platts rockies oil & gas

Platts Rockies Oil & Gas North Dakota Pipeline Authority

Justin J. Kringstad April 14, 2014 – Denver, CO

2 JJ Kringstad - North Dakota Pipeline Authority

North Dakota Pipeline Miles

3 3 JJ Kringstad - North Dakota Pipeline Authority

2,470 miles of new pipe in 2012

Roughly Distance from Los Angeles to New York City

Understanding production potential

Understanding current transportation dynamics and potential transportation constraints

Understanding current and future market conditions

4

Crude Oil

4 JJ Kringstad - North Dakota Pipeline Authority

Understanding production potential

Understanding current transportation dynamics and potential transportation constraints

Understanding current and future market conditions

5

Crude Oil

5 JJ Kringstad - North Dakota Pipeline Authority

April 10, 2014 – 189 Drilling Rigs

6 JJ Kringstad - North Dakota Pipeline Authority

ND Drilling Stats

7 JJ Kringstad - North Dakota Pipeline Authority

Forecasted Drilling Rigs

8 8 JJ Kringstad - North Dakota Pipeline Authority

Production forecast is for visual demonstration purposes only and should not be considered accurate for any near or long term planning.

Forecasted New Wells

9 9 JJ Kringstad - North Dakota Pipeline Authority

Production forecast is for visual demonstration purposes only and should not be considered accurate for any near or long term planning.

Forecasting Williston Basin Oil Production, BOPD

Production forecast is for visual demonstration purposes only and should not be considered accurate for any near or long term planning.

10 10 JJ Kringstad - North Dakota Pipeline Authority

Forecasting Challenges

11

Ongoing Considerations

-Increased Density Drilling

-Drilling Efficiencies

-Improving Completion Techniques

-Productivity of the Lower Three Forks

-Eastern Montana Success

11 JJ Kringstad - North Dakota Pipeline Authority

Current Model

-Approx. 30,000 New Wells Out to Dec 2029

-Average EUR Roughly 400,000 BBLS

-Average First Month Production of 347 BOPD

Long Term Considerations -EOR Opportunities

-Pricing

-Competition

-Additional Williston Basin Plays

Crude Oil

Understanding production potential

Understanding current transportation dynamics and potential transportation constraints

Understanding current and future market conditions

12 12 JJ Kringstad - North Dakota Pipeline Authority

Challenges* 1) Moving oil out of the

Williston Basin 2) Moving oil within the

Williston Basin

*Modified from Bridger and Belle Fourche Pipelines

2

1

13

North Dakota Crude Oil Pipelines

13 JJ Kringstad - North Dakota Pipeline Authority

210,000 BOPD

68,000 BOPD

160,000 BOPD

145,000 BOPD

14

North Dakota Crude Oil Pipelines

14 JJ Kringstad - North Dakota Pipeline Authority

Oil Loading Rail Facilities

15 JJ Kringstad - North Dakota Pipeline Authority

February 2014

Estimated Williston Basin Oil Transportation

16

16 JJ Kringstad - North Dakota Pipeline Authority 16

Estimated Williston Basin Oil Transportation

17

17 JJ Kringstad - North Dakota Pipeline Authority 17

Estimated Williston Basin Oil Transportation

18

18 JJ Kringstad - North Dakota Pipeline Authority 18

Estimated ND Rail Export Volumes

19 JJ Kringstad - North Dakota Pipeline Authority 19

Williston Basin Oil Production & Export Capacity, BOPD

Production forecast is for visual demonstration purposes only and should not be considered accurate for any near or long term planning.

20 20 JJ Kringstad - North Dakota Pipeline Authority

Confirmed Pipeline Projects

21

21 JJ Kringstad - North Dakota Pipeline Authority 21

Butte Loop • In-service Date: Q3 2014 • 110,000 BOPD • Service to Guernsey, WY

Hiland Double H • In-service Date: Q4 2014 • 50,000 BOPD (Expandable up to 100,000 BOPD) • Extended Open Season to April 16, 2014 • Service to Guernsey, WY

Plains Bakken North • In-service Date: 2014 • 40,000 BOPD (Expandable up to 70,000 BOPD) • Movement North to Canadian Interconnect

Pipeline Projects In Business Development or Regulatory

22

22 JJ Kringstad - North Dakota Pipeline Authority 22

North Dakota Pipeline Company Sandpiper • Open Season Successful: 155,000 BOPD Committed • 225,000 BOPD ND Capacity to Clearbrook, MN (24”) • 375,000 BOPD Clearbrook, MN to Superior, WI (30”) • In-service Date: Q1 2016

TransCanada Keystone XL • Up to 100,000 BOPD • Timeline Uncertain Energy Transfer Partners • Binding Open Season Launched March 12, 2014 • Project Details Unavailable

23

Crude Oil Gathering

Challenges* 1) Moving oil out of the

Williston Basin 2) Moving oil within the

Williston Basin

*Modified from Bridger and Belle Fourche Pipelines

2

1

24

North Dakota Crude Oil Pipelines

24 JJ Kringstad - North Dakota Pipeline Authority

Red – Trucked Blue – Pipeline

Sep 2012 Estimates – Some data incomplete or unavailable

All ND Production

ND Crude Oil Gathering

25 25 JJ Kringstad - North Dakota Pipeline Authority

Red – Trucked Blue – Pipeline

Sep 2013 Estimates Some data incomplete or unavailable

All ND Production

ND Oil Gathering

26 26 JJ Kringstad - North Dakota Pipeline Authority

41% 59% 20%

80%

31% 69%

48% 52%

54% 46%

42% 58%

9%

91%

41% 59%

22%

78%

100%

100%

36% 64%

100%

14%

86%

3%

97%

~250 Additional Truckloads Per Day

27 JJ Kringstad - North Dakota Pipeline Authority

Year-Over-Year Oil Gathering Changes*

*Best available estimate. Some data incomplete or missing

28 JJ Kringstad - North Dakota Pipeline Authority

Estimated YOY Oil Gathering Change

Sep 2012 to Sep 2013

29 JJ Kringstad - North Dakota Pipeline Authority

Estimated YOY Daily Truckload Change

Sep 2012 to Sep 2013 Assumes - 225 bbls/truck

30 JJ Kringstad - North Dakota Pipeline Authority

Closer Look at Gathering Type

Gathering (After CTB) Green = Pipeline Red = Truck Yellow = Both Blue = Confidential Sep 2013 Data

Crude Oil

Understanding production potential

Understanding current transportation dynamics and potential transportation constraints

Understanding current and future market conditions

33 33 JJ Kringstad - North Dakota Pipeline Authority

US Refining Infrastructure

34 JJ Kringstad - North Dakota Pipeline Authority

$106.38

$95.99

$84.53 $78.98

$100.76

EIA Dec 2013 Refinery Acquisition Cost

Simple Terms Blue – Lack of pipelines Orange – Challenges on existing infrastructure

GREEN – % of gas captured and sold Blue – % flared from zero sales wells Orange – % flared from wells with at least one mcf sold.

February 2014 Data – Non-Confidential Wells Statewide

Solving the Flaring Challenge

35 JJ Kringstad - North Dakota Pipeline Authority

*Hess Tioga Gas Plant shut-in for 140 MMCFD expansion starting in November

*

Solving the Flaring Challenge

36 JJ Kringstad - North Dakota Pipeline Authority

New NDPA Natural Gas Report

Strengthening Landowner Relations

38 JJ Kringstad - North Dakota Pipeline Authority

NDPA Publications & Presentations

39 JJ Kringstad - North Dakota Pipeline Authority

Visit: www.northdakotapipelines.com

Justin J. Kringstad, Director North Dakota Pipeline Authority

600 E. Boulevard Ave. Dept. 405 Bismarck, ND 58505-0840

Phone: (701)220-6227

Fax: (701)328-2820 E-mail: jjkringstad@ndpipelines.com

Websites:

www.pipeline.nd.gov www.northdakotapipelines.com

40 JJ Kringstad - North Dakota Pipeline Authority

Contact Information

40