Apa Corporation · NASDAQ:APA
Apa — Investor Presentation (September 2021)
24 slides from Apa's investor presentation, September 2021
Slide 1: Investor Update September 2021
Investor Update September 2021
Slide 2: Notice to Investors
Notice to Investors Certain statements in this presentation contain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 including, without limitation, expectations, beliefs, plans, and objectives regardin
Slide 3: APA Investment Case
APA Investment Case • Excellent progress on debt reduction, ~$6.0 Bn net debt(1) expected by year-end • Strong position to begin accelerating cash return to investors • Robust FCF generation capacity and strong visibility into years of sustained production within legacy portfolio • Significant upsid
Slide 4: ESG Leadership: Primary Areas of Focus
ESG Leadership: Primary Areas of Focus ESG Vision 2021 Goal Be at the forefront of industry’s efforts Eliminating U.S. onshore routine flaring and targeting to measure, disclose and < 1% flaring intensity in the U.S. AIR mitigate emissions Preserve freshwater resources Targeting freshwater consumpti
Slide 5: APA Corporation Strategy
APA Corporation Strategy Foundation For Leveraging Disciplined Long-Term Diversified Financial Approach Success Portfolio • Prioritize long-term returns and sustain • Diversify risk through a balanced • Aggressively manage cost structure global BOE production within legacy commodity profile and geog
Slide 6: APA Free Cash Flow Generation Capacity
APA Free Cash Flow Generation Capacity Annual Upstream FCF of $1.6 - $1.7 Billion Before Investment in Suriname Key Assumptions: o $1.2 billion of annual development capital (up from $900 million in 2021E) o Oil and gas prices remain flat with 2021 prices (using 1H’21 actuals / 2H’21 strip) o Global
Slide 7: August 2021 Tender Results and Debt Maturity Profile
August 2021 Tender Results and Debt Maturity Profile YE 2020 Current(1) Long Term Debt(2) $8,052MM $6,344MM Tender Overview $1,500 Avg. Coupon 4.978% 5.075% • Tender offer upsized by ~$200MM; total of Avg. Maturity 15.1 Years 14.1 Years ~$1.7BN principal repurchased 1,333 Tendered Notes Accepted (~$
Slide 8: APA Overview
APA Overview US Egypt North Sea Suriname 8
Slide 9: United States
United States Permian Basin Acreage • Currently running 2 rigs in Permian Basin Central Basin Platform • Strong performance from 2021 Permian completions • May add 3rd rig in Permian, Alpine High, or Austin Chalk Southern Midland Basin TOTAL PRODUCTION MBOE/D Central Delaware 360 283 299 300 233 242
Slide 10: Egypt
Egypt Apache Egypt Acreage: ~5.2 million acres • Country’s largest oil producer and onshore acreage holder • Deep, high-quality inventory Apache • Running 8 rigs: Gross production to begin trending 25 Miles up in 2H’21 REPORTED GROSS PRODUCTION MBOE/D 400 335 300 • Egypt PSC modernization(1) could e
Slide 11: North Sea
North Sea Apache North Sea Acreage • Maintaining 1 floating rig & 1 platform crew Apache Beryl • Activity set capable of sustaining production in 55 to 60 Mboe/d range for several years Forties • Both planned and unplanned operational downtime Scotland 25 impacting 2021 volumes and unit costs Miles
Slide 12: Suriname
Suriname • Block 58 (APA 50% WI): World Class Opportunity o 4 Discoveries since Jan. 2020, appraisal drilling underway o Recent successful appraisal result at Sapakara South-1, flow test to be conducted later this year • Keskesi South-1 appraisal well drilling - spud in late May • Bonboni exploratio
Slide 13: Appendix
Appendix 13
Slide 14: 2Q 2021 Operating Cash Margins
2Q 2021 Operating Cash Margins Egypt North Sea United States(2) $70 $69 / Boe $60 $39 $50 Per Boe $48 / Boe - $1 $40 vs. 1Q $37 $30 / Boe $35 / Boe Per Boe $30 + $3 $25 vs. 1Q Per Boe $20 North Sea cash operating cost - $1 $11 / Boe per Boe increase largely driven vs. 1Q $10 / Boe $10 by a 26% decre
Slide 15: 3Q21 Guidance
3Q21 Guidance New Production (Mboe/d) United States…………………………………………………………………………………. 233 3Q21 CBP Sale Production Impact International (Adjusted)………………………………………………………………… 102 Total Adjusted Production……………………………………………………… 335 U.S. Total Production: 4 Mboe/d U.S. Oil: 3 Mbo/d United States Oil (Mbo/d)
Slide 16: 2021 Guidance
2021 Guidance Previous New Production (Mboe/d) United States…………………………………………………………………………………………… 220 – 225 227 International…………………………………………………………………………………………… 170 – 175 163 Reported Production……………………………………………………………………… 390 – 400 390 2021 CBP Sale Production Impact Less: Egypt Tax Barrels……………………………
Slide 17: Open Commodity Derivative Positions (As of August 4, 2021)
Open Commodity Derivative Positions (As of August 4, 2021) Weighted Avg Price Production Period Trade Type Index Units Daily Volume $ / Unit WTI Hedges July – September 2021 Fixed Swap NYMEX WTI BBL 22,000 $60.15 October – December 2021 Fixed Swap NYMEX WTI BBL 11,000 $58.59 Brent Hedges July – Sept
Slide 18: APA / Total Suriname Joint Venture
APA / Total Suriname Joint Venture Summary Terms and Production Sharing Contract Mechanics Suriname Gov’t Profit Oil Split by 20% R-Factor Joint APA 40% Total 40% Venture Staatsolie 20% Gross APA 40% Contractors Total 40% Revenue 93.75% Staatsolie 20% 1. Opex APA & Total in Proportion to 2. Developm
Slide 19: Summary of Terms Suriname PSC APA / Total JV
Summary of Terms Suriname PSC APA / Total JV • Cost oil recovery ceiling of 80% after royalty payment • Parties have the right to alternate proposals of exploration wells up to 8 wells per year • Unrecovered cost oil balances carried forward until fully recovered on a project-by-project basis • Eith
Slide 20: Glossary of Referenced Terms & Non-GAAP Reconciliations
Glossary of Referenced Terms & Non-GAAP Reconciliations 20
Slide 21: Glossary of Referenced Terms
Glossary of Referenced Terms • Upstream Capital Investment: Includes exploration, development, gathering, processing, and transmission capital, capitalized overhead, and settled asset retirement obligations, and excludes capitalized interest, non-cash asset retirement additions and revisions, and Eg
Slide 22: Non – GAAP Reconciliation
Non – GAAP Reconciliation Cash Flow Before Changes in Operating Assets & Liabilities and Free Cash Flow Reconciliation of Net Cash Provided by Operating Activities to Cash Flows from Operations before Changes in Operating Assets and Liabilities and Free Cash Flow Cash flows from operations before ch
Slide 23: Non – GAAP Reconciliation
Non – GAAP Reconciliation Upstream Capital Investment Reconciliation of Costs Incurred to Upstream Capital Investment Management believes the presentation of upstream capital investments is useful for investors to assess the Company's expenditures related to our upstream capital activity. We define
Slide 24: Non – GAAP Reconciliation
Non – GAAP Reconciliation Net Debt Reconciliation of Debt to Net Debt Net debt, or outstanding debt obligations less cash and cash equivalents, is a non-GAAP financial measure. Management uses net debt as a measure of the Company's outstanding debt obligations that would not be readily satisfied by