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US Shale Gas Special Analyst Workshop – Banpu Public Company Limited

Banpu Public Company Limited · Jul 24, 2019 · 60 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. US Shale Gas Special Analyst Workshop – Banpu Public Company Limited – slide 1
    US shale gas Special analyst workshop 24th July 2019
  2. US Shale Gas Special Analyst Workshop – Banpu Public Company Limited – slide 2
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  3. US Shale Gas Special Analyst Workshop – Banpu Public Company Limited – slide 3
    DISCLAIMER The information contained in this presentation is intended solely for your reference. This presentation contains forward-looking statements that relate to future events, which are, by their nature, subject to significant risks…
  4. US Shale Gas Special Analyst Workshop – Banpu Public Company Limited – slide 4
    Objectives To exchange knowledge on the US unconventional gas sector: Basics of unconventional US gas Dynamic and outlook of the US gas market Competitive landscape, key players To demonstrate how unconventional asset is…
  5. US Shale Gas Special Analyst Workshop – Banpu Public Company Limited – slide 5
    1 Introduction 2 Shale gas basics 3 US gas market 4 Competitive landscape 5 BNAC 5
  6. US Shale Gas Special Analyst Workshop – Banpu Public Company Limited – slide 6
    Gas highest growth in a decade in 2018 4.6% yoy 45% Increase in global of the 2018 worlds demand for natural growth in energy gas in 2018 demand came from gas OUR WAY IN ENERGY 6
  7. US Shale Gas Special Analyst Workshop – Banpu Public Company Limited – slide 7
    Gas second fastest growing primary energy demand IEA, U.S. NATURAL DOMESTIC GAS DEMAND WORLD ENERGY DEMAND 2017 VS 2040* WORLD ENERGY OUTLOOK (NEW POLICIES) Unit: Btoe Unit: Bcf/d 17.7 +1.6 Btoe 90 Actuals 3.6 +2.6% 14.0 CAGR…
  8. US Shale Gas Special Analyst Workshop – Banpu Public Company Limited – slide 8
    Banpu greener and smarter ENERGY RESOURCES ENERGY GENERATION ENERGY TECHNOLOGY COAL CONVENTIONAL SMART POWER ENERGY OIL & GAS RENEWABLE PROPRIETARY POWER TECHNOLOGY DEVELOPMENT Greener and smarter with stronger…
  9. US Shale Gas Special Analyst Workshop – Banpu Public Company Limited – slide 9
    Our investments in gas have been value creating Low acquisition multiples compared Acquisitions during high even at the current market price differential, lower assets prices EV1P RESERVES HENRY HUB AND RELATIVE NETBACK /Mcfe Unit:…
  10. US Shale Gas Special Analyst Workshop – Banpu Public Company Limited – slide 10
    Gas contributed 100m Ebitda to Banpu in 2018 2013-2015 2016 - 2018 2019 -2020 Cumulative acquisitions (US M) 112 M 522 M 1 Bn Ebitda (USM) 101 M 8 M 25 M FEASIBILITY FIRST ACQUISITION FULL CONTRIBUTION PORTFOLIO…
  11. US Shale Gas Special Analyst Workshop – Banpu Public Company Limited – slide 11
    1 Introduction 2 Shale gas basics 3 US gas market 4 Competitive landscape 5 BNAC 11
  12. US Shale Gas Special Analyst Workshop – Banpu Public Company Limited – slide 12
    Unconventional gas extraction hydraulic fracturing RESERVOIRS AND CONVENTIONAL VERSUS UNCONVENTIONAL Hydraulic fracturing involves high pressure injection of fraccing fluids, mainly water into deep-rock formations to enable gas,…
  13. US Shale Gas Special Analyst Workshop – Banpu Public Company Limited – slide 13
    Lower exploration risk, sensitive to development costs CONVENTIONAL UNCONVENTIONAL TYPICAL CONVENTIONAL PRODUCTION PROFILE TYPICAL UNCONVENTIONAL PRODUCTION PROFILE Unit: BOPD* Unit: BOPD* DRILLING 35,000 DEVELOPMENT 35,000…
  14. US Shale Gas Special Analyst Workshop – Banpu Public Company Limited – slide 14
    Reserves vs. Resources 1 DEFINITION OF RESERVE Reserve must be discovered (by drilling), recoverable (with current technology), remaining in the subsurface and commercial To be considered as commercial Intention to proceed with…
  15. US Shale Gas Special Analyst Workshop – Banpu Public Company Limited – slide 15
    Classification of 1P reserves EXAMPLE OF CHAFFEE CORNERS GAS RESERVES TYPES OF 1P RESERVE PROVED DEVELOPED RESERVE (PDP) Expected to be extracted through existing wells and equipment Actively being produced PROVED DEVELOPED…
  16. US Shale Gas Special Analyst Workshop – Banpu Public Company Limited – slide 16
    Estimated Ultimate Recovery (EUR) ILLUSTRATIVE DAILY PRODUCTION AND EUR Mmcf/d Bcf Definition: sum of all oil or gas that is forecast to have the potential to be 12000 10 EUR produced up to the termination point Accumulated 9 10000…
  17. US Shale Gas Special Analyst Workshop – Banpu Public Company Limited – slide 17
    Dry gas vs. wet gas BKVs wells produce dry gas and supply to power plants and residential DEMAND BY SECTOR Dry gas may consist exclusively Power plants Transportation of Methane (CH4) Requires less Methane (C1) Natural gas or…
  18. US Shale Gas Special Analyst Workshop – Banpu Public Company Limited – slide 18
    Single well economics to company cashflows ILLUSTRATIVE ONLY 1-CYCLE WELLHEAD ECONOMICS CASHFLOWS OF SEVERAL WELLS Unit: Annual FCF Cummulative Free Cash Flow Sustaining capex* Net cashflow of several wells (i.e., company…
  19. US Shale Gas Special Analyst Workshop – Banpu Public Company Limited – slide 19
    Illustrative single well return sensitivity SINGLE WELL ECONOMICS LOWER MARCELLUS WYOMING COUNTY Key assumptions 70% 3BCF per 000 lateral foot Type curve 60% 5,000 Ft. lateral Life-Cycle Single Well IRR (%) 50% 40%…
  20. US Shale Gas Special Analyst Workshop – Banpu Public Company Limited – slide 20
    1 Introduction 2 Shale gas basics 3 US gas market 4 Competitive landscape 5 BNAC 20
  21. US Shale Gas Special Analyst Workshop – Banpu Public Company Limited – slide 21
    5 7 shale plays represent majority of US shale gas U.S. NATURAL GAS RESERVES BY SHALE GAS PLAYS (2017) Unit: Tcf Others BNACs portfolio 14 The United State has access to significant shale natural gas Marcellus resources Utica…
  22. US Shale Gas Special Analyst Workshop – Banpu Public Company Limited – slide 22
    Strong domestic demand with export potential US NATURAL GAS DEMAND / SUPPLY DYNAMICS Unit: Bcf/d Pipeline and LNG Pipeline imports capacity under from Canada 3 Bcf/d development LNG Export Import 5 Bcf/d 10 Bcf/d 8 Bcf/d Mexico…
  23. US Shale Gas Special Analyst Workshop – Banpu Public Company Limited – slide 23
    Marcellus to lead shale gas production growth US NATURAL GAS FLOWS AND PRODUCTION OUTLOOK Unit: Bcf/d 2018 production 2035e production Supply Others NORTHWEST Natural gas production growth in 7 Bakken the U.S. is largely driven by…
  24. US Shale Gas Special Analyst Workshop – Banpu Public Company Limited – slide 24
    Appalachia, Permian is expected to lead production growth TOTAL PROJECTED NATURAL GAS PRODUCTION Unit: Bcf/d Other Production 135 Tight and CBM Conventional 120 Associated gas 105 Other associated gas D 90 Permian Eagle Ford…
  25. US Shale Gas Special Analyst Workshop – Banpu Public Company Limited – slide 25
    Further growth is expected to come from export NORTH AMERICAN GAS DEMAND Unit: Bcf/d +2.7% +1.7% p.a. p.a. CAGR CAGR 2018-25 2025-30 124 126 120 122 115 119 113 114 107 109 103 20 20 22 24 27 13.8% 8.8% 96 100 17 17 18 14 15…
  26. US Shale Gas Special Analyst Workshop – Banpu Public Company Limited – slide 26
    Significant export capacity is in the pipeline NORTH AMERICAN LNG EXPORT FACILITIES LNG EXPORT TERMINALS CAPACITY GROWTH Unit: Bcf/d Unit: Bcf/d 30 Second wave of new capacity 25 20 15 10 5 0 2019 2021 2023 2025 2027…
  27. US Shale Gas Special Analyst Workshop – Banpu Public Company Limited – slide 27
    Expanding infrastructure to support demand growth GAS PIPELINE CAPACITY OUT OF NORTHEAST STATES Unit: Bcf/d 30 New pipelines come into service from 2019 2021 to match 25 growing production and market demand 20 Mountain Valley…
  28. US Shale Gas Special Analyst Workshop – Banpu Public Company Limited – slide 28
    Storage level and impacts on pricing U.S. NATURAL GAS STORAGE LEVEL VS TEMPERATURE (NEW YORK) Unit: c Unit: Bcf Positive correlation between level 40 Temperature (LHS) 5,500 of storage and temperature, high Storage (RHS) storage…
  29. US Shale Gas Special Analyst Workshop – Banpu Public Company Limited – slide 29
    Appalachia and associated gas prolific resource base U.S. ONSHORE COST CURVE Unit: /Mcf 8 6 Breakeven Henry hub price 4 2 0 -2 Resources commercial below 3/Mcf: 675 Tcf -4 -6 -8 0 75 150 225 300 375 450 525 600 675…
  30. US Shale Gas Special Analyst Workshop – Banpu Public Company Limited – slide 30
    Long term gas price could rise up to 3-4 HENRY HUB GAS PRICE FORECAST (2019 - 2035) Unit: /MMBTU AVG 2035: 4.1 4.5 AVG 2030: 3.7 4.0 AVG 2025: 3.2 3.5 3.0 2.5 2.0 2019 2020 2021 2022 2023 2024 2025…
  31. US Shale Gas Special Analyst Workshop – Banpu Public Company Limited – slide 31
    1 Introduction 2 Shale gas basics 3 US gas market 4 Competitive landscape 5 BNAC 31
  32. US Shale Gas Special Analyst Workshop – Banpu Public Company Limited – slide 32
    10 11 12 13 14 15 16 0 1 2 3 4 5 7 8 9 6 NE Core Unit: Bcf MaSW Core NE Non-Core Source: IHS Markit, April 2019 Marcellus SW Liquids Rich OUR WAY IN ENERGY Periphery EUR PER WELL BY…
  33. US Shale Gas Special Analyst Workshop – Banpu Public Company Limited – slide 33
    BKV is the top 20 gas producers in Pennsylvania TOP 20 GAS PRODUCERS IN PENNSYLVANIA (AVERAGE 1Q19) Unit: Mmcf/d 4,000 Top 20 gas producers 3,500 accounted for c.95% of 3,000 total gas production in 2,500 Pennsylvania 2,000…
  34. US Shale Gas Special Analyst Workshop – Banpu Public Company Limited – slide 34
    Players in the core area likely to be more competitive Liquid Rich Supercore BKV 40 others Cabot Cheasapeake Chief CNX 1st Quintile ExxMobil 2nd Quintile Nation Fuel 3rd Quintile Range Rscs Southwest 4th Quintile…
  35. US Shale Gas Special Analyst Workshop – Banpu Public Company Limited – slide 35
    BNAC performance in-line with Appalachia top producers 2018 APPALACHIA BENCHMARKING METRICS Metric BKV Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Consolidated EBITDA per 1.40 1.56 -0.58 -1.13 0.46 2.01 Mcfe Cash Opex per 1.16 1.19 1.46…
  36. US Shale Gas Special Analyst Workshop – Banpu Public Company Limited – slide 36
    US unconventional gas valuation matrics BANPU COMPARABLES INFORMATON AND MULTIPLES (AS OF 15 JULY) ENTERPRISE EV/EBITDA EV/EBITDA EV/CURRENT EV/1P PROVED VALUE 2018 (x) 2019e (x) PROD. RESERVES RLI (USBN) (/MCFED) (/MCFE) (YEARS)…
  37. US Shale Gas Special Analyst Workshop – Banpu Public Company Limited – slide 37
    Current prices on the low side good acquisition window SHARE PRICE OF US SHALE GAS PLAYERS INDEX = JULY 2015 Currently in low gas 140% price environment 120% 100% CABOT -23% 80% 60% CNX -52% 40% EQT -63% Antero -84%…
  38. US Shale Gas Special Analyst Workshop – Banpu Public Company Limited – slide 38
    1 Introduction 2 Shale gas basics 3 US gas market 4 Competitive landscape 5 BNAC 38
  39. US Shale Gas Special Analyst Workshop – Banpu Public Company Limited – slide 39
    Strong gas portfolio: positioned to capture growth Banpu position: Total reserve 1.25 Tcf, Net production 200-230 MMcfd and 362 wells New York Banpu now one of top 20 natural MARCELLUS SHALE gas producers in Pennsylvania in Marcellus…
  40. US Shale Gas Special Analyst Workshop – Banpu Public Company Limited – slide 40
    Established systems and infrastructure Drilling operations Fraccing operations Drilling Operations P&G Warehouse Pad Fraccing Operations Mirabelli Pad Wellhead Compressor station Natural gas well heads on well pad Edsell…
  41. US Shale Gas Special Analyst Workshop – Banpu Public Company Limited – slide 41
    Photos from our operation Drilling team Drilling operations Drill (hammer) bits used for percussion (air) drilling Rig Precision 532 Rig on P&G4 Pad OUR WAY IN ENERGY 41
  42. US Shale Gas Special Analyst Workshop – Banpu Public Company Limited – slide 42
    Experienced Banpu Gas team CHRISTOPHER JOSEPH KATHLEEN ETHAN MATTHEW KALNIN DAVIS NEUHEARDT NGO JOHNSON CEO/ Co-Founder COO/ Partner VP Finance & Controller SVP Engineering VP Corporate / Partner / Partner Development/…
  43. US Shale Gas Special Analyst Workshop – Banpu Public Company Limited – slide 43
    BNACs gas sale process and pricing implications Majority of HENRY HUB BNACs volume is PRICE sold at this step - Basin differential to Henry Hub EFFECTIVE NETBACK NETBACK SELLING PRICE PRICE 1 PRICE 2 (e.g. Transco Leidy (NEPA 1-5)…
  44. US Shale Gas Special Analyst Workshop – Banpu Public Company Limited – slide 44
    Illustrative BNACs economics Unit: /Mcf ILLUSTRATIVE ONLY Total differential Henry Effective Hub selling price 3.0 0.5 Operating expenses Netback 0.2 price 1 0.5 Capex 1 1.9 0.2 2 0.1 3 0.2 1.4 1.0 4 0.4 5 Henry Hub…
  45. US Shale Gas Special Analyst Workshop – Banpu Public Company Limited – slide 45
    Unit sold c.71 Bcf in 2018, 70 81 Bcf target in 2019 QUARTERLY UNIT SOLD ANNUAL UNIT SOLD Unit: Bcf Unit: Bcf 18.4 18.1 70.8 17.5 16.7 16.2 8.0 20.3 4.1 4.5 3.7 Unit sold (Bcf) 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18…
  46. US Shale Gas Special Analyst Workshop – Banpu Public Company Limited – slide 46
    Henry Hub prices and average revenue per unit HISTORICAL QUARTERLY GAS PRICES HISTORICAL GAS PRICES Unit: /Mmbtu and /Mcf Unit: /Mmbtu and /Mcf 4.5 4.0 3.5 3.0 Henry Hub 2.9 (/Mmbtu) 3.0 Henry Hub 2.5 Average revenue…
  47. US Shale Gas Special Analyst Workshop – Banpu Public Company Limited – slide 47
    Costs and Ebitda HISTORICAL QUARTERLY EBITDA AND CASH COST HISTORICAL ANNUAL Unit: /Mcf EBITDA AND CASH Unit: /Mcf 2.4 2.2 2.2 2.0 2.0 2.0 1.9 1.8 1.8 1.8 1.6 1.4 0.9 2.0 1.7 1.4 Ebitda (/Mcf) 1.6 1.6 1.2 0.9 1.5 1.2…
  48. US Shale Gas Special Analyst Workshop – Banpu Public Company Limited – slide 48
    Ebitda contribution 100M in 2018 HISTORICAL QUARTERLY EBITDA HISTORICAL EBITDA Unit: M Unit: M +308% 36.4 101.2 26.8 27.5 23.6 14.5 24.8 6.6 6.8 5.8 5.6 Ebitda 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2017…
  49. US Shale Gas Special Analyst Workshop – Banpu Public Company Limited – slide 49
    2019 indicative guidance ILLUSTRATIVE AND INDICATIVE ONLY UNIT GUIDANCE (US/ MCF) COMMENTS REVENUE Reserves (Bcf) 1,250 Production volume (Mmcfd) 200-300 Average differential to 0.5-0.8 Difference selling points and (NYMEX basis)…
  50. US Shale Gas Special Analyst Workshop – Banpu Public Company Limited – slide 50
    Banpu Gas business strategy RESERVES/ PRODUCTION Ramp up existing portfolio production volume and improve reserves life with effective production development program MARGIN Enhance efficiencies and cost efficiencies through use of…
  51. US Shale Gas Special Analyst Workshop – Banpu Public Company Limited – slide 51
    Key takeaways SHALE GAS BASICS US GAS MARKET Lower exploration risk, more sensitive to development Despite all the supply growth, Natural Gas demand is costs growing faster than was previously forecasted. Future growth is likely to…
  52. US Shale Gas Special Analyst Workshop – Banpu Public Company Limited – slide 52
    APPENDIX 52
  53. US Shale Gas Special Analyst Workshop – Banpu Public Company Limited – slide 53
    Gas price outlook LAST 6 MONTHS or 4Q18 2019 OUTLOOK Strong demand and tight supply Strong production growth, despite continued to drive gas price increasing demand DEMAND DRIVERS DEMAND DRIVERS Strong summer 2018 power Summer power…
  54. US Shale Gas Special Analyst Workshop – Banpu Public Company Limited – slide 54
    Banpu gas portfolio: 200-230 MMcfd gas production MAR JAN MAR MAY SEP JAN 2016 2017 2018 TOTAL CHAFFEE NEPA NEPA NEPA NEPA NEPA CORNERS CORNERS-I CORNERS-II CORNERS-III CORNERS-IV CORNERS-V INVESTMENT 112 63 16 16 210 105 522…
  55. US Shale Gas Special Analyst Workshop – Banpu Public Company Limited – slide 55
    Value as an operator KEY DEVELOPMENT BENEFITS ESTABLISHED Greater control and US FIELD OFFICE financial management Facilitate asset operations Ability to manage pace of for sustainable growth development and focus of capital…
  56. US Shale Gas Special Analyst Workshop – Banpu Public Company Limited – slide 56
    Near-term growth driven by supply from Permian and Northeast NORTH AMERICA NATURAL GAS PRODUCTION GROWTH NATURAL GAS PRODUCTION GROWTH 2019-2035 Unit: Bcf/d Unit: Bcf/d 2019-2024 production growth 2024-2035 production growth WESTERN…
  57. US Shale Gas Special Analyst Workshop – Banpu Public Company Limited – slide 57
    Glossary Barrel (Bbl) This is the standard measurement for quantities of oil. One barrel of oil is equal to 42 gallons. Mcf Gas is measured in number of cubic feet. Thousands of cubic feet, or Mcf, is the standard measurement for…
  58. US Shale Gas Special Analyst Workshop – Banpu Public Company Limited – slide 58
    Glossary Hydraulic Fracturing The process of pumping water, sand and chemicals into a drill wellbore in order to fracture impermeable rock. This fracturing then allows hydrocarbons, previously considered inaccessible, to flow towards the…
  59. US Shale Gas Special Analyst Workshop – Banpu Public Company Limited – slide 59
    Glossary Oil and Gas Lease Prior to drilling activities, an Oil and Gas Lease must be retrieved from the mineral owner. Mineral owners are paid an upfront Lease Bonus, in addition to a royalty percentage from any productive well. Held…
  60. US Shale Gas Special Analyst Workshop – Banpu Public Company Limited – slide 60

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