Burlington Resources
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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 It’s not Just the Idea......... BURLINGTON RESOURCES CORPORATE HISTORY Burlington Northern Resources Division Unicon Southland Royalty Milestone Petroleum Diamond Shamrock Offshore BR & Louisiana Land and Exploration merge BURLINGTON RESOURCES MERIDIAN OIL Continuing Western Canadian expansion, BR acquires Canadian Hunter BR expands to Western Canada through agreement to purchase Poco Petroleums El Paso Exploration Union Texas Petroleum 1900 -------- 1978 -------1984 ---- 1985 ---1986 ------ 1990 ------- 1994 -------- 1996 --------- 1997 --------------------------10/97--------------1999------------2001 Burlington Resources Formed in 1988 BURLINGTON RESOURCES COMPANY SUMMARY Market Capitalization, $B 7.0 Enterprise Value, $B 11.3 2001 Cash Flow, $B 1.9 Reserves, TCFE Production, BCFE/D Annual Drilling Program (#Wells) 11.8 2.7 600-800 BURLINGTON RESOURCES 2002 CAPITAL PROGRAM $1.3 Billion Total 40% 30% U.S. Canada Other International 30% BURLINGTON RESOURCES RESERVES POSITION 11.8 TCFE North American Gas 16% North American Oil 72% International Gas 8% International Oil 4% BURLINGTON RESOURCES PROVED NORTH AMERICAN GAS RESERVES 10 9 8 7 TCF 6 5 4 3 2 1 0 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 BURLINGTON RESOURCES NORTH AMERICA NATURAL GAS POSITION Largest of U.S. Independents RESERVES PRODUCTION (2Q 2001) (TCF) 6 30.1 4.8** 4.2 4 2.1 2.1 2.1** *DVN RD *COC/P 2 *CHV 0 BP 6.1 XOM 6.2 PEMEX 7.9 APC BP XOM PEMEX 0 8.5 *DVN 9.5 2.2 BR 2.8 *CHV 15 10 5 3.2 14.5 BR 16.6 *COC/P 35 30 25 20 (BCF/D) *Includes recent acq./mergers, reserves are 2000 reported **Year-end 2000 production figure Sources: JS Herold & Annual Reports, as of 12/31/00 BURLINGTON RESOURCES GLOBAL OPERATIONS CANADA EAST IRISH SEA U.S. EGYPT ECUADOR CHINA ALGERIA PERU GABON Gas ARGENTINA Oil BURLINGTON RESOURCES CORE AREAS WESTERN CANADA ROCKY MOUNTAINS SAN JUAN BASIN BURLINGTON RESOURCES COMPETITIVE ADVANTAGES Program Drilling Cost Control Operational Expertise BURLINGTON RESOURCES SAN JUAN BASIN Fruitland Coal Pictured Cliffs Lewis Shale / Chacra Mesaverde Mancos / Niobrara 1200’ - 1500’ 800’ 1500’ - 1700’ Dakota BURLINGTON RESOURCES SAN JUAN BASIN: New Mexico / Colorado Operated Gas Production, MMCF/D 1,200 Operated Wells 6,500 Projects per Year 800 BURLINGTON RESOURCES GAS PRODUCTION GROWTH San Juan Example 900 Conventional (Tight Gas) 750-800 800 700 Coalbed Methane 600 500 400 300 200 100 0 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 BURLINGTON RESOURCES SAN JUAN COST PERFORMANCE Mesaverde Average Well Cost ($ Thousand) 486 375 1995 1998 23% cost reduction over 3 years BURLINGTON RESOURCES SAN JUAN PRODUCTION MANAGEMENT Mesaverde 80-Acre Infill Progam Study Area Pressures Resource 49% Recovery @ 160-acre Spacing 44% 1,225 950 300 Incremental Recovery @ 80-Acre Spacing 7% 1950s 1998 Abandonment Estimated Gas-in-Place: 28.5 TCF BURLINGTON RESOURCES MADDEN FACILITY: Fremont Co., WY BURLINGTON RESOURCES WIND RIVER BASIN: Madden Field Management Challenges Drilling Depths and Costs Pipeline and Processing Infrastructure Geophysical Interpretation Reservoir Management BURLINGTON RESOURCES MADDEN FIELD: Lower Ft. Union Drilling Costs Reduced Drill Time - 23 Days Gross Cost Savings - $600M/Well 0 Depth (Feet) 2,000 4,000 Pre-1998 Current 6,000 8,000 10,000 0 5 10 15 20 25 30 35 40 Days BURLINGTON RESOURCES MADDEN FIELD: Wind River Basin, WY BH 6-27 TD ~ 25,855 ft. 4-36 7-34 1-5 2-3 LOST CABIN GAS PLANT 5-6 BH 8-35 Drilling N Proved Reserves Probable Reserves BURLINGTON RESOURCES MADDEN FIELD: Madison Drilling Costs Completed & Tied-in Cost ($MM) 0 Bighorn Madison Depth (Feet) 5,000 10,000 4-36 Actual 15,000 20,000 #4-36 #5-6 40.3 30.7 5-6 Actual 25,000 30,000 0 50 100 150 200 250 300 Days 350 400 450 500 BURLINGTON RESOURCES TOTAL MADDEN PRODUCTION (MMCF/D) 300 250 200 150 100 50 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 BURLINGTON RESOURCES WHY CANADA? Competitive Advantages Large Natural Gas Resource Changing North American Supply/Demand Picture BURLINGTON RESOURCES HENRY HUB : Gas Prices 1999 NPC Projections 6.00 Price (Nominal $/mmbtu) 5.00 4.00 3.00 2.00 Actual '99 Reference 1.00 0.00 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 BURLINGTON RESOURCES HENRY HUB : Gas Prices 1999 NPC Projections 6.00 Price (Nominal $/mmbtu) 5.00 4.00 3.00 2.00 Historical '99 Reference Actual Forward Strip 1.00 0.00 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 BURLINGTON RESOURCES CANADIAN STRATEGY ALBERTA DEEP GAS SHALLOW GAS & HEAVY OIL Edmonton BRITISH COLUMBIA Calgary SHALLOW GAS SASKATCHEWAN SHALLOW GAS & CONVENTIONAL OIL BURLINGTON RESOURCES ACQUISITION OF POCO PETROLEUM ALBERTA BRITISH COLUMBIA Poco Petroleum SASKATCHEWAN BURLINGTON RESOURCES CANADA: Gas Production 600 20% MMCF/D 500 Avg. 473 Avg. 397 400 300 200 100 0 1Q00 2Q00 3Q00 4Q00 1Q01 *4th Quarter 2001 does not include the acquisition of Canadian Hunter 2Q01 3Q01 4Q01E BURLINGTON RESOURCES ACQUISITION OF CANADIAN HUNTER ALBERTA BRITISH COLUMBIA Poco Petroleum Canadian Hunter SASKATCHEWAN BURLINGTON RESOURCES CANADIAN HUNTER: Deep Basin Land BURLINGTON RESOURCES DEEP BASIN OVERVIEW San Juan Basin Gas Fairway BURLINGTON RESOURCES CANADIAN HUNTER GAS PRODUCTION 600 MMCF/D 500 +14% 400 / YR 300 200 100 0 1997 1998 1999 2000 2001E BURLINGTON RESOURCES CURRENT CANADIAN LAND POSITION ALBERTA BRITISH COLUMBIA Poco Petroleum Canadian Hunter Chevron JV Lands ATCO Viking Kinsella SASKATCHEWAN BURLINGTON RESOURCES CHINA: Sichuan Basin QIULIN XiangXi Prospect JUNGGAR Beijing TUHA TARIM QAIDAM ORDOS Shanghai Chengdu 500 miles SICHUAN Hong Kong Significant Resource Basin BR Core Competency: Tight Gas Gas Market Potential CHUANZHONG BLOCK 1.8 MILLION ACRES BURLINGTON RESOURCES SUMMARY One of Largest U.S. Independents Proven Gas Development Expertise Focused on Efficiency Committed to North American Natural Gas BURLINGTON RESOURCES BURLINGTON RESOURCES
