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TRANSCRIPT
Chris Faulkner
CEO, Breitling Oil and Gas
Shale Gas World Europe 2013
Warsaw, Poland
Update from U.S. - Shale 2.0
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0 50 100 150 200 250
Marcellus Haynesville Eagle Ford Montney Barnett Fayetteville Bossier Woodford Horn River Granite Wash Antrim Utica (US) Permian Delaware Niobrara Permian Midland Mississippi Lime Bakken (US) Anadarko tight New Albany Cardium
Unconventional Gas Play Rankings
Remaining Recoverable Gas Resources (Tcf)
Dry gas
NGL
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0 6 8 18 20
Unconventional Oil Play Rankings
Recoverable Oil Resources (billion barrels) Bakken (U.S.) Eagle Ford Permian Niobrara Utica (U.S.) Anadarko tight Mississippi Lime Cardium Bakken (Canada) Tuscaloosa Granite Wash Woodford Monterey Alberta Bakken Montney Marcellus Barnett Utica (Canada)
2 4
Developing
10 12 14 16
Contingent+Prospective
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Marcellus Resource
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bcf
ed
16 14 12 10 8 6 4 2
Marcellus Production Forecast
0
2006 Other(s)
Anadarko
National Fuel Gas
Cabot Oil and Gas
2010 Ultra Petroleum
Southwestern Energy
Noble Energy
EQT Corporation
2014 Antero Resources
ExxonMobil
CONSOL Energy
Range Resources
2018 Shell
Talisman Energy
Statoil
Chesapeake
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Marcellus Economic Analysis
Case Name Cabot Oil and Gas (Susquehanna County, PA) Chesapeake (North Pennsylvania) Consol Energy/Noble Energy (Joint Venture - Wet Gas) Range Resources (NE Pennsylvania) Breitling Oil and Gas (Super rich area) Talisman Energy (Pennsylvania)
Type Well Well 30-day IP EUR Spacing CAPEX NPV (mmcfe/d) (bcfe) (acres) ($mm) ($mm) 11.19 10.56 80 6.5 3.19 6.06 5.56 90 6.0 0.84 4.00 5.56 80 6.5 1.52 6.15 6.28 80 4.5 1.52 3.96 5.12 80 4.7 4.25 4.05 4.61 80 5.0 0.10
Breakeven gas price ($/mcfe) 2.99 3.56 3.26 3.20 2.24 3.93
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Bakken/Three Forks Resource (U.S.)
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tho
usa
nd
bo
ed
1,400 1,200 1,000 800 600 400 200
0
2005 2007 2009 2011 2013 2015 2017 2019
Bakken Production Forecast
Unawarded Acres*
ExxonMobil Marathon Oil Kodiak Oil and Gas Northern Oil & Gas
Continental Resources
Statoil ConocoPhillips Breitling Oil and Gas Oasis Petroleum
Hess
Whiting Petroleum EOG Resources Apache Other(s)
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Bakken Economic Analysis
Case Name 30-day IP (boe/d)
30 Year - EUR (Mboe)
Well Spacing (acres)
CAPEX ($mm)
Type Well Break even oil NPV ($mm) price ($/boe)
ConocoPhillips (Core Area)
Continental Resources (Nesson Anticline Area) EOG Resources (Core Area)
ExxonMobil (Nesson Anticline)
Hess (East Nesson)
Marathon Oil (Ajax and Hector Area)
Marathon Oil (Diomedes Area)
Marathon Oil (Myrmidon and Aeneas)
Oasis Petroleum (East Nesson)
Breitling Oil and Gas (West Williston)
Statoil (Rough Rider Area)
Whiting Petroleum (Lewis and Clark Area)
Breitling Oil and Gas (Sanish and Parshall Area)
660
1052
808
516
993
491
411
682
635
597
903
418
575
431
593
601
344
551
501
463
550
437
373
435
394
667
160
160
320
140
160
320-420
640
320-420
320
320
160
640
213
8.5
9.0
8.0
5.0
9.5
8.6
8.2
9.0
8.7
10.3
8.9
7.0
6.0
4.26
6.92
8.14
4.13
5.92
5.40
4.14
5.99
3.98
1.78
3.77
3.93
9.75
54.16
45.07
40.69
43.68
50.03
49.61
53.70
48.36
55.80
72.38
57.69
51.77
42.11
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Permian Resource
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tho
usa
nd
bo
ed
1,800 1,600 1,400 1,200 1,000 800 600 400 200
0
2008 2010 2012 2014 2016 2018 2020
Permian Production Forecast
Chevron
Pioneer Natural Resources Laredo Petroleum Energen EP Energy
Concho Resources
Apache ConocoPhillips Shell BHP Billiton
Devon Energy
Oxy Cimarex Energy Anadarko EOG Resources
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Permian Economic Analysis
Case Name Cimarex (Bone Spring/Northern Delaware) Concho Resources (Avalon Shale/Delaware Basin) Concho Resources (Bone Spring/Northern Delaware) Devon Energy (Bone Spring) EOG Resources (Leonard Shale/Bone Spring Sands) OXY (Bone Spring/Avalon) Approach Resources (Wolffork) Concho Resources (Wolfberry) Devon Energy (Wolfberry) EOG Resources (Wolfcamp Shale) EP Energy (Wolfcamp) Laredo Petroleum (Wolfberry) Breitling Oil and Gas (Wolfberry) Breitling Oil and Gas (Wolfcamp horizontal)
30-day IP (boe/d) 618 486 622
545 559
556 151 113 150 540 490 143 114 567
EUR (Mboe) 551 410 515
531 446
469 110 140 171 420 444 138 141 511
Well Spacing (acres) 160 80 80
80 160
80 20 20-40 20-40 160 90 40 40 140
CAPEX ($mm) 7.0 6.0 6.0
5.6 6.0
6.5 1.2 1.8 2.5 5.5 8.2 2.2 1.6 7.0
Type Well NPV ($mm) 6.82 1.17 4.14
8.18 2.16
4.47 1.33 1.07 1.27 1.76 3.22 0.76 1.35 5.37
Breakevenoil price ($/boe) 41.35 69.69 43.47
33.42 59.53
48.06 38.43 50.83 53.85 62.12 58.84 61.10 44.06 46.35
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Eagle Ford Resource
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Eagle Ford Economics
Case Name BHP Billiton (Black Hawk) Anadarko/KNOC (Joint Venture) Chesapeake EOG Resources (Oil, Eastern Province) EOG Resources (Oil, Western Province) Talisman/Statoil (Joint Venture, Liquids Rich Area) Breitling Oil (Oil Rich Area) Marathon Oil (Volatile Oil) Pioneer Natural Resources (Joint venture with Reliance)
30-day IP EUR (boe/d) (Mboe) 1973.21 1066.8 533.51 450.3 631.58 543.9
996.15 506.3
662.67 492.2
1166.50 662.2
1403.66 605.9 651.45 643.0
1966.97 1000.0
Type Well Well Breakeven Breakeven Spacing CAPEX NPV gas price oil price (acres) ($mm) ($mm) ($/mcfe) ($/boe) 90-100 9.9 10.50 2.00 38.25 80 5.8 2.13 2.80 58.63 80 7.5 3.94 2.50 53.09
90 6.5 6.12 1.90 41.36
90 6.5 5.31 2.00 44.49
90 9.0 1.75 3.30 68.13
80 7.0 5.81 2.10 43.47 160 8.0 5.98 2.10 46.00
140 8.0 9.87 1.90 33.34
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Tho
usa
nd
s B
bl/
d
6,000 5,000 4,000 3,000 2,000 1,000 0
2008 2010 2012 2014 2016 2018 2020
Crude Oil & Condensate Production Forecast Other plays
Utica
Cardium
Anadarko & Panhandle Plays
Mississippi Lime
Niobrara
Permian Basin Tight Oil
Eagle Ford
Bakken
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U.S gas price stability - As supply grows, price remains low, stable
Lower 48 gas supply has grown by 20 Bcfd since 2000, up 50%
• Driven by shale and infrastructure development post 2005
• Result: lower, more stable pricing leading to a manufacturing renaissance
Cold weather
Hurricanes Katrina & Rita Strong global economy Price run-up with crude oil
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U.S. Shale Gas/Oil – 2013 pad drilling developments
(Dense Population)
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Breitling King George Field (Barnett Combo)
Average decline curves from the major U.S. fields
19
million cubic feet per year
1
Adam Sieminski , FLAME
March 13, 2013
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Update: U.S. Shale Gas/Oil – Longer, Targeted Laterals.
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Closing Comments • Shale gas 2.0 revolution in U.S. – Shale gas is a game changer: U.S. no longer destined to be gas
importer. Will be exporting within 3 years
– Large coal to gas shift largest reduction in CO2 emissions in
the world. New U.S. Carbon Bill
– Low gas prices stimulus for particular industrial industries
– Will this be sustainable and make U.S. more competitive?
– Impact on world gas supply – demand/competition balance via LNG
– Transportation fuel? If so, when?
• Meanwhile the EU evolution…2.0? – There is shale gas potential, but commercial viability to be proven
– Current coal-to-gas price ratio harms gas power plants
– Calls for lenient position towards shale gas to support industry
– Diverse viewpoints country to country - politically driven
– Community backlash/early mover environmental movement
– Will shale gas be a game changer here. If so, when?
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Challenges for Europe: U.S. 2008?
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Thank you. Q/A
Chris Faulkner
CEO, Breitling Oil and Gas
Shale Gas World Europe 2013
Warsaw, Poland