Adam Bedard, CEO ARB Midstream, LLC DUG Rockies Changing Dynamics in Rockies Oil March 11, 2016
ARB Midstream Overview Independent, growth-oriented company providing crude oil and gas liquids midstream and marketing/logistics solutions in North America Developing interconnected assets and a marketing platform Analyze, Identify,…
Organic Projects Energy Rail Hubs Niobrara Connector Permian Gateway Located in the heart of DJ Located in Howard County 230 Acres 350 acres Phase I in service late March Under construction Transloading for crude oil Pipe connection…
ARBs Current Footprint Existing/proposed storage Terminals Pipeline capacity Marketing regions Asset / Basin Capacity Marketing NiCon DJ 6,600 b/d Pipelines Rockies/Midcon 1,000 b/d to Niobrara 18,000 b/d Connector LACT…
Outline Global market is long US production has to slow as part of the market rebalancing; what does that mean for the Rockies Regional declines in the US will depend on well economics Rockies IRRs fall to the right of many Permian…
Global Balance Is Expected to Stay Long; US Declines Are Critical to the Crude Recovery Base Potential range Changes in the global crude balance during 2016 Incremental long (short) MMbbl/d -6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6 7 2015…
Rockies Production Less Economic than Permian Price (WTI) Needed at the Wellhead to Generate a 15% ATIRR (incl. transport) for an Average Well 80 70 60 50 15% ARIRR Threshold 40 30 20 10 - 7
Rockies Rig Count Down from 200 to 50 (75%) YoY 350 300 250 Total Rig Count 200 150 100 50 - Williston DJ-Niobrara PRB Uinta 8
Bakken Rig Count Down By 153 rigs, or 82% Over the Past 2 Years Apr 1, 2014 Mar 8, 2016 9
PRB Rig Count Down to Zero, a Decline of 30 Rigs Over the Past 2 Years Apr 1, 2014 Mar 8, 2016 10
DJ Basin Rig Count Dropped 72% During the Past 2 Years, from 54 to 13 Apr 1, 2014 Mar 8, 2016 11
The Rockies Are on Track to Lead Production Declines in 2016 US Crude and Condensate Production (000 bbl/d)1 2016 Dec-to-Dec Decline (Total US = -493 kbd) 10,000 100 9,000 Other OK/Midcon 50 8,000 Alaska West Coast 000 bbl/d…
Transportation Capacity Planned in 2013 and 2014 Is Overshooting Declining Production 2013-2014: Production Growth vs. Pipeline Capacity Growth 2015-2016: Production Growth vs. Pipeline Capacity Growth 1,000,000 1,000,000 Production…
DJ Demand + Committed Capacity Will Exceed Production by Q3 2016 900,000 By Q3 2016, DJ Basin crude 850,000 production will not be sufficient to 800,000 satisfy estimated committed pipeline 750,000 volumes Rail Production and…
The Bakken Will Have Excess Pipeline Takeaway Capacity by Year-end 2016 3,200,000 3,000,000 2,800,000 Rail Production and Takeaway Capacity (bpd) 2,600,000 2,400,000 2,200,000 2,000,000 1,800,000 1,600,000 1,400,000…
Diffs Are Not Set By Transportation Costs in This Over-piped Market WCS -11.42 2016 YTD Average Spot Prices Clearbrook As of March 8, 2016 0.65 1.22 Brent Bkn Gnsy ANS 0.02 WTI 1.26 31.59 Midland Seaway Lt 0.26 3.13…
Most Arbs Are Closed in This Market Transport Cost Assumptions (/bbl) Trans 2016 YTD 2016 YTD Arb PnL Movement Origin Destination Cost Lt/Hvy Buy Market AvgBuy Sell Market Avg Sell Open (/bbl) Barge Corpus Christi St. James 5.92 Light…
Longer Term, the Global Market Will Swing From Oversupplied to Undersupplied Key takeaways Demand is growing by 1MMb/d per year. Meanwhile supply growth is slowing, and CapEx reductions today will delay future supply growth ARB…
End Adam Bedard, CEO ARB Midstream adam.bedardarbmidstream.com 19
Rigs Are Drilling 35% More Wells/Month Today Compared to a Year Ago DJ: 24 today = 37 a year ago Bakken: 62 today = 81 a year ago PRB: 10 today = 19 a year ago 4.00 Hz Rig Efficiency (wells drilled per month per rig) 3.50…
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