Wells Fargo Appendix v2filecache.investorroom.com/mr5ir_anadarko/869/download/Wells Far… · Total...

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

BRIAN KUCKDirector

832 636 7135

SHANDELL SZABODirector

832 636 3977

PETE ZAGRZECKIDirector

832 636 7727

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

APPENDIX

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

Differentiating Capital Allocation & Portfolio Management

$0

$5

$10

$15

Bill

ions

GOM

2011 2012 2013 2014 2015 2016E$0

$5

$10

$15

Bill

ions

U.S. Onshore (E&P Only)

2011 2012 2013 2014 2015 2016E$0

$5

$10

$15

Bill

ions

International

2011 2012 2013 2014 2015 2016E

EBITDAX Monetizations TPE Capital Adj. FCF (Cumulative)** Based on consensus prices as of 5/2/2016: WTI $40/Bbl and HH $2.35/McfNote: EBITDAX excludes corporate G&A; see Appendix for non-GAAP definitions

-$3

$15

Bill

ions

Total Company

Adj. DCF Monetizations TPE Capital** Adj. FCF (Cumulative)

2011 2012 2013 2014 2015 2016E*

* Based on consensus prices as of 5/2/2016: WTI $40/Bbl and HH $2.35/Mcf** Excludes impact from Deepwater Horizon Event and TronoxNote: See Appendix for non-GAAP definitions and reconciliations

16


Anticipate Periodic TransactionsWES Independently Funds Significant Midstream ExpansionsProvides Visible Cash Source

$0

$400

$800

$1,200

2008 2009 2010 2011 2012 2013 2014 2015 2016E**

Mill

ions

~$6 Billion Returned to Anadarko*

Distributions Asset Sales to WES WGP Monetizations

WES & WGP: ~$13 Billion Value for Anadarko~$7 BILLION*

LP UNIT VALUE OWNED BY ANADARKO

~30% LP**~2% GP

78%LP**

Western GasPartners, LP

Anadarko

Western GasEquityPartners, LP

NYSE:WGP

NYSE:WES

~8%LP**

GP

* As of 6/17/2016** Fully diluted. Assumes outstanding Tangible Equity Units (NYSE: AEUA) convert to 7.9 million WGP Common Units

17


U.S. Onshore: Reducing Activity to Preserve Value

D E L A W A R E B A S I NP L A N N E D A C T I V I T Y

2015~7 Rigs

~2 Frac Crews

2016E4+ Rigs

1+ Frac CrewsN E T S A L E S V O L U M E S

2015

32MBOE/d

2016E

42 - 44MBOE/d

E A G L E F O R DP L A N N E D A C T I V I T Y

2015~4 Rigs

~3 Frac Crews

2016ENo Rigs

~1 Frac CrewN E T S A L E S V O L U M E S

2015

85MBOE/d

2016E

71 - 73MBOE/d

E . T X / N . L AP L A N N E D A C T I V I T Y

2015~3 Rigs

~1 Frac Crew2016ENone

N E T S A L E S V O L U M E S

2015

57MBOE/d

2016E

48 - 50MBOE/d

M A R C E L L U SP L A N N E D A C T I V I T Y

2015None

2016ENone


2015

75MBOE/d

2016E

69 - 71MBOE/d

D J B A S I NP L A N N E D A C T I V I T Y

2015~7 Rigs

~3 Frac Crews

2016E~1 Rig

1+ Frac CrewsN E T S A L E S V O L U M E S

2015

224MBOE/d

2016E

232 - 235MBOE/d

G R E A T E R N A T U R A L B U T T E S

P L A N N E D A C T I V I T Y

2015~1 Rig

~1 Frac Crew2016ENone


2015

69MBOE/d

2016E

61 - 64MBOE/d

Note: Planned activity represents operated activity only

18


Midstream: Integration with Upstream Creates ValueEnables Asset Operational ControlEnsures Timely Well ConnectionsImproves Price RealizationsLeverages Third-Party Commitments

$0

$400

$800

$1,200

2009 2010 2011 2012 2013 2014 2015 2016E

Mill

ions

Midstream Asset-Level EBITDA*

Processing PlantMarket CenterOil Equity PipelineNGL Equity PipelineNGL Pipeline*Includes WES EBITDA

FRONT RANGE

OPPL

WHITE CLIFFSSADDLEHORN

ENTERPRISE

Conway, KSNGL HUB

Cushing, OKWTI HUB

ChipetaLancaster

WattenbergPlatte Valley

COSF

Brasada

MAPL / SEMINOLE

TEXAS EXPRESS

ETC

Mt. Belvieu, TXNGL HUBRamsey

BonesMi Vida

Note: See Appendix for non-GAAP definitions

EAGLEFORDProcessing Capacity 200 MMcf/d

DELAWARE BASINProcessing Capacity 625 MMcf/d

2016E Additional Capacity 400 MMcf/d

GREATER NATURAL BUTTES

Processing Capacity 980 MMcf/d

DJ BASINProcessing Capacity 1,175 MMcf/d

Y E A R - E N D 2 0 1 5

P I P E L I N E S T H R O U G H P U T G A T H E R I N G P R O C E S S I N GC A P A C I T Y

~18,000Miles

5+Bcf/d

~350MBOPD

~4Bcf/d

19


Gulf of Mexico: Anadarko’s Superior Value-Creation Model

Proven Oil Finders* 60+% Success Rate

Industry-Leading Project Management Leader in Standardization Utilize Strategic Partnerships Leverage Existing Infrastructure

Develop the Best, Divest the Rest* $4+ Billion Monetizations $2+ Billion Carried-Interest Agreements

Deep Inventory of Opportunities

*2006 - 2015 ResultsNote: See Appendix for non-GAAP definitions

Geologic Advantage Infrastructure Advantage Commercial Advantage

20

$16 BillionAdjusted FCF2006 - 2015

800+ MMBOEDiscovered Net Resources

Converting to Value

Future Exploration Success


CONSTITUTION

MARCO POLO

LUCIUS

21

Gulf of Mexico: Low-Cost, High-Return Investment OpportunitiesFocused on Capital-Efficient Tiebacks 15 - 30 Development Well Inventory

Advancing Appraisal OpportunitiesMinimal Exploratory Drilling

HEIDELBERG

L U C I U SP L A N N E D A C T I V I T Y

1 Tieback

HEIDELBERGP L A N N E D A C T I V I T Y

Achieved First Oil2 Additional Wells

K 2 C O M P L E XP L A N N E D A C T I V I T Y

2 Tiebacks

CAESAR/TONGAP L A N N E D A C T I V I T Y

2 TiebacksPhase 2 Facility Work

G U L F O F M E X I C OGross Acres: ~1.6 Million

APC 262 WI Blocks

APC Exploration/Appraisal

G O M N E T S A L E S V O L U M E S 2 0 1 5 2 0 1 6 E

TOTAL (MBOE/D) 85 76 - 80LIQUIDS (MBBL/D) 60 63 - 67

T I E B A C K O P P O R T U N I T I E S *

I N V E N T O R Y

CAESAR/TONGA 5 - 8 WELLS

K24 - 7 WELLS

+2 Potential New Fields

HEIDELBERG3 - 6 WELLS

+2 Potential New Fields

LUCIUS

3 - 7 WELLS+

1 Potential New Field+

Third-Party Developments

WARRIOR

PHOBOS

SHENANDOAH

* As of 1/1/2016

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 N

Gulf of Mexico: Near-Term Exploration & Appraisal

TAHITICONSTITUTION

INDEPENDENCE HUB

BOOMVANG

NANSEN GUNNISON

CONGER

POWER PLAY

BLIND FAITH

K2 COMPLEX

Phobos

LUCIUS

BALDPATE

Shenandoah

Warrior

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 Unit24% WI

3 MILES

Lucius

Phobos Discovery50% WI

P H O B O S1 Appraisal Well

Potential Tieback to Lucius

G R E E N C A N Y O N

Marco Polo 3 MILES

518

562561

606605

519

563

608

Warrior 55 WI%

K2 Unit 42% WI

607

W A L K E R R I D G E

5251 53

139 143141 142

SHENANDOAH BASIN

Yucatan25% WI

Coronado60+% WI

95 999897

3 MILES

Shenandoah30% WI

S H E N A N D O A H B A S I N2 Appraisal Wells

Evaluating Development Options

W A R R I O R1 Exploration Well

Potential Tieback to Marco Polo

G U L F O F M E X I C OGross Acres: ~1.6 Million

APC 262 WI BlocksAPC WI FacilitiesOil FieldProspect Area

APC DiscoverySuccessful WellPlanned DrillingSubsea Tieback/Future Tieback

38

22

921

965

Hannibal Prospect50% WI


Significant Resource Potential Large Structural Closure Thick Sandstone Packages Excellent Reservoir & Fluid Properties

Strategic Position in Prolific BasinFinish Drilling Shenandoah-5Spud Shenandoah-6 4Q16Pre-FEED Work Under Way

Shenandoah: Active Appraisal Program

APC Operated BlockAPC Op DiscoverySuccessful WellPlanned DrillingOil Field

999897

SHENANDOAH BASIN

Coronado60%+ WI

Shenandoah30% WI

52 53

139

95

143141 142

51

W A L K E R R I D G E

3 MILES

A

A’

Shenandoah-5 & 6

G U L F O F M E X I C O

Yucatan25% WI

Total TVD Oil Pay: 1,000’

Shenandoah-2

100’

Shen-4 Shen-2 Shen-3Shen-6

A A’

NW Basin

Shen-4

Proven OilProjected Oil

Shen-5

S A L T C A N O P Y

Shen-4 ST620+ ft Net Pay

Shen-4 550 ft Core

Shen-21000 ft Net Pay

Shen-5 Currently Drilling

Shen-6 Spud by YE2016

Shen-3 490 ft Core

A

23


G U L F O F M E X I C OGross Acres ~1.6MM

APC 262 WI BlocksAPC DiscoveryPlanned Exploration/Appraisal 2016 - 2018

LOUISIANA

Phobos

Shenandoah

YucatanYeti

HaleakalaThunderdel

Opal

S U B - S A L T P L I O C E N E

M I O C E N E

L O W E R T E R T I A R Y

J U R A S S I C

Calpurnia

Coronado

24

Positioned for Continued Success~60 Captured Opportunities

Multi-Billion-Barrel Gross Resource Potential

3+ Annual Exploration Tests

NANSEN

CONSTITUTION

MARCO POLO

LUCIUS

HEIDELBERG

BOOMVANG

BALDPATE

CONGERPOWER PLAY

BLIND FAITH

GUNNISON Warrior


Best-In-Class Project Management Delivers ValueLucius at Full CapacityHeidelberg Achieved First Oil 1Q16TEN Scheduled First Oil 3Q16Mozambique LNG Development Advancing

DESIGN ONE: BUILD TWO

LUCIUSSanction to First Production: 3 Years

HEIDELBERGSanction to First Production: 3 Years

2015

Fast/High-cost

Fast/Low-cost

Slow/High-cost

Slow/Low-cost

1.00

Sche

dule

Per

form

ance

1.00Facilities Cost Performance

2015 IPA BENCHMARKING STUDY*

*IPA – Independent Project Analysis consortium ranks world-wide project performance

Industry Norm*

25


Upgraded Deepwater Rig Fleet Enhances Efficiency

R I G F L E E T 2016 2017 2018 2019 2020

Noble Bob Douglas

Rowan Resolute

Bolette Dolphin

Ocean BlackHawk

Ocean BlackHornet

Ocean BlackHornet

Noble Bob Douglas

26


Mozambique LNG: Reducing UncertaintyEnormous Recoverable Resources 75+ Tcf in Offshore Area 1 Scalable Onshore Development to 50+ MMTPA

Attractive Cost Advantages Close Proximity to Shore Natural Harbor Direct Subsea to Shore Development High Well Deliverability Access to Premium Asian Markets

Advantaged Economics 12 MMTPA for Cost of 10 MMTPA 20-Year Offtake Non-Binding HOAs Pricing Mechanism Protects Economics

Financially Derisked $2.1 Billion Monetization Net Proceeds Material Project Financing Available

APC WI BlockNatural Gas Field

M O Z A M B I Q U EGross Acres: 1+MM

A F R I C A

MOZAMBIQUE

AREA 1

10 MILES16 KMS

17,000-ACRE LNG FACILITY SITE

GOLFINHO/ATUM

PROSPERIDADE

ORCA

TUBARÃO

TUBARÃO TIGRE

27


Côte d’Ivoire: Progressing Toward CommercialityAdvancing Paon Paon-5A: Encountered ~100 net feet TVT pay Paon-3A: Drilling HZ section Perform DST

Drill Pelican-1XDrill Rossignol-1XEvaluating Development OptionsPromoting Interest

C Ô T E D ’ I V O I R EGross Acres: ~1MM

A F R I C A

CI‐52990% WI

CI‐52890% WI

CI‐10365% WIPaon-1X

Paon-3AR

CI‐52790% WI

Paon-4A

CÔTE D’IVOIREPaon-5A

Pelican-1XRossignol-1X

10 MILES16 KMS

APC WI BlockAPC DiscoverySuccessful WellPlanned DrillingOil FieldProspects/Leads

PAON-3ARMonitor Gauges

PAON-5A HDrill Stem Test

PAON-1 XMonitor Gauges

PAON-3AR ST H

A

A’

A A’

PAON RESERVOIR~3,000 ft

~3,500 ft

~1.5 MILES ~2 MILES

28


GRAND FUERTE (50% WI)

Colombia: Opportunity Rich

Kronos Discovery Confirmed Working Petroleum System

Plan to Drill Purple Angel-1

Grand COL Phase I 3D Seismic Completed on Schedule and Under Budget

Grand COL Phase II 3D Seismic Commenced 1Q16

C O L O M B I AGross Acres: ~16MM

COLOMBIA

GRAND COL

GRAND FUERTE

COL 5

URA 4

PURPLEANGEL

FUERTENORTE

FUERTESUR

50 MILES80 KM

50 MILES80 KM

Purple Angel-1

Kronos-1

APC WI BlockAPC DiscoveryPlanned DrillingGas FieldProspects/Leads

GRAND COL (100% WI)

3D Phase II13,000 km2

(2016)

COL 7

COL 2

COL 6

COL 13D Phase I16,300 km2

(2015)

SOUTHAMERICA

29


Non-GAAP Financial Measure Definitions & Reconciliations

This list of non-GAAP financial measure definitions and related reconciliations is intended to satisfy the requirements of Regulation G of the Securities Exchange Act of 1934, as amended. This information is historical in nature. Anadarko Petroleum Corporation (the “Company”) undertakes no obligation to publicly update or revise any non-GAAP financial measure definitions and related reconciliations. The following slides include reconciliations of GAAP to non-GAAP financial measures and statements indicating why management believes the non-GAAP financial measures provide useful information for investors. Non-GAAP financial measures provided in this presentation for specific areas are calculated using the same methodology.

30


Adjusted EBITDAX (EBITDAX)The Company defines Adjusted EBITDAX as income (loss) before income taxes; gains (losses) on divestitures, net; exploration expense; depreciation, depletion, and amortization; impairments; interest expense; total (gains) losses on derivatives, net, less net cash from settlement of commodity derivatives; and certain items not related to the Company’s normal operations, less net income attributable to noncontrolling interests. During the periods presented, items not related to the Company’s normal operations included Deepwater Horizon settlement and related costs, Algeria exceptional profits tax settlement, Tronox-related contingent loss, and certain other nonoperating items included in other (income) expenses, net.

Management believes that the presentation of Adjusted EBITDAX provides information useful in assessing the Company’s financial condition and results of operations and that Adjusted EBITDAX is a widely accepted financial indicator of a company’s ability to incur and service debt, fund capital expenditures, and make distributions to stockholders.

Adjusted EBITDAX as defined by Anadarko may not be comparable to similarly titled measures used by other companies and should be considered in conjunction with net income (loss) attributable to common stockholders and other performance measures prepared in accordance with GAAP, such as operating income or cash flows from operating activities. Adjusted EBITDAX has important limitations as an analytical tool because it excludes certain items that affect net income (loss) attributable to common stockholders and net cash provided by operating activities. Adjusted EBITDAX should not be considered in isolation or as a substitute for an analysis of Anadarko’s results as reported under GAAP.

Non-GAAP Reconciliation

Year Ended December 31, 2015Millions

Income (loss) before income taxes (GAAP) $ (9,689)(Gains) losses on divestitures, net 1,022 Exploration Expense 2,644DD&A 4,603 Impairments 5,075 Interest Expense 825Total (gains) losses on derivatives, net, less net cash received in settlement of commodity derivatives 235Other operating expense 74 Tronox-related contingent loss 5 Certain other nonoperating items 22Less net income attributable to noncontrolling interests (120) Consolidated adjusted EBITDAX (Non-GAAP) $ 4,936

31


Net Debt to Adjusted Capitalization Ratio December 31, 2015

MillionsAnadarko

ConsolidatedWGP*

ConsolidatedAnadarko

excluding WGPTotal debt (GAAP) $ 15,751 $ 2,707 $ 13,044

Less cash and cash equivalents 939 100 839Net debt (Non-GAAP) $ 14,812 $ 2,607 $ 12,205

MillionsAnadarko

ConsolidatedAnadarko

excluding WGPNet debt $ 14,812 $ 12,205

Total Equity 15,457 12,819Adjusted Capitalization (Non-GAAP) $ 30,269 $ 25,024

Net debt to adjusted capitalization ratio 49% 49%

Net Debt to Adjusted CapitalizationThe Company defines net debt as total debt less cash and cash equivalents. Net debt for Anadarko excluding Western Gas Equity Partners, LP (WGP) is Anadarko’s Consolidated net debt, less WGP’s net debt.

The Company defines net debt to adjusted capitalization ratio as net debt / (net debt + total equity). Net debt to adjusted capitalization ratio for Anadarko excluding WGP excludes WGP’s net debt and noncontrolling interest attributable to WGP.

Management uses net debt as a measure of the Company’s outstanding debt obligations that would not be readily satisfied by cash and cash equivalents on hand.


*WGP is a publicly traded consolidated subsidiary of Anadarko and Western Gas Partners, LP (WES) is a consolidated subsidiary of WGP

32


Adjusted Discretionary Cash Flow from Operations (Adjusted DCF)The Company defines adjusted discretionary cash flow from operations as net cash provided by (used in) operating activities adjusted by changes in accounts receivable, changes in accounts payable and accrued expenses, other items - net, Deepwater Horizon and Tronox settlement payments, collections associated with the Algeria exceptional profits tax settlement, certain nonoperatingand other excluded items, current taxes related to Tronox tax position, and WES/WGP distributions to third parties. Management uses adjusted discretionary cash flow from operations because it is useful in comparisons of oil and gas exploration and production companies as it excludes certain fluctuations in assets and liabilities and current taxes related to certain items affecting comparability.

Adjusted Free Cash Flow (Adjusted FCF)The Company defines adjusted free cash flow as adjusted discretionary cash flow from operations less capital expenditures excluding WES and cash received from the Algeria Exceptional Profits Tax settlement and monetizations. Management uses adjusted free cash flow to demonstrate the Company's ability to fund capital expenditures and to service or incur additional debt.


Year Ended December 31,millions 2011 2012 2013 2014 2015Net cash provided by (used in) operating activities (GAAP) $ 2,505 $ 8,339 $ 8,888 $ 8,466 $ (1,877)Adjusted by:

Increase (decrease) in accounts receivable 993 (520) 11 (103) 2 Increase (decrease) in accounts payable and accrued expenses (284) 476 (150) (97) 995

Other items – net 16 (126) (146) 71 (772)Deepwater Horizon / Tronox settlement payments 3,948 (6) - - 5,215

Algeria exceptional profits tax settlement - (1,006) (730) - -Certain nonoperating and other excluded items - - 160 119 96

Current taxes related to Tronox tax position - - - - 910

WES/WGP distributions to third parties (79) (107) (158) (216) (280)Adjusted discretionary cash flow from operations (Non-GAAP) $ 7,099 $ 7,050 $ 7,875 $ 8,240 $ 4,289 Adjusted by:

Capital expenditures excluding WES* (6,114) (6,782) (7,731) (8,560) (5,363)

Collection of Algeria exceptional profits of tax receivable - 1,006 730 - -Monetizations 580 1,244 1,033 5,659 1,825

Adjusted free cash flow (Non-GAAP) $ 1,565 $ 2,518 $ 1,907 $ 5,339 $ 751

* WES capital expenditures 439 529 792 696 525

33


Finding and Development CostsThe Company defines finding and development (F&D) costs as total costs incurred divided by reserve additions. In addition, the Company will use several variations of this calculation, including isolating development costs and incorporating price-related and non-price-related reserve additions.

Management believes that the presentation of F&D costs provides useful information in assessing the Company’s ability to efficiently manage its capital programs.


* NM: Not Meaningful

Year Endedmillions December 31, 2015

Costs incurred $ 5,753 Asset retirement obligation liabilities incurred (207)Cash expenditures for asset retirement obligations 298

Oil and natural gas exploration and development costs $ 5,844

Non-price related additions before divestitures (MMBOE) 407

Finding and development costs ($/BOE) $ 14.36

Additions including pre-related revisions (MMBOE) (216)

Finding & development costs including price-related revisions ($/BOE) NM *

34


Glossary of TermsLP: Limited PartnershipM: ThousandsMM: MillionsNGL: Natural Gas LiquidsNYSE: New York Stock ExchangePK0: Point Kilometrique 0 PRB: Powder River BasinROR: Rate of ReturnS&P: Standard & Poor’sSLE: Short Lateral EquivalentT: TrillionTEN: Tweneboa, Enyenra, NtommeTPA: Tonnes per AnnumTPE: Exceptional Profits TaxTRX: TronoxYE: Year EndYOY: Year over YearYTD: Year to DateWES: Western Gas Partners, LPWGP: Western Gas Equity Partners, LP WI: Working InterestWTI: West Texas Intermediate

Adj: AdjustedAPC: Anadarko Petroleum Corp.B: BillionBbl: BarrelBBl/d: Barrels of Liquid per DayBOE: Barrel of Oil Equivalent BOE/d: Barrel of Oil Equivalent per DayBOPD: Barrels of Oil per DayBTAX: Before Tax CBM: Coalbed Methanecf: Cubic Feet of Natural Gascf/d: Cubic Feet per DayCPF: Central Processing Facility DCF: Discretionary Cash FlowDC&E: Drill, Complete and EquipDD&A: Depreciation, Depletion and AmortizationDJ: Denver JulesburgDST: Drill Stem TestDWH: Deepwater HorizonE&P: Exploration and Production EBITDA: Earnings Before Interest, Tax, Depreciation and Amortization

EBITDAX: Earnings Before Interest, Tax, Depreciation, Amortization and Exploration Expense EOR: Enhanced Oil RecoveryF&D: Finding and Development CostFCF: Free Cash FlowFID: Final Investment DecisionFPSO: Floating Production Storage and Offloading UnitGAAP: Generally Accepted Accounting Principles G&A: General and AdministrativeGOM: Gulf of MexicoGP: General Partner HBNS: Hassi Berkine Sud (South) HH: Henry HubHOA: Heads of AgreementIDUCs: Intentionally Deferred CompletionsIPA: Independent Producers of AmericaKm: KilometersLNG: Liquefied Natural Gas

35

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