FASP Project
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APACHE NORTH SEA LIMITED SUBSEA UK EXPRO OPEN PLENARY MARK RICHARDSON APACHE NORTH SEA PROJECTS GROUP MANAGER 11TH FEBRUARY 2015 FORWARD LOOKING STATEMENTS Certain statements in this presentation may contain "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995 including, without limitation, expectations, beliefs, plans and objectives regarding production and exploration activities. Any matters that are not historical facts are forward-looking and, accordingly, involve estimates, assumptions, risks and uncertainties, including, without limitation, risks, uncertainties and other factors discussed in our most recently filed Annual Report on Form 10-K, recent Quarterly Reports on Form 10-Q, recent Current Reports on Form 8-K available on our website, http://www.apachecorp.com/, and in our other public filings and press releases. These forward-looking statements are based on Apache Corporation’s (Apache) current expectations, estimates and projections about the company, its industry, its management’s beliefs and certain assumptions made by management. No assurance can be given that such expectations, estimates or projections will prove to have been correct. Whenever possible, these “forward-looking statements” are identified by words such as “expects,” “believes,” “anticipates” and similar phrases. Because such statements involve risks and uncertainties, Apache’s actual results and performance may differ materially from the results expressed or implied by such forward-looking statements. Given these risks and uncertainties, you are cautioned not to place undue reliance on such forward-looking statements. Unless legally required, we assume no duty to update these statements as of any future date. However, you should review carefully reports and documents that Apache files periodically with the Securities and Exchange Commission. Cautionary Note to Investors: The United States Securities and Exchange Commission ("SEC") permits oil and gas companies, in their filings with the SEC, to disclose only proved, probable, and possible reserves that meet the SEC's definitions for such terms. Apache uses certain terms in this presentation, such as “BO resource,” “BO Potential” and other similar terms that the SEC guidelines strictly prohibit Apache from including in filings with the SEC. “BO Resource,” “BO Potential” and other such terms do not take into account the certainty of resource recovery, which is contingent on exploration success, technical improvements in drilling access, commerciality and other factors, and are therefore not indicative of expected future resource recovery and should not be relied upon. Investors are urged to consider carefully the disclosure in Apache’s Annual Report on Form 10-K for the fiscal year ended December 31, 2011, and amendments thereto, available from Apache at www.apachecorp.com or by writing Apache at: 2000 Post Oak Blvd., Suite 100, Houston, Texas 77056 (Attn: Corporate Secretary). You can also obtain this report from the SEC by calling 1-800-SEC-0330 or from the SEC's website at www.sec.gov 2 APACHE NORTH SEA 3 Improvement Prohibition SAFETY PERFORMANCE Company Notices Notices Talisman Sinopec Energy UK Limited 12 1 CNR International (U.K.) Limited 11 2 BHP Billiton Petroleum Limited 10 Maersk 8 2 Shell U.K. Limited 7 6 Marathon Oil U.K. LLC 7 Nexen Petroleum U.K. Limited 5 Petrofac Facilities Management Limited 5 TAQA Bratani Limited 4 Total E&P UK Limited 4 Teekay Petrojarl Production AS 3 1 Eni Liverpool Bay Operating Company Limited 3 Bluewater Services UK Limited 2 Perenco UK Limited 2 Premier Oil ONS Limited 2 Star Energy Oil & Gas Limited 2 Ugland Stena Storage AS 2 ConocoPhillips (UK) Limited 1 1 Amec Group Limited 1 Apache North Sea Limited 1 BG International Limited 1 BP Exploration Operating Company Limited 1 Centrica Storage Limited 1 Chevron North Sea Limited 1 E.ON E&P UK Ltd 1 Enquest Plc 1 Hydrocarbon Resources Limited 1 North Sea Production Company Limited 1 Wood Group Engineering (North Sea) Limited 1 Sources: OGUK Benchmarking 2013 Data and HSE http://www.hse.gov.uk/notices/notices 2013 PRODUCTION MBOE/D 3,000 Forties 140 120 2,500 100 80 2,000 60 40 1,500 Gas 20 Oil Beryl Area 1,000 0 Nelson 500 Scott Nevis S Telford Buckland Ness Maclure Bacchus 0 5 2013 PRODUCTION EFFICIENCY 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% APACHE MARATHON TULLOW PERENCO BHP CENTRICA ENQUEST BRIDGE NEXEN DANA COP TAQA RWE BG CHEVRON 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 ITHACA 1 PREMIER 3 SHELL TOTAL 5 BP 7 TALISMAN MAERSK 9 CNR E.ON 11 Operator Ranking Operator 13 15 17 6 Source: OGUK Production Efficiency Task Force Data Pack 19 PROJECT PERFORMANCE FASP $54,865/Tonne FASP 4.8% £2,000,000 Non-Deepwater Subsea Tiebacks AFE APPROVED Cost per Well (subsea only projects) Eng, Mat, Inst PROJECT TOTAL 120,000,000 FORECAST v AFE Some points on this chart may be obscured £1,500,000 by others with near-identical values. Linear (PROJECT TOTAL) Outlier with y > 120,000,000 is not shown. Linear (FORECAST v AFE) 100,000,000 £1,000,000 Aviat $32m per Slot 80,000,000 y = 102,948,194x-0.4120 £500,000 R² = 0.5327 60,000,000 £0 40,000,000 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 -£500,000 20,000,000 Cost per Maximum Number of of Maximum Wellper NumberConnections (USD)Cost Bacchus $22m per Slot 0 -£1,000,000 0 5 10 15 20 25 Maximum Number of Well Connections North Sea Asia/Australia Africa ss_only Precision Range +/- ss_only Trend 7 AVIAT FUEL GAS TIE-BACK Facilities 23km 8” CS API X65 Pipeline 6” Flexible Riser on Forties Alpha 23km Services Umbilical Pipeline & Umbilical Rock Dumped 4-slot Manifold & SSIV Structures 2-off Subsea Trees Tie-in Spools & Jumpers Design 179.3barg MAOP & Sour Service 15 year design life New 500m Safety Zone at Aviat BERYL SUBSEA DEVELOPMENT DRILLING Ocean Patriot FNT L4N L4S BG2 NTP 9 EXPLORATION AND APPRIASAL DEVELOPMENTS NNS K Prospect - Tie-back Beryl Tertiary - Tie-back/FPSO Cassini - Tie-back Brora - Tie-back CNS Vail & Val d’Isere - Tie-back OTHERS Seagull - Non-Op Isabella - Tie-back 10 Wil Phoenix AREAS OF IMPACT AND INFLUENCE High Fiscal Policy Contractor Culture Regulatory Operator Regime Culture Operator Collaboration Production Med Efficiency Technology Industry Impact Industry Low Low Med High Operator Influence 11 CONTRACTOR CULTURE - REQUIREMENT Retrofit Subsea Choke Valve Installation Required in December Valve Lead Time 22 Weeks 12 CONTRACTOR CULTURE – TRADITIONAL THINKING Proposal 7m x 7m Over Trawlable Structure Planned Delivery February (8 weeks after required date) Required Sea State >1.2m Metrology Spool Required Engineering Costs: £115k, Fabrication Estimated Cost: £485k 13 CONTRACTOR CULTURE – NEW APPROACH Fit For Purpose Delivered December Required Sea State >3.0m Metrology Spool Not Required Engineering Costs: £30k, Fabrication Cost: £50k 14 OPERATOR CULTURE Present Culture Risk Averse Process Driven Insufficient Leverage of Human Capital Lack of Collaboration Function Constrained New Requirement Leadership Sense of Urgency Devolved Decision Making Responsibility, Accountability and Authority Best Answers Win Respect, Integrity and Trust 15 16 .