58
53 a meaningful company doing meaningful work delivering meaningful results Exploration & Production Company

Exploration & Production Company - library.corporate …library.corporate-ir.net/library/97/971/97166/items/232266/2... · a meaningful company doing meaningful work delivering meaningful

  • Upload
    ngobao

  • View
    231

  • Download
    0

Embed Size (px)

Citation preview

Page 1: Exploration & Production Company - library.corporate …library.corporate-ir.net/library/97/971/97166/items/232266/2... · a meaningful company doing meaningful work delivering meaningful

53a meaningful company doing meaningful work delivering meaningful results

Exploration &Production Company

Page 2: Exploration & Production Company - library.corporate …library.corporate-ir.net/library/97/971/97166/items/232266/2... · a meaningful company doing meaningful work delivering meaningful

54

Today’s Agenda

• Opening Thoughts

• E&P Overview

• 2006 Comments

• Business Priorities

• Division Reviews

• 2007 Plan Summary

Page 3: Exploration & Production Company - library.corporate …library.corporate-ir.net/library/97/971/97166/items/232266/2... · a meaningful company doing meaningful work delivering meaningful

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

Page 4: Exploration & Production Company - library.corporate …library.corporate-ir.net/library/97/971/97166/items/232266/2... · a meaningful company doing meaningful work delivering meaningful

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

Page 5: Exploration & Production Company - library.corporate …library.corporate-ir.net/library/97/971/97166/items/232266/2... · a meaningful company doing meaningful work delivering meaningful

57

2006 Production Mix—798 MMcfe/d

International24 MMcfe/d

3%

TGC187 MMcfe/d

23%

GOM174 MMcfe/d

22%

Onshore413 MMcfe/d

52%

2007 range: 800–860 MMcfe/d500

600

700

800

900

2005 2006

MM

cfe/

d

El Paso Production Trend

Note: Includes our 43.1% share of Four Star

Page 6: Exploration & Production Company - library.corporate …library.corporate-ir.net/library/97/971/97166/items/232266/2... · a meaningful company doing meaningful work delivering meaningful

58

2006 YE Proved Reserves—2.6 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

Page 7: Exploration & Production Company - library.corporate …library.corporate-ir.net/library/97/971/97166/items/232266/2... · a meaningful company doing meaningful work delivering meaningful

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)

Page 8: Exploration & Production Company - library.corporate …library.corporate-ir.net/library/97/971/97166/items/232266/2... · a meaningful company doing meaningful work delivering meaningful

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%

Page 9: Exploration & Production Company - library.corporate …library.corporate-ir.net/library/97/971/97166/items/232266/2... · a meaningful company doing meaningful work delivering meaningful

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 Int’l 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

Page 10: Exploration & Production Company - library.corporate …library.corporate-ir.net/library/97/971/97166/items/232266/2... · a meaningful company doing meaningful work delivering meaningful

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

Page 11: Exploration & Production Company - library.corporate …library.corporate-ir.net/library/97/971/97166/items/232266/2... · a meaningful company doing meaningful work delivering meaningful

63

2006 Accomplishments

• Integrated East Texas and Rockies acquisitions

• Announced significant acquisition for Texas Gulf Coast

• New country entry in Egypt

• Permit approval on Pinaúna (Brazil) exploration wells

• Continued efforts on process improvements

• Exited with 5 years of drilling inventory

Page 12: Exploration & Production Company - library.corporate …library.corporate-ir.net/library/97/971/97166/items/232266/2... · a meaningful company doing meaningful work delivering meaningful

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

Page 13: Exploration & Production Company - library.corporate …library.corporate-ir.net/library/97/971/97166/items/232266/2... · a meaningful company doing meaningful work delivering meaningful

65

Priorities for Profitable Growth

• Get the right assets, get the assets right

• Focus on fundamentals

• Drive “Performance Delivery Model” concepts

Page 14: Exploration & Production Company - library.corporate …library.corporate-ir.net/library/97/971/97166/items/232266/2... · a meaningful company doing meaningful work delivering meaningful

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

Int’l

Page 15: Exploration & Production Company - library.corporate …library.corporate-ir.net/library/97/971/97166/items/232266/2... · a meaningful company doing meaningful work delivering meaningful

67

Attention to Fundamentals

• Strive to be full-cycle, low-cost

• Benchmark to assess relative performance

• Attract and retain excellent people

Page 16: Exploration & Production Company - library.corporate …library.corporate-ir.net/library/97/971/97166/items/232266/2... · a meaningful company doing meaningful work delivering meaningful

68

E&P Performance Delivery Model = Success

Page 17: Exploration & Production Company - library.corporate …library.corporate-ir.net/library/97/971/97166/items/232266/2... · a meaningful company doing meaningful work delivering meaningful

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

Page 18: Exploration & Production Company - library.corporate …library.corporate-ir.net/library/97/971/97166/items/232266/2... · a meaningful company doing meaningful work delivering meaningful

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

Page 19: Exploration & Production Company - library.corporate …library.corporate-ir.net/library/97/971/97166/items/232266/2... · a meaningful company doing meaningful work delivering meaningful

71

Onshore

Page 20: Exploration & Production Company - library.corporate …library.corporate-ir.net/library/97/971/97166/items/232266/2... · a meaningful company doing meaningful work delivering meaningful

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

Page 21: Exploration & Production Company - library.corporate …library.corporate-ir.net/library/97/971/97166/items/232266/2... · a meaningful company doing meaningful work delivering meaningful

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

Page 22: Exploration & Production Company - library.corporate …library.corporate-ir.net/library/97/971/97166/items/232266/2... · a meaningful company doing meaningful work delivering meaningful

74

Onshore Organic Production Growth

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

Base Capital Uplift

405 405 411 415 420

Average MMcfe/d

Note: Includes our 43.1% share of Four Star

Page 23: Exploration & Production Company - library.corporate …library.corporate-ir.net/library/97/971/97166/items/232266/2... · a meaningful company doing meaningful work delivering meaningful

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)

4–5 years of inventory

Note: See cautionary statement on non-SEC proved reserves

Page 24: Exploration & Production Company - library.corporate …library.corporate-ir.net/library/97/971/97166/items/232266/2... · a meaningful company doing meaningful work delivering meaningful

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

Page 25: Exploration & Production Company - library.corporate …library.corporate-ir.net/library/97/971/97166/items/232266/2... · a meaningful company doing meaningful work delivering meaningful

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 Bcfe–0.9 Bcfe– Rate: 100 Mcf/d–175 Mcf/d

NM

CO

Vermejo Park Ranch

EPEP minerals

Page 26: Exploration & Production Company - library.corporate …library.corporate-ir.net/library/97/971/97166/items/232266/2... · a meaningful company doing meaningful work delivering meaningful

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 Bcfe–0.6 Bcfe– Rate: 100 Mcf/d–300 Mcf/d

Black Warrior BasinCoalbed Methane

Tuscaloosa

Jefferson

AL

Blue Creek West

Short Creek

Brookwood

EPEP lease

White Oak Creek

Page 27: Exploration & Production Company - library.corporate …library.corporate-ir.net/library/97/971/97166/items/232266/2... · a meaningful company doing meaningful work delivering meaningful

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

Page 28: Exploration & Production Company - library.corporate …library.corporate-ir.net/library/97/971/97166/items/232266/2... · a meaningful company doing meaningful work delivering meaningful

80

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

Page 29: Exploration & Production Company - library.corporate …library.corporate-ir.net/library/97/971/97166/items/232266/2... · a meaningful company doing meaningful work delivering meaningful

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

Page 30: Exploration & Production Company - library.corporate …library.corporate-ir.net/library/97/971/97166/items/232266/2... · a meaningful company doing meaningful work delivering meaningful

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

Page 31: Exploration & Production Company - library.corporate …library.corporate-ir.net/library/97/971/97166/items/232266/2... · a meaningful company doing meaningful work delivering meaningful

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

Page 32: Exploration & Production Company - library.corporate …library.corporate-ir.net/library/97/971/97166/items/232266/2... · a meaningful company doing meaningful work delivering meaningful

84

GOM/SLA Production Growth

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

Base Uplift

107133

165189

209

Average MMcfe/d

Page 33: Exploration & Production Company - library.corporate …library.corporate-ir.net/library/97/971/97166/items/232266/2... · a meaningful company doing meaningful work delivering meaningful

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

Page 34: Exploration & Production Company - library.corporate …library.corporate-ir.net/library/97/971/97166/items/232266/2... · a meaningful company doing meaningful work delivering meaningful

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

Page 35: Exploration & Production Company - library.corporate …library.corporate-ir.net/library/97/971/97166/items/232266/2... · a meaningful company doing meaningful work delivering meaningful

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 Shelf

LafayetteLake Charles

EPEP leases3D outline2006 discoveries☼

Planulina Shelf

Camerina Shelf

LA

☼☼☼

☼☼

Page 36: Exploration & Production Company - library.corporate …library.corporate-ir.net/library/97/971/97166/items/232266/2... · a meaningful company doing meaningful work delivering meaningful

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 Bcfe–45 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 Miocene

EPEP leases2006 discoveries

Page 37: Exploration & Production Company - library.corporate …library.corporate-ir.net/library/97/971/97166/items/232266/2... · a meaningful company doing meaningful work delivering meaningful

89

Texas Gulf Coast

Page 38: Exploration & Production Company - library.corporate …library.corporate-ir.net/library/97/971/97166/items/232266/2... · a meaningful company doing meaningful work delivering meaningful

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

Page 39: Exploration & Production Company - library.corporate …library.corporate-ir.net/library/97/971/97166/items/232266/2... · a meaningful company doing meaningful work delivering meaningful

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

Page 40: Exploration & Production Company - library.corporate …library.corporate-ir.net/library/97/971/97166/items/232266/2... · a meaningful company doing meaningful work delivering meaningful

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)

4–5 years of inventory

Note: See cautionary statement on non-SEC proved reserves

Page 41: Exploration & Production Company - library.corporate …library.corporate-ir.net/library/97/971/97166/items/232266/2... · a meaningful company doing meaningful work delivering meaningful

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

Page 42: Exploration & Production Company - library.corporate …library.corporate-ir.net/library/97/971/97166/items/232266/2... · a meaningful company doing meaningful work delivering meaningful

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 Bcfe–4 Bcfe– Rate: 2 MMcf/d–8 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 Bcfe–3 Bcfe– Rate: 1 MMcf/d–3 MMcf/d

Sta

rr C

o.H

idal

go C

o.

EPEP lease3D Coverage

TX

Page 43: Exploration & Production Company - library.corporate …library.corporate-ir.net/library/97/971/97166/items/232266/2... · a meaningful company doing meaningful work delivering meaningful

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 Bcfe–4 Bcfe– Rate: 5 MMcf/d–20 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/Hardy’s Creek

Page 44: Exploration & Production Company - library.corporate …library.corporate-ir.net/library/97/971/97166/items/232266/2... · a meaningful company doing meaningful work delivering meaningful

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 Bcfe–3 Bcfe– Rate: 2 MMcf/d–5 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

Page 45: Exploration & Production Company - library.corporate …library.corporate-ir.net/library/97/971/97166/items/232266/2... · a meaningful company doing meaningful work delivering meaningful

97

International

Page 46: Exploration & Production Company - library.corporate …library.corporate-ir.net/library/97/971/97166/items/232266/2... · a meaningful company doing meaningful work delivering meaningful

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

Page 47: Exploration & Production Company - library.corporate …library.corporate-ir.net/library/97/971/97166/items/232266/2... · a meaningful company doing meaningful work delivering meaningful

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

Page 48: Exploration & Production Company - library.corporate …library.corporate-ir.net/library/97/971/97166/items/232266/2... · a meaningful company doing meaningful work delivering meaningful

100

Pinaúna Development

• Project sanctioned at 100% WI

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

• 4–5 producers/4–5 injectors

• 2007 Focus: Facilities, procurement and construction

• High pour point oil handled by heated process flow

• Development pending regulatory approval

• Pinaúna is hub for future Sardinha and Camarao phases

Heated Process Flow

Turret Moored FSO

Page 49: Exploration & Production Company - library.corporate …library.corporate-ir.net/library/97/971/97166/items/232266/2... · a meaningful company doing meaningful work delivering meaningful

101

Pinaúna Exploration Upside—Cacau and Açai

• 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

PinaúnaPODarea

BAS-73

2

3

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

1 3km

Sergi depth

-2380 m OWC

BAS-74

Açaí-1

-2420 m OWC

Cacau-1

BAS-64BAS-64

1

Rio de Janeiro

Brazil

Page 50: Exploration & Production Company - library.corporate …library.corporate-ir.net/library/97/971/97166/items/232266/2... · a meaningful company doing meaningful work delivering meaningful

102

Bia & BM-ES-5 Block Prospectivity

Light oil discoveries in Espírito 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: PetrobrásBlock: BES-100, area 1Reservoir: Upper Cretaceous sandsStatus: Discovery 280 MMbo

(source: www.petrobras.com)

Rio de Janeiro

Brazil

Page 51: Exploration & Production Company - library.corporate …library.corporate-ir.net/library/97/971/97166/items/232266/2... · a meaningful company doing meaningful work delivering meaningful

103

Egypt: New Country Entry

2007–2008 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

Page 52: Exploration & Production Company - library.corporate …library.corporate-ir.net/library/97/971/97166/items/232266/2... · a meaningful company doing meaningful work delivering meaningful

104

2007 Plan Summary

Page 53: Exploration & Production Company - library.corporate …library.corporate-ir.net/library/97/971/97166/items/232266/2... · a meaningful company doing meaningful work delivering meaningful

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

Page 54: Exploration & Production Company - library.corporate …library.corporate-ir.net/library/97/971/97166/items/232266/2... · a meaningful company doing meaningful work delivering meaningful

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

– Pinaúna exploration & development

– Egypt evaluation

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

Texas Gulf Coast$566 MM

34%

Int’l $215 MM

13%

Onshore$505 MM

30% GOM/SLA$281 MM

16%

Admin. and Other $113 MM

7%

Page 55: Exploration & Production Company - library.corporate …library.corporate-ir.net/library/97/971/97166/items/232266/2... · a meaningful company doing meaningful work delivering meaningful

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

Page 56: Exploration & Production Company - library.corporate …library.corporate-ir.net/library/97/971/97166/items/232266/2... · a meaningful company doing meaningful work delivering meaningful

108

2007 Production Profile

0100200300400500600700800900

1,000

2004 2005 2006 2007

Base Capital

829767 798 833

~ 30%base decline

0%–8%growth

MMcfe/d

Page 57: Exploration & Production Company - library.corporate …library.corporate-ir.net/library/97/971/97166/items/232266/2... · a meaningful company doing meaningful work delivering meaningful

109

Why We Can Succeed

• Strong foundation of assets and people in place

• Organization-wide focus on performance

• Value-creation mindset

We will become a top E&P performer

Page 58: Exploration & Production Company - library.corporate …library.corporate-ir.net/library/97/971/97166/items/232266/2... · a meaningful company doing meaningful work delivering meaningful

110

Q&A