Oil Macro Perspective Likely U.S. Production Trends UBS Oil & Gas Conference May 22, 2018 Mark G. Papa
Items Where Theres No Disagreement 2013-2017 global oil demand has surpassed to the upside every year for 5 years 1.7 MMBD in 2017 A major determinant of future oil prices is the rate of US oil growth 2017 YOY US oil growth has…
Marks Perspective 2018+ US Oil Growth Currently a minority opinion Even in a constructive oil price environment, 2018+ US oil growth will be more tepid than most people are predicting Reasons for tepid growth: Primary: o Lack of…
Total US Crude Production Has Been Essentially Flat For 9 of the Past 13 Months US Crude Production (MBPD) 10,264 Conclusion: Monthly EIA data is 10,099 10,024 10,004 erratic and should be analyzed on a 12 month average basis.…
Growth Prediction In a constructive oil price environment, total 2018 US oil growth will be 950 MBD/yr. vs EIA/IEA predictions of 1.3/1.4 MMBD/yr and global demand growth of 1.6 1.8 MMBD/yr. 2019 total US oil growth will likely be…
Basis For This Prediction EIA monthly data is telling us something The GOM turnaround is inevitable A large portion of the Tier I Eagle Ford and Bakken acreage has already been drilled approximately 70% Theres a steep drop-off in…
What to Expect In 2018+ In A Constructive Oil Price Environment The Eagle Ford is unlikely to grow from present levels unless oil prices increase to 80+ The Bakken will only grow 100 MBD from current levels unless oil prices…
Conclusions US oil production will grow, but less than currently predicted o Corollary: WTI will have to be very high to stimulate US growth of 1.2 - 1.5 MMBD/yr. Even so, by 2019 the US will be essentially tied with Russia and…
2018 Items to Monitor EIA Monthly Data o Expect 950 MBD/yr. 2018 growth rate and 850 MBD 2019 rate o Expect monthly US data to be erratic need to annualize E&Ps repositioning away from Eagle Ford, Bakken, Scoop and Stack E&Ps 2018…
Centennial Resource Development, Inc. Unhedged, oil weighted Delaware Basin pure-play Quality acreage position One of the highest debt-adjusted oil growth CAGR Best mid-cap shale development technical team Conservative…
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