burlington resources
DESCRIPTION
B. R. BURLINGTON RESOURCES. ATTRIBUTES OF PERSONAL SUCCESS. You’re Selling, Somebody is Buying Entrepreneurial Spirit is Critical Accountability. BURLINGTON RESOURCES. ATTRIBUTES OF BUSINESS SUCCESS. Understand Your Market Differentiate Yourself See the Future - PowerPoint PPT PresentationTRANSCRIPT
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