Thu, 11 Dec 2008|
Automatically Generated Transcript (may not be 100% accurate)
Thank you -- appreciate the opportunity to tell -- story. A lot of people are surprised to hear about what -- does we have a very diversified portfolio we do things in the Permian Basin. On this shelf in the Gulf of Mexico. And then the deep water -- from Mexico. This disclosure statement. I was there will read this but is on our website as is the entire. Presentation for you look at. All right our four key pillars that the company is run on their integrity balance. Efficient growth and opportunity an example of our integrity is just the way we handle our business on the day to -- basis. But also are fully engineered reserve report writer Scott has been doing Mariner's. Reserve report for over a decade. And -- can have comfort in that. It's our financial hedges are with -- parties with -- double -- ratings are better and we don't have any exposure to mainlanders and -- Balance wise we -- Portfolio approach to building the company so we have diversity between -- shelf and deep water. And we do projects have different risk preserve profiles. We're growing our company efficiently. Are CEOs and for years and years that we live within our means. And -- continued to to do that. We're always looking for opportunity. I think 2009 will be an interest in years and there has some power drive to take advantage of some growth opportunities next -- -- it -- all focused on today is a little bit about the company and then again these three. Pieces of expanding the deep water expanding onshore. And using our shelf assets essentially is the cash register to fund these activities. In kind of a map view. What's interesting about our portfolio. Is that in the deep water we have numerous high impact prospects that will be drilling over the next several years. For the people are also contributes about a third of our current production. On the shelf. We have a large number of opportunities to keep the shelf cash register going and it provides over half of our current production. In the Permian Basin we're expanding there. Half of our proved reserves are actually in the Permian Basin. -- only 15% of our production but those are those long lived assets that'll continue producing for a long time. Where our reserves were mariners reserves. We on the on the left is our proved reserves on the right -- -- probable. Home might note that you we have over one point two TC after reserves proved plus probable. And one thing that I want to say is that we continually see. Proved reserve additions to probable conversion some time that's been strong element of mariners track record and I've seen the same going for. The track record here you see. Power reserves of grown over the last four or five years. And additionally power production is from likewise with a couple of hurricane eruption years in there and 2005 months of this year. The the the key thing is -- we are on track to have over. Twenty to 30%. Growth in production this year before -- Now we're down to only between percent growth in production from -- hundred BCF last year to the table for these little bit over 120 BC. This year and we think continued growth into 2009. So we're we're happy about that. The in 2006 I would note that that's when he forced shelf acquisition took place and they seem to -- -- and in 2006. We continue to have continues. -- after that. We do have several deep water projects that we've discovered this year that'll and -- reserve growth. And then hopefully our production fictional talk of definitely during the presentation. So how did we grow well some of it is acquisition some of its by the drill bit and some of it is by -- problem. Conversions. In you can see 2006. The company replacement cost and placement rate went up next forced shelf acquisition. We he's a three year rolling average to. Calculate all these things as you can imagine in the Gulf of Mexico. Spent some time. Gathering at least at the lease sale than you might go what the following year. Put -- on production you're after that. And then you start getting problems conversions in the out years. So it really takes three to five years to really see the fruits of all your capital spending early to get your full production. So I think that's how we look at things. Gulf of Mexico. Hardware -- we spend our money what we start off this year with a budget of seven -- sixty million dollars and we said with growth and with. Expiration success. That it can go north of a billion. Dollars and in fact it hands. Right now we're looking at one point one billion dollars in capital expenditures this year. Before Hurricane Ike we thought we'd have a couple of hundred million dollars -- -- cache those pay down debt. I kid us and that -- -- see and negative. And so at the end of the year I think will be very close but our -- will be slightly more. -- -- Cash flow and we always say we live within our means and so we're trying to do that. We think we certainly will -- next year. Just looking ahead to 2009. We think it'll be another strong year of good production growth good cash flow and and Taylor capital expenditure program to generate some excess cash -- And this briefly read recently announced a third quarter results we we had a great quarter with record volumes and prices. And earnings -- production was -- actually 17%. Versus the same quarter last year. But that had. Three months of full production and this year we only had about two multiple production -- you comparing three months of two months and still grew by 17% so we're very proud of that. And we continue to have good success with with the drill bit and the Gulf of Mexico and onshore. Let's talk a little bit about the the Gulf of Mexico. Went deep water and shelf here. This is drilling success record over the last several years and the -- particularly proud of being the chief expiration officer. We've had increase in activity over the last three or four years but -- also had an increase in success rate. We're right at 80% this year and expect to spend about 25 wells -- here. We would have had more but hurricanes -- -- things. As far as the deep water. This is a slide that just kind generalize is what kind of projects we do in the deep water so there's conventional amplitude salt -- -- -- -- my scene and the lower tertiary play. These numbers are approximates to. Reserve sizes. Costs. What -- -- working interest will be an estimated development cost now from left right you see everything. Increases in size increases in cost increases in risk. So how does mariner with its balanced approach to deal with that so the mitigate those issues. I think you'll BCS drilling him more of the things on the left -- of things on the right. And also we'll take a lower working interest. In the things that are higher risk more costly on the right. We've been in here what we think we might -- over the next couple years this is always dynamic drilling schedules are depending on partners on regulatory issues. Hurricanes and things like that so hopefully this gives you an idea what -- begin the next couple years. These play types just to show cartoon what they look like in the upper left hand corners are conventional deep water. These are things that are out toward its all this -- your conventional amplitude play with. The pre -- time data. Showing a -- anomalies and things like that. We still see some conventional amplitude out there to chase but it's obviously -- diminishing game and we're starting to have to go look underneath salt -- -- -- -- over angst. Now fortunately technologies kept up with that that we have -- that depth migrate data. That actually images the top and the base and the sediments underneath that solved. And so the overhang play is actually an extension of the conventional play just underneath the salt. In the lower left hand corner is the expanded -- -- And this is truly 25 to 30000 -- wells completely underneath -- huge potential but also expensive and -- In the last one is lower tertiary it will cost play. There's been a lot of world class announcements about how big this could be we see this is still kind of an unproven there's been no troop reduction just well test here there. And so -- take a wait and see -- we do have some prospects in that place. This is the result of our last couple of lease sales were very successful we picked up prospects in each of these four play types. And what we've already started -- some of these these are mature prospects not just ideas -- acreage positions. These are identified and should be ready to -- some -- next year. -- -- deep water we continue to grow this seat in the yellow stars are current production. In the blue stars are two fields that we brought on line this year -- them. Left side -- northwest -- and operated by Anadarko it's been very good success. And on the right the blue -- fast life that's in over 6000 feet of water we have to Wellesley that are online right now and we. Expect him to continue to produce about a 10210. And -- and million today and we have 42% interest in the notes. Additionally we have a couple of projects that are discoveries and under development. BK 21 was announced early this year that'll be operated by Walter and hope to have online before the end of next year. Go for was a significant discovery that we had earlier this year we hope to problem. Line in the first quarter of next year little delayed by -- we hope to have had -- on by the end of the year. But have some delays there. And their ability to wells coming online there were probably in that range of -- 12250. Many cubic feet today and again we have about 60% working interest and go for. Daniel Boone operated by WT we expect to come online next year. And having -- announce another discovering that the political Dalmatian Murphy operates. Time events still to be determined but those very -- success. Why don't on the shelf. And I think our shelf assets are kind of misunderstood and people don't realize how much of production and cash flow we get the shelf and people worry about the shelf being you know -- or -- -- treadmill. And it is that you have to keep drilling and finding more things we've had success with them but it's a treadmill that creates a lot of cash and we're happy about that. It's our shelf assets were created really through the acquisition forced assets in 2006 and an earlier this year -- position steadily he grooms felt assets. We've been really pleased with the forced assets we acquired them and had little over 300 BCF of proved reserves. On the last three years we've actually produced over 300 BC for reserves that we still have almost 300 BCF -- proved reserves on the book. And we have another 300 to 400 of identified projects going forward so this has been. A very nice treadmill to be you know. There's an example of some things that we've identified that we think will drill over the next couple of years. The key thing about that is that we operate almost all of these and they have high working interest so we control the pace of we want to. Do things are not do things we -- and complete control. And so the pace of the development is really up from there and that gives us an agreement flexibility which we think will need 2000. All right the last. Laying on the stools the Permian Basin and this is our. Core area that has been steady growth for the company for the last several years. We started off just in this frame rate trend but we keep finding new opportunities in an -- Anchorage. So you can see that our reserves have grown every year. And acreage position continues to expand or an active drilling in the Permian Basin currently have five rigs running. We start off with a small production office from now staffed it would challenges Lan man engineers and it's a fully function office. That is charged with expanding and growing in the Permian Basin. We start off with that kind of the big red blob right there in the middle that was our -- burial will field but since we've. We have about 800 wells producing there we think and we have up to thousand additional locations -- that -- -- came through the railroad commission. Machine and allowing optional twenty -- down spacing so. When the economics. -- -- little higher oil price we think that we'll be doing some some down -- there. We've also expanded into the account the west side in the east side looking at some other play types. Recently drilled. Did -- prospect which is going after the trial wolfcamp. The logs look good doing second while -- They still need to be fractured stimulated and have some production. That'll take a couple of months but I think by the time we give our year end reserve report and conference call we hope to be able to say something more about that would -- pretty excited about that. On the left hand side withdrawal from all very wells and some of phoney and false woman. Wolf very well -- Excited about some of those wells and hope to have. Some additional things to say there but we're encouraged by what fun there. Part to lastly. We've had really good production growth. We see upside in the deep water expiration. Expand the Permian Basin. Keep doing this shelf to keep our cash -- strong. We see a lot of exciting opportunities in 2009 both internally and externally. And we we're excited to take. To take advantage of these challenging times we think well positioned to -- -- thank you for your time.