Transcript Hilcorp PPT Style v1

Integrity
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Urgency
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Ownership
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Alignment
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Innovation
We are often asked…
Why buy into
Cook Inlet?
COOK INLET: The positives
Legacy oil and gas basin
with giant fields
Access to land
Rule of law
Stable fiscal policy
The History of Cook Inlet
OIL
GAS
First commercial discovery:
1957 at Swanson River Field
First gas encountered: 1950’s
First oil production: 1958
Peak oil production:
227,000 BOPD in 1970
December 2011 oil rate:
11,000 BOPD
First and largest commercial
discovery: 1959 Kenai Gas Field
First gas production: 1961
Gas production/sales peak: 2001
212 BCF (580 mmscfd)
Current gas production/sales: 2013
90 BCF (246.5 mmscfd)
HILCORP: Making Headway
ONSHORE: New drilling rigs
Swanson River Field
Ninilchik, SD8
OFFSHORE: Enhancing Operations
BUILT FOR PURPOSE
PULLING UNITS
MONCLA RIG 301
Granite Point Platform
Bruce Platform
HAK #1
Dolly Varden Platform
King Salmon Platform
Granite Point Platform
Increased field activity
80
70
60
50
New Drill Wells
40
Workovers
30
20
10
0
2010
2011
2012
2013
Oil Production
Thousands of Barrels per Day
Cook Inlet Oil Production
Support Industry is Critical
INCREASED DEMAND
FOR SUPPORT SERVICES
2013
More than 835,000
Contract Man Hours with
Alaska-based service companies
= More than 400 FT Jobs
Sell more gas
Hilcorp Alaska Cook Inlet Gas Commitments
60
HAK Firm Commitments
HAK Commitments at Acquisition
50
Bcf/Yr
40
30
20
10
0
2013
2014
2015
2016
2017
2018
2019
2020
Gas Pipeline Consolidation
4 COMMON CARRIER GAS
PIPELINES
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Kenai Nikiski Pipeline
Cook Inlet Gas Gathering System
Kenai Kachemak Pipeline
Beluga Pipeline
WHY?
Builds efficiencies for Hilcorp & shippers
WHAT CHANGES?
Tariff will transition to “Postage Stamp Rate”
Costs will be spread throughout the system
Nomination process is greatly simplified
HOW?
Settlement approach with the RCA
Invest for the future
2013 Investment
$338.7MM
Capital Projects
Drilling
Facility/Expense
Seismic Work
Community minded employees
Nearly 500 grants to Alaskan 501(c)3 Organizations
$560,000+
Religious
Health
Human Services
Educational
Public Benefits
Environmental
Arts
International
2012-2013 HAK Financial Impact
Gov’t Payments
$80MM
$8MM
Royalty to Individuals
Payroll
$96MM
Goods & Services
$814MM
Total Impact
Cook Inlet Outlook: Half-full or Half-Empty?
HALF FULL
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In the Cook Inlet region, the USGS estimates mean undiscovered
volumes of nearly 600 million barrels of oil, about
19 trillion cubic feet
$80MM
of gas, and about 46 million barrels of natural gas liquids
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New entrants, increased activity
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Contractor base getting stronger
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Encouraging results
$96MM
HALF EMPTY
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Constrained natural gas market
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Risk of regulation creep
$814MM
Why NOT
Cook Inlet?