Burlington Resources

Report
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

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