En Enca cana na In Inve vest stor or Pr Pres esent entation ation January 2019
D E M O N S T R A T I N G T H E P O W E R O F A L E A D I N G S H A L E P O R T F O L I O 2 A Prem emium um E&P P Co Compan any • Premiu ium m posi siti tions ons in 3 t 3 top sh shale plays ys su supports orts a su sust stain inabl able e busi sines ness s acros oss s pric ice envir ironm onments ents o Focused on generating free cash flow Ŧ o Maintaining liquidity and conservative leverage profile o Dynamic capital allocation across portfolio, mitigating regional market constraints o Transfer of ideas and technologies across portfolio • 20 2019 19 buyba back k of $1 $1.25 25 billi lion on foll llowin wing closi sing, ng, su suppor ported d with th cash sh on hand sh flow Ŧ and cash • Trans ansact actio ion n accreti tive ve to per sh share free ee cash sh flow Ŧ • Sign gnific ificant nt opti tional onality ity acros oss s the port rtfolio folio to grow free ee cash sh flow Ŧ , , moneti tize ze non-cor ore ass ssets, s, return urn capital tal to sh sharehol eholders ders Ŧ Non -GAAP measures defined in advisories. For additional information regarding non- GAAP measures see the Company’s website
V A L U E P R O P O S I T I O N 3 Disc scip iplined, lined, Foc ocus used ed and nd Prof ofitable table Gr Growt wth + + financial strength return capital to quality growth shareholders potential Leadin ding g North th Am American can unconven vention tional al produ ducer cer with: • Resilient, multi-basin portfolio supporting a strong balance sheet • Compelling return of capital to shareholders • Sustainable free cash flow Ŧ growth Ŧ Non -GAAP measures defined in advisories. For additional information regarding non- GAAP measures see the Company’s website
C A P I T A L A L L O C A T I O N P R I N C I P L E S 4 Retur Re urn n of of Ca Capital ital Mod odel el Prior ority ty #1 - Financi ancial al Stren ength gth Lower Investment grade credit ratings Prices Manage leverage at mid-cycle prices to ~1.5x net debt to adjusted EBITDA Ŧ Strong liquidity Prior ority ty #2 – Divid viden ends* Prior ority ty #3 - Sustai ain Cash Flow Ŧ Maintain scale (cash flow Ŧ and liquids Sustain current dividend production) in core areas Prior ority ty #4 – Increme menta ntal l Retur urn n of Capit ital al to Shareh ehol older ers Ongoing share buybacks Dividend increases* as sustainable free cash flow Ŧ grows Prior ority ty #5 – Growth Inves estm tmen ent Higher Prices Focused investment to expand free cash flow and generate full-cycle returns *Declaration and payment of future dividends subject to board approval Ŧ Non -GAAP measures defined in advisories. For additional information regarding non- GAAP measures see the Company’s website
E N C A N A : A P R E M I E R N O R T H A M E R I C A N R E S O U R C E C O M P A N Y 5 Newf Ne wfield ield Acqu quisit isition ion Aligne gned d With h Strategy tegy • Top tier er resource, e, mult lti-basin asin optiona ionalit ity MARKET TOP TIER FUNDAMENTALS Core-of-the- core positions in 3 of North America’s top basins RESOURCE o • Operati ation onal al excellen llence Leading operator in stacked pay development o Anadarko primed for Cube Development o • Market et fundame amenta ntals Track record of risk mitigation and margin enhancement o Balance sheet strength Anadarko ideally located near Cushing, OK (WTI) o • Capit ital al alloc locati ation on Disciplined capital allocation to core assets o Multi-basin portfolio provides optionality to mitigate regional risks o Maximize value of non-core assets o • Balanc ance e sheet t streng ngth th OPERATIONAL CAPITAL Further strengthens balance sheet and reduces cost of capital EXCELLENCE ALLOCATION o
A S S E T O V E R V I E W 6 Mul ulti ti-Bas Basin in Adva vantage ntage • Core positi tion ons in 3 top North h Ameri rican an basin ins: : Permian, mian, Anadark arko o & Montney Mo Montne ney • High h quality lity growth h opportun rtunit ities es Duvernay • Other er assets ts suppor ort t scale le, gener erate ate free e operat atin ing g cash flow Ŧ Uinta Williston • Track k record of portfo folio io high-gr grad adin ing • Optiona ionalit ity y for capit ital al allocation location Perm rmian ian miti tigate gates regiona ional l market et constr trai aints nts Eagle Ford • Rapid id transfer nsfer of technology nology and An Anad adar arko learni arning ngs Ŧ Non -GAAP measures defined in advisories. For additional information regarding non- GAAP measures see the Company’s website
K E Y M E S S A G E S 7 2019 19 Pri rior oritie ities • Rapid pid and successf essful ul integr tegrati tion on of Newfield field o Achieve run rate synergies in H2 2019 $1.25 .25 BILLION LLION o Immediately deploy cube development model to Anadarko SHARE REPURCHASE PROGRAM IN 2019 • Generate te free cash flow Ŧ o Free cash flow Ŧ prioritized over production growth o Responsive 2019 program based on market conditions 25% % INCREASE CREASE • Commitm tment ent to retur urn n cash to sharehol eholder ders s in 2019 019 o $1.25B share buyback and 25% increase to dividend, following close of IN QUARTERLY CASH DIVIDEND Newfield transaction o Funded with cash on hand • Discipl ciplin ined ed capit ital al allo locatio ation n STRON ONG o ~3/4 of 2019 capital to 3 core growth assets o Optimize free cash flow Ŧ and liquids production from other assets BALANCE NCE SHEET ET • Strong ong balan lance sheet LEVERAGE WITHIN TARGET RANGE o Leverage remains within target range Ŧ Non -GAAP measures defined in advisories. For additional information regarding non- GAAP measures see the Company’s website
D I S C I P L I N E D C A P I T A L A L L O C A T I O N & F R E E C A S H F L O W G E N E R A T I O N 8 2019 19 Ove vervie rview 2019 Initial Capital Allocation h flow Ŧ at • Expect ct to generate ate free cash current ent commodity dity prices es • Expect ct 2019 019 capital tal spend nd to be lower wer than n combin bined ed 2018 018 ECA+N A+NFX FX Other • ~3/4 /4 of capita tal l to core growth wth assets; ets; Permian Permian ian, Anada adarko o & Montne tney h flow Ŧ from • Optim timizi zing ng free cash om othe her r Anadarko assets; ets; Eagle le Ford, d, Willi illist ston, on, and d Duvernay ernay Montney • Liqui quids ds growth wth in mid id-to to-hi high gh singl ngle digits gits • Strong ong hedge ge posi siti tion on protec tects ts cash h flow Ŧ Ŧ Non -GAAP measures defined in advisories. For additional information regarding non- GAAP measures see the Company’s website
A S S E T O V E R V I E W S 9 Capital Ca tal Inve nvest stmen ment t Foc ocuse used d on on Re Retur urns ns Permian ian Anadar darko • Deli liver ered ed highl hly y effici ficien ent t 2018 8 • Newfield eld achie ieving ving oil l type curve e on 2018 8 program am with h 4 rigs infill fills* • Achieve ved ~100 0 MBOE/d /d in Q4 2018 • HBP dril illin ing g sets up for cube develo elopme ment nt • >35% annual alized ed produc ucti tion on growth • High h confid fiden ence ce well ll-cos ost t synergi gies es expec ecte ted to reduce e well l costs by $1MM by H2 2019 PORTFOLIO DELIVERS >40% 40% IRR R Well ll Montne ntney Other er Ass ssets Returns urns • Focus on YoY liq iqui uids growth • Gener erat atin ing g full ll-cy cycle cle return rns and sustai aini ning ng AT $55/bbl WTI & • Abil ilit ity y to flex x program am with $3/MMBtu NYMEX free e cash flow Ŧ , primari marily in the Eagl gle e Ford, commodi odity ty price Will lliston, ton, and Duvern ernay ay Ŧ Non -GAAP measures defined in advisories. For additional information regarding non- GAAP measures see the Company’s website * Per Newfield Form 8-K, filed January 8, 2019
E X E C U T I O N A T S C A L E 10 Ana nadar darko o Poi oise sed for or Cu Cube e Deve velopmen opment • Held ld by prod oduc ucti tion on wells lls completed pleted prim imari rily ly with th low frac intensi tensity o Reduces future parent-child interactions • “Lease Line Pairs” maximizes potential un un-dr drain ained ed development elopment acreage • Modern ern completion pletions, s, multi lti-well well cubes s core ECA compet peten ency • Decades es of high gh return, rn, free cash flow Ŧ generating ating inventory ventory Low intensity completions Average 1,400lbs/ft & • 1,000 gal/ft High intensity completions >2,000lbs/ft & >2000 • gal/ft * Source: Newfield Exploration Ŧ Non -GAAP measures defined in advisories. For additional information regarding non- GAAP measures see the Company’s website
Recommend
More recommend
