Presentation Slides - ncac-usaee
BENTEK Energy, LLC BENTEK is an energy market analytics company, focused on the natural gas market and related energy sectors. Matt Marshall Market Analytics Lead Crude Oil, North America Office: 303-988-1320 [email protected]
DISCLAIMER. THIS REPORT IS FURNISHED ON AN “AS IS”BASIS. BENTEK DOES NOT WARRANT THE ACCURACY OR CORRECTNESS OF THE REPORT OR THE INFORMATION CONTAINED THEREIN. BENTEK MAKES NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE USE OF ANY INFORMATION CONTAINED IN THIS REPORT IN CONNECTION WITH TRADING OF COMMODITIES, EQUITIES, FUTURES, OPTIONS OR ANY OTHER USE. BENTEK MAKES NO EXPRESS OR IMPLIED WARRANTIES AND EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANT- ABILITY OR FITNESS FOR A PARTICULAR PURPOSE. RELEASE AND LIMITATION OF LIABILITY: IN NO EVENT SHALL BENTEK BE LIABLE FOR ANY DIRECT, INDIRECT, SPECIAL, INCIDENTAL, OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFIT) ARISING OUT OF OR RELATED TO THE ACCURACY OR CORRECTNESS OF THIS REPORT OR THE INFORMATION CONTAINED THEREIN,WHETHER BASED ON WARRANTY, CONTRACT, TORT OR ANY OTHER LEGAL THEORY.
BENTEKENERGY.COM
1
BENTEK Energy Who We Are
5%
40%
33%
• Based in Evergreen, CO • 120 People • 400+ Customers • Reports, Data, Consulting,
22% Majors, Producers, Mktrs, Industrials Pipelines, Utilities, Midstream Financial and Hedge
and Tools • Subsidiary of McGrawHill/Platts
Government, Associations, Consultants BENTEKENERGY.COM
2
Oil Market Outlook
MMb/d
U.S. Crude Production Backs out Imports 10 9 8 7 6 5 4 3 2 1 -
U.S. Crude Oil Imports (Excl. Canada)
BENTEKENERGY.COM
Forecast
4
Crude Awakening Series • • •
•
6 Parts 300+ Pages In Depth Analysis Of Each PADD and Canada By Fundamental • Supply • Demand • Transportation • Storage • Price 10 Year Outlook Conclusion
$/MMBtu Equivalent
Gas, Oil and NGL Price Comparison: MMBTU Equivalent $30.00
$30.00
$25.00
$25.00
$20.00
$20.00
$15.00
$15.00
$10.00
$10.00
Value Gap $5.00
$5.00
$0.00
$0.00
WTI $/MMBtu BENTEKENERGY.COM
HH Gas $/MMBtu
MB NGL Ave. $/MMBtu Source: ICE, EIA
6
U.S. Active Rig Locations: Resource Plays Dominate Williston Basin Bakken Shale (Oil Play)
Pinedale/Jonah Tight Gas
Niobrara Shale Play (Oil Play)
Uinta – Piceance
Marcellus Shale Gas Play
Woodford Shale Gas Play Granite Wash, Cleveland, Miss.
Fayetteville Shale Gas Play
Barnett Shale Gas Play
Permian Basin-Oil Targets
Eagle Ford Shale Play
Haynesville Shale Gas Play
1400 1200 1000 800 600 400 200 0
U.S. Active Rigs
Ver BENTEKENERGY.COM
Source RigData and BENTEK: Lower 48 States, March 9, 2012
Dir
Hor
7
Oil Plays Provide Superior Returns Bakken 50%
Pinedale 15%
Niobrara
Uinta 29% Piceance
48% 11%
9%
Cleve/Tonk 100% 88%
Granite Wash 96%
Marcellus 46% Dry/Wet Miss Lime 6%
Fayetteville
2%
Permian 66% Ark/Wood
1%
Haynesville
58%/
Eagle Ford 53% 63% Oil/Wet
BENTEKENERGY.COM
Source: Based on 4Q2011 Financials and Commodity Prices on February 10, 2012
8
Plays With High Returns Attract Drilling Rigs
215/+134
4/+1 1/-2
21/+12 3/-3
24/-6
120/+44
45/+27
38/+13
82/+44
48/+20
31/-6
257/+134 8/+0
40/+22 3/-9
18/-11
93/-16
59/-34 63/-66 485/+266 65/+6 Dry Gas Focused Areas
16/+12
3/-5
23/+0
253/+193
11/+0 29/+15
91/+6
2150 +791
Liquids Rich/Oil Focused Areas Rig Declines
BENTEKENERGY.COM
Source: Bentek, March 2012
Note: Active rig count: March 2, 2012 / Change in rig count from January 1, 2010
9
Producers Poking Around in Fringe Areas Williston Basin Bakken Shale (Oil Play)
Michigan
Utica Uinta – Piceance
San Juan Brown Dense Tuscaloosa
BENTEKENERGY.COM
Source RigData and BENTEK: Lower 48 States, January 15, 2012
10
Historical U.S. Crude Oil Production The Unconventionals Gain Steam
Ave. Million Barrels Per Day
11 10 9
U.S. Onshore Crude Oil Production on the Rise
8 7 6 5 4 3 2 1
Lower 48 Onshore
BENTEKENERGY.COM
Offshore GOM (F&S)
2008
2004
2000
1996
1992
1988
1984
1980
1976
1972
1968
1964
1960
1956
1952
1948
1944
1940
1936
1932
1928
1924
1920
1916
1912
1908
1904
1900
0
Alaska
Source: EIA, Excludes NGLs and Other Liquids
11
U.S. Crude Oil Supply Growth
Production (‘000 b/d) b/d) b/d) (‘000 (‘000 Production Production Production (‘000 b/d) Production (‘000 b/d)
450 400 1,200 400 1,800 350 1,000 1,000 350 1,600 900 300 300 1,400 800 800 250 250 700 1,200 200 600 600 200 1,000 150 500 150800 400 400 100 100600 300 50200 40050 200 0200 0 0 100 0 -
BENTEKENERGY.COM
Niobrara Shale (DJ+PRB) Anadarko Williston Permian Eagle Ford
Permian
Mb/d
12
Unconventional Oil Plays – Turning The Corner
Bakken
+555
Niobrara +253 Anadarko
Permian
Growth 2011 – 2016 2,200 Mb/d
+145
+528 +698 Eagle Ford
BENTEKENERGY.COM
13
10,000 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0
1988
1900 1905 1910 1915 1920 1925 1930 1935 1940 1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015
‘000s b/d
Forecast Through 2016
1900-2007
BENTEKENERGY.COM
2008-2010
2011-2016
Source: BENTEK, EIA, Excludes NGLs and Other Liquids
14
Adding In Canada Canadian Production and Imports 4,500 4,000
Production (‘000 b/d)
3,500 3,000 2,500 2,000 1,500 1,000 500
PADD 2/PADD 3 BENTEKENERGY.COM
PADD 4
PADD 5
PADD 1
2016
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
0
Production 15
Canada 450
+940 Bakken
344
+555
Niobrara +253 50
Anadarko
Permian
Source: Petroleum Project Tracker
+528
350
345 Refinery Expansion
200 +698
Not All Projects Shown
Note: 2011 Average to 2016 Average (MB/d) BENTEKENERGY.COM
698
+145 Seaway 850
33
Eagle Ford
Refinery Closure
Rail Barge Dock Terminal 16
($17)
2011
($16) ($12)
($10) ($15)
$8
($17)
($11)
2016
($8)
($11)
($12)
$12 ($1)
($3) $16
$8
Brent Premium $16
BENTEKENERGY.COM
$20 17
U.S. Light Crude Oil Growth Potentially Displaces all Foreign Imports Landing in PADD III 1000 900 800 700 600 500 400 300 200 100 0
700
600
600
500 400
400
MB/D
MB/D
MB/D
500
300
300
200
200
HOUSTON, TX
100
100
0
0 PORT ARTHUR, TX
ST. JAMES, LA
Light (32⁰+) Intermediate (28-32⁰) Heavy (28⁰-)
BENTEKENERGY.COM
Note: 2011 Average Imports (Jan-Dec 2011)
18
St. James Imports by Country 300
MB/D
250
200 150 100 50
0 SAUDI ARABIA
NIGERIA
MB/D
Heavy
IRAQ
Intermediate
VENEZUELA
MEXICO
Light
90 80 70 60 50 40 30 20 10 0
BENTEKENERGY.COM
Note: 2011 Average Imports (Jan-Dec 2011)
19
Conclusions Supply growth will shape the market. US Growth will Displace Foreign Light Oil Imports Heavy – Light Spread Set to Tighten with Refinery Upgrades and U.S. Light Oil Growth LLS - WTI Spread to Tighten as Projects Reconnect Premium Market to WTI BENTEKENERGY.COM
20
BENTEK Energy, LLC BENTEK is an energy market analytics company, focused on the natural gas market and related energy sectors. Matt Marshall Market Analytics Lead Crude Oil, North America Office: 303-988-1320 [email protected]
DISCLAIMER. THIS REPORT IS FURNISHED ON AN “AS IS”BASIS. BENTEK DOES NOT WARRANT THE ACCURACY OR CORRECTNESS OF THE REPORT OR THE INFORMATION CONTAINED THEREIN. BENTEK MAKES NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE USE OF ANY INFORMATION CONTAINED IN THIS REPORT IN CONNECTION WITH TRADING OF COMMODITIES, EQUITIES, FUTURES, OPTIONS OR ANY OTHER USE. BENTEK MAKES NO EXPRESS OR IMPLIED WARRANTIES AND EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANT- ABILITY OR FITNESS FOR A PARTICULAR PURPOSE. RELEASE AND LIMITATION OF LIABILITY: IN NO EVENT SHALL BENTEK BE LIABLE FOR ANY DIRECT, INDIRECT, SPECIAL, INCIDENTAL, OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFIT) ARISING OUT OF OR RELATED TO THE ACCURACY OR CORRECTNESS OF THIS REPORT OR THE INFORMATION CONTAINED THEREIN,WHETHER BASED ON WARRANTY, CONTRACT, TORT OR ANY OTHER LEGAL THEORY.
BENTEKENERGY.COM
21
DISCLAIMER. THIS REPORT IS FURNISHED ON AN “AS IS”BASIS. BENTEK DOES NOT WARRANT THE ACCURACY OR CORRECTNESS OF THE REPORT OR THE INFORMATION CONTAINED THEREIN. BENTEK MAKES NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE USE OF ANY INFORMATION CONTAINED IN THIS REPORT IN CONNECTION WITH TRADING OF COMMODITIES, EQUITIES, FUTURES, OPTIONS OR ANY OTHER USE. BENTEK MAKES NO EXPRESS OR IMPLIED WARRANTIES AND EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANT- ABILITY OR FITNESS FOR A PARTICULAR PURPOSE. RELEASE AND LIMITATION OF LIABILITY: IN NO EVENT SHALL BENTEK BE LIABLE FOR ANY DIRECT, INDIRECT, SPECIAL, INCIDENTAL, OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFIT) ARISING OUT OF OR RELATED TO THE ACCURACY OR CORRECTNESS OF THIS REPORT OR THE INFORMATION CONTAINED THEREIN,WHETHER BASED ON WARRANTY, CONTRACT, TORT OR ANY OTHER LEGAL THEORY.
BENTEKENERGY.COM
1
BENTEK Energy Who We Are
5%
40%
33%
• Based in Evergreen, CO • 120 People • 400+ Customers • Reports, Data, Consulting,
22% Majors, Producers, Mktrs, Industrials Pipelines, Utilities, Midstream Financial and Hedge
and Tools • Subsidiary of McGrawHill/Platts
Government, Associations, Consultants BENTEKENERGY.COM
2
Oil Market Outlook
MMb/d
U.S. Crude Production Backs out Imports 10 9 8 7 6 5 4 3 2 1 -
U.S. Crude Oil Imports (Excl. Canada)
BENTEKENERGY.COM
Forecast
4
Crude Awakening Series • • •
•
6 Parts 300+ Pages In Depth Analysis Of Each PADD and Canada By Fundamental • Supply • Demand • Transportation • Storage • Price 10 Year Outlook Conclusion
$/MMBtu Equivalent
Gas, Oil and NGL Price Comparison: MMBTU Equivalent $30.00
$30.00
$25.00
$25.00
$20.00
$20.00
$15.00
$15.00
$10.00
$10.00
Value Gap $5.00
$5.00
$0.00
$0.00
WTI $/MMBtu BENTEKENERGY.COM
HH Gas $/MMBtu
MB NGL Ave. $/MMBtu Source: ICE, EIA
6
U.S. Active Rig Locations: Resource Plays Dominate Williston Basin Bakken Shale (Oil Play)
Pinedale/Jonah Tight Gas
Niobrara Shale Play (Oil Play)
Uinta – Piceance
Marcellus Shale Gas Play
Woodford Shale Gas Play Granite Wash, Cleveland, Miss.
Fayetteville Shale Gas Play
Barnett Shale Gas Play
Permian Basin-Oil Targets
Eagle Ford Shale Play
Haynesville Shale Gas Play
1400 1200 1000 800 600 400 200 0
U.S. Active Rigs
Ver BENTEKENERGY.COM
Source RigData and BENTEK: Lower 48 States, March 9, 2012
Dir
Hor
7
Oil Plays Provide Superior Returns Bakken 50%
Pinedale 15%
Niobrara
Uinta 29% Piceance
48% 11%
9%
Cleve/Tonk 100% 88%
Granite Wash 96%
Marcellus 46% Dry/Wet Miss Lime 6%
Fayetteville
2%
Permian 66% Ark/Wood
1%
Haynesville
58%/
Eagle Ford 53% 63% Oil/Wet
BENTEKENERGY.COM
Source: Based on 4Q2011 Financials and Commodity Prices on February 10, 2012
8
Plays With High Returns Attract Drilling Rigs
215/+134
4/+1 1/-2
21/+12 3/-3
24/-6
120/+44
45/+27
38/+13
82/+44
48/+20
31/-6
257/+134 8/+0
40/+22 3/-9
18/-11
93/-16
59/-34 63/-66 485/+266 65/+6 Dry Gas Focused Areas
16/+12
3/-5
23/+0
253/+193
11/+0 29/+15
91/+6
2150 +791
Liquids Rich/Oil Focused Areas Rig Declines
BENTEKENERGY.COM
Source: Bentek, March 2012
Note: Active rig count: March 2, 2012 / Change in rig count from January 1, 2010
9
Producers Poking Around in Fringe Areas Williston Basin Bakken Shale (Oil Play)
Michigan
Utica Uinta – Piceance
San Juan Brown Dense Tuscaloosa
BENTEKENERGY.COM
Source RigData and BENTEK: Lower 48 States, January 15, 2012
10
Historical U.S. Crude Oil Production The Unconventionals Gain Steam
Ave. Million Barrels Per Day
11 10 9
U.S. Onshore Crude Oil Production on the Rise
8 7 6 5 4 3 2 1
Lower 48 Onshore
BENTEKENERGY.COM
Offshore GOM (F&S)
2008
2004
2000
1996
1992
1988
1984
1980
1976
1972
1968
1964
1960
1956
1952
1948
1944
1940
1936
1932
1928
1924
1920
1916
1912
1908
1904
1900
0
Alaska
Source: EIA, Excludes NGLs and Other Liquids
11
U.S. Crude Oil Supply Growth
Production (‘000 b/d) b/d) b/d) (‘000 (‘000 Production Production Production (‘000 b/d) Production (‘000 b/d)
450 400 1,200 400 1,800 350 1,000 1,000 350 1,600 900 300 300 1,400 800 800 250 250 700 1,200 200 600 600 200 1,000 150 500 150800 400 400 100 100600 300 50200 40050 200 0200 0 0 100 0 -
BENTEKENERGY.COM
Niobrara Shale (DJ+PRB) Anadarko Williston Permian Eagle Ford
Permian
Mb/d
12
Unconventional Oil Plays – Turning The Corner
Bakken
+555
Niobrara +253 Anadarko
Permian
Growth 2011 – 2016 2,200 Mb/d
+145
+528 +698 Eagle Ford
BENTEKENERGY.COM
13
10,000 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0
1988
1900 1905 1910 1915 1920 1925 1930 1935 1940 1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015
‘000s b/d
Forecast Through 2016
1900-2007
BENTEKENERGY.COM
2008-2010
2011-2016
Source: BENTEK, EIA, Excludes NGLs and Other Liquids
14
Adding In Canada Canadian Production and Imports 4,500 4,000
Production (‘000 b/d)
3,500 3,000 2,500 2,000 1,500 1,000 500
PADD 2/PADD 3 BENTEKENERGY.COM
PADD 4
PADD 5
PADD 1
2016
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
0
Production 15
Canada 450
+940 Bakken
344
+555
Niobrara +253 50
Anadarko
Permian
Source: Petroleum Project Tracker
+528
350
345 Refinery Expansion
200 +698
Not All Projects Shown
Note: 2011 Average to 2016 Average (MB/d) BENTEKENERGY.COM
698
+145 Seaway 850
33
Eagle Ford
Refinery Closure
Rail Barge Dock Terminal 16
($17)
2011
($16) ($12)
($10) ($15)
$8
($17)
($11)
2016
($8)
($11)
($12)
$12 ($1)
($3) $16
$8
Brent Premium $16
BENTEKENERGY.COM
$20 17
U.S. Light Crude Oil Growth Potentially Displaces all Foreign Imports Landing in PADD III 1000 900 800 700 600 500 400 300 200 100 0
700
600
600
500 400
400
MB/D
MB/D
MB/D
500
300
300
200
200
HOUSTON, TX
100
100
0
0 PORT ARTHUR, TX
ST. JAMES, LA
Light (32⁰+) Intermediate (28-32⁰) Heavy (28⁰-)
BENTEKENERGY.COM
Note: 2011 Average Imports (Jan-Dec 2011)
18
St. James Imports by Country 300
MB/D
250
200 150 100 50
0 SAUDI ARABIA
NIGERIA
MB/D
Heavy
IRAQ
Intermediate
VENEZUELA
MEXICO
Light
90 80 70 60 50 40 30 20 10 0
BENTEKENERGY.COM
Note: 2011 Average Imports (Jan-Dec 2011)
19
Conclusions Supply growth will shape the market. US Growth will Displace Foreign Light Oil Imports Heavy – Light Spread Set to Tighten with Refinery Upgrades and U.S. Light Oil Growth LLS - WTI Spread to Tighten as Projects Reconnect Premium Market to WTI BENTEKENERGY.COM
20
BENTEK Energy, LLC BENTEK is an energy market analytics company, focused on the natural gas market and related energy sectors. Matt Marshall Market Analytics Lead Crude Oil, North America Office: 303-988-1320 [email protected]
DISCLAIMER. THIS REPORT IS FURNISHED ON AN “AS IS”BASIS. BENTEK DOES NOT WARRANT THE ACCURACY OR CORRECTNESS OF THE REPORT OR THE INFORMATION CONTAINED THEREIN. BENTEK MAKES NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE USE OF ANY INFORMATION CONTAINED IN THIS REPORT IN CONNECTION WITH TRADING OF COMMODITIES, EQUITIES, FUTURES, OPTIONS OR ANY OTHER USE. BENTEK MAKES NO EXPRESS OR IMPLIED WARRANTIES AND EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANT- ABILITY OR FITNESS FOR A PARTICULAR PURPOSE. RELEASE AND LIMITATION OF LIABILITY: IN NO EVENT SHALL BENTEK BE LIABLE FOR ANY DIRECT, INDIRECT, SPECIAL, INCIDENTAL, OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFIT) ARISING OUT OF OR RELATED TO THE ACCURACY OR CORRECTNESS OF THIS REPORT OR THE INFORMATION CONTAINED THEREIN,WHETHER BASED ON WARRANTY, CONTRACT, TORT OR ANY OTHER LEGAL THEORY.
BENTEKENERGY.COM
21
