Road Map to Permian Basin Economics David J. Howard P.Eng Director, Energy Research Darrel Koo Senior Associate, Energy Research Gillian Surbey Senior Associate, Energy Research 2013 Investment Technology Group, Inc. All rights…
Activity Is Booming and Forecast to Grow *Estimated using average well costs (D&C) in each play and 10/boe Source: ITG IR, raw data provided by didesktop
Oil Production up 1MM bbl/d in the Next Decade Source: ITG IR, raw data provided by didesktop
Permian is Very Low Supply Cost Oil Source: ITG IR, raw data provided by didesktop
Exposure to the Right Permian Play Matters Source: ITG IR, raw data provided by didesktop
Horizontal Shale Plays are Massive in Scale 3 MM ac 5 MM ac 7 MM ac Source: ITG IR, raw data provided by didesktop
Perfect Environment for both Source and Reservoir Source: ITG IR, raw data provided by drillinginfo, didesktop, Bureau of Economic Geology, Texas RRC, Modified from C.R. Hanford, Sedimentology and Genetic Stratigraphy of Dean and…
Industry Activity Points to the Midland and Delaware Source: ITG IR, raw data provided by didesktop
Permian is Very Low Supply Cost Oil Source: ITG IR, raw data provided by didesktop
24,000 Wells Represented on a Single Graph Play Average Wellhead Liquids % Play Average Each Dot Is an Individual Well Oil:Gas Price Color of Dot Signifies Wellhead Liquids Fraction Source: ITG IR, raw data provided by…
Horizontal and Vertical Rates Are Relatively Low Vt - 94 boe/d Hz - 448 boe/d Source: ITG IR, raw data provided by didesktop
Horizontal and Vertical EURs Are Relatively Low Vt 123 MBoe Hz 377MBoe Source: ITG IR, raw data provided by didesktop
Economics Are Superior to Most L48 Plays Hz 68 WTI Vt 60 WTI Source: ITG IR, raw data provided by didesktop
Delaware Basin Offers Multizone Potential 1st & 2nd Bone Spring Avalon,1st & 2nd Bone Spring Wolfcamp 3rd Bone Spring 3rd Bone Spring & Wolfcamp Source: ITG IR, raw data provided by didesktop, Application and Transfer…
Delaware Wolfcamp Wells Improving Wolfcamp Wells Improving 72 Source: ITG IR, raw data provided by didesktop
Shelf Slope and War-Wink Currently Most Economic Source: ITG IR, raw data provided by didesktop
Overpressured Deep Basin More Economic Source: ITG IR, raw data provided by didesktop
No Longer Largest Uneconomic Oil Field in the USA Source: ITG IR, raw data provided by didesktop, Application and Transfer of Advanced Geological and Engineering Technologies for Incremental Production Opportunities, Bureau of…
Vertical Midland Wells Very Economic Horizontal Wells Improving Source: ITG IR, raw data provided by didesktop
Vertical Wells Are More Economic Around the Rim Source: ITG IR, raw data provided by didesktop
Midland Basin 10 Million Total Fairway Acres 3MM ac 7MM ac Source: ITG IR, raw data provided by didesktop
Four Horizontal Target Intervals Wolfcamp A Wolfcamp B Wolfcamp C Cline Strawn Source: ITG IR, raw data provided by didesktop, Application and Transfer of Advanced Geological and Engineering Technologies for Incremental…
Midland Hz Economics Historically Marginal 2012 Average 95 WTI Source: ITG IR, raw data provided by didesktop
Normalizing for 7,000 Laterals Boosts Economics Longer Laterals 75 WTI Source: ITG IR, raw data provided by didesktop
500MBoe Recoveries will Prompt Shift to Hz Wells 500 Mboe Well 61WTI Source: ITG IR, raw data provided by didesktop
Delaware Wolfcamp Next Big Thing 5 MM ac Source: ITG IR, raw data provided by didesktop
How Are You Going To Take Advantage of This *Estimated using average well costs (D&C) in each play and 10/boe Source: ITG IR, raw data provided by didesktop
Appendix Delaware Basin Single-Well Economics ITG IR's Single-Well Assumptions Bone Spring Bone Spring White City Wolfbone Wolfbone Shelf Hz Basin Hz War-Wink Hz Horizontal Vertical Avg Vertical High WELL DATA Tie-in (months) 2 2…
Appendix Other Permian Basin Single-Well Economics ITG IR's Single-Well Assumptions CBP Abo CBP Guad CBP Leonard Yeso Vertical Vertical Vertical CBP Horizontal Yeso Vertical Horizontal WELL DATA Tie-in (months) 2 2 2 2 2 2…
Analyst Certifications and Important Disclosures FINRA Rule 2711 Non-Member Affiliate Disclosures: As of the date of the publication of this report, neither the Analyst nor a member of the Analysts team maintained a financial interest…
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