US GoM Deepwater Markets: Delving Deeper!
MCS GOM Proposal Cover.qxd
10/12/01
4:33 pm
Page 1
WOOD MACKENZIE
Multi-Client Study Proposal
November 2001
US GoM Deepwater Markets: Delving Deeper!
US GoM Deepwater Markets Delving Deeper ! Mississippi Jackson
ChevronTexaco Alabama
Georgia
Agip
Mis
Louisiana
sis Riv sipp i er
Dallas
Texas Lafayette
Beaumont Houston
ExxonMobil Kerr-McGee
g Fort Worth
BP Shell
BHP
Baton Rouge
Conoco
Tallahassee Jacksonville
New Orleans
Murphy Dominion Marathon
Tampa
Florida
Eastern Gulf Planning Area Western Gulf Planning Area
Central Gulf Planning Area
Ocean
Miami
TFE Nexen Amerada Hess
Gulf of Mexico
Unocal Stra
its o
f Flo
rida
Mariner Enterprise
CUBA tan ca el Yu ann Ch
Occidental
tres
0 me
2,00
0 1,0
MEXICO 0
75 Km
150
0m
etr
Yucatan Peninsula
es
0 40
tr me 20
es
0
tr me
Pioneer
Spinnaker Devon Grand Cayman
es
Remaining NPV10 (2002) Commercial Fields - US$M
Burlington Anadarko
Caribbean Sea
Phillips 0
Contacts:
Ian Ashcroft Charles Mitchell
Website http://www.woodmac.com
Tel +44 (0)131 243 4468 Tel +1 713 821 1381
Fax +44 (0)131 243 4472 Fax +1 713 821 1573
5,000
10,000
15,000
20,000
e-mail [email protected] e-mail [email protected]
US GoM Deepwater Markets – Delving Deeper!
2
Summary Wood Mackenzie ‘delves deeper’ in accessing the fundamental economics of the US GoM Deepwater Following on from the success of our international deepwater multi-client studies, Global Deepwater Markets #1 and #2, Wood Mackenzie has been inundated with requests to ‘delve deeper’ into the regional trends, players and full-cycle rates of return of the US Gulf of Mexico region. Specifically, clients with a deepwater GoM focus are requesting a more clear, coherent and detailed analysis of how the upstream industry has performed in the US Gulf of Mexico region over the past 10-30 years. Most of the world’s larger IOCs now have a significant presence in the deepwater GoM. Indeed the region also benefits from the presence of a plethora of US independents with specific deepwater expertise. But who are the winners and losers? And what strategies have been invoked by the key players? Wood Mackenzie intends to address these issues by developing an addendum, or ‘bolt-on’ to our latest international multi-client study (Global Deepwater Markets #2). ‘US GoM Deepwater Markets – Delving Deeper!’ will draw upon our unique research platform to quantify the risks and rewards of deepwater investments in the region and analyse the position and strategies of the top 25 leading players. Regional deepwater trends will be assessed, including exploration activity and results, well recoveries, project cycle times, project economics, and full cycle exploration economics. Purchased in isolation, US GoM Deepwater Markets – Delving Deeper! will be an invaluable tool in addressing the fundamental driving forces behind the US Gulf of Mexico deepwater market. As an addendum to the international multi-client study, US GoM Deepwater Markets – Delving Deeper! will impart a greater insight into the performance of the region, and its key players, by providing: Ô
More focus/clarity – assessing US GoM only
Ô
More regional analysis – detailed analysis of leasing and exploration trends (including success rates and finding costs), reserves (including well recoveries), projects (including lead times), costs (including A&D costs) - plus field rankings and breakdowns by water depth
Ô
More corporate analysis – detailed analyses of both the portfolios (including acreage distribution, acreage maturity and production growth) and the performance (including finding costs and A&D activity) of the top 25 regional players - plus company rankings and breakdowns by water depth
Ô
More corporate coverage –analyses of the top 25 leading companies (including up to 10 new, ‘regional’ players)
A full understanding of the dynamics of risks and reward is essential to any involvement in the US GoM deepwater market
November 2001
US GoM Deepwater Markets – Delving Deeper!
3
Scope and Methodology Wood Mackenzie’s understanding of the deepwater US Gulf of Mexico is based on our unique research platform. Our detailed asset-by-asset research covers all commercial fields (c. 100) and technical discoveries (c. 50) in the region to date and provides the basis for the commercial analysis of this US Gulf of Mexico multi-client study. Similarly, Wood Mackenzie’s PathFinder and other proprietary in-house databases, give Wood Mackenzie unrivalled coverage of lease and E&A drilling activity in the region. Our third unique selling point is our in-depth company knowledge (in terms of both operations and strategy) that stems from our close and long-established personal dealings with all of the region’s key deepwater players.
1.
Regional Deepwater Trends ** Risk-Reward Profile of US Gulf of Mexico Deepwater **
Wood Mackenzie will provide an in depth review of regional E&P trends including lease acquisition costs, exploration success rates, finding costs, reserves growth, capital expenditure and production forecasts. We will also examine all commercial fields and/or projects for which we have created a cash flow model using our in-house Global Economic Model (GEM). These analyses will be run under common oil price and economic assumptions. Projects will then be ranked according to a range of criteria including: NPV, NPV/barrel, IRR, Capex per barrel. Discoveries that are currently considered by Wood Mackenzie to be non-commercial – i.e. ‘Technical Reserves’ - will also be valued and ranked accordingly. Full cycle economics will be conducted on a regional basis using historic lease bonus costs, E&A drilling costs and project cash flows of all commercial fields. Several full cycle cash flows will be generated to examine industry performance over different timeframes (e.g. 5, 10, 20 and 30-year returns) and different water depths (e.g. deep vs ultra-deep returns). The key drivers will be highlighted and discussed.
40
60
mmboe/well
30 40
25
30
20 15
20
10 10
Success Rate (%)
35
50
5
0
0 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 Commercial mmboe/w ell
Technical mmboe/w ell
Commercial Success Rate
Technical Success Rate
November 2001
US GoM Deepwater Markets – Delving Deeper!
4
../ Scope and Methodology 2.
Key Deepwater Players ** Performance & Strategies of the Leading Players in US Gulf of Mexico Deepwater **
The Study will assess the individual deepwater portfolios, performance and strategies of twenty-five leading companies in the US Gulf of Mexico deepwater region. A provisional list of companies is given in the following table*.
Agip Amerada Hess Anadarko Petroleum BHP Billiton BP Burlington Resources ChevronTexaco Conoco Devon Energy Dominion Resources Enterprise Oil ExxonMobil Kerr-McGee
Marathon Oil Mariner Energy Murphy Oil Nexen Ocean Energy Occidental Petroleum Phillips Petroleum Pioneer Natural Resources Shell Spinnaker Exploration TotalFinaElf Unocal
* Provisional – subject to revision.
Portfolios will be assessed in terms of acreage, commercial fields/developments and technical reserves/discoveries. Key performance measures include exploration success & discovery rates, unit finding costs, unit capital & operating costs, acquisition and divestment costs, project economics and full cycle returns. Deepwater strategies will be reviewed in the context of critical success factors, including discussions on each company’s key strengths and weaknesses.
1200.0
Blind Faith Atlantis Mad Dog Holstein
800.0
Crazy Horse Hoover/Diana
600.0
Ursa Troika
400.0
Ram Pow ell Mars Others
200.0
2032
2029
2026
2023
2020
2017
2014
2011
2008
2005
2002
1999
1996
1993
0.0 1990
Net Production ('000 boe/d)
1000.0
November 2001
US GoM Deepwater Markets – Delving Deeper!
3.
5
Corporate Overview – ** Corporate Benchmarking of Portfolios & Performance **
The corporate overview section will consolidate the results of the twenty-five company analyses to allow direct comparisons of portfolios and performance. Company portfolios will be compared on the basis of acreage (e.g. quantity, distribution and maturity), reserves, production, value and relative importance in terms of both global deepwater and global upstream portfolios. Company performance will be measured in terms of exploration success, finding costs, development costs, A&D costs and full cycle economics.
US$M 20,000 Remaining NPV10 (2002) - Tier 1 Companies - Commercial Fields
15,000
10,000
5,000
0 BP
Shell
ExxonMobil Cum. Tier 2
US$M 2,500 Remaining NPV10 (2002) - Tier 2 Companies - Commercial Fields
2,000 1,500 1,000
Phillips
Anadarko
Burlington
Devon
Occidental
Spinnaker
Pioneer
Enterprise
Mariner
Unocal
Amerada Hess
Nexen
TFE
Ocean
Marathon
Dominion
Murphy
Conoco
Agip
ChevronTexaco
Kerr-McGee
0
BHP
500
November 2001
US GoM Deepwater Markets – Delving Deeper!
6
Contents The Study report will be structured in the following way: 1.
Executive Summary
2.
Regional Deepwater Trends **In-depth Review of the Risk Reward Profile of US GoM Deepwater ** §
2.1 Summary of Key Deepwater Characteristics
§
2.2 Exploration Results, Trends & Costs Ø Lease allocation activity (i.e. lease sale trends) § distribution by water depth Ø Lease allocation costs (i.e. lease bonuses) Ø Exploration & appraisal drilling activity § exploration vs appraisal § distribution by water depth Ø Exploration & appraisal drilling costs § exploration vs appraisal § distribution by water depth Ø Exploration success & discovery rates § commercial vs technical § 5 year vs 10 year vs 30 year § creaming curves Ø Finding costs § commercial vs technical Ø Remaining exploration potential
§
2.3 Reserves and Production Ø Ultimate reserves § size distributions (commercial vs technical) § distribution by oil/gas mix § distribution by development status § distribution by water depth Ø Production § profile by oil/gas mix § profile by development status § distribution by water depth
§
2.4 Fields and Developments Ø Ultimate reserves & well recoveries by field § ranking by gross reserves § ranking by well recoveries Ø Production by field § ranking by 2001 production rates § ranking by 2006 production rates § ranking by 2001/2006 production growth Ø Development types by field § by development status § by production start year Ø Lead times by field § sanction to first production § discovery to first production
November 2001
US GoM Deepwater Markets – Delving Deeper!
§
2.5 Costs Ø Capital costs by field § profile by development status § ranking by PV/boe Ø Operating costs by field § ranking by PV/boe
§
2.6 Project Economics Ø NPV by field § ranking by PV/boe Ø IRR by filed § ranking by IRR
§
2.7 Full Cycle Economics Ø Returns on investments to date § Post-1970 § Post-1980 § Post-1990 § Post-1995 Ø Expected returns on future investment Ø Other Factors Impacting Full Cycle Economics
7
November 2001
US GoM Deepwater Markets – Delving Deeper!
3.
8
Key Deepwater Players ** Performance & Strategies of the Leading Players in the US GoM Deepwater ** ** Twenty-Five Individual Company Chapters ** §
3.x.1 Portfolio Summary
§
3.x.2 Portfolio Analysis Ø Acreage § current lease holding (no of leases; gross, net, operated) § geographic spread (distribution by water depth and planning & protraction areas) § maturity (distribution by award & expiry date) Ø Fields § reserves ranking (ranking by field, distribution; commercial vs technical) § reserves profiles (by development status, oil/gas mix, water depth) § production ranking (by 2001 rates, 2006 rates, 2001/2006 growth rates) § production profiles (by field, development status, oil/gas mix) Ø Deepwater business value § rem PV & rem PV per boe (by field, development status, water depth)
§
3.x.3 Relative Importance of Deepwater GoM § In global upstream portfolio § In global deepwater portfolio
§
3.x.4 Corporate Performance Measures Ø Exploration activity & results § lease acquisition activity & costs § E&A drilling activity & costs § discovery rates § success rates § finding costs Ø Development costs § capital & operating costs by field § capital cost profile (by development status, by field) Ø Asset Acquisitions & Divestments § A&D cost profiles Ø Consolidated Cost Profile
§
3.x.5 Full Cycle Analysis Ø Cash flows (PVs & RORs) § Post-1970 § Post-1980 § Post-1990 § Post-1995
§
3.x.6 Critical Success Factors Ø Full cycle returns Ø Key strengths Ø Key weaknesses Ø Discussion
November 2001
US GoM Deepwater Markets – Delving Deeper!
4.
9
Corporate Overview ** Corporate Benchmarking of Portfolios & Performance ** §
4.1 Corporate Portfolios Ø Acreage § current lease holding (no of leases; gross, net, operated) § geographic spread (distribution by water depth and planning & protraction areas) § maturity (distribution by expiry date) Ø Fields § No. of fields (by operator & development status) § reserves distribution (commercial vs technical, development status, oil/gas mix, water depth) § production ranking (by 2001 rates, 2006 rates, 2001/2006 growth rates) § production distribution (by 2001 rates, 2006 rates, 2001/2006 growth rates) Ø Deepwater business value § rem PV & rem PV per boe (by field, development status, water depth)
§
4.2 Relative Importance of Deepwater GoM § In global upstream portfolio (value, reserves, production & capex indices) § In global deepwater portfolio (value & reserves)
§
4.3 Corporate Performance Measures Ø Exploration activity & results § lease acquisition costs (by year) § E&A drilling activity (by year, water depth & E vs A) § discovery rates § success rates § finding costs Ø Development costs § average capital & operating costs § near-term capex commitment (2001-2006) Ø Asset acquisitions & divestments § A&D cost profiles Ø Consolidated Cost Profile
§
4.4 Full Cycle Analysis Ø Full cycle PVs § Post-1970 § Post-1990 Ø Full cycle RORs § Post-1970 § Post-1980 § Post-1990 § Post-1995
5.
Conclusions
6.
Appendix
November 2001
US GoM Deepwater Markets – Delving Deeper!
10
The Study Team The proposed team draws upon Wood Mackenzie resources and brings together individuals with industry experience, technical and regional knowledge, and commercial backgrounds. Details of the key individuals with expertise on the US Gulf of Mexico (deepwater) are shown below. Experts from other regional teams will also contribute to the Study as appropriate.
Ian Ashcroft, Principal Consultant (Project Manager) Ian joined Wood Mackenzie in 1987 as a Far East oil analyst. He subsequently moved to Sydney Australia to manage the Australasia Upstream Service and participated in numerous consultancy projects. In 1993 Ian returned to Edinburgh to head up the Australasia operation at head office. During 1996 Ian expanded Wood Mackenzie’s research coverage to include North America and subsequently spent two years working on consultancy projects with a specific emphasis on energy issues in Asia Pacific and North America. Ian developed Wood Mackenzie’s US Gulf of Mexico (Deepwater) Upstream Service, and retains overall responsibility for North America consultancy work. Ian holds an MEng in Petroleum Engineering from Heriot-Watt University.
Valerie Brett, US Gulf of Mexico, Consultant - Edinburgh Valerie graduated from St Andrews University in June 1997 with an upper second class honours degree in Geoscience. In September 1997, Valerie joined Racal Survey Group Ltd. as an offshore field geophysicist, specialising in engineering surveys, pre-drilling and pre-pipeline laying studies. Valerie joined Wood Mackenzie in February 1999 as an energy analyst in the North America team. She played an integral role in setting up the US Gulf of Mexico (Deepwater) Upstream Service and has since become the lead analyst responsible for maintaining and developing the US GoM product suite.
Mark Tuckwood, US Gulf of Mexico, Consultant - Edinburgh Mark joined Wood Mackenzie in March 2001after spending four years with Marathon Oil UK Ltd. based in Aberdeen. During his first two years at Marathon he worked as a Reservoir Engineer for Marathon’s North Sea gas condensate assets. During this time he was involved in the development of brown field production potential in and around the Brae area. Mark was involved with several other projects during this time including commercial modelling of the Brae sales gas stream, exposure to acquisition data rooms and temporary project assignments to Houston and Calgary. In 1999, Mark joined Marathon’s Environmental Group where he had the responsibility for developing an atmospheric emissions management programme. Mark joined Wood Mackenzie in 2001 to help further develop the US Gulf of Mexico (Deepwater) Upstream Service.
November 2001
US GoM Deepwater Markets – Delving Deeper!
11
Deliverables, Timing and Costs The results of the Study will be presented in both hard copy report (one colour copy) and electronic (.PDF file) formats to each subscriber. On the basis that the minimum subscription threshold is achieved by end October 2001, the Study will be completed and dispatched (by courier) in early December 2001. The nominal cost of the study will be US$20,000*. For clients that have already signed-up for Wood Mackenzie’s international deepwater study - Global Deepwater Markets # 2 - the cost will be US$10,000*. Additional hard copies of the Study will be available at US$800* per copy. Half-day ‘in-house’ presentations of the Study results for individual clients can be arranged after the completion date at a cost of US$2,000 (plus expenses)*. The Study will be undertaken within Wood Mackenzie’s standard Terms and Conditions, which are available on request. Invoices will be issued on receipt of completed order forms unless otherwise agreed. (*plus VAT where applicable.)
November 2001
US GoM Deepwater Markets – Delving Deeper!
12
To order the Multi-Client Study
US Gulf of Mexico Deepwater Markets Delving Deeper! Please return this form to:
Sharon Edwards-Grant, Business Development Executive Wood Mackenzie, 5847 San Felipe, San Felipe Plaza 17th Floor, Houston, Texas 77057 USA Tel: +1 713 821 1386 Fax: +1 713 821 1573 e-mail: [email protected]
I would like to subscribe to the Study: US Gulf of Mexico Deepwater Markets – Delving Deeper! I have already subscribed to the international study: Global Deepwater Markets # 2
US$10,000*
I would like to subscribe to the Study: US Gulf of Mexico Deepwater Markets – Delving Deeper! I have not subscribed to the international study: Global Deepwater Markets # 2
US$20,000*
Additional hard copies @ US$800 surcharge per copy
*plus VAT where applicable
Name:
_______________________________________________________________
Company:
______________________
Address:
_______________________________________________________________
Position:
__________________________
_______________________________________________________________ Postcode/ZIP: ______________________
Country:
__________________________
Tel:
______________________
Fax:
__________________________
E-mail:
_______________________________________________________________
Signature:
______________________
Date:
__________________________
** An invoice will be issued on receipt of completed order form**
November 2001
10/12/01
4:33 pm
Page 1
WOOD MACKENZIE
Multi-Client Study Proposal
November 2001
US GoM Deepwater Markets: Delving Deeper!
US GoM Deepwater Markets Delving Deeper ! Mississippi Jackson
ChevronTexaco Alabama
Georgia
Agip
Mis
Louisiana
sis Riv sipp i er
Dallas
Texas Lafayette
Beaumont Houston
ExxonMobil Kerr-McGee
g Fort Worth
BP Shell
BHP
Baton Rouge
Conoco
Tallahassee Jacksonville
New Orleans
Murphy Dominion Marathon
Tampa
Florida
Eastern Gulf Planning Area Western Gulf Planning Area
Central Gulf Planning Area
Ocean
Miami
TFE Nexen Amerada Hess
Gulf of Mexico
Unocal Stra
its o
f Flo
rida
Mariner Enterprise
CUBA tan ca el Yu ann Ch
Occidental
tres
0 me
2,00
0 1,0
MEXICO 0
75 Km
150
0m
etr
Yucatan Peninsula
es
0 40
tr me 20
es
0
tr me
Pioneer
Spinnaker Devon Grand Cayman
es
Remaining NPV10 (2002) Commercial Fields - US$M
Burlington Anadarko
Caribbean Sea
Phillips 0
Contacts:
Ian Ashcroft Charles Mitchell
Website http://www.woodmac.com
Tel +44 (0)131 243 4468 Tel +1 713 821 1381
Fax +44 (0)131 243 4472 Fax +1 713 821 1573
5,000
10,000
15,000
20,000
e-mail [email protected] e-mail [email protected]
US GoM Deepwater Markets – Delving Deeper!
2
Summary Wood Mackenzie ‘delves deeper’ in accessing the fundamental economics of the US GoM Deepwater Following on from the success of our international deepwater multi-client studies, Global Deepwater Markets #1 and #2, Wood Mackenzie has been inundated with requests to ‘delve deeper’ into the regional trends, players and full-cycle rates of return of the US Gulf of Mexico region. Specifically, clients with a deepwater GoM focus are requesting a more clear, coherent and detailed analysis of how the upstream industry has performed in the US Gulf of Mexico region over the past 10-30 years. Most of the world’s larger IOCs now have a significant presence in the deepwater GoM. Indeed the region also benefits from the presence of a plethora of US independents with specific deepwater expertise. But who are the winners and losers? And what strategies have been invoked by the key players? Wood Mackenzie intends to address these issues by developing an addendum, or ‘bolt-on’ to our latest international multi-client study (Global Deepwater Markets #2). ‘US GoM Deepwater Markets – Delving Deeper!’ will draw upon our unique research platform to quantify the risks and rewards of deepwater investments in the region and analyse the position and strategies of the top 25 leading players. Regional deepwater trends will be assessed, including exploration activity and results, well recoveries, project cycle times, project economics, and full cycle exploration economics. Purchased in isolation, US GoM Deepwater Markets – Delving Deeper! will be an invaluable tool in addressing the fundamental driving forces behind the US Gulf of Mexico deepwater market. As an addendum to the international multi-client study, US GoM Deepwater Markets – Delving Deeper! will impart a greater insight into the performance of the region, and its key players, by providing: Ô
More focus/clarity – assessing US GoM only
Ô
More regional analysis – detailed analysis of leasing and exploration trends (including success rates and finding costs), reserves (including well recoveries), projects (including lead times), costs (including A&D costs) - plus field rankings and breakdowns by water depth
Ô
More corporate analysis – detailed analyses of both the portfolios (including acreage distribution, acreage maturity and production growth) and the performance (including finding costs and A&D activity) of the top 25 regional players - plus company rankings and breakdowns by water depth
Ô
More corporate coverage –analyses of the top 25 leading companies (including up to 10 new, ‘regional’ players)
A full understanding of the dynamics of risks and reward is essential to any involvement in the US GoM deepwater market
November 2001
US GoM Deepwater Markets – Delving Deeper!
3
Scope and Methodology Wood Mackenzie’s understanding of the deepwater US Gulf of Mexico is based on our unique research platform. Our detailed asset-by-asset research covers all commercial fields (c. 100) and technical discoveries (c. 50) in the region to date and provides the basis for the commercial analysis of this US Gulf of Mexico multi-client study. Similarly, Wood Mackenzie’s PathFinder and other proprietary in-house databases, give Wood Mackenzie unrivalled coverage of lease and E&A drilling activity in the region. Our third unique selling point is our in-depth company knowledge (in terms of both operations and strategy) that stems from our close and long-established personal dealings with all of the region’s key deepwater players.
1.
Regional Deepwater Trends ** Risk-Reward Profile of US Gulf of Mexico Deepwater **
Wood Mackenzie will provide an in depth review of regional E&P trends including lease acquisition costs, exploration success rates, finding costs, reserves growth, capital expenditure and production forecasts. We will also examine all commercial fields and/or projects for which we have created a cash flow model using our in-house Global Economic Model (GEM). These analyses will be run under common oil price and economic assumptions. Projects will then be ranked according to a range of criteria including: NPV, NPV/barrel, IRR, Capex per barrel. Discoveries that are currently considered by Wood Mackenzie to be non-commercial – i.e. ‘Technical Reserves’ - will also be valued and ranked accordingly. Full cycle economics will be conducted on a regional basis using historic lease bonus costs, E&A drilling costs and project cash flows of all commercial fields. Several full cycle cash flows will be generated to examine industry performance over different timeframes (e.g. 5, 10, 20 and 30-year returns) and different water depths (e.g. deep vs ultra-deep returns). The key drivers will be highlighted and discussed.
40
60
mmboe/well
30 40
25
30
20 15
20
10 10
Success Rate (%)
35
50
5
0
0 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 Commercial mmboe/w ell
Technical mmboe/w ell
Commercial Success Rate
Technical Success Rate
November 2001
US GoM Deepwater Markets – Delving Deeper!
4
../ Scope and Methodology 2.
Key Deepwater Players ** Performance & Strategies of the Leading Players in US Gulf of Mexico Deepwater **
The Study will assess the individual deepwater portfolios, performance and strategies of twenty-five leading companies in the US Gulf of Mexico deepwater region. A provisional list of companies is given in the following table*.
Agip Amerada Hess Anadarko Petroleum BHP Billiton BP Burlington Resources ChevronTexaco Conoco Devon Energy Dominion Resources Enterprise Oil ExxonMobil Kerr-McGee
Marathon Oil Mariner Energy Murphy Oil Nexen Ocean Energy Occidental Petroleum Phillips Petroleum Pioneer Natural Resources Shell Spinnaker Exploration TotalFinaElf Unocal
* Provisional – subject to revision.
Portfolios will be assessed in terms of acreage, commercial fields/developments and technical reserves/discoveries. Key performance measures include exploration success & discovery rates, unit finding costs, unit capital & operating costs, acquisition and divestment costs, project economics and full cycle returns. Deepwater strategies will be reviewed in the context of critical success factors, including discussions on each company’s key strengths and weaknesses.
1200.0
Blind Faith Atlantis Mad Dog Holstein
800.0
Crazy Horse Hoover/Diana
600.0
Ursa Troika
400.0
Ram Pow ell Mars Others
200.0
2032
2029
2026
2023
2020
2017
2014
2011
2008
2005
2002
1999
1996
1993
0.0 1990
Net Production ('000 boe/d)
1000.0
November 2001
US GoM Deepwater Markets – Delving Deeper!
3.
5
Corporate Overview – ** Corporate Benchmarking of Portfolios & Performance **
The corporate overview section will consolidate the results of the twenty-five company analyses to allow direct comparisons of portfolios and performance. Company portfolios will be compared on the basis of acreage (e.g. quantity, distribution and maturity), reserves, production, value and relative importance in terms of both global deepwater and global upstream portfolios. Company performance will be measured in terms of exploration success, finding costs, development costs, A&D costs and full cycle economics.
US$M 20,000 Remaining NPV10 (2002) - Tier 1 Companies - Commercial Fields
15,000
10,000
5,000
0 BP
Shell
ExxonMobil Cum. Tier 2
US$M 2,500 Remaining NPV10 (2002) - Tier 2 Companies - Commercial Fields
2,000 1,500 1,000
Phillips
Anadarko
Burlington
Devon
Occidental
Spinnaker
Pioneer
Enterprise
Mariner
Unocal
Amerada Hess
Nexen
TFE
Ocean
Marathon
Dominion
Murphy
Conoco
Agip
ChevronTexaco
Kerr-McGee
0
BHP
500
November 2001
US GoM Deepwater Markets – Delving Deeper!
6
Contents The Study report will be structured in the following way: 1.
Executive Summary
2.
Regional Deepwater Trends **In-depth Review of the Risk Reward Profile of US GoM Deepwater ** §
2.1 Summary of Key Deepwater Characteristics
§
2.2 Exploration Results, Trends & Costs Ø Lease allocation activity (i.e. lease sale trends) § distribution by water depth Ø Lease allocation costs (i.e. lease bonuses) Ø Exploration & appraisal drilling activity § exploration vs appraisal § distribution by water depth Ø Exploration & appraisal drilling costs § exploration vs appraisal § distribution by water depth Ø Exploration success & discovery rates § commercial vs technical § 5 year vs 10 year vs 30 year § creaming curves Ø Finding costs § commercial vs technical Ø Remaining exploration potential
§
2.3 Reserves and Production Ø Ultimate reserves § size distributions (commercial vs technical) § distribution by oil/gas mix § distribution by development status § distribution by water depth Ø Production § profile by oil/gas mix § profile by development status § distribution by water depth
§
2.4 Fields and Developments Ø Ultimate reserves & well recoveries by field § ranking by gross reserves § ranking by well recoveries Ø Production by field § ranking by 2001 production rates § ranking by 2006 production rates § ranking by 2001/2006 production growth Ø Development types by field § by development status § by production start year Ø Lead times by field § sanction to first production § discovery to first production
November 2001
US GoM Deepwater Markets – Delving Deeper!
§
2.5 Costs Ø Capital costs by field § profile by development status § ranking by PV/boe Ø Operating costs by field § ranking by PV/boe
§
2.6 Project Economics Ø NPV by field § ranking by PV/boe Ø IRR by filed § ranking by IRR
§
2.7 Full Cycle Economics Ø Returns on investments to date § Post-1970 § Post-1980 § Post-1990 § Post-1995 Ø Expected returns on future investment Ø Other Factors Impacting Full Cycle Economics
7
November 2001
US GoM Deepwater Markets – Delving Deeper!
3.
8
Key Deepwater Players ** Performance & Strategies of the Leading Players in the US GoM Deepwater ** ** Twenty-Five Individual Company Chapters ** §
3.x.1 Portfolio Summary
§
3.x.2 Portfolio Analysis Ø Acreage § current lease holding (no of leases; gross, net, operated) § geographic spread (distribution by water depth and planning & protraction areas) § maturity (distribution by award & expiry date) Ø Fields § reserves ranking (ranking by field, distribution; commercial vs technical) § reserves profiles (by development status, oil/gas mix, water depth) § production ranking (by 2001 rates, 2006 rates, 2001/2006 growth rates) § production profiles (by field, development status, oil/gas mix) Ø Deepwater business value § rem PV & rem PV per boe (by field, development status, water depth)
§
3.x.3 Relative Importance of Deepwater GoM § In global upstream portfolio § In global deepwater portfolio
§
3.x.4 Corporate Performance Measures Ø Exploration activity & results § lease acquisition activity & costs § E&A drilling activity & costs § discovery rates § success rates § finding costs Ø Development costs § capital & operating costs by field § capital cost profile (by development status, by field) Ø Asset Acquisitions & Divestments § A&D cost profiles Ø Consolidated Cost Profile
§
3.x.5 Full Cycle Analysis Ø Cash flows (PVs & RORs) § Post-1970 § Post-1980 § Post-1990 § Post-1995
§
3.x.6 Critical Success Factors Ø Full cycle returns Ø Key strengths Ø Key weaknesses Ø Discussion
November 2001
US GoM Deepwater Markets – Delving Deeper!
4.
9
Corporate Overview ** Corporate Benchmarking of Portfolios & Performance ** §
4.1 Corporate Portfolios Ø Acreage § current lease holding (no of leases; gross, net, operated) § geographic spread (distribution by water depth and planning & protraction areas) § maturity (distribution by expiry date) Ø Fields § No. of fields (by operator & development status) § reserves distribution (commercial vs technical, development status, oil/gas mix, water depth) § production ranking (by 2001 rates, 2006 rates, 2001/2006 growth rates) § production distribution (by 2001 rates, 2006 rates, 2001/2006 growth rates) Ø Deepwater business value § rem PV & rem PV per boe (by field, development status, water depth)
§
4.2 Relative Importance of Deepwater GoM § In global upstream portfolio (value, reserves, production & capex indices) § In global deepwater portfolio (value & reserves)
§
4.3 Corporate Performance Measures Ø Exploration activity & results § lease acquisition costs (by year) § E&A drilling activity (by year, water depth & E vs A) § discovery rates § success rates § finding costs Ø Development costs § average capital & operating costs § near-term capex commitment (2001-2006) Ø Asset acquisitions & divestments § A&D cost profiles Ø Consolidated Cost Profile
§
4.4 Full Cycle Analysis Ø Full cycle PVs § Post-1970 § Post-1990 Ø Full cycle RORs § Post-1970 § Post-1980 § Post-1990 § Post-1995
5.
Conclusions
6.
Appendix
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US GoM Deepwater Markets – Delving Deeper!
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The Study Team The proposed team draws upon Wood Mackenzie resources and brings together individuals with industry experience, technical and regional knowledge, and commercial backgrounds. Details of the key individuals with expertise on the US Gulf of Mexico (deepwater) are shown below. Experts from other regional teams will also contribute to the Study as appropriate.
Ian Ashcroft, Principal Consultant (Project Manager) Ian joined Wood Mackenzie in 1987 as a Far East oil analyst. He subsequently moved to Sydney Australia to manage the Australasia Upstream Service and participated in numerous consultancy projects. In 1993 Ian returned to Edinburgh to head up the Australasia operation at head office. During 1996 Ian expanded Wood Mackenzie’s research coverage to include North America and subsequently spent two years working on consultancy projects with a specific emphasis on energy issues in Asia Pacific and North America. Ian developed Wood Mackenzie’s US Gulf of Mexico (Deepwater) Upstream Service, and retains overall responsibility for North America consultancy work. Ian holds an MEng in Petroleum Engineering from Heriot-Watt University.
Valerie Brett, US Gulf of Mexico, Consultant - Edinburgh Valerie graduated from St Andrews University in June 1997 with an upper second class honours degree in Geoscience. In September 1997, Valerie joined Racal Survey Group Ltd. as an offshore field geophysicist, specialising in engineering surveys, pre-drilling and pre-pipeline laying studies. Valerie joined Wood Mackenzie in February 1999 as an energy analyst in the North America team. She played an integral role in setting up the US Gulf of Mexico (Deepwater) Upstream Service and has since become the lead analyst responsible for maintaining and developing the US GoM product suite.
Mark Tuckwood, US Gulf of Mexico, Consultant - Edinburgh Mark joined Wood Mackenzie in March 2001after spending four years with Marathon Oil UK Ltd. based in Aberdeen. During his first two years at Marathon he worked as a Reservoir Engineer for Marathon’s North Sea gas condensate assets. During this time he was involved in the development of brown field production potential in and around the Brae area. Mark was involved with several other projects during this time including commercial modelling of the Brae sales gas stream, exposure to acquisition data rooms and temporary project assignments to Houston and Calgary. In 1999, Mark joined Marathon’s Environmental Group where he had the responsibility for developing an atmospheric emissions management programme. Mark joined Wood Mackenzie in 2001 to help further develop the US Gulf of Mexico (Deepwater) Upstream Service.
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US GoM Deepwater Markets – Delving Deeper!
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Deliverables, Timing and Costs The results of the Study will be presented in both hard copy report (one colour copy) and electronic (.PDF file) formats to each subscriber. On the basis that the minimum subscription threshold is achieved by end October 2001, the Study will be completed and dispatched (by courier) in early December 2001. The nominal cost of the study will be US$20,000*. For clients that have already signed-up for Wood Mackenzie’s international deepwater study - Global Deepwater Markets # 2 - the cost will be US$10,000*. Additional hard copies of the Study will be available at US$800* per copy. Half-day ‘in-house’ presentations of the Study results for individual clients can be arranged after the completion date at a cost of US$2,000 (plus expenses)*. The Study will be undertaken within Wood Mackenzie’s standard Terms and Conditions, which are available on request. Invoices will be issued on receipt of completed order forms unless otherwise agreed. (*plus VAT where applicable.)
November 2001
US GoM Deepwater Markets – Delving Deeper!
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To order the Multi-Client Study
US Gulf of Mexico Deepwater Markets Delving Deeper! Please return this form to:
Sharon Edwards-Grant, Business Development Executive Wood Mackenzie, 5847 San Felipe, San Felipe Plaza 17th Floor, Houston, Texas 77057 USA Tel: +1 713 821 1386 Fax: +1 713 821 1573 e-mail: [email protected]
I would like to subscribe to the Study: US Gulf of Mexico Deepwater Markets – Delving Deeper! I have already subscribed to the international study: Global Deepwater Markets # 2
US$10,000*
I would like to subscribe to the Study: US Gulf of Mexico Deepwater Markets – Delving Deeper! I have not subscribed to the international study: Global Deepwater Markets # 2
US$20,000*
Additional hard copies @ US$800 surcharge per copy
*plus VAT where applicable
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** An invoice will be issued on receipt of completed order form**
November 2001
