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IPAA OGIS – S&P Global

S&P Global · Sep 12, 2016 · 30 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. IPAA OGIS – S&P Global – slide 1
    Peter Compton IPAA OGIS Senior Consultant S&P Global Platts Analytics North American Crude Outlook
  2. IPAA OGIS – S&P Global – slide 2
    Where We Are Today
  3. IPAA OGIS – S&P Global – slide 3
    Onshore US Production Has Fallen by 900 Mb/d Since January 2015 Cumulative Production Change 0.4 0.2 0.0 (0.2) MMb/d (0.4) (0.6) (0.8) Source: Platts Analytics Bentek Products (1.0) Apr-15 Apr-16 Jan-15 Feb-15…
  4. IPAA OGIS – S&P Global – slide 4
    In August, OPEC Production Was Up Nearly 1 MMb/d Year on Year OPEC YoY Change 1.0 0.8 0.6 0.4 MMb/d 0.2 0.0 (0.2) (0.4) Source: Platts Analytics - Survey (0.6) Iran Iraq Libya Angola Kuwait Qatar…
  5. IPAA OGIS – S&P Global – slide 5
    Non-OPEC Non-US/Canada Production Has Also Been Sensitive to the Low Price Environment Non-OPEC non-US/Canada Production 39.0 2.5% Source: Platts Bentek, EIA 38.5 2.0% 1.5% 38.0 1.0% YOY % Change 37.5 0.5% MMb/d 37.0…
  6. IPAA OGIS – S&P Global – slide 6
    The Near-term Picture For US Production
  7. IPAA OGIS – S&P Global – slide 7
    At Status Quo, Production Roughly Flat Through 2018 Projection Total US 10.0 (30) Mb/d 9.0 8.0 7.0 MMb/d 6.0 5.0 4.0 3.0 2.0 1.0 0.0 Source: Platts Analytics Bentek Products Permian Williston DJ Eagle Ford Onshore…
  8. IPAA OGIS – S&P Global – slide 8
    Low Prices Are Moving the Market Toward Balance, but Platts Expects Subdued Pricing in the Near Term Forecast Dated Brent 120 100 2017 Average 2016 Average 51/bbl 80 43/bbl /bbl 60 40 Source: Platts Analytics Bentek…
  9. IPAA OGIS – S&P Global – slide 9
    50+ WTI Warrants Increased Drilling IRR sensitivity to WTI 35% 30% 25% 20% % IRR 15% 10% 5% 0% -5% 60 WTI 50 WTI 40 WTI Source: Platts Bentek WTI Sensitivity: WTI prices are adjusted while regional oil differentials…
  10. IPAA OGIS – S&P Global – slide 10
    Rig Count Remains Sensitive to WTI Rig Count vs. WTI Price 120 1800 100 1600 1400 80 1200 of Rigs 60 1000 800 40 600 400 20 200 Source: RigData, Nymex, Platts Analytics Bentek Energy 0 0 WTI Price (3 months lagged)…
  11. IPAA OGIS – S&P Global – slide 11
    DUC Inventories are Beginning to Decline, with Texas and Colorado Leading the Reduction Horizontal Drilled but Uncompleted Wells 3000 Source: Rig Data; Drilling Info; Platts Analytics Bentek Energy 2500 2000 1500 1000 500…
  12. IPAA OGIS – S&P Global – slide 12
    Increasing Oil Prices Will Enable US Production to Rebound, with Shale Leading the Charge Forecast Crude Oil 10.0 9.0 8.0 7.0 MMb/d 6.0 5.0 4.0 3.0 2.0 1.0 Source: Platts Analytics Bentek Energy 0.0 Other US Permian…
  13. IPAA OGIS – S&P Global – slide 13
    Production From Shale Basins will Begin Trending Upward Again in Early 2017 Forecast Crude Oil 250 200 150 100 Mb/d 50 0 (50) Source: Platts Analytics Bentek Products (100) Permian Williston DJ Eagle Ford 13
  14. IPAA OGIS – S&P Global – slide 14
    But will the market balance
  15. IPAA OGIS – S&P Global – slide 15
    Narrow WTI/Brent Spread Has Contributed to Higher Imports 9.0 0 8.5 (2) 8.0 WTI/Brent MMb/d (4) 7.5 (6) 7.0 (8) 6.5 (10) 6.0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2014 2015 2016 15 16 Source: Platts…
  16. IPAA OGIS – S&P Global – slide 16
    Refined Product Inventories Must Normalize Before Crude Inventories Can Be Consumed Total US Refined Product Stocks 900 850 800 MMbbl 750 700 650 600 2010 2011 2012 2013 2014 2015 2016 Source: Bentek, S&P…
  17. IPAA OGIS – S&P Global – slide 17
    US Product Inventories Remain Uncomfortably High Refined Product Stocks Difference to 5-Yr Ave. Days Forward Cover 10 9 8 7 6 Days 5 4 3 2 1 Source: EIA 0 Gasoline Distillate 17
  18. IPAA OGIS – S&P Global – slide 18
    Stocks Will Draw, but Not to Typical Days Forward Cover Level US Crude Stocks (excl. SPR) Source: EIA, Platts Analytics 560 540 520 500 MM bbls 480 460 440 420 400 380 360 DFC Mirror 2015 Forecast 18
  19. IPAA OGIS – S&P Global – slide 19
    The Balance Will Allow for High Stock Levels to Finally Start Drawing Down US Balance (MMb/d) 17.2 0.4 17.1 0.3 17.0 0.2 16.9 0.1 16.8 0.0 16.7 (0.1) 16.6 (0.2) 16.5 (0.3) 2015 2016 2017 2018 Supply Demand Balance 19
  20. IPAA OGIS – S&P Global – slide 20
    And what about the global market
  21. IPAA OGIS – S&P Global – slide 21
    Countries/Companies Are Still Reporting Plans to Increase Production During 2017 Global YOY Production Changes 600 500 400 300 200 Mb/d 100 0 -100 -200 Source: Platts Analytics -300 21
  22. IPAA OGIS – S&P Global – slide 22
    The Global Reporting Groups Have Become Much Less Optimistic About When the Market Will Balance Supply and Demand Balance Source: IEA, EIA, OPEC 3.5 3.0 2.5 2.0 MMb/d 1.5 1.0 0.5 0.0 (0.5) (1.0) (1.5) Average EIA IEA…
  23. IPAA OGIS – S&P Global – slide 23
    There Are Also Many Vessels Full of Crude that Have Been Idle for More than 30-Days Source: Platts Analytics 1 MM 1 MM DWT DWT 19 MM DWT 11 MM 7 MM DWT DWT June: 24 25 MM DWT Sept: 39 40 MM DWT 23
  24. IPAA OGIS – S&P Global – slide 24
    Capex Cuts Now Will Impact Future Production Growth Quarterly Capital Expenditures Source: Capital IQ 12 10 USD bn 8 6 4 2 0 BP Chevron ConocoPhillips Eni SpA Exxon Mobil Shell TOTAL S.A. 1H2013 2H2013 1H2014 2H2014…
  25. IPAA OGIS – S&P Global – slide 25
    Flat OPEC and declining non-OPEC/US/Canada supply could lead to very short market Global Supply/Demand Scenario Forecast 120 100 80 MMb/d 60 40 Supply Demand (2021) 20 -5.7 MMb/d 0 2012 2013 2014 2015 2016 2017 2018 2019…
  26. IPAA OGIS – S&P Global – slide 26
    Platts Analytics Continues to Expect Subdued Pricing in the Near Term, with More Support in Latter Years Forecast Dated Brent 120 2021 Average 100 78/bbl 80 /bbl 60 40 Source: Platts Analytics Bentek Energy 20…
  27. IPAA OGIS – S&P Global – slide 27
    Weaker GDP Growth Remains a Substantial Risk 5% 4% 3% 2% 1% 0% -1% -2% 10 Years 9 Years 8 Years 7th Year -3% -4% GDP per Capita (YoY Growth) Global Oil Demand (YoY Growth) 27
  28. IPAA OGIS – S&P Global – slide 28
    Key Takeaways Low prices are reducing the oversupply, but further balancing is needed US production is expected to begin growing modestly late next year, despite prices remaining subdued Crude oil inventories in the US will move…
  29. IPAA OGIS – S&P Global – slide 29
    Questions Thank you Peter Compton, Senior Consultant peter.comptonspglobal.com (720) 264 - 6663
  30. IPAA OGIS – S&P Global – slide 30
    Restrictions on Use: You may use the prices, indexes, assessments and other related information (collectively, Data) in this presentation only for your personal use. You may not publish, reproduce, distribute, retransmit, resell, create…

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