Freeport-mcmoran, Inc. · NYSE:FCX
Freeport-mcmoran — Investor Day (June 2013)
178 slides from Freeport-mcmoran's investor day presentation, Jun 24, 2013
Slide 1: Management Presentations New York City
EXPANDING RESOURCES Management Presentations New York City June 24, 2013 www.fcx.com
Slide 2: Cautionary Statement Regarding Forward-Looking Statements
EXPANDING RESOURCES Cautionary Statement Regarding Forward-Looking Statements This presentation contains forward-looking statements in which FCX discusses its potential future performance. Forward-looking statements are all statements other than statements of historical facts, such as those statemen
Slide 3: Agenda
EXPANDING RESOURCES Agenda 1:30 pm Welcome - Richard Adkerson 1:35 pm Chairman’s Remarks - Jim Bob Moffett 2:00 pm Corporate Overview and Update on Indonesia - Richard Adkerson 2:30 pm Americas Mining Update - Red Conger 2:45 pm Break 3:00 pm Oil & Gas Business Overview - Jim Bob Moffett, Jim Flores
Slide 4: James R. Moffett
EXPANDING RESOURCES EXPANDING RESOURCES James R. Moffett Chairman of the Board
Slide 5: Freeport-McMoRan History
EXPANDING RESOURCES Freeport-McMoRan History Long Track Record for Creating Value for Shareholders One of Most Active Oil/Gas Drillers on the GOM Shelf Early 1981 1988 1995 2007 2013 1900s Freeport Minerals – Merged with Discovery of FCX Spun Off Acquired Acquired PXP Long History in McMoRan Grasber
Slide 6: The Grasberg Story – 8th Wonder of the World
The Grasberg Story – EXPANDING RESOURCES “8th Wonder of the World” 80 Reserve Growth 70 World’s Premier Mining Resource Reserves + 60 Copper Production* billion lbs 50 Grasberg 100% State of the Art Engineering, 40 Discovery Infrastructure and Technology (1988) 30 20 PT-FI’s 10 Share Important
Slide 7: Indonesia – Grasberg
EXPANDING RESOURCES Indonesia ̶ Grasberg Grasberg Grasberg Underground Development Mill Complex 7
Slide 8: Phelps Dodge Transaction – Exploration Drives Organic Growth
EXPANDING RESOURCES Phelps Dodge Transaction – Exploration Drives Organic Growth Properties Underexplored Reserve Additions +46 billion lbs Cu* 1.7x cumulative production Invested $1 Billion in since 12/31/06 Candelaria/Ojos Exploration Since 2007 and Added 46 Billion lbs Bagdad Copper Reserves
Slide 9: Exploration Update
EXPANDING RESOURCES Exploration Update Brownfield & Greenfield Opportunities Brownfield Greenfield North America Serbia Potential Brownfield Reserve Indonesia Additions Africa (North & South America) South ~40-60 billion lbs Cu America NA* SA** Additional opportunities: DRC (Tenke & Kisanfu), Grasbe
Slide 10: Bagdad X-Section
EXPANDING RESOURCES Bagdad X-Section Significant Intercepts, 2011-2012 Drilling 1 km W E 2012 Reserve Pit 2012 Mineralized Material Cone Cu% 579 meters 0.51% Cu & >=0 0.030% Mo >=0.2 500 meters >=0.3 0.42% Cu & >=0.4 0.053% Mo 628 meters >=0.5 0.48% Cu & >=0.6 0.032% Mo 10
Slide 11: Cerro Verde X-Section
EXPANDING RESOURCES Cerro Verde X-Section Significant Intercepts, 2012 Drilling 1 km W E Cerro Santa Verde Pit Rosa Pit 600 meters 0.69% Cu & 2012 Reserve Pit 0.028% Mo 2012 Mineralized Plan View Material Cone 528 meters Cerro 0.52% Cu & Verde Pit 0.020% Mo Cu% >=0 “Bridge” >=0.2 N Santa 723 meters
Slide 12: Morenci X-Section
EXPANDING RESOURCES Morenci X-Section Significant Intercepts, 2010-2012 Drilling 1 km SW NE Morenci Western Copper Garfield 2012 Reserve Pit Plan View N Garfield Cu % 2012 Mineralized Material Cone Coronado >=0 Western >=0.1 Copper 1,240 meters 655 meters >=0.2 0.30% Cu & 0.52% Cu & >=0.3 0.029% Mo
Slide 13: El Abra X-Section
EXPANDING RESOURCES El Abra X-Section Significant Intercepts, 2012 Drilling W 1 km E 2012 Reserve Pit 576 meters 0.71% Cu 2012 Mineralized Material Cone 441 meters 0.70% Cu Plan View Cu% 900 meters >=0 0.66% Cu >=0.2 >=0.35 >=0.5 N >=0.8 >=1.0 13
Slide 14: Oil & Gas Assets
EXPANDING RESOURCES Oil & Gas Assets Significant Current Operations & Resource Base California High Impact GOM Exploration Leverage Meaningful Development Opportunities. Lucius Spar Offloaded in Corpus Christi. Significant Deepwater Eagle Ford/Haynesville GOM Infrastructure 14
Slide 15: Conceptual Model - Ultra-Deep Play
EXPANDING RESOURCES Conceptual Model - Ultra-Deep Play Industry Leading Position in This New Exploration Frontier Drilling activities to date have successfully confirmed geologic model and have indicated the potential for a major new geologic trend spanning 200 miles in the shallow waters of the GOM
Slide 16: Management Structure
EXPANDING RESOURCES Management Structure Office of the Chairman James R. Moffett – Chairman of the Board Richard C. Adkerson – Vice Chairman, President and CEO James C. Flores – Vice Chairman, President and CEO of Oil & Gas Business 16
Slide 17: Richard C. Adkerson
EXPANDING RESOURCES EXPANDING RESOURCES Richard C. Adkerson President & CEO
Slide 18: FCX – A Premier U.S. Based Natural Resource Company
EXPANDING RESOURCES FCX – A Premier U.S. Based Natural Resource Company World’s Largest Publicly Traded Copper Producer High Quality U.S. Focused Oil & Gas Assets Strong Margins & Cash Flows Visible and Predictable Organic Growth Strong Technical Capabilities Track Record of Capital Disc
Slide 19: Completion of Oil & Gas Transactions
EXPANDING RESOURCES Completion of Oil & Gas Transactions Transactions Totaled $19 Billion • PXP Closed May 31, 2013 • MMR Closed June 3, 2013 FCX Financial Profile Pro Forma for O&G Transactions ($ in billions) PF 2012 Revenues $22.7 PF 2012 EBITDA(1) $10.5 PF Net Debt (3/31/13) (2) $16.2 With the a
Slide 20: FCX's Global Footprint
EXPANDING RESOURCES FCX’s Global Footprint Major Operations & Development Projects North America1 All major mining assets majority-controlled and operated Reserves Cu 38.8 bn lbs Mo 2.7 bn lbs Copper Oil & Gas 688 MMBOE2 Sales Copper/Gold/Silver Cu 1.45 bn lbs Molybdenum Mo 92 mm lbs3 Grasberg (90.6
Slide 21: World's Leading Copper Producers
EXPANDING RESOURCES World’s Leading Copper Producers Top 10 Copper Producers (2013e) (000 t) 2,000 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 Codelco FCX BHP Billiton Xstrata Southern Rio Tinto Anglo KGHM Antofagasta RAO Norilsk Copper American ____________________ Source: Wood Mackenzie 1Q13.
Slide 22: Freeport-McMoRan Oil & Gas Portfolio
EXPANDING RESOURCES Freeport-McMoRan Oil & Gas Portfolio Diverse Asset Base with Scale Positioned in Attractive U.S. Basins Hedge Protected Cash Flows ~90% of Revenues from Oil/Liquids (Brent/LLS Based Pricing) Attractive Long-term U.S. Natural Gas Position Visible Growth Profile with St
Slide 23: Visible Organic Growth
EXPANDING RESOURCES Visible Organic Growth Mining Oil & Gas Targeting +5 Billion Pounds Potential to Double Production Annual Production by 2015 (37% Over Next 5 Years Increase from 2012) Substantial Production Capacity from Advanced Stage Brownfield Existing Deepwater Infrastructure to Deve
Slide 24: Clear Objectives
EXPANDING RESOURCES Clear Objectives A Strong & Focused Organization Maximize Total Shareholder Returns Strong Management of the Base Operational Excellence Achieve Production Targets Effective Cost and Capital Management Manage HS&E and Other Inherent Risks Return Driven Growth Prioritize
Slide 25: Ongoing Cost & Capital Initiatives
EXPANDING RESOURCES Ongoing Cost & Capital Initiatives Reviewing Entire Asset Portfolio for Opportunities to Reduce Costs and Defer Capital Expenditures Reviewing Potential Divestments of Non-strategic Assets Prepared to Respond to Varying Market Conditions Historical Track Record for Managi
Slide 26: Phelps Dodge Case Study
EXPANDING RESOURCES Phelps Dodge Case Study $26 Billion Acquisition in 2007 Rapid Delevering Highly Successful Transformational Transaction ($ in bns) Asset & Geographic $20 Diversification $17.6 Significant Reserve Additions $15 • +46 billion lbs Cu* $10 Developed World-Class Copper $7.2
Slide 27: Copper Markets
EXPANDING RESOURCES Copper Markets Favorable Long-term Demand Drivers & Supply Constraints Total Consumption Supply From Existing Mines 40,000 20,000 +4.7Mt (4.6Mt) +10.7Mt 34% (25%) 32,000 39% 15,000 +7.5Mt 38% 24,000 Cu in kt Cu in kt 10,000 16,000 5,000 8,000 0 0 2001 2013 2025 2001 2013 2025 Chi
Slide 28: World Class Copper Discoveries Are Extremely Rare
EXPANDING RESOURCES World Class Copper Discoveries Are Extremely Rare Recoverable Copper Reserves 2013e Copper Production Million metric tons Thousand metric tons 0 5 10 15 20 25 30 0 200 400 600 800 1000 1200 1979 Escondida - 1979 Escondida - 1979 Grasberg Complex - 1988 1988 Grasberg Complex - 198
Slide 29: Copper Supply Considerations
EXPANDING RESOURCES Copper Supply Considerations Supply Development has been a Challenge Examples of Time to Develop Greenfield Projects Country Year of First Time Discovery Production in Years Oyu Tolgoi Mongolia 1997 2013 16 Esperanza Chile 1988 2011 23 Safford U.S. 1950 2007 57 Tenke Fungurume
Slide 30: Oil & Gas Market Fundamentals
EXPANDING RESOURCES Oil & Gas Market Fundamentals Population Growth, Urbanization and Global Economic Growth to Drive Energy Demand Global Energy Demand Expected to Grow by 35% by 2040 (1) Crude Oil and Natural Gas Primary Sources of Long-term Global Energy Sources Oil Natural Gas #1 Global
Slide 31: Portfolio of World Scale Mines
EXPANDING RESOURCES Portfolio of World Scale Mines Positive Exploration Results – “Big Mines Get Bigger” Mines with Potential Capacity for 1 billion lbs of copper per annum* Morenci Tenke Grasberg Fungurume Cerro Verde El Abra * Grasberg currently producing over 1 bln lbs/annum, Morenci (100%) & Cer
Slide 32: Brownfield Development Projects
EXPANDING RESOURCES Brownfield Development Projects +1 Billion Pounds per Annum Increase by 2016 Tenke Phase II Expansion Morenci SO2 Furnace Ball Mill Tenke Phase 2 $0.9 Billion(1) Morenci ~ $1.4 Billion • Completed on Time and Within • Construction in Process Budget • Startup in 2014 • 50% Inc
Slide 33: Update on PT Freeport Indonesia
EXPANDING RESOURCES Update on PT Freeport Indonesia QMS Training Center May 14th Tunnel Collapse in Training Facility (accident location) 28 Fatalities; 10 Injuries Sudden Ground Failure in Long-Standing Area is Unusual and Unprecedented in PT-FI History Existence of Ceiling Impeded Ability
Slide 34: History of Underground Operations at PT-FI
EXPANDING RESOURCES History of Underground Operations at PT-FI Freeport is a Recognized Global Leader in Underground Mining and Development Initial Block Caving Operations Commenced in 1980 Decades of Successful and Safe Underground Mining Operations Designed to Highest International Standar
Slide 35: Strong Safety Culture & Commitment
EXPANDING RESOURCES Strong Safety Culture & Commitment Safety of Our Employees – Our Highest Priority Hardrock Mining – Industry with Inherent Safety Hazards Strong Safety Culture Throughout Organization Paramount in Maintaining Long-term “License” to Operate Active Safety Management Program
Slide 36: Underground Development
EXPANDING RESOURCES Underground Development • 240 miles of underground tunnels completed with an additional 540 miles projected through the life of the mine • Tunnels are projected to total 780 miles over the life of the mine 540 miles (865 km) 70 Future Development 43 Balance Kucing 60 DMLZ 37 Liar
Slide 37: Mine Design Summary
EXPANDING RESOURCES Mine Design Summary Grasberg BC Deep MLZ • 1 bln t, 1.0% Cu & 0.8 g/t Au • 0.5 bln t, 0.8% Cu & 0.7 g/t Au Reserves* • 19 bln lbs Cu & 16 mm ozs Au • 8 bln lbs Cu & 9 mm ozs Au • 2,400 drawpoints • 1,900 drawpoints • El Teniente-style Layout • El Teniente-style layout Drawpoints
Slide 38: COW Discussion Items
EXPANDING RESOURCES COW Discussion Items PT-FI has Strong Legal Contract (Term Through 2041) Positive Long-term Partnership with Government Since 1960’s Discussion Topics: • Royalties • Downstream Processing • Divestiture • Contract Extension Working to Achieve Mutually Beneficial Resolution
Slide 39: Tax Comparison 1992 - 2012
EXPANDING RESOURCES Tax Comparison 1992 - 2012 Royalty and Income-based Tax Comparison From 1992-2012 by Country ($ in billions) $12 PTFI’s 1991 Contract of Work Estimated Income Taxes and Royalties Under Other Countries’ Regulations $10 $8 $6 $4 $2 $0 PTFI's 1991 COW Canada Papua New South Africa A
Slide 40: Financial Benefits to Indonesia
EXPANDING RESOURCES Financial Benefits to Indonesia ($ millions) Contributed Over $60 Billion to National GDP in Total Since 1992 Largest Private Employer in Papua and One of the Largest Taxpayers in Indonesia Last Next 5 Years 5 Years (2) Direct Benefits (1) Taxes $6,518 $5,760 Dividends to G
Slide 41: Pro Forma Capitalization Table
EXPANDING RESOURCES Pro Forma Capitalization Table (US$ billions) Pro Forma March 31, 2013 Capitalization Amount % Rates Cash and Cash Equivalents (1) $ 4.6 -- Revolver (2) $ 0.0 0% FCX Senior Notes & Term Loan 13.5 25% 3.0% FMC Senior Notes 0.4 1% 7.7% FM Oil & Gas Senior Notes 6.7 13% 7.1% Other S
Slide 42: Financial Policy
EXPANDING RESOURCES Financial Policy Maintain Strong Balance Sheet & Liquidity Position • Achieve Targeted Debt Reductions Over Next 3 Years Invest in Projects with Strong Financial Returns/Capital Discipline Anticipate Continuing Current Common Stock Dividend Rate: $1.25/Share per Annum Boa
Slide 43: Long Track Record of Generating Value for Shareholders
EXPANDING RESOURCES Long Track Record of Generating Value for Shareholders History of Prudent Capital Exploration & Solid Financial Allocation & Opportunistic Development Performance Acquisitions Grasberg Discovery & Financial Discipline Achieving Production Development Successful Phelps Dod
Slide 44: Red Conger
EXPANDING RESOURCES EXPANDING RESOURCES Red Conger President, Freeport-McMoRan Americas
Slide 45: Copper Reserves & Mineralized Material
EXPANDING RESOURCES Copper Reserves & Mineralized Material as of 12/31/12 billion lbs of copper 12/31/12 230 Mineralized Material (b) by Geographical Region Mineralized 113 Material (b) billion (contained copper) lbs North 117 at $2.20 Cu price America 52% South Indonesia America Reserves 17% 19% 12
Slide 46: North America Copper Mines & Molybdenum Mines
EXPANDING RESOURCES North America 7 Copper Mines & 2 Molybdenum Mines 12/31/12 (Billion lbs of Copper) Reserves: 39 Mineralized Material: 59 Morenci Sierrita 1.35 Billion lbs of Copper Sold in 2012 Unit Net Cash Cost of $1.67 per lb of Copper in 2012 Miami Smelter Bagdad Note: Reserves & volumes
Slide 47: Colorado Molybdenum Mines
EXPANDING RESOURCES Colorado Molybdenum Mines Climax Mine 12/31/12 (Billion lbs of Molydenum) COLORADO From primary and by-product mines. Climax and Reserves: 3.4 Henderson Mines Mineralized Material: 3.7 83 Million lbs of Henderson Mine Molybdenum Sold in 2012 Unit Net Cash Cost of $7.07 per lb
Slide 48: South America – Copper Mines
EXPANDING RESOURCES South America – 4 Copper Mines 12/31/12 (Billion lbs of Copper) Reserves: 39 Peru Mineralized Material: 22 Lima Cerro Verde (53.6%) 1.25 Billion lbs of El Abra (51%) Copper Sold in 2012 Candelaria/Ojos del Salado (80%) Unit Net Cash Cost Santiago of $1.50 per lb of Chile Copp
Slide 49: Morenci Mill Expansion
EXPANDING RESOURCES Morenci Mill Expansion Ball Mill June 2013 49
Slide 50: Morenci Mill Expansion
EXPANDING RESOURCES Morenci Mill Expansion Flotation 50
Slide 51: Morenci Mill Expansion
EXPANDING RESOURCES Morenci Mill Expansion Flotation 51
Slide 52: Cerro Verde Mill Expansion
EXPANDING RESOURCES Cerro Verde Mill Expansion CV II Site Preparation June 2013 52
Slide 53: Cerro Verde Mill Expansion
EXPANDING RESOURCES Cerro Verde Mill Expansion Core Material Haul Road 53
Slide 54: El Abra Development Potential
EXPANDING RESOURCES El Abra Development Potential Current Production ~300 mm lbs per Annum Exploration Results Indicate Potential Sulfide Resource Engaged in Studies to Evaluate Potential Large Scale Milling Operation Potential for 1 Bn lb per Year Mine 54
Slide 55: Americas Growth Outlook
EXPANDING RESOURCES Americas Growth Outlook Copper Production billion lbs per year 3.5 Potential Projects under review 2.9 Cerro Verde Expansion 2.6 Morenci Morenci 2.4 Expansion Chino Mill Restart Exp. #2 Ajo El Abra ~1.8 Lone Mill bln lbs Star Twin Buttes/ Sierrita Bagdad Expansion 2010 2012 2014e
Slide 56: Break
EXPANDING RESOURCES EXPANDING RESOURCES Break
Slide 57: Oil & Gas Business Overview
Oil & Gas Business Overview Jim Bob Moffett, Jim Flores and team
Slide 58: Forward Looking Statement
EXPANDING RESOURCES Forward Looking Statement Cautionary Statement This presentation contains forward-looking statements in which Freeport-McMoRan Oil & Gas (Freeport-McMoRan) discusses its potential future performance. Forward-looking statements are all statements other than statements of historica
Slide 59: Business Profile
EXPANDING RESOURCES Business Profile U.S. based oil and gas production business, industry leading operating cash margin 1,200 employees Houston based with additional offices throughout California, Louisiana and Texas Assets and operations are primarily onshore and offshore United States and
Slide 60: Key Attributes
EXPANDING RESOURCES Key Attributes Solid base of oil operating assets provides strong cash margins Reinvestment in high ROR development projects and portfolio of high impact exploration Cash margin growth at ~15% CAGR 4
Slide 61: Dynamic Operating Cash Margin Growth
EXPANDING RESOURCES Dynamic Operating Cash Margin Growth 1Q13 vs 1Q12 $/BOE Note: Companies referenced in this chart: Apache, Anadarko, Chesapeake, ConocoPhillips, Devon, EOG, Marathon and Occidental. Source: public filings. Operating cash margin per barrel of oil equivalent, a non-GAAP measure, is
Slide 62: Operating Cash Margin Leader
EXPANDING RESOURCES Operating Cash Margin Leader Quarter Ending March 31, 2013 $/BOE $60.00 $50.00 $40.00 $30.00 $20.00 $10.00 $0.00 FM O&G Note: Companies referenced in this chart: Apache, Anadarko, Chesapeake, ConocoPhillips, Devon, EOG, Marathon and Occidental. Source: public filings. Operating c
Slide 63: Strong Cash Margin From Operating Assets
EXPANDING RESOURCES Strong Cash Margin From Operating Assets Eagle Ford Haynesville $3.3 B Madden GOM 2013 California + $1,050 MM R/P 38.0 yrs (1) + $1,400 MM R/P 13.6 yrs (1) = Cash $850 MM Margin PV-10 $3.4 B (2) PV-10 $9.4 B (2) R/P 24.5 yrs (1) PV-10 $7.3 B(2) Note: Estimated cash margin assumes
Slide 64: Potential to Triple Cash Margin by 2020 Through Investment
EXPANDING RESOURCES Potential to Triple Cash Margin by 2020 Through Investment Est. % of Future Cash Margin Development 65% “Brownfield” 35%-45% $3.3 B Pre-Tax ROR(1) Cash Margin in 2013 12% Exploration 25%-35% $9.3 B Pre-Tax ROR(1) Cash Margin in 2020 23% Excess Cash Margin (1) Pre-Tax ROR on futur
Slide 65: Strong Growth Potential and High ROR on Invested Capital
EXPANDING RESOURCES Strong Growth Potential and High ROR on Invested Capital Risked Net Pre-Tax Pre-Tax Assets ROR (1) Resource (2) PV-10 (3) MMBOE $Billion Operating 74% 1,565 $20.1 Development 43% 644 $10.4 Exploration 31% 1,045 $11.2 Total Assets 48% (4) 3,254 $41.7 (1) Pre-Tax ROR on future proj
Slide 66: Operating Assets: Strong Potential and High ROR
EXPANDING RESOURCES Operating Assets Strong Potential and High ROR on Invested Capital Risked Net Pre-Tax Pre-Tax Assets Resource PV-10 (2) (3) ROR (1) MMBOE $Billion California 60% 350 $7.3 Eagle Ford 40% 78 $1.4 Deepwater GOM 142% 241 $9.4 Haynesville / Madden 24% 896 $2.0 Operating Assets Total 7
Slide 67: Operating Assets Highlighted Assets
EXPANDING RESOURCES Operating Assets Highlighted Assets San Joaquin Valley-Midway Sunset Eagle Ford Gathering System 37,200 BOE/D 1Q 2013 Total 44,700 BOE/D 1Q 2013 Production CA Production 500+ Future Locations 2,300+ Future Locations LLS Pricing Brent Based Pricing 11
Slide 68: Operating Assets Highlighted Gas Assets
EXPANDING RESOURCES Operating Assets Highlighted Gas Assets Haynesville Drilling Site Madden Lost Cabin Gas Plant 134,200 MCFE/D 1Q 2013 24,700 MCFE/D 1Q 2013 Production Production 11,000+ Future Locations 30+ Future Locations NYMEX Pricing NYMEX Pricing 12
Slide 69: Development Assets Highlighted Assets - Holstein, Marlin & Horn Mtn
EXPANDING RESOURCES Development Assets Highlighted Assets - Holstein, Marlin & Horn Mtn Capacity Capacity Capacity • 113,500 BOPD • 60,000 BOPD • 75,000 BOPD • 142,300 MCFD • 235,000 MCFD • 72,000 MCFD Truss SPAR: 149 ft. diameter Tension Leg Platform: Dry Truss SPAR: 106 ft. diameter Water Depth: 4
Slide 70: Development Assets Highlighted Project - Lucius
EXPANDING RESOURCES Development Assets Highlighted Project - Lucius Lucius Spar Lucius Topside On Time/On Budget Processing Capacity 80,000 – 120,000 BOPD 450,000 MCFD 1st Oil - Mid 2014 14
Slide 71: Development Assets High ROR Drives Powerful Growth
EXPANDING RESOURCES Development Assets High ROR Drives Powerful Growth Strong development project portfolio that provides compounding growth from existing, large, near-term projects 15
Slide 72: Development Assets Eagle Ford, GOM Deepwater & Ultra-Deep
EXPANDING RESOURCES Development Assets Eagle Ford, GOM Deepwater & Ultra-Deep Texas Louisiana Lineham Creek Eagle Ford King West Deep HM NWFX Viosca Marlin Eagle Ford Davy Jones HM Alliance Knoll HM Kudu Risked Net Resource 76 MMBOE Blackbeard Area HM Lion King M63 PV-10 $1.9 B HM Zebra HM Deep Horn
Slide 73: Dynamic Production Growth Portfolio From Development Assets
EXPANDING RESOURCES Dynamic Production Growth Portfolio From Development Assets Operating Development 350 300 250 King MBOE/D Horn Mtn West King Tango Phobos 200 Blackbeard Redev. Horn Mtn Lineham East Holstein Horn Mtn Lion Creek Davy Alliance Deep 150 Blackbeard Jones Lucius West 100 50 0 2013 201
Slide 74: Development Assets: Strong Growth Potential and High ROR
EXPANDING RESOURCES Development Assets Strong Growth Potential and High ROR on Invested Capital Risked Net Pre-Tax Pre-Tax Assets Resource PV-10 (2) (3) ROR (1) MMBOE $Billion “Brownfield” Development Assets Deepwater GOM 45% 318 $6.0 Ultra-Deep GOM 35% 250 2.5 Eagle Ford 40% 76 1.9 Development Asse
Slide 75: Operating & Development Assets Operational Plan
EXPANDING RESOURCES Operating & Development Assets Operational Plan FM O&G Net Production Cash Margin(1)(2) 480 $8,000 420 $7,000 360 $6,000 300 $5,000 MBOE/D MM$ 240 $4,000 180 $3,000 120 $2,000 $3.0 B $2.2 B $2.4 B 60 $2.0 B $2.0 B $1,000 $1.5 B $1.6 B $1.1 B 0 $0 2013E 2014E 2015E 2016E 2017E 201
Slide 76: Exploration Assets High Impact Assets Drive Powerful Growth
EXPANDING RESOURCES Exploration Assets High Impact Assets Drive Powerful Growth Dynamic exploration portfolio continues to create new high cash margin development projects that will fuel future profitable growth for the company and its stakeholders 20
Slide 77: Exploration Assets Gulf of Mexico Deepwater & Ultra-Deep
EXPANDING RESOURCES Exploration Assets Gulf of Mexico Deepwater & Ultra-Deep Lomond North Texas Louisiana England Marlin Viosca Knoll Platinum Ultra-Deep GOM (7 Prospects) Barbosa Horn Mountain Risked Net Resource 317 MMBOE Mississippi Canyon Calico Jack PV-10 $1.7 B Tungsten Holstein Garden Banks G
Slide 78: Dynamic Production Growth Portfolio From Exploration Assets
EXPANDING RESOURCES Dynamic Production Growth Portfolio From Exploration Assets Operating Development Exploration 350 Captain Tara Blood 300 Titanium Tungsten Martinique Platinum 250 England MBOE/D Calico Copper Jack 200 Barbosa Electra Lomond 150 North 100 50 0 2013 2014 2015 2016 2017 2018 2019 20
Slide 79: Exploration Assets: Strong Potential and High ROR
EXPANDING RESOURCES Exploration Assets Strong Potential and High ROR on Invested Capital Risked Net Pre-Tax Pre-Tax Assets Resource PV-10 (2) (3) ROR (1) MMBOE $Billion High Impact Exploration Assets Ultra-Deep GOM 25% 463 $2.5 Deepwater GOM 35% 289 4.6 International 35% 293 4.1 Exploration Assets T
Slide 80: Strong Growth Potential and High ROR on Invested Capital
EXPANDING RESOURCES Strong Growth Potential and High ROR on Invested Capital Risked Net Pre-Tax Assets Pre-Tax Resource (2) PV-10 (3) ROR (1) MMBOE $Billion Operating California 60% 350 $7.3 Eagle Ford 40% 78 1.4 Deepwater GOM 142% 241 9.4 Haynesville / Madden 24% 896 2.0 74% 1,565 $20.1 Development
Slide 81: Exploration Risk Sensitivity
EXPANDING RESOURCES Exploration Risk Sensitivity % of Exploration 0% 25% 50% 75% Success MBOEPD (1) 256 462 668 874 Risked Net Resource (2) 2,209 3,254 4,299 5,344 MMBOE Pre-Tax PV-10 $Billion (3) $31 $42 $53 $64 (1) Expected production volumes in 2020. (2) Operating resource is unrisked and consist
Slide 82: Total Operational Plan
EXPANDING RESOURCES Total Operational Plan Operating, Development & Exploration Assets FM O&G Net Production Cash Margin(1)(2) 600 $9.3 B $10,000 Cash Margin in 2020 500 $8,000 400 MBOE/D $6,000 $3.3 B MM$ 300 Cash Margin in 2013 $4,000 200 $5.5 B $5.5 B $4.4 B $4.2 B $3.8 B $2,000 100 $3.1 B $2.2 B
Slide 83: Strong Cash Margin From Operating Assets
EXPANDING RESOURCES Strong Cash Margin From Operating Assets Eagle Ford Haynesville $3.3 B Madden GOM 2013 California + $1,050 MM R/P 38.0 yrs (1) + $1,400 MM R/P 13.6 yrs (1) = Cash $850 MM Margin PV-10 $3.4 B (2) PV-10 $9.4 B (2) R/P 24.5 yrs (1) PV-10 $7.3 B(2) Note: Estimated cash margin assumes
Slide 84: California Decline Curve & Forecast
EXPANDING RESOURCES California Decline Curve & Forecast 100 90 San Joaquin Valley-Midway Sunset 80 70 60 50 3P Net MBOEPD 40 Proved 30 20 PDP 10 Jan‐10 Jan‐11 Jan‐12 Jan‐13 Jan‐14 Jan‐15 Jan‐16 Jan‐17 Jan‐18 Jan‐19 Jan‐20 28
Slide 85: Eagle Ford Decline Curve & Forecast
EXPANDING RESOURCES Eagle Ford Decline Curve & Forecast 100 Eagle Ford Gathering System 3P & Development Resource Net MBOEPD 10 Proved PDP 1 Jan‐10 Jan‐11 Jan‐12 Jan‐13 Jan‐14 Jan‐15 Jan‐16 Jan‐17 Jan‐18 Jan‐19 Jan‐20 29
Slide 86: Haynesville/Madden Decline Curve & Forecast
EXPANDING RESOURCES Haynesville/ Madden Decline Curve & Forecast Haynesville Drilling Site 100 3P Net MBOEPD Proved 10 Madden Lost Cabin Gas Plant PDP 1 Jan‐10 Jan‐11 Jan‐12 Jan‐13 Jan‐14 Jan‐15 Jan‐16 Jan‐17 Jan‐18 Jan‐19 Jan‐20 30
Slide 87: Holstein Decline Curve & Forecast
EXPANDING RESOURCES Holstein Decline Curve & Forecast 100 3P & Development Resource 10 3P Net MBOEPD SI for fa cility Proved modi fications to a ccomodate s ubsea tiebacks 1 PDP 0 2013 2014 2015 2016 2017 2018 2019 2020 31
Slide 88: Horn Mountain Decline Curve & Forecast
EXPANDING RESOURCES Horn Mountain Decline Curve & Forecast 100 3P + Development Resource Curta i led for Pa s cagoula Pl ant turna round Net MBOEPD 10 3P Proved SI for fa cility modi fications to a ccomodate PDP s ubsea tiebacks 1 2013 2014 2015 2016 2017 2018 2019 2020 32
Slide 89: Marlin Decline Curve & Forecast
EXPANDING RESOURCES Marlin Decline Curve & Forecast 100 3P + Development Resource SI for fa cility 10 modi fications to 3P a ccomodate Net MBOEPD s ubsea tiebacks Proved 1 PDP 0 2013 2014 2015 2016 2017 2018 2019 2020
Slide 90: Lucius Decline Curve & Forecast
EXPANDING RESOURCES Lucius Decline Curve & Forecast 100 Net MBOEPD 3P + Development 10 Resource 3P Proved 1 2013 2014 2015 2016 2017 2018 2019 2020 34
Slide 91: Operating Assets: Strong Potential and High ROR
EXPANDING RESOURCES Operating Assets Strong Potential and High ROR on Invested Capital Risked Net Pre-Tax Pre-Tax Assets Resource PV-10 (2) (3) ROR (1) MMBOE $Billion California 60% 350 $7.3 Eagle Ford 40% 78 $1.4 Deepwater GOM 142% 241 $9.4 Haynesville / Madden 24% 896 $2.0 Operating Assets Total 7
Slide 92: Dynamic Production Growth Portfolio From Development Assets
EXPANDING RESOURCES Dynamic Production Growth Portfolio From Development Assets Operating Development 350 300 250 King MBOE/D Horn Mtn West King Tango Phobos 200 Blackbeard Redev. Horn Mtn Lineham East Holstein Horn Mtn Lion Creek Davy Alliance Deep 150 Blackbeard Jones Lucius West 100 50 0 2013 201
Slide 93: Development Assets Eagle Ford, GOM Deepwater & Ultra-Deep
EXPANDING RESOURCES Development Assets Eagle Ford, GOM Deepwater & Ultra-Deep Texas Louisiana Lineham Creek Eagle Ford King West Deep HM NWFX Viosca Marlin Eagle Ford Davy Jones HM Alliance Knoll HM Kudu Risked Net Resource 76 MMBOE Blackbeard Area HM Lion King M63 PV-10 $1.9 B HM Zebra HM Deep Horn
Slide 94: Development Assets Overview Table of Contents
EXPANDING RESOURCES Development Assets Overview Table of Contents GOM Deepwater Development Lucius Phobos Holstein + tiebacks Marlin Hub – King/Dorado + tiebacks Horn Mountain + tiebacks GOM Ultra-Deep Development Lineham Creek Davy Jones Blackbeard 38
Slide 95: Lucius-Phobos Development
EXPANDING RESOURCES Lucius-Phobos Development Louisiana Texas Breton Main Pass Sound Main S & E Add Marlin Pass West Cam Hub SMI Eugene Isl. Platinum Dorado Viosca Knoll East Cam N. Add West Grand South High Island West Cam Vermilion Isle Delta Pass Mercury W. Add S. Pelto Horn Mountain Galveston HI
Slide 96: Lucius-Phobos Development
EXPANDING RESOURCES Lucius-Phobos Development Lucius Discovery Composite Type Log Cascade Discovery Wilcox Type Log Lucius 1st Oil Mid 2014 Thick Pliocene oil column, large upside Miocene potential PL IOCENE Resource Potential 181 MMBOE Phobos April 2013 Phobos #1BP2 Discovery Keathley Canyon 250 Ne
Slide 97: Lucius Development – C Sand
EXPANDING RESOURCES Lucius Development – C Sand Keathley Canyon 919 OCS-G 21447 #3BP1 A Lucius 5 Currently Drilling “C” Sands Lucius 1 429 NFP Lucius 6 Lucius 3 Lucius 2 A’ Thick Pliocene oil column Oil Gas Planned Producer 41
Slide 98: Lucius Development – D Sand
EXPANDING RESOURCES Lucius Development – D Sand Keathley Canyon 919 OCS-G 21447 #3BP1 Lucius 5 Currently Drilling Will not penetrate “D-1” Sand A Lucius 4 “D” Sands 200 NFP A’ Large upside Miocene potential Oil Gas Planned Producer 42
Slide 99: NW-SE Seismic Line Through Lucius
EXPANDING RESOURCES NW-SE Seismic Line Through Lucius 5 Seismic Image Removed PL IOCENE Per Licensing Agreement MIOCENE Oil Gas 43
Slide 100: Phobos Development
EXPANDING RESOURCES Phobos Development Louisiana Texas Breton Main Pass Sound Main S & E Add Marlin Pass West Cam Hub SMI Eugene Isl. Platinum Dorado Viosca Knoll East Cam N. Add West Grand South High Island West Cam Vermilion Isle Delta Pass Mercury W. Add S. Pelto Horn Mountain Galveston HI SMI S.
Slide 101: Phobos Development – Wilcox
EXPANDING RESOURCES Phobos Development – Wilcox Potential stand alone or tieback to Lucius. Cascade Discovery Wilcox Type Log Seismic Image Removed Per Licensing Phobos #1BP2 Agreement Proven oil column in Upper Wilcox, upside potential in Lower Wilcox. Oil Potential Locations 45
Slide 102: Holstein Development
EXPANDING RESOURCES Holstein Development Louisiana Texas Breton Main Pass Sound Main S & E Add Marlin Pass West Cam Hub SMI Eugene Isl. Platinum Dorado Viosca Knoll East Cam N. Add West Grand South High Island West Cam Vermilion Isle Delta Pass Mercury W. Add S. Pelto Horn Mountain Galveston HI SMI
Slide 103: Holstein Area 2014-2018
EXPANDING RESOURCES Holstein Area 2014-2018 Holstein Tungsten 598Deep 599 600 601 602 603 25 61 MMBOE 1st QTR 2013 Production MMBOE 12,400 BOED 642 643 644 645 646 647 9.4 MMBOE Reserves PDP Holstein 50 MMBOE 686 687 688 689 690 691 70 Copper Peak Rate MMBOE 730 731 732 733 734 735 33,000 BOED 312 M
Slide 104: Holstein Field /NW-SE Seismic Dip Line
EXPANDING RESOURCES Holstein Field /NW-SE Seismic Dip Line Seismic Image Removed Per Licensing Agreement Oil 48
Slide 105: Holstein Field – J2 Sand
EXPANDING RESOURCES Holstein Field – J2 Sand Active Water Injector A5 Producer 925 ac A9ST Abandoned Injector A A7 Producer A2 Producer 375 ac Prop J2/J3 Producers Active Water Injector A’ 100 ac A12BP1 Producer Prop J2 South Producer Producers 500 ac Proposed Producers 8.9 MMBOE of unexploited rese
Slide 106: Holstein Field - K2 Sand
EXPANDING RESOURCES Holstein Field - K2 Sand Prop K2 Ramp Producer A A3ST Producer 730 ac Prop K2 Terrace Injectors Prop K2 Terrace Producer 500 ac Prop K2 Trough Injector A’ Producers 14.7 MMBOE of unexploited reserves planned to be developed. Proposed Producers Expecting 5,000 + BOPD from a high a
Slide 107: Holstein Deep Development
EXPANDING RESOURCES Holstein Deep Development Louisiana Texas Breton Main Pass Sound Main S & E Add Marlin Pass West Cam Hub SMI Eugene Isl. Platinum Dorado Viosca Knoll East Cam N. Add West Grand South High Island West Cam Vermilion Isle Delta Pass Mercury W. Add S. Pelto Horn Mountain Galveston HI
Slide 108: Holstein Deep Development Miocene - M18 Sand
EXPANDING RESOURCES Holstein Deep Development Miocene - M18 Sand Miocene Type Log Development planned for Subsalt Miocene reserves on West GC 643 Flank in 2014. OCS-G 16772 #1 & 1ST2 Subsalt Miocene potential under Holstein Spar on SE Flank can be tested with deep Wilcox well. Prolific subsalt Mioce
Slide 109: Seismic Line Through Holstein Deep
EXPANDING RESOURCES Seismic Line Through Holstein Deep Miocene Type Log GC 643 OCS-G 16772 #1 & 1ST2 Seismic Image Removed Per Licensing Agreement Oil 53
Slide 110: Holstein Wilcox - Exploration
EXPANDING RESOURCES Holstein Wilcox - Exploration KC 292 GC 643 OCS-G 25792 #1BP2 OCS-G 16772 #1 & 1ST2 Structural closure in Wilcox on all flanks of salt. FM O&G has land position to develop all flanks. Potential for large reserves with long life. Prolific Wilcox pay seen on KC 292 Kaskida type log
Slide 111: West-East Seismic Line
EXPANDING RESOURCES West-East Seismic Line KC 292 OCS-G 25792 #1BP2 Seismic Image Removed Per Licensing Agreement Oil 55
Slide 112: Copper Exploration Subsea Tieback Example
EXPANDING RESOURCES Copper Exploration Subsea Tieback Example Louisiana Texas Breton Main Pass Sound Main S & E Add Marlin Pass West Cam Hub SMI Eugene Isl. Platinum Dorado Viosca Knoll East Cam N. Add West Grand South High Island West Cam Vermilion Isle Delta Pass Mercury W. Add S. Pelto Horn Mount
Slide 113: Copper Exploration Subsea Tieback Example
EXPANDING RESOURCES Copper Exploration Subsea Tieback Example GOM OCS Blocks: Green Canyon 689, 733 (100% WI) Play Type: Supra-Salt Amplitude Play, Holstein Analog (located 4.5 miles SE of Holstein) Play Concept: Structural/Stratigraphic trap of high density turbidite sands ponded against salt
Slide 114: Copper Exploration Subsea Tieback Example
EXPANDING RESOURCES Copper Exploration Subsea Tieback Example A Holstein Field Seismic Image Removed Per Licensing Agreement Copper Prospect A’ Operator FM O&G Pliocene Amplitude Play - syncline separated from Holstein pays FM O&G W.I. 100% with structural conformance Net Resource Potential: 70 MM
Slide 115: Copper Deep Exploration Subsea Tieback Example
EXPANDING RESOURCES Copper Deep Exploration Subsea Tieback Example Seismic Image Removed Per Licensing Agreement A Holstein J Sands cumulative production = 62.2 MMBOE Productive area = 1,100 acres Copper Deep Amplitude anomaly area = 2,000 acres A’ 59
Slide 116: Marlin Hub - King Development
EXPANDING RESOURCES Marlin Hub - King Development Louisiana Texas Breton Main Pass Sound Main Marlin S & E Add Pass Hub West Cam SMI Eugene Isl. Platinum Dorado Viosca Knoll N. Add East Cam Grand West South High Island West Cam Mercury Vermilion S. Pelto Isle Delta Pass Horn Mountain W. Add Galvesto
Slide 117: Marlin Hub- Dorado & King 2015-2018
EXPANDING RESOURCES Marlin Hub- Dorado & King 2015-2018 VK0869 VK0870 VK0871 VK0872 VK0873 VK0874 1st QTR 2013 Production VK0913 VK0914 VK0915 Dorado VK0916 VK0916 VK0918 34,000 BOED 9 MMBOE 35 MMBOE Reserves PDP VK0957 VK0958 VK0959 VK0960 VK0961 VK0962 Peak Rate 46,000 BOED 18 Mercury 39 40 41 MMB
Slide 118: King Development Subsalt Prospect - M63 Sand
EXPANDING RESOURCES King Development Subsalt Prospect - M63 Sand King Field Composite Type Log D3 M63 Sand Producer Estimated O/W contact from seismic -6,000’ amplitude G’ Seismic Image Prop MC 128 #1 King -8,000’ Subsalt Removed p Prospect SALT Per Licensing Operator: -10,000’ FM O&G W.I.: FM O&G 1
Slide 119: King Development M63 & D3ST Prospects
EXPANDING RESOURCES King Development M63 & D3ST Prospects - M63 Sand King Field M63 Prospect Composite Type Log Operator: FM O&G FM O&G W.I.: 100% King M63 Prospect Prop M63 #1 Net Resource Potential: 162 MMBOE NW Fault Block Estimated production rate: 15,000 BOPD A’ D & C: $150 MM PTD: 12,420’ TVD
Slide 120: Marlin Hub - Dorado Development
EXPANDING RESOURCES Marlin Hub - Dorado Development Louisiana Texas Breton Main Pass Sound Main Marlin S & E Add Pass Hub West Cam SMI Eugene Isl. Platinum Dorado Viosca Knoll N. Add East Cam Grand West South High Island West Cam Mercury Vermilion S. Pelto Isle Delta Pass Horn Mountain W. Add Galves
Slide 121: Dorado Development M66 Sand
EXPANDING RESOURCES Dorado Development M66 Sand The SS#6 well is planned to penetrate the two most prolific reservoirs at Dorado Field. A’ Proposed Well SS#2 Producer West Infill North Target Possible Well SS#4 ST-1 SS#3 Attic Infill Proposed Well -8,000’ Producer SS#6 Target SS#3 Producer SS#5 Prod
Slide 122: Dorado Development M62 Sand
EXPANDING RESOURCES Dorado Development M62 Sand The SS#6 well is planned to penetrate the two most prolific reservoirs at Dorado Field. SS#1 Shut-In SI SI SS#1 ST-1 Shut-In Producer A’ Producer A2 Shut-In Producer Proposed Well West Infill Possible Well North Target SS#3 Attic Infill SS#4 ST-1 Produ
Slide 123: Horn Mountain Development
EXPANDING RESOURCES Horn Mountain Development Louisiana Texas Breton Main Pass Sound Main Marlin S & E Add Pass Hub West Cam SMI Eugene Isl. Platinum Dorado Viosca Knoll N. Add East Cam Grand West South High Island West Cam Mercury Vermilion S. Pelto Isle Delta Pass Horn Mountain W. Add Galveston HI
Slide 124: Horn Mountain Area 2015-2018
EXPANDING RESOURCES Horn Mountain Area 2015-2018 32 Platinum MMBOE VK0998 VK0999 VK1000 VK1001 VK1002 VK1003 VK1004 1st QTR 2013 Production 9,900 BOED 28 MMBOE Reserves PDP 36 37 38 39 40 41 0001 80 81 82 83 84 85Peak 0045 Rate 56,000 BOED 187 MMBOE Net Resource 124 125 126 127 128 129 0089 46 Horn
Slide 125: Horn Mountain Development - J Sand
EXPANDING RESOURCES Horn Mountain Development - J Sand Horn Mountain Composite Type Log Proven undeveloped potential in 2 fault blocks and additional exploitation potential in numerous amplitude supported prospects. Seismic Image Removed Per Licensing Agreement AA A Kudu Sable Kudu Sable Kilo / Osca
Slide 126: Horn Mountain Development - M2 Sand
EXPANDING RESOURCES Horn Mountain Development - M2 Sand Horn Mountain Composite Type Log Proven undeveloped potential in 2 fault blocks and additional exploitation potential in numerous amplitude supported prospects. Seismic Image Removed Per Licensing Agreement MC 126 M2 NWFX MC 126 M2 NWFX V A A K
Slide 127: Horn Mountain Development Kilo/Oscar
EXPANDING RESOURCES Horn Mountain Development Kilo/Oscar Operator: FM O&G Vastar FM O&G W.I.: 100% MC 127 #1 ST1 Net Resource Potential: 18.2 MMBOE Estimated production rate: 7,500 BOPD D&C: $150 MM PTD: 13,000’ TVD A’ A Seismic Image A10 Removed J Sand Producer WGC MC 13 Q 1x2 Depth Kilo - J sand t
Slide 128: Horn Mountain Development Victory/Quebec
EXPANDING RESOURCES Horn Mountain Development Victory/Quebec Operator: FM O&G FM O&G W.I.: 100% Vastar B’ Net Resource Potential: 6.8 MMBOE Planned drill in 2015 for Estimated production rate: 7,500 BOPD MC 127 #1 ST1 proven undeveloped potential D&C: $150 MM in J & M Sands PTD: 13,140’ TVD B B’ Sei
Slide 129: Horn Mountain Development NWFX - M2 Sand
EXPANDING RESOURCES Horn Mountain Development NWFX - M2 Sand Horn Mountain Composite Type Log D’ Prop MC 126 M2 NWFX Attic reserve potential to proven prolific M Sand A4 M2 Sand Producer Seismic Image Operator: FM O&G D A3 Removed FM O&G W.I.: 100% Net Resource Potential: 8.3 MMBOE M2 Sand Producer
Slide 130: Horn Mountain Deep Development M56 Sand
EXPANDING RESOURCES Horn Mountain Deep Development M56 Sand Operator: FM O&G FM O&G W.I.: 100% Net Resource Potential: 53 MMBOE Estimated production rate: 15,000 BOPD D & C: $175 MM 126 127 MC 127 HM Deep Up-dip S/T PTD: 16,385’ TVD A’ Deeper pool test in M56 Sand below proven J & M Sand field pays.
Slide 131: Ultra-Deep Development
EXPANDING RESOURCES Ultra-Deep Development Louisiana Texas Breton Main Pass Sound Main S & E Add Pass West Cam Lineham Creek SMI Eugene Isl. Viosca Knoll East Cam Davy Jones N. Add Grand West South High Island West Cam Vermilion Delta Pass S. Pelto Isle W. Add Galveston SMI HI S. Tim E. Add Ship Sho
Slide 132: Ultra-Deep Development Davy Jones
EXPANDING RESOURCES Ultra-Deep Development Davy Jones Discovery Well Engineering study ongoing to determine best path forward Wilcox Sands with 13-15% Porosity Pay Count Summary B sand – 33’ C sand – 50’* D sand – 38’ E sand – 14’ F sand – 65’ *two members (42’ in one and 8’ in the other) 76
Slide 133: Ultra-Deep Development Davy Jones
EXPANDING RESOURCES Ultra-Deep Development Davy Jones MMR #1 ST1 MMR #14 (2) Seismic Image Removed Per Licensing Agreement 77
Slide 134: Ultra-Deep Development Blackbeard Area
EXPANDING RESOURCES Ultra-Deep Development Blackbeard Area FM O&G Permitted “C” Location FM O&G MMR #1BP1 Permitted “A” Location 78
Slide 135: Ultra-Deep Development Blackbeard Area
EXPANDING RESOURCES Ultra-Deep Development Blackbeard Area MMR #3 BP2 79
Slide 136: Development Assets: Strong Growth Potential and High ROR
EXPANDING RESOURCES Development Assets Strong Growth Potential and High ROR on Invested Capital Risked Net Pre-Tax Pre-Tax Assets Resource PV-10 (2) (3) ROR (1) MMBOE $Billion “Brownfield” Development Assets Deepwater GOM 45% 318 $6.0 Ultra-Deep GOM 35% 250 2.5 Eagle Ford 40% 76 1.9 Development Asse
Slide 137: Dynamic Production Growth Portfolio From Exploration Assets
EXPANDING RESOURCES Dynamic Production Growth Portfolio From Exploration Assets Operating Development Exploration 350 Captain Tara Blood 300 Titanium Tungsten Martinique Platinum 250 England MBOE/D Calico Copper Jack 200 Barbosa Electra Lomond 150 North 100 50 0 2013 2014 2015 2016 2017 2018 2019 20
Slide 138: Exploration Assets Gulf of Mexico Deepwater & Ultra-Deep
EXPANDING RESOURCES Exploration Assets Gulf of Mexico Deepwater & Ultra-Deep Lomond North Texas Louisiana England Marlin Viosca Knoll Platinum Ultra-Deep GOM (7 Prospects) Barbosa Horn Mountain Risked Net Resource 317 MMBOE Mississippi Canyon Calico Jack PV-10 $1.7 B Tungsten Holstein Garden Banks G
Slide 139: Exploration Assets Overview Table of Contents
EXPANDING RESOURCES Exploration Assets Overview Table of Contents GOM Deepwater Exploration Tara Tara & Zephir GOM Ultra-Deep Exploration Onshore South Louisiana GOM Shelf International Atlantic Margin – Offshore Morocco 83
Slide 140: Tara Exploration
EXPANDING RESOURCES Tara Exploration Louisiana Texas Breton Main Pass Sound Main S & E Add Marlin Pass West Cam Hub SMI Eugene Isl. Platinum Dorado Viosca Knoll East Cam N. Add West Grand South High Island West Cam Vermilion Isle Delta Pass Mercury W. Add S. Pelto Horn Mountain Galveston HI SMI S. T
Slide 141: Tara Prospect
EXPANDING RESOURCES Tara Prospect Operator: FM O&G FM O&G W.I.: 100% Play Type: Lucius analog play – Pliocene/Miocene targets Play Concept: Pliocene/Miocene 4-way closure Net Resource Potential: 740 MMBOE DHC: $100 MM PTD: 23,000’ MD/TVD 85
Slide 142: Exploration Assets Highlighted Project - Tara & Zephir Prospect
EXPANDING RESOURCES Exploration Assets Highlighted Project - Tara & Zephir Prospect Keathley Canyon Pliocene, Miocene objectives 3-way closure against salt mapped on latest proprietary processed WAz 3-D seismic PL IOCENE Net Resource 1,194 MMBOE MIOCENE 86
Slide 143: Tara & Zephir Reservoir Outlines
EXPANDING RESOURCES Exploration Assets Highlighted Project - Tara & Zephir Reservoir Outlines Lucius/Phobos Reservoir Outlines Shown for Comparative Illustration Keathley Canyon Zephir Keathley Canyon Tara Sigsbee Escarpment 87
Slide 144: Tara Prospect
EXPANDING RESOURCES Tara Prospect NW – SE Seismic Line (Proprietary WAz) Pliocene “AA” Structure Map A Seismic Image Removed Per Licensing Agreement A’ CI = 100’ 88
Slide 145: Tara Prospect
EXPANDING RESOURCES Tara Prospect SW – NE Seismic Line (Proprietary WAz) Pliocene “AA” Structure Map B’ Seismic Image Removed Per Licensing Agreement B CI = 100’ 89
Slide 146: Tara Prospect Hydrocarbon Charge & Migration
EXPANDING RESOURCES Tara Prospect Hydrocarbon Charge & Migration B’ B Seismic Image Removed Depth Slice @ 22,016’ Per Licensing Agreement Tara Salt Pliocene Miocene Oligocene Wilcox Cretaceous Salt 90
Slide 147: Ultra-Deep Prospects Onshore South Louisiana & GOM Shelf
Ultra-Deep Prospects Onshore South Louisiana & GOM Shelf
Slide 148: FM O&G is Uniquely Positioned in the Ultra-Deep Trend
EXPANDING RESOURCES FM O&G is Uniquely Positioned in the Ultra-Deep Trend Ownership of Proprietary Processes Industry Leading Ultra-Deep & Specialty Completion Acreage Position Equipment/Technologies Experienced Team FM O&G’s Onshore/Shelf Sub-salt “Franchise” Extensive 3D Database Tying Shelf to De
Slide 149: Ultra-Deep Accomplishments To-Date
EXPANDING RESOURCES Ultra-Deep Accomplishments To-Date Activities to Date Have De-risked Ultra-Deep Play Proved Wells Can be Drilled/Evaluated Safely Below Salt Weld Confirmed Geologic Model in 8 Formations Below Salt Weld Proved High Quality Reservoirs with Large Structural Features Are P
Slide 150: B EXPANDING RESOURCES B
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Slide 151: Conceptual Model - Ultra-Deep Play
EXPANDING RESOURCES Conceptual Model - Ultra-Deep Play Recognized as Industry Leader in This New Exploration Frontier Drilling activities to date have successfully confirmed geologic model and have indicated the potential for a major new geologic trend spanning 200 miles in the shallow waters of the
Slide 152: Ultra-Deep Prospects/Potential
EXPANDING RESOURCES Ultra-Deep Prospects/Potential Gross Unrisked Potential* Exceeds 100 Tcfe DAVY JONES DAVY JONES WEST Lomond North LINEHAM CREEK (in progress) (in progress) Tortuga BONNET ENGLAND FM O&G Wilcox/Cretaceous Play BLACKBEARD WEST FM O&G Miocene/Wilcox Play QUEEN ANNE’S DRAKE REVENGE B
Slide 153: Davy Jones West/Davy Jones Seismic Tie
EXPANDING RESOURCES Davy Jones West/Davy Jones Seismic Tie Seismic Image Removed Per Licensing Agreement 97
Slide 154: Davy Jones ~185 Miles From Tiber Deepwater Discovery
EXPANDING RESOURCES Davy Jones ~185 Miles From Tiber Deepwater Discovery
Slide 155: Lineham Creek Onshore Sub-salt Exploration Prospect
EXPANDING RESOURCES Lineham Creek Onshore Sub-salt Exploration Prospect Located Onshore in Cameron Parish, LA Large Area of Potential Closure ̶ ~33,000 Gross Acres Encountered Hydrocarbon Bearing Porous Sands Above 24,000’ Ryder Scott Assigned 3P Reserves of 547 Bcfe Gross (142 Bcfe Net) Dri
Slide 156: Lomond North Onshore Sub-salt Exploration Prospect
EXPANDING RESOURCES Lomond North Onshore Sub-salt Exploration Prospect Located Onshore in Iberia, St. Martin, Assumption and Iberville Parishes Control Exploratory Rights to 80,000 Gross Acres Spud September 19, 2012 Drilling Below 21,000’ In the Highlander Area Proposed Total Depth: 30,000’
Slide 157: Lomond North Cross Section
EXPANDING RESOURCES Lomond North Cross Section 101
Slide 158: England Seismic Line
EXPANDING RESOURCES England Seismic Line Seismic Image Removed Per Licensing Agreement 102
Slide 159: Regional Seismic Tie – England Prospect to Davy Jones Complex
EXPANDING RESOURCES Regional Seismic Tie – England Prospect to Davy Jones Complex Seismic Image Removed Per Licensing Agreement 103
Slide 160: International Atlantic Margin – Offshore Morocco
International Atlantic Margin – Offshore Morocco
Slide 161: Exploration Assets International - Morocco
EXPANDING RESOURCES Exploration Assets International - Morocco Chevron Chariot FM O&G Mazagan Permit Area * Morocco Kosmos Kosmos Agadir Chevron Kosmos Genel Cairn Cairn, Genel Genel GALP Algeria 105 Note: Subject to final Moroccan government approval.
Slide 162: Mazagan Block Summary
EXPANDING RESOURCES Mazagan Block Summary Net resource potential 1,827 MMBOE (Amtoudi, Toubkal and Jbel Musa) Approx. 2.7 MM gross acres ( ~ 468 OCS blocks) Water depths 3,000’ - 7,000’ Miocene plays are combined OCS Block Size structural/stratigraphic traps Miocene prospects exhibit stron
Slide 163: West Africa Deep Water NPV-10s per BBL
EXPANDING RESOURCES West Africa Deep Water NPV-10s per BBL Deep Water Field NPV-10s by Country ($/BBL) $18 $16 $14 $12 $10 $8 $6 $4 $2 $0 Equatorial Guinea Angola Mauritania Republic of Congo (DRC) Namibia Gambia South Africa Ghana Canary Islands Liberia Sierra Leone Congo Brazzaville Gabon Senegal
Slide 164: Nova Scotia Conjugate Margin Comparison
EXPANDING RESOURCES Nova Scotia Conjugate Margin Comparison 108
Slide 165: Nova Scotia Conjugate Margin Comparison
EXPANDING RESOURCES Nova Scotia Conjugate Margin Comparison AA A’ A’ B B B’ B’ Salt A A’ B B’ AA A’A’ B’ B’ BB Salt Mazagan Equivalent Area 109
Slide 166: Inline Through Proposed Toubkal Well
EXPANDING RESOURCES Inline Through Proposed Toubkal Well Mid Miocene Fan Play Mid Miocene Structure N Seismic Image Removed Per Licensing Agreement Miocene Type Log Net Resource Potential 558 MMBOE Expected Spud 2014 110
Slide 167: Toubkal Fan Amplitude Delineation
EXPANDING RESOURCES Toubkal Fan Amplitude Delineation ~ 62,000 Acres 111
Slide 168: Xline Through Jbel Musa
EXPANDING RESOURCES Xline Through Jbel Musa L.Cretaceous Toe Thrust Anticline Seismic Image Removed Per Licensing Agreement Type Log Sand Oil 112
Slide 169: 3D-View Mid-Miocene & Mid-Cretaceous
EXPANDING RESOURCES 3D-View Mid-Miocene & Mid-Cretaceous Amtoudi Toubkal Jbel Musa Salt Front Toe Thrusts Transpression Fold Axes 113
Slide 170: Exploration Assets: Strong Potential and High ROR
EXPANDING RESOURCES Exploration Assets Strong Potential and High ROR on Invested Capital Risked Net Pre-Tax Pre-Tax Assets Resource PV-10 (2) (3) ROR (1) MMBOE $Billion High Impact Exploration Assets Ultra-Deep GOM 25% 463 $2.5 Deepwater GOM 35% 289 4.6 International 35% 293 4.1 Exploration Assets T
Slide 171: Strong Growth Potential and High ROR on Invested Capital
EXPANDING RESOURCES Strong Growth Potential and High ROR on Invested Capital Risked Net Pre-Tax Assets Pre-Tax Resource (2) PV-10 (3) ROR (1) MMBOE $Billion Operating California 60% 350 $7.3 Eagle Ford 40% 78 1.4 Deepwater GOM 142% 241 9.4 Haynesville / Madden 24% 896 2.0 74% 1,565 $20.1 Development
Slide 172: Exploration Risk Sensitivity
EXPANDING RESOURCES Exploration Risk Sensitivity % of Exploration 0% 25% 50% 75% Success MBOEPD (1) 256 462 668 874 Risked Net Resource (2) 2,209 3,254 4,299 5,344 MMBOE Pre-Tax PV-10 $Billion (3) $31 $42 $53 $64 (1) Expected production volumes in 2020. (2) Operating resource is unrisked and consist
Slide 173: Total Operational Plan
EXPANDING RESOURCES Total Operational Plan Operating, Development & Exploration Assets FM O&G Net Production Cash Margin(1)(2) 600 $9.3 B $10,000 Cash Margin in 2020 500 $8,000 400 MBOE/D $6,000 $3.3 B MM$ 300 Cash Margin in 2013 $4,000 200 $5.5 B $5.5 B $4.4 B $4.2 B $3.8 B $2,000 100 $3.1 B $2.2 B
Slide 174: Question and Answer Session
EXPANDING RESOURCES Question and Answer Session
Slide 175: Addendum
EXPANDING RESOURCES Addendum
Slide 176: Reconciliation of Operating Cash Margin (Non-GAAP) to Cash Provided by Operating Activities (GAAP)
EXPANDING RESOURCES Reconciliation of Operating Cash Margin (Non-GAAP) to Cash Provided by Operating Activities (GAAP) The following table reconciles the operating cash margin, a non-GAAP measure, to the cash provided by operating activities (GAAP) for the three months ended March 31, 2013. Manageme
Slide 177: Definitions
EXPANDING RESOURCES Definitions Cash Margin is oil and gas revenues minus production expenses. PV-10 is FM O&G’s estimate of the present value of future net revenues from oil and gas reserves after deducting estimated production and ad valorem taxes, future capital costs and operating expenses, but
Slide 178: June 2013
EXPANDING RESOURCES June 2013