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Permian Basin Takes Global Stage – Pioneer Natural Resources Co.

Pioneer Natural Resources Co. · Mar 21, 2017 · 22 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. Permian Basin Takes Global Stage – Pioneer Natural Resources Co. – slide 1
    Permian Basin Takes Global Stage MARCH 2017
  2. Permian Basin Takes Global Stage – Pioneer Natural Resources Co. – slide 2
    PERMIAN BASIN TAKES GLOBAL STAGE Total Recoverable Resource (BBOE)1 0 20 40 60 80 100 120 140 160 Ghawar, Saudi Arabia Permian Basin, USA Produced To Date Midland Basin Delaware Basin Burgan, Kuwait Safaniyah, Saudi Arabia…
  3. Permian Basin Takes Global Stage – Pioneer Natural Resources Co. – slide 3
    DELAWARE AND MIDLAND BASINS: SIMILAR YET DIFFERENT Similar geologic histories through Permian time Vastly different post-Permian uplift history Delaware much closer to Laramide/Rockies Both were deep marine basins and areas of great…
  4. Permian Basin Takes Global Stage – Pioneer Natural Resources Co. – slide 4
    THE TWO LARGEST U.S. OIL SHALE PLAYS Delaware Midland Midland Basin Delaware Basin Basin Basin 75 BBOE recoverable Estimates indicate resource potential similar resource Avalon Shale Clear Fork potential to the Midland Basin 1st…
  5. Permian Basin Takes Global Stage – Pioneer Natural Resources Co. – slide 5
    MIDLAND BASINS MULTIPLE SHALE INTERVALS 13 horizontal play intervals identified (so far) Successful Horizontal Wells in the Play 10 intervals have been tested successfully Future Horizontal Play 3 additional intervals remain to be…
  6. Permian Basin Takes Global Stage – Pioneer Natural Resources Co. – slide 6
    IMPACT OF HORIZONTAL TECHNOLOGY IN THE MIDLAND BASIN Midland Basin Spraberry/Wolfcamp Production 1,200,000 1,100,000 1,000,000 900,000 Spraberry/Wolfcamp production has 800,000 increased 900,000 BOEPD since 2009…
  7. Permian Basin Takes Global Stage – Pioneer Natural Resources Co. – slide 7
    PERMIAN BASIN HORIZONTALS ARE A GAME CHANGER The Permian Basin has produced 35 BBOE in the past 90 years with an estimated 150 BBOE recoverable resource remaining 1.8 160 Permian Basin Tight 1.6 Oil Production 140 Daily Oil…
  8. Permian Basin Takes Global Stage – Pioneer Natural Resources Co. – slide 8
    PERMIAN BASIN ONLY GROWING OIL SHALE PLAY Permian Basin is the only growing major U.S. oil shale since downturn began 2.5 Nov. 2014 OPEC Decision Permian Basin 2.0 Million Barrels Oil Per Day 1.5 1.0 Eagle Ford…
  9. Permian Basin Takes Global Stage – Pioneer Natural Resources Co. – slide 9
    U.S. OIL PRODUCTION Average Monthly Oil Production Weekly Data Monthly Data 10.0 9.5 9.0 8.5 8.0 MMBOPD 7.5 7.0 6.5 6.0 5.5 5.0 4.5 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Source: EIA 10
  10. Permian Basin Takes Global Stage – Pioneer Natural Resources Co. – slide 10
    DRILLING RIG ADDITIONS DIRECTED TO PERMIAN Basin Rig Count Permian Basin 160 Delaware 140 Midland 120 100 80 Eagle Ford 60 Cana Woodford 40 Williston 20 0 Source: Baker Hughes rig count data as of 3/3/2017 11
  11. Permian Basin Takes Global Stage – Pioneer Natural Resources Co. – slide 11
    PERMIAN BASIN: INCREASING RIG COUNT MARKET SHARE % U.S. Horizontal Oil Rigs By Basin 100% Williston 90% 80% 70% Permian Basin 50% 60% 15% 50% Other 40% 30% 20% Eagle Ford 10% Woodford 0% Feb/11 Feb/12 Feb/13…
  12. Permian Basin Takes Global Stage – Pioneer Natural Resources Co. – slide 12
    U.S. RIG COUNT UP 87% SINCE MAY 16 1997-99 2001-02 2008-09 2014-17 120% 1997-98 Drop Peak 1,032 2001-02 Drop Trough 488 Rigs (544) Peak 1,293 100% Trough 738 Rigs (%) (53%) Rigs (555) Rigs (%) (43%) Current Rig Count as % of…
  13. Permian Basin Takes Global Stage – Pioneer Natural Resources Co. – slide 13
    PERMIAN HORIZONTAL RIG COUNT 400 Peak: 349 350 300 Mar 17: 267 +130% vs bottom 250 200 150 100 Bottom: 116 50 0 Feb-11 Aug-11 Feb-12 Aug-12 Feb-13 Aug-13 Feb-14 Aug-14 Feb-15 Aug-15 Feb-16 Aug-16 Feb-17 Source: Baker…
  14. Permian Basin Takes Global Stage – Pioneer Natural Resources Co. – slide 14
    PERMIAN BASIN HORIZONTAL ECONOMICS AMONG THE BEST IN THE WORLD Average breakeven oil price (/barrel) Recent transactions for Permian Basin acreage: Delaware Basin 49M per acre Midland Basin 58M per acre PXD Midland HZ…
  15. Permian Basin Takes Global Stage – Pioneer Natural Resources Co. – slide 15
    WELL PRODUCTIVITY AND COSTS CONTINUE TO IMPROVE 50% Permian Well Well Productivity1 Productivity1 Well Productivity Drivers 40% Increased water volumes Change in 30% Increased sand volumes Reduced cluster spacing 20%…
  16. Permian Basin Takes Global Stage – Pioneer Natural Resources Co. – slide 16
    MIDLAND BASIN HORIZONTAL OIL PRODUCTION BY PEER (GROSS) PXD: 3.75 production rate of nearest peer (XOM) PXD: 31% of total horizontal oil produced within Midland Basin 14-peer group PXD Oil Produced (BOPD) XOM, PE, ECA RSPP,…
  17. Permian Basin Takes Global Stage – Pioneer Natural Resources Co. – slide 17
    CURRENT OPEC TRENDS Announced production cuts in November 2016 OPEC announced production cuts of 1.2 MMBOPD (primarily GCC countries) Non-OPEC countries (primarily Russia) announced production cuts of .6 MMBOPD Effective January 1…
  18. Permian Basin Takes Global Stage – Pioneer Natural Resources Co. – slide 18
    OPEC BREAKEVEN COSTS 140 127 120 98 99 100 95 Oil Price (/BBL) 80 63 60 53 40 20 0 Iran Kuwait OPEC Saudi Arabia Iraq Nigeria OPEC countries need 95+/bbl to balance budgets Source: RBC Capital Markets 19
  19. Permian Basin Takes Global Stage – Pioneer Natural Resources Co. – slide 19
    PRICE FORECAST (NYMEX PRICES AS OF 2/15/17) Research Group Crude Price Forecast Bank Crude Price Forecast Bentek PIRA IHS NYMEX Citi MS GS JPM BAML NYMEX 110.00 90.00 100.00 80.00 90.00 80.00 70.00 70.00 60.00 60.00 50.00…
  20. Permian Basin Takes Global Stage – Pioneer Natural Resources Co. – slide 20
    PIONEERS SPRABERRY/WOLFCAMP PRODUCTION GROWTH FORECAST Spraberry/Wolfcamp Net Production1 1 MMBOEPD (MBOEPD) Horizontal Production Vertical Production 171 125 79 99 45 66 32 34 2009 2010 2011 2012 2013 2014 2015 2016…
  21. Permian Basin Takes Global Stage – Pioneer Natural Resources Co. – slide 21
    PERMIAN BASIN POISED FOR LONG -TERM GROWTH The Permian Basin will drive long-term U.S. oil production growth 6 2025 Permian Basin Oil Growth Forecast 5 MMBOPD (2016 - 2025) Daily Oil Production (MMBOPD) 5 4 3 Today…
  22. Permian Basin Takes Global Stage – Pioneer Natural Resources Co. – slide 22
    FINAL THOUGHTS Expect extreme oil price volatility Oil Price We will see 80/BBL oil again, but will also see 40/BBL Average price for the next 10 years of 50-60/BBL World demand growth of 1 MMBOPD and declining Oil World economy is…

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