 Bcfe of PUD reserves including 35 Bcfe of Four StarNote: See cautionary statement on non-SEC proved reserves

  • 62

    2006 Accomplishments

    4%* organic production growth

    117%* reserve replacement excludingprice revisions

    PVR > 1 at $5.50/$37.00; 1.3 at 12/31/06 strip

    Gross well count up by ~30%

    High drilling success rates on major programs

    *Includes our 43.1% share of Four Star; see appendix for further information

  • 63

    2006 Accomplishments

    Integrated East Texas and Rockies acquisitions

    Announced significant acquisition for Texas Gulf Coast

    New country entry in Egypt

    Permit approval on Pinana (Brazil) exploration wells

    Continued efforts on process improvements

    Exited with 5 years of drilling inventory

  • 64

    2006 Challenges

    Volume and reserve performance impacted by:

    Extended GOM hurricane recovery operations

    Delayed cycle-times from services shortages

    Service cost pressures

    Early phase International spending impact

    Industry-wide staffing shortages

  • 65

    Priorities for Profitable Growth

    Get the right assets, get the assets right

    Focus on fundamentals

    Drive Performance Delivery Model concepts

  • 66

    Balanced Portfolio

    Region RiskGrowth

    Potential Cash Flow

    Onshore

    TGC

    GOM/SLA

    Low

    Low/Med

    Med/High

    Med/High

    Moderate

    Moderate

    Low Flat

    High

    Generator

    Neutral

    Generator

    UserGOM Int'l

    GOM Ons. TGC Int'l

    Onshore TGC

    (Pc < 40%)High

    Med

    (Pc > 80%)Low

    Ris

    k

    Intl

  • 67

    Attention to Fundamentals

    Strive to be full-cycle, low-cost

    Benchmark to assess relative performance

    Attract and retain excellent people

  • 68

    E&P Performance Delivery Model = Success

  • 69

    It All Starts With Inventory

    All employees doing impact work

    Robust database of future ideas

    Characterized by consistent criteria

    Value

    Capital efficiency

    Size and impact

    Generated or re-loaded from:

    Base production optimization

    Resource studies

    Exploration activities

    Acquisitions

    License Ready

    Drillable

    Concepts

    Leads

    Prospects

    Recommended

    Rig Ready

    Resource Potential Geologic risked Mean

    Tec

    hn

    ical

    ly M

    atu

    reT

    ech

    nic

    ally

    Imm

    atu

    re

    Mat

    uri

    ty a

    nd

    Exe

    cuti

    on

    Cer

    tain

    ty

    Low

    High

  • 70

    Striving for Excellence

    Learning organization

    Growing competencies

    Project management

    Operations excellence

    Improved safety

    Average Rig Activity

    2005 2006

    WorkoversRecompletionsDrilling & completion

    24

    115

    40

    31

    16

    9

    56

  • 71

    Onshore

  • 72

    Lower-48 Unconventional Resources

    *Includes our 43.1% share of Four Star except net acres; all data 2006 unless noted

    Rockies

    Production: 55 MMcfe/dReserves: 246 BcfeNet acres: 364,000

    Raton Basin

    Production: 76 MMcfe/dReserves: 343 BcfeNet acres: 605,000

    Arklatex

    Production: 122 MMcfe/dReserves: 448 BcfeNet acres: 104,000

    Mid-Continent

    Production: 28 MMcfe/dReserves: 110 BcfeNet acres: 319,000

    Black Warrior Basin

    Production: 64 MMcfe/dReserves: 342 BcfeNet acres: 172,000

    Total Onshore*

    Production: 413 MMcfe/dReserves: 1,711 BcfeNet acres: 1,692,000Base decline: 20%R/P: 11.3

  • 73

    Onshore Characterization

    High-quality, concentrated asset base

    Material core positions

    Extensive project inventory

    Strong positions in resource plays with running room

    Geared for $500 MM$550 MM annual capital spend

    Targeting repeatable, low-risk programs

    Predictable, mid-single digit production growth

  • 74

    Onshore Organic Production Growth

    4Q 2005 1Q 2006 2Q 2006 3Q 2006 4Q 2006

    Base Capital Uplift

    405 405 411 415420

    Average MMcfe/d

    Note: Includes our 43.1% share of Four Star

  • 75

    2006 YE Onshore Project Inventory

    Rockies

    Black Warrior

    Arklatex

    Mid-Continent

    Raton

    Total

    237

    672

    615

    507

    358

    2,389

    195

    160

    440

    115

    215

    1,125

    PlaysUnrisked

    Wells

    Net RiskedResources

    (Bcfe)

    45 years of inventory

    Note: See cautionary statement on non-SEC proved reserves

  • 76

    Onshore Competitive Strengths

    Resource play technical expertise

    Proven ability to execute large programs

    Existing inventory of repeatable opportunities

    Concentrated positions with high working interest

    Ability to apply technology for improved efficiency

  • 77

    Raton BasinCoal Bed Methane

    Net acres: 605,000 2007 capital: $115 MM 2007 gross wells: 178 Average gross well statistics:

    WI: 100% Capex: $0.5 MM$0.7 MM Reserves: 0.3 Bcfe0.9 Bcfe Rate: 100 Mcf/d175 Mcf/d

    NM

    CO

    Vermejo Park Ranch

    EPEP minerals

  • 78

    Net acres: 172,000 2007 capital: $52 MM 2007 gross wells: 145 Average gross well statistics:

    WI: 74% Capex: $0.4 MM$0.5 MM Reserves: 0.2 Bcfe0.6 Bcfe Rate: 100 Mcf/d300 Mcf/d

    Black Warrior BasinCoalbed Methane

    Tuscaloosa

    Jefferson

    AL

    Blue Creek West

    Short Creek

    Brookwood

    EPEP lease

    White Oak Creek

  • 79

    Illinois BasinNew Albany Shale

    Net acres: 118,000 Average gross well stats:

    WI: 47% Capex: $1 MM Gross production > 2 MMcf/d

    from 14 wells 2007 Focus

    Expand core producing area Additional new area tests Productivity enhancement

    Pike

    IN

    DuboisEPEP lease

    Martin

    Knox

    Daviess

  • 80

    Gulf of Mexico (GOM)/South Louisiana (SLA)

  • 81

    GOM/SLA Position

    TX LAMS AL

    Key Statistics

    Production: 174 MMcfe/dReserves: 272 BcfeNet acres SLA: 34,000Net acres GOM: 688,000Total net acres: 722,000Decline rate: 40%50%R/P: 4.3

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