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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

    Note: All data 2006 unless noted

  • 82

    GOM/SLA Seismic Coverage

    El Paso leases3-D seismic coverageSeismic re-processed in-houseSeismic re-processed by vendors

    80,000+ sq. mi. GOM 3-D3,900+ sq. mi. SLA 3-D

    Catapult Project

    Extensive proprietaryreprocessed seismic

  • 83

    GOM/SLA Characterization

    Program emphasis on:

    Discrete structural and stratigraphic plays

    Geophysically-driven programs

    Higher rate, higher return wells

    Geared for about $300 MM of capital spending

    Repeatable portfolio of prospects

    Essentially flat production

  • 84

    GOM/SLA Production Growth

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

    Base Uplift

    107133

    165189

    209

    Average MMcfe/d

  • 85

    GOM/SLA Concentrated InventoryMiocene PleistoceneC. Miocene S. AdditionsW. Miocene Texas MioceneMain Pass Onshore S. LA

    Houston

    New Orleans

    Five year inventory at 2006 funding levelsDrill depths from 2,000'23,500'Additional prospects being generated in core trendsNew trends could add significant impact

  • 86

    GOM/SLA Competitive Strengths

    Extensive 3D seismic and leasehold base

    Advanced in-house seismic processing capability

    Expertise in application of seismic AVO technology

    Experience in deep, hostile directional drilling

  • 87

    S. LouisianaCatapult Project

    18,100'

    19,200'

    18,700'

    19,500'

    Net acres 34,000 2007 capital: $29 MM 2007 gross wells: 7 Avg. gross well stats:

    WI: 22% BCP, 37% ACP Capex: $20 MM$25 MM Reserves: ~30 Bcfe Rate: ~20 MMcf/d ~500 Bc/d

    Lo

    wer

    Mio

    cem

    e R

    eser

    voir

    s

    Sand Resistivity (HC Indicator)

    Siph She

    lf

    LafayetteLake Charles

    EPEP leases3D outline2006 discoveries

    Planulina S

    helf

    Camerina Shelf

    LA

  • 88

    GOM Lower Miocene

    Net acres 226,000 2007 capital: $145 MM 2007 gross wells: 14 66 gross blocks in trends Avg. gross well stats:

    WI: 34% BCP, 40% ACP Capex: $25 MM$30 MM Reserves: 35 Bcfe45 Bcfe Rate: ~30 MMcfe/d

    16,970'

    17,360'

    CRIS R SAND

    L. M

    ioce

    ne

    Res

    ervo

    irs

    W. GOM M/L Miocene

    ST/GI M

    iocene

    EPEP leases2006 discoveries

  • 89

    Texas Gulf Coast

  • 90

    Texas Gulf Coast

    TX

    Note: All data 2006 unless noted

    Key Statistics

    Production: 187 MMcfe/dReserves: 406 BcfeNet acres: 137,000Base decline: ~ 30%R/P: 6.0

    South Texas Wilcox

    Production: 27 MMcfe/dNet acres: 25,000

    Upper Gulf Coast Wilcox

    Production: 32 MMcfe/dNet acres: 31,000

    Vicksburg Frio

    Production: 123 MMcfe/dNet acres: 81,000

  • 91

    Texas Gulf Coast Characterization

    Program features include:

    Elements of onshore resource plays

    Seismically-driven prospect identification

    Detailed subsurface mapping

    Geared for capital growth

    ~ $200 MM on existing assets plus acquisition capital

    Targeting repeatable, mid-risk program

    Expect double-digit production growth in 2007

  • 92

    2006 YE Texas Gulf Coast Inventory

    S. Texas Wilcox

    Wilcox

    Vicksburg

    Vicksburg Expl.

    Upper Frio/Yegua

    Total

    129

    71

    71

    17

    30

    318

    160

    135

    135

    35

    25

    490

    PlaysUnrisked

    Gross WellsNet Resources

    (Bcfe)

    45 years of inventory

    Note: See cautionary statement on non-SEC proved reserves

  • 93

    Texas Gulf Coast Competitive Strengths

    Legacy assets, data and staff

    Access to infrastructure

    Extensive seismic database (Sabine to Rio Grande)

    Operational expertise

    Significant identified inventory in existing fields

    Attractive rig terms

  • 94

    South Texas Vicksburg Starr and Hidalgo Counties

    Jeffress Net acres: 17,000 2007 capital: $18 MM 2007 gross wells: 7 Avg. gross well stats:

    WI: 68% Capital: $3 MM$4 MM Reserves: 2 Bcfe4 Bcfe Rate: 2 MMcf/d8 MMcf/d

    Monte Christo Net acres: 12,500 2007 capital: $21 MM 2007 gross wells: 10 Avg. gross well stats:

    WI: 90% Capital: $2.5 MM$3.5 MM Reserves: 1 Bcfe3 Bcfe Rate: 1 MMcf/d3 MMcf/d

    Sta

    rr C

    o.H

    idal

    go C

    o.

    EPEP lease3D Coverage

    TX

  • 95

    Upper Gulf Coast Wilcox Lavaca County

    Net acres: 18,000 2007 capital: $32 MM 2007 gross wells: 7 Avg. gross well stats:

    WI: 88% Capital: $5 MM$8 MM Reserves: 2 Bcfe4 Bcfe Rate: 5 MMcf/d20 MMcf/d

    Lavaca

    EPEP lease3D Coverage

    Sand Resistivity (HC Indicator)

    M/L

    Wilc

    ox

    Res

    ervo

    irs

    10,500'

    11,000'

    14,000'

    Dry Hollow/Big Holler/Hope

    Speaks/Hardys Creek

  • 96

    South Texas WilcoxZapata County

    Net acres: 37,000 2007 capital: $85 MM 2007 Gross wells: 30 Avg. gross well stats:

    WI: 90% Capital: $2 MM$4 MM Reserves: 1 Bcfe3 Bcfe Rate: 2 MMcf/d5 MMcf/d

    Sand Resistivity

    14,000'

    13,200'

    11,400'

    10,700'

    Wilc

    ox/

    Lo

    bo

    Res

    ervo

    irs

    Zapata

    3D Coverage

    El Paso E&P Acreage

  • 97

    International

  • 98

    International Characterization

    Focus on short-cycle oil opportunities in proven plays

    Positions in Brazil and Egypt with low-moderate country risk

    Mix of exploration and development opportunities

    Focus on operated assets

    Investment phase getting underway

    Meaningful reserve/production growth beginning 2008

  • 99

    Brazil: Positioned for Growth

    Brazil 114 655

    UnriskedGross Wells

    Net RiskedResource

    (Bcfe)

    Key Statistics

    Net production: 24 MMcfe/dReserves: 248 BcfeNet acres: 361,000R/P: 29

    Rio deJaneiro

    Note: All data 2006 unless noted; see cautionary statement on non-SEC proved reserves

    Potiguar2 Production Blocks2 Development Blocks2 Exploration Blocks

    Camamu-Almada1 Development Block5 Exploration Blocks

    Espirito Santo1 Exploration Block

    Brazil

  • 100

    Pinana Development

    Project sanctioned at 100% WI

    1st oil 4Q 2008: 15 Mboe/d peak rate

    45 producers/45 injectors

    2007 Focus: Facilities, procurement and construction

    High pour point oil handled by heated process flow

    Development pending regulatory approval

    Pinana is hub for future Sardinha and Camarao phases

    Heated Process Flow

    Turret Moored FSO

  • 101

    Pinana Exploration UpsideCacau and Aai

    Two well drilling program at 100% WI

    Three Southern targets and deeper OWC

    Up to 100 MMboe unrisked potential

    Pc = 34%

    3D s

    urve

    y o

    utlin

    e

    W

    PinanaPODarea

    BAS-73

    2

    3

    Pinana Field (BAS-64)37 MMboe R2P1,350 acres(at -2,380 m ss/conservative OWC)

    1 3km

    Sergi depth

    -2380 m OWC

    BAS-74

    Aa-1

    -2420 m OWC

    Cacau-1

    BAS-64BAS-64

    1

    Rio de Janeiro

    Brazil

  • 102

    Bia & BM-ES-5 Block Prospectivity

    Light oil discoveries in Esprito Santo Basinnow total 700 MMboe, all since 2003

    10 km

    Petrobras oper WI 65%El Paso WI 35%

    PotentialNew Discovery-

    Prospect Trend

    10 km

    Petrobras operated WI 65%El Paso WI 35%

    Petrobras oper WI 100%

    Bia wildcat

    New Discovery

    Well: 4-ESS-164ADate: April 2006Operator: PetrobrsBlock: BES-100, area 1Reservoir: Upper Cretaceous sandsStatus: Discovery 280 MMbo

    (source: www.petrobras.com)

    Rio de Janeiro

    Brazil

  • 103

    Egypt: New Country Entry

    20072008 Activity

    S. Mariut:

    Aero mag survey

    Minimum 400 Km2 of 3D seismic

    S. Feiran:

    Contingent well

    NileDelta

    Western Desert

    Sinai

    El Paso E&P Acreage

    Gulf

    of

    Suez

    Block 8 (South Mariut): 100% WIArea: 1.2 MM acres (4,785 km2)

    South Feiran: 20% WI (ENI operated)Area: 65,000 acres (262 km2)

    Egypt

  • 104

    2007 Plan Summary

  • 105

    2007 Plan Highlights

    $1.7 billion capital program

    Approximately $1.2 billion domestic O&G capital

    $255 MM TGC acquisition

    $215 MM International O&G capital

    Volume guidance range: Flat to 8% year-to-year growth

    Expect reserve growth of 1%5% from known inventory

  • 106

    2007 Capital Allocation

    Onshore and GOM/SLA essentially flat to 2006

    South Texas Acquisition

    $255 MM acquisition price

    $85 MM E&D capital

    International capital doubles versus 2006

    Pinana exploration & development

    Egypt evaluation

    BM-ES-5 block exploration Total = $1.7 Billion

    Texas Gulf Coast$566 MM

    34%

    Intl $215 MM

    13%

    Onshore$505 MM

    30% GOM/SLA$281 MM

    16%

    Admin. and Other $113 MM

    7%

  • 107

    2007 Planned Drilling Activity

    (Pc < 40%)High

    Med

    (Pc > 80%)Low

    % of 2007 Drilling Capital

    14%

    20%

    66%

    Ris

    k

    GOM Int'l

    GOM Ons.

    Onshore TGC

    TGC Int'l

    23

    28

    599

    Gross Wells

  • 108

    2007 Production Profile

    0100200300400500600700800900

    1,000

    2004 2005 2006 2007

    Base Capital

    829767 798

    833

    ~ 30%base decline

    0%8%growth

    MMcfe/d

  • 109

    Why We Can

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