burlington resources

BURLINGTONRESOURCES

ATTRIBUTES OF PERSONAL SUCCESS

BURLINGTONRESOURCES

You’re Selling, Somebody is Buying

Entrepreneurial Spirit is Critical

Accountability

ATTRIBUTES OF BUSINESS SUCCESS

BURLINGTONRESOURCES

Understand Your Market

Differentiate Yourself

See the Future

It’s not Just the Idea.........

CORPORATE HISTORY

Burlington NorthernResources Division

SouthlandRoyalty

Union Texas Petroleum

Union Texas Petroleum

UniconUnicon

MERIDIANOIL

Diamond ShamrockOffshore

Diamond ShamrockOffshore

El Paso Exploration

El Paso Exploration

MilestonePetroleum

MilestonePetroleum

BURLINGTONRESOURCES

BR & Louisiana Land and

Exploration merge

BR & Louisiana Land and

Exploration merge

Burlington Resources Formed in 1988

BR expands to Western Canada

through agreement to purchase

Poco Petroleums

BR expands to Western Canada

through agreement to purchase

Poco Petroleums

Continuing Western Canadian

expansion, BR acquires

Canadian Hunter

Continuing Western Canadian

expansion, BR acquires

Canadian Hunter

BURLINGTONRESOURCES

1900 -------- 1978 -------1984 ---- 1985 ---1986 ------ 1990 ------- 1994 -------- 1996 --------- 1997 --------------------------10/97--------------1999------------2001

COMPANY SUMMARY

BURLINGTONRESOURCES

Market Capitalization, $B 7.0

Enterprise Value, $B 11.3

2001 Cash Flow, $B 1.9

Reserves, TCFE 11.8

Production, BCFE/D 2.7

Annual Drilling Program (#Wells) 600-800

2002 CAPITAL PROGRAM

BURLINGTONRESOURCES

$1.3 Billion Total

RESERVES POSITION

BURLINGTONRESOURCES

International Gas

North American Gas

North American Oil

International Oil

72%

16%

8%

4%

11.8 TCFE

PROVED NORTH AMERICAN GAS RESERVES

BURLINGTONRESOURCES

TC

F

NORTH AMERICA NATURAL GAS POSITION

BURLINGTONRESOURCES

(TCF) (BCF/D)RESERVES PRODUCTION (2Q 2001)

Largest of U.S. Independents

Sources: JS Herold & Annual Reports, as of 12/31/00

*Includes recent acq./mergers, reserves are 2000 reported

**Year-end 2000 production figure

GLOBAL OPERATIONS

BURLINGTONRESOURCES

EAST IRISH SEA

ALGERIAALGERIA

EGYPT

Gas

OilOil

CHINA

GABONGABON

ARGENTINA

ECUADORECUADOR PERUPERU

U.S.

CANADA

CORE AREAS

BURLINGTONRESOURCES

WESTERNCANADA

SAN JUAN BASIN

ROCKY MOUNTAINS

COMPETITIVE ADVANTAGES

BURLINGTONRESOURCES

Program Drilling

Cost Control

Operational Expertise

SAN JUAN BASIN

BURLINGTONRESOURCES

Mesaverde

Lewis Shale / Chacra

Mancos / Niobrara

Dakota

Pictured Cliffs

1200’ - 1500’

1500’ - 1700’

800’

Fruitland Coal

CO

NM

SAN JUAN BASIN: New Mexico / Colorado

BURLINGTONRESOURCES

Operated Gas Production, MMCF/D 1,200

Operated Wells 6,500

Projects per Year 800

GAS PRODUCTION GROWTH

BURLINGTONRESOURCES

San Juan Example

750-800

SAN JUAN COST PERFORMANCE

BURLINGTONRESOURCES

486

375

1995 1998

Mesaverde Average Well Cost ($ Thousand)

23% cost reduction over 3 years

SAN JUAN PRODUCTION MANAGEMENT

BURLINGTONRESOURCES

1,225

950

300

Estimated Gas-in-Place: 28.5 TCF

Study Area PressuresStudy Area Pressures

1950s 1998 Abandonment

Resource49%

Recovery@ 160-acre Spacing

44%

Incremental Recovery @ 80-Acre Spacing

7%

Mesaverde 80-Acre Infill Progam

MADDEN FACILITY: Fremont Co., WY

BURLINGTONRESOURCES

WIND RIVER BASIN: Madden Field

BURLINGTONRESOURCES

Drilling Depths and Costs

Pipeline and Processing Infrastructure

Geophysical Interpretation

Reservoir Management

Management Challenges

MADDEN FIELD: Lower Ft. Union Drilling Costs

BURLINGTONRESOURCES

0

2,000

4,000

6,000

8,000

10,0000 5 10 15 20 25 30 35 40

Reduced Drill Time - 23 DaysGross Cost Savings - $600M/Well Reduced Drill Time - 23 DaysGross Cost Savings - $600M/Well

Dep

th (

Fee

t)

Days

Pre-1998Pre-1998CurrentCurrent

MADDEN FIELD: Wind River Basin, WY

BURLINGTONRESOURCES

Proved ReservesProbable Reserves

LOST CABIN GAS PLANT

NNNN

2-32-3

4-364-36

1-51-5

BH 6-27BH 6-27TD ~ 25,855 ft.TD ~ 25,855 ft.

BH 8-35BH 8-35DrillingDrilling

7-347-34 5-65-6

MADDEN FIELD: Madison Drilling Costs

BURLINGTONRESOURCES

0

5,000

10,000

15,000

20,000

25,000

30,000

0 50 100 150 200 250 300 350 400 450 500

5-6Actual

4-36Actual

Dep

th (

Fee

t)

Days

Bighorn Madison

#4-36#4-36 #5-6#5-6

40.3 30.7

Completed & Tied-in Cost ($MM)

TOTAL MADDEN PRODUCTION

BURLINGTONRESOURCES

0

50

100

150

200

250

300

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001

(MMCF/D)

WHY CANADA?

BURLINGTONRESOURCES

Competitive Advantages

Large Natural Gas Resource

Changing North American Supply/Demand Picture

HENRY HUB : Gas Prices

BURLINGTONRESOURCES

1999 NPC Projections

0.00

1.00

2.00

3.00

4.00

5.00

6.00

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010

Actual

'99 Reference

Pri

ce (

Nom

inal

$/m

mb

tu)

HENRY HUB : Gas Prices

BURLINGTONRESOURCES

1999 NPC Projections

0.00

1.00

2.00

3.00

4.00

5.00

6.00

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010

Historical

'99 Reference

Actual

Forward Strip

Pri

ce (

Nom

inal

$/m

mb

tu)

CANADIAN STRATEGY

BURLINGTONRESOURCES

ALBERTAALBERTA

SASKATCHEWANSASKATCHEWANBRITISHBRITISH

COLUMBIA COLUMBIA

Calgary

Edmonton

DEEP GAS

SHALLOWGAS &

HEAVY OIL

SHALLOWGAS

SHALLOW GAS& CONVENTIONAL OIL

ACQUISITION OF POCO PETROLEUM

BURLINGTONRESOURCES

Poco PetroleumPoco PetroleumALBERTAALBERTA

SASKATCHEWANSASKATCHEWANBRITISHBRITISH

COLUMBIA COLUMBIA

CANADA: Gas Production

BURLINGTONRESOURCES

Avg. 397Avg. 397

MM

CF

/D

Avg. 473Avg. 47320%20%

*4th Quarter 2001 does not include the acquisition of Canadian Hunter

ACQUISITION OF CANADIAN HUNTER

BURLINGTONRESOURCES

Poco PetroleumPoco PetroleumCanadian HunterCanadian Hunter

ALBERTAALBERTA

SASKATCHEWANSASKATCHEWANBRITISHBRITISH

COLUMBIA COLUMBIA

CANADIAN HUNTER: Deep Basin Land

BURLINGTONRESOURCES

DEEP BASIN OVERVIEW

BURLINGTONRESOURCES

San Juan BasinGas Fairway

CANADIAN HUNTER GAS PRODUCTION

BURLINGTONRESOURCES

MM

CF

/D

+14% / YR

CURRENT CANADIAN LAND POSITION

BURLINGTONRESOURCES

Poco PetroleumPoco PetroleumCanadian HunterCanadian Hunter

Chevron JV LandsChevron JV LandsATCO Viking KinsellaATCO Viking Kinsella

ALBERTAALBERTA

SASKATCHEWANSASKATCHEWANBRITISHBRITISH

COLUMBIA COLUMBIA

CHINA: Sichuan Basin

BURLINGTONRESOURCES

QIULINXiangXi Prospect

Significant Resource Basin BR Core Competency:

Tight Gas Gas Market Potential

Significant Resource Basin BR Core Competency:

Tight Gas Gas Market Potential

CHUANZHONG BLOCK1.8 MILLION ACRES

500 miles

ChengduChengdu

BeijingBeijing

Hong KongHong Kong

ShanghaiShanghai

TARIM

JUNGGAR

TUHA

QAIDAM ORDOS

SICHUAN

SUMMARY

BURLINGTONRESOURCES

One of Largest U.S. Independents

Proven Gas Development Expertise

Focused on Efficiency

Committed to North American Natural Gas

BURLINGTONRESOURCES