dave pursell [email protected] 713-333-2962 *disclosures begin on page 43 2016 crude oil outlook...
TRANSCRIPT
Dave [email protected]
713-333-2962
*Disclosures begin on page 43
2016 Crude Oil Outlook – “Strong, like Bull”September 2015
2
Re-affirm our $80+/bbl oil price in 2H16
□ US supply growth moderates in 2015 and declines in 2016
□ Global Demand: only needs to be OK…but currently better than OK!
OPEC
□ Wildcard
□ Current supply increasing from Saudi and Iraq
□ Iran remains uncertain
Long Term to 2025
□ Rest of non-OPEC?
□ Well Spacing / Inventory depth?
□ Terminal decline rates?
Crude Oil Market
3
But the NYMEX Futures Say…….!!!!
“I can hardly remember how I built my bankroll, but I can't stop thinking of how I lost it” Mike McDermott,
Rounders
Source: Bloomberg, TPH & Co.
-60%
-30%
0%
30%
60%
90%
120%
Jan-99
Jan-01
Jan-03
Jan-05
Jan-07
Jan-09
Jan-11
Jan-13
Jan-15NYM
EX S
trip
, Pre
dic
ted
-Ac
tual
, %
Strip Too High
(Strip Too Low)
4
Oil S/D Model
87
88
89
90
91
92
93
94
95
96
97
98
(2.5)
(2.0)
(1.5)
(1.0)
(0.5)
0.0
0.5
1.0
1.5
2.0
Supp
ly/D
eman
d (m
mbb
l/d)
Und
er/<
Ove
r> S
uppl
y (m
mbb
l/d)
Global Crude ProductionImplied Inventory Change Supply Demand
Undersupplied
Oversupplied
“Are you suggesting coconuts migrate?”Monty Python and the Holy Grail
Source: IEA, TPH & Co.
5
OECD Inventories
NAM Non-NAM
Source: IEA, TPH & Co.
1,100
1,200
1,300
1,400
1,500
1,600
J an Feb Mar Apr May J un J ul Aug Sep Oct Nov Dec
Million
Bar
rels
Max
Min
Norm
2014
2015
1,100
1,150
1,200
1,250
1,300
1,350
1,400
1,450
1,500
1,550
1,600
J an Feb Mar Apr May J un J ul Aug Sep Oct Nov Dec
Million
Bar
rels
Max
Min
2015
Norm2014
6
OECD Inventories
Source: IEA, TPH & Co.
2,200
2,400
2,600
2,800
3,000
J an Feb Mar Apr May J un J ul Aug Sep Oct Nov Dec
Mill
ion
Barr
els
2015
Max
Min
Norm
2014
7
US Rig Count Decline is Fast and Furious…
Source: RigData
0
500
1,000
1,500
2,000
2,500
U.S
. Lan
d Ri
g Co
unt
Week
Peak to Trough Rig Count:'08-'09 vs. Current2008-2009 Current
8
(61)
(45)
(32)(32)(32)
(27)
(24)(23)(21)
(16)(15)(13)(13)(13)(12)(12)(11)(11)
(9) (9) (9) (8) (7) (6)(4) (4) (4) (3)
(70)
(60)
(50)
(40)
(30)
(20)
(10)
0
APA
CHK
CXO
OXY SD PXD
CLR
COP
MRO XE
CEO
GD
VN LIN
EQ
EP HES
OAS NFX
WLL AR BHP
LPI
NBL
EGN
SWN
SM STO
XOM
APC
CVX
RRC
Chan
ge in
Rig
Cou
ntChange in Rig Count by Operator Since Q4 Peak
Change in Rig Count by Operator Since Q4 Peak
Source: RigData, TPH & Co.
Note: Private Operators -523 rigs (-65%) since Q4 peak
9
US Oil Production Annual Growth
(400)
(200)
0
200
400
600
800
1,000
1,200
2010 2011 2012 2013 2014e 2015e 2016e 2017e 2018e 2019e 2020e
mbo
pd
Oil ProductionAnnual Growth
Source: DrillingInfo, Company Filings, TPH Research
US production declines are coming
10
TPH Oil Supply Model
Source: DrillingInfo, Company Filings, TPH Research
Actuals Forecast 2020E vs.Oil (mbopd) 2009A 2010A 2011A 2012A 2013A 2014E 2015E 2016E 2017E 2018E 2019E 2020E 2013A
Permian 863 907 1,009 1,188 1,346 1,590 1,710 1,726 1,900 2,167 2,491 2,844 1,497 Eagle Ford 19 68 230 564 962 1,328 1,437 1,446 1,663 1,897 2,093 2,282 1,320 Bakken 247 342 541 813 1,025 1,225 1,309 1,257 1,337 1,455 1,575 1,673 648 Niobrara 53 60 75 100 152 230 273 300 370 453 548 654 503 SCOOP 3 5 6 8 14 22 30 53 86 118 145 167 153 MS Lime 45 48 55 73 93 109 112 105 115 133 150 167 74 GW, Tonk, Cle 54 71 105 121 122 123 109 92 85 82 81 82 (40) Sub-Total 1,284 1,501 2,023 2,867 3,715 4,627 4,982 4,980 5,556 6,305 7,084 7,870 4,155
Growth 217 521 844 849 911 355 (2) 576 749 779 786 NA
Other Texas 534 532 523 523 562 578 550 511 485 485 485 485 (76) FO Gulf 1,684 1,700 1,469 1,453 1,393 1,462 1,569 1,488 1,428 1,364 1,305 1,250 (142) California 589 569 554 561 570 580 568 528 528 528 528 528 (42) Alaska 646 600 562 526 515 510 474 441 419 398 378 359 (156) Other US 711 722 712 826 795 765 727 654 641 628 616 604 (191) Sub-Total 4,164 4,123 3,820 3,889 3,835 3,896 3,888 3,623 3,502 3,404 3,313 3,227 (608)
Growth (42) (303) 69 (54) 61 (8) (265) (120) (98) (92) (86) NA
TPH Forecast 5,448 5,624 5,842 6,755 7,550 8,522 8,869 8,603 9,058 9,709 10,397 11,097 3,547 Total Growth 176 218 913 795 973 347 (267) 456 651 688 700 NA
US production growth is required
in 2017+
11
Rig Assumptions by Basin
Source: TPH & Co.
Actuals Rigs Forecasted RigsBasin 2009A 2010A 2011A 2012A 2013A 2014E 2015E 2016E 2017E 2018E 2019E 2020E
Permian Hz 22 50 95 149 193 295 220 274 352 444 540 626 Permian V 93 216 301 300 227 193 60 60 85 85 85 85 Eagle Ford 19 83 176 229 208 196 127 154 186 199 212 225 Bakken 50 117 174 202 183 182 90 100 132 145 158 171 MS Lime 13 25 39 78 93 100 35 35 53 61 69 77 Niobrara Hz 1 10 21 28 51 51 37 50 64 75 85 95 Niobrara V 12 17 21 15 5 1 - - - - - - GW, Tonk, Cle 20 71 106 101 93 89 30 33 36 40 45 50 SCOOP 14 21 19 24 32 52 43 49 59 66 73 80 Marcellus 41 99 131 108 90 83 60 75 86 103 107 110 Utica 0 0 3 15 29 36 33 37 41 46 49 52 Haynesville 146 195 139 55 38 38 30 34 38 38 38 38 Cana Woodford 11 25 47 31 19 12 20 25 25 25 25 25 Barnett 74 76 59 35 25 16 3 5 7 7 7 7 Pinedale 27 22 19 14 12 12 11 11 11 11 11 11 Piceance 31 33 30 16 13 11 7 3 5 7 7 7 Fayetteville 40 38 31 21 15 12 6 8 8 8 8 8
Oil Hz 965 582 695 882 1,030 1,182 1,324 Growth (383) 113 187 148 152 142
Oil V 194 60 60 85 85 85 85 Growth (134) - 25 - - -
Total Oil 1,159 642 755 967 1,115 1,267 1,409 Growth (517) 113 212 148 152 142
Total Gas 220 170 198 221 244 252 257 Growth (50) 28 23 24 7 5
Total Unmodeled 649 315 490 590 690 790 890 Growth (335) 175 100 100 100 100
Total 2,029 1,127 1,443 1,777 2,049 2,308 2,556 Growth (902) 316 334 272 259 247 Growth (%) -44% 28% 23% 15% 13% 11%
12
US Oil Production – Declines are Happening
Less volatile onshore oil production declined in April, May and June’15…an average of 83kbopd per month
0
5
10
Jan-10 Jan-12 Jan-14 Jan-16
US
Oil
Prod
uctio
n, m
illio
n ba
rrel
s pe
r day
Total US Oil Production
Source: EIA, TPH & Co.
13
US Oil Production – Declines are Happening
Less volatile onshore oil production declined in April, May and June’15…an average of 83kbopd per month
0
5
10
Jan-10 Jan-12 Jan-14 Jan-16
US
Oil
Prod
uctio
n, m
illio
n ba
rrel
s pe
r day
Total US Oil Production
Onshore Oil Production
Total US Oil Production
Source: EIA, TPH & Co.
14
US Oil Production – Forecast Thru 2016
The recent decline rate results in almost 850kbopd y/y decline.
0
3
6
9
Jan-10 Jan-12 Jan-14 Jan-16 Jan-18
US
Oil
Prod
uctio
n, m
illio
n ba
rrel
s pe
r day
Onshore
Source: EIA, TPH & Co.
15
US Oil Production – Forecast Thru 2016
The recent decline rate results in almost 850kbopd y/y decline.
0
3
6
9
Jan-10 Jan-12 Jan-14 Jan-16 Jan-18
US
Oil
Prod
uctio
n, m
illio
n ba
rrel
s pe
r day
Onshore
35kbopd monthly decline
Source: EIA, TPH & Co.
16
0
3
6
9
Jan-10 Jan-12 Jan-14 Jan-16 Jan-18
US
Oil
Prod
uctio
n, m
illio
n ba
rrel
s pe
r day
Onshore
35kbopd monthly decline
75kbopd monthly decline
US Oil Production – Forecast Thru 2016
The recent decline rate results in almost 850kbopd y/y decline.
Source: EIA, TPH & Co.
17
0
3
6
9
Jan-10 Jan-12 Jan-14 Jan-16 Jan-18
US
Oil
Prod
uctio
n, m
illio
n ba
rrel
s pe
r day
Onshore
35kbopd monthly decline
75kbopd monthly decline
US Oil Production – Forecast Thru 2016
35 kbopd monthly declineOnshore Annual Change
mmbopd kbopd2014 6.8 2015 7.3 578 2016 6.9 (417)
April'15 less Dec'16 946
The recent decline rate results in almost 850kbopd y/y decline.
75 kbopd monthly declineOnshore Annual Change
mmbopd kbopd2014 6.8 2015 7.3 508 2016 6.4 (847)
April'15 less Dec'16 1,666
Source: EIA, TPH & Co.
18
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
4,000
5,000
6,000
7,000
8,000
9,000
10,000
11,000
Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
Oil-
dire
cted
Rig
Cou
nt
kbbl
s/da
yMonthly US Oil Production
Weekly US Oil Production (4-wk Trailing Avg)
Oil-directed Rig Count
US Crude Production and Oil-Directed Rig Count
Source: BHI, EIA, TPH & Co.
Recent weekly/monthly data suggests growth may be
slowing
19
Non-OPEC Oil Production Growth – Ain’t Happening
25
30
35
40
45
50
5
6
7
8
9
10
11
12
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014e
Non
-OPE
C (e
x-U.S
.) S
upply
, mm
bpd
U.S
. Sup
ply,
mm
bpd
United States
Non-US, Non-OPEC
Source: IEA, TPH & Co.
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
1.8
2.0
2008A 2009A 2010A 2011A 2012A 2013A 2014E 2015E 2016E
Oil
Prod
uctio
n G
row
th (
Inde
xed
to 1
.0)
Oil Production Growth by Country/RegionOPEC (ex. Saudi) OECD (ex. U.S.) Non-OECD (ex. Russia) Saudi Arabia United States Russia
20
US Caused This Problem… U.S. Will Fix It
U.S. is offender for global supply growth and needs to throttle back production
Source: IEA, TPH & Co.
21
20
25
30
35
40
45
50
55
60
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Dem
and,
mm
bpd
OECD Demand
Non-OECD Demand
Demand- A Tale of 2 Cities
Source: IEA, TPH & Co.
22
-4%
-3%
-2%
-1%
0%
1%
2%
3%
4%
5%
1987 1992 1997 2002 2007 2012
Global Demand – Wait What?
Source: IEA, TPH & Co.
Asia Demand
0.0
5.0
10.0
15.0
20.0
25.0
1999 2001 2003 2005 2007 2009 2011 2013 2015
Tota
l D
eman
d (M
MB
PD)
Asian Total Products Demand
China Other Asia
“That's mathematics, son! You can argue with me, but you can't argue with figures!” Foghorn Leghorn
Source: Infield, TPH & Co.
Q3'15 Q3'14 Q3'15 vs. Q3'15 Q3'14 Q3'15 vs.
Europe (Brent) 21-Aug-15 14-Aug-15 21-Aug-14 QTD avg. QTD avg. Q3'14 Asia (Dubai) 21-Aug-15 14-Aug-15 21-Aug-14 QTD avg. QTD avg. Q3'14
NWE 95 Gasoline $19.40 $20.81 $9.66 $23.08 $10.89 111.9% Singapore 92 Gasoline $14.12 $16.23 $8.38 $15.86 $13.69 15.9%
NWE Gasoil $12.43 $11.18 $12.27 $10.57 $10.18 3.8% Singapore Gasoil $9.77 $11.62 $15.73 $10.37 $13.52 -23.3%
*Crude components in parentheses *Crack spread data based on 5-day rolling average prices
NWE 95 Gasoline Singapore 92 Gasoline
NWE Gasoil Singapore Gasoil
Europe and Asia Crack Spreads
$0
$5
$10
$15
$20
$25
$30
J F M A M J J A S O N D
$/b
bl
5-Yr Range 5-Yr Avg 2014 2015
$0
$5
$10
$15
$20
$25
J F M A M J J A S O N D
$/b
bl
5-Yr Range 5-Yr Avg 2014 2015
$0
$5
$10
$15
$20
$25
$30
J F M A M J J A S O N D
$/b
bl
5-Yr Range 5-Yr Avg 2014 2015
$0
$5
$10
$15
$20
$25
J F M A M J J A S O N D
$/b
bl
5-Yr Range 5-Yr Avg 2014 2015
Europe and Asia Crack Spreads
“I'm just here for the gasoline.”Max…Mad Max
Source: Bloomberg, TPH & Co.
25
OPEC Production History
20
22
24
26
28
30
32
34
Oct-95 Jul-98 Apr-01 Jan-04 Oct-06 Jul-09 Apr-12 Dec-14 Sep-17
Mill
ion
Bar
rels
per
Day
“I can hardly remember how I built my bankroll, but I can't stop thinking of how I lost it.”Mike McDermott….Rounders
Source: IEA, TPH & Co.
26
Iran: Production History and Outlook
Forecasting pre-sanctions production declines to the present, Iran should have 3.3mmbopd total productive capacity…an incremental
500kbopd higher than current 2.8mmbopd
2.0
2.5
3.0
3.5
4.0
4.5
Jan-00 Jan-02 Jan-04 Jan-06 Jan-08 Jan-10 Jan-12 Jan-14 Jan-16 Jan-18 Jan-20
Oil
Prod
uctio
n, m
mbo
pd
500k bopd increase
1mm bopd increase
SanctionsStatus Quo
Source: IEA, TPH & Co.
27
Saudi Arabia: Production History and Outlook
Saudi scenarios: They signaled a decline once internal summer demand wanes. Saudi could certainly keep ramping but we doubt they would go above 11mmbpd as they want to keep 1.5mmbpd excess capacity to fill a
global supply disruption.
1. Saudi increased supply to 9.2mmbpd in mid-08 and decreased to 7.8mmbopd in early ’09
2. Supply increased in early ’11 due to tightening markets and then the onset of Arab Spring
3. Saudi recently increased supply to 10.3+mmbpd.
7
8
9
10
11
12
13
Jan-06 Jan-08 Jan-10 Jan-12 Jan-14 Jan-16 Jan-18
Oil
Prod
uctio
n, m
mbo
pd
Saudi Stated Capacity: 12.5mmbpd
1
2
3
10.4mmbopd
Continue ramp to 11mmbopd
Down 500kbpd to 9.8mmbpd
Source: IEA, TPH & Co.
Cumulative OPEC Excess Capacity In The Early 80s!
28
0
5
10
15
20
1980 1981 1982 1983 1984 1985
Exc
ess
Capaci
ty, m
mbpd
Excess Capacity ComponentsDuring Early 1980's
Excess Capacity
Non-OPEC Growth
Demand Contraction
1985 - more than half of excess capacity was driven by non- OPEC supply growth...
1985 – more than half of excess capacity was driven by non-OPEC supply growth…
Source: IEA, TPH & Co.
29
Sweet Spots –Drilling Inventory in Tier 1?
□ Drainage Area Wall Street Math vs. Reality? Well spacing = potential interference = higher terminal decline rates
Steeper Terminal Decline Rate
□ Does not impact NPV but does impact reserves/DD&A and long term production outlook
Fracture Optimization
□ Are we in the 4th or 8th Inning?
□ Have we reached the practical limits to lateral length and sand volumes?
□ Re-Frac’s – How big is the opportunity?
Service Costs
□ Should re-inflate in 2016+
Non-OPEC
□ Cuts to exploration capex should materially affect deepwater growth in the long term.
Things That Makes Us Say…Huh?
It’s Happening Now!
30
January 2015
February 2015
March 2015
Appendix
31
Dry gas rig count drop to accelerate declines in legacy basins. Since Aug. 2014, rig count down from 101 to 63 and may drop further over the coming months.
1000 rigs dropping out of the associated gas market to drive volume declines by Q3’15.
Northeast going ex-growth for the majority of 2015 and we see downside bias to production estimates on shut-in volumes.
NGL collapse may cause cash flow shortfall, further pressuring rig count in the Marcellus and Utica.
Canadian E&Ps have significantly cut back growth capex (TPHe -40% y/y). On reduced capital plans, plays like the Montney may struggle to offset conventional declines, meaning less gas being sent south.
Coal to Gas switching (TPHe 3Bcf/d at $2.75/mcf) to provide a floor for commodity near term as fundamentals correct over the year.
Structural demand changes kicking in, with over 2Bcf/d of potential growth in 2015 driven by industrial demand, coal fleet retirement, Mexican gas exports and LNG facility start-ups late in the year.
Why Are We Bullish Natural Gas into 2016?
Rig Count ProgressionBasins Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15
Fayetteville 14 11 13 13 12 10 14 8Haynesville 43 44 39 39 41 41 40 33
Barnett 16 15 13 14 13 9 8 3Pinedale 14 14 16 16 15 14 11 11Piceance 14 14 15 13 14 14 8 8
Total 101 98 96 95 95 88 81 63
Rig Count ProgressionBasins Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15
Marcellus 91 89 91 85 76 84 72 60Utica 40 42 41 45 47 48 39 33Total 131 131 132 130 123 132 111 93
Source: Drillinginfo, Company Filings, TPH & Co.32
33
Nat Gas Market ~Balanced YTD 2015
0
1,000
2,000
3,000
4,000
26-Dec 27-Mar 26-J un 25-Sep 25-Dec
Wor
king
Gas
, bc
f
Normal
Max2014
Min
2015
Source: EIA, TPH & Co.
34
71
72
73
74
75
76
Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15
BCF
EIA 914 vs Flow DataSept 2014 - YTD
914
Flow Data 1
Flow Data 2
Gas Demand OK….Supply THE Outstanding Question
EIA, LCI Energy, TPH & Co
Which is Right?
35
TPH Gas Production Forecast > 2016 Ex-Growth
(8)
(6)
(4)
(2)
-
2
4
6
2010 2011 2012 2013 2014 2015 2016 2017
BCF
TPHe Gas Production GrowthYoY 2010-2017
Northeast
Associated Gas
Other
Total
Response to 2012 gas prices plus GOM declines
Back to the races, though
Northeast growth May be
limited by associated gas
production
Associated gas masked all but 500mmcfd of
“other” declines 2012-2014 allowing NE growth to
standout
Associated gas goes ex-
growth…NE production
growth needed to offset declines
Source: EIA, DrillingInfo, TPH & Co.
36
Leading Edge Data Suggests Gas Production Declining
-1.50
-1.00
-0.50
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
bcfd
Gas Production Growth by RegionSept 2014 = 0
Total Lower 48
GOM
Gulf Onshore
Mid Con
Rockies
Permian
San Juan
East
West
Source: EIA, LCI Energy, TPH & Co.
37
In the Background Coal Prices Moving Down
$9
$10
$11
$12
$13
$14
$15
$46
$51
$56
$61
$66
$71
1/2/2015 2/2/2015 3/2/2015 4/2/2015 5/2/2015 6/2/2015 7/2/2015 8/2/2015
PRB
$/to
n
NA
PP $
/ton
NAPP
PRB
Coal prices down ~25% YTD…moves a $3.75/mmbtu gas break-
even to >$3/mmbtu
38
Onshore Natural Gas Production Growth (EIA-914)
Source: EIA, TPH & Co.
40
45
50
55
60
65
70
75
80
85
Jan-
05
Jan-
06
Jan-
07
Jan-
08
Jan-
09
Jan-
10
Jan-
11
Jan-
12
Jan-
13
Jan-
14
Jan-
15
bcf/
day
39
Natural Gas Production (EIA-914)
Source: EIA, TPH & Co.
0
5
10
15
20
25
30
35
40
Jan-
05
Jan-
06
Jan-
07
Jan-
08
Jan-
09
Jan-
10
Jan-
11
Jan-
12
Jan-
13
Jan-
14
Jan-
15
bcf/
day
Other States
Gulf of Mexico
Louisiana
New Mexico, Oklahoma, Wyoming
Texas
40
TPH Gas Supply Model
Actuals Forecast 2020E vs.Gas (mmcf/d) 2009A 2010A 2011A 2012A 2013A 2014E 2015E 2016E 2017E 2018E 2019E 2020E 2013A
Marcellus 226 1,146 3,292 6,208 9,536 12,793 14,394 16,012 18,508 21,185 23,830 25,845 16,309 Utica 0 2 9 56 421 1,613 2,789 3,586 4,510 5,405 6,267 7,068 6,647 Eagle Ford 297 609 1,433 2,845 4,339 5,653 6,108 6,134 6,829 7,635 8,409 9,198 4,858 Permian 4,444 4,283 4,282 4,635 5,136 5,592 5,795 5,769 6,151 6,781 7,555 8,438 3,302 SCOOP 43 72 94 128 260 423 608 1,044 1,656 2,248 2,678 2,938 2,678 Niobrara 547 575 635 699 862 1,163 1,290 1,394 1,672 1,977 2,292 2,606 1,744 Bakken 273 348 493 804 1,024 1,387 1,493 1,462 1,503 1,528 1,654 1,764 740 MS Lime 602 547 590 773 893 997 1,015 962 1,026 1,159 1,282 1,412 519 Pinedale 3,223 3,055 3,002 2,921 2,852 2,865 2,848 2,821 2,819 2,825 2,834 2,844 (7) GW, Tonk, Cle 1,972 2,011 2,308 2,439 2,375 2,321 2,082 1,806 1,694 1,635 1,610 1,609 (767) Piceance 2,749 2,521 2,569 2,497 2,249 2,078 1,940 1,733 1,584 1,546 1,528 1,499 (750) Cana Woodford 825 839 883 955 1,081 1,088 971 992 1,019 1,034 1,046 1,056 (25) Fayetteville 1,646 2,347 2,787 2,983 2,965 2,873 2,544 2,250 2,107 1,966 1,876 1,812 (1,154) FO Gulf 7,357 6,710 5,553 4,896 4,058 3,793 3,835 3,674 3,433 3,159 2,906 2,674 (1,385) Barnett 5,212 5,354 5,703 5,829 5,553 5,044 4,468 4,020 3,879 3,809 3,733 3,669 (1,883) Haynesville 4,421 6,767 9,370 9,125 7,281 6,391 5,854 5,501 5,441 5,420 5,381 5,350 (1,931) All Other US States 26,930 25,600 24,438 22,879 20,393 19,469 18,885 18,318 17,769 17,236 16,719 16,217 (4,176)
TPH Forecast 60,765 62,785 67,441 70,672 71,279 75,543 76,919 77,480 81,600 86,547 91,601 95,999 NAGrowth 2,020 4,655 3,232 607 4,264 1,376 560 4,120 4,948 5,054 4,398 24,720
Source: Drillinginfo, Company Filings, TPH & Co.
LPG Exports?
Liquids rich drilling has driven >400 MBPD of propane production growth over the last 4 years
Supply growth has steadily outpaced demand driving pricing erosion with C3 cut by a third as a percent of WTI
Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Dec-180
200
400
600
800
1,000
1,200
1,400
1,600
US LPG Export Capacity (MBPD)
EPD Targa EPD 2013 Expansion Targa Sept 2013 ExpansionTarga Q3 2014 Mariner East I EPD 2015 Expansion Mariner SouthOXY Corpus EPD Phase 2: OTI PSX Sweeny Terminal Mariner East IICurrent US Exports
Pro
pane E
xport
s (
MB
PD
)
41
Distance, Economics have cut off NE & Canada from Belvieu
42Source: Company Presentations, Public Filings, TPH Estimates, EIA
43
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RESEARCH
Oil Service / E&C
J eff [email protected]
Byron [email protected]
George O’[email protected]
Taylor [email protected]
Shola Labinjo**+44 20 3008 [email protected]
Integrated Oils
Anish Kapadia**+44 20 3008 [email protected]
David Gamboa**+44 20 3427 [email protected]
Refiners
Matthew Blair, [email protected]
Erik [email protected]
TRADINGSALES
Houston
Clay [email protected]
Mike [email protected]
Rusty D’[email protected]
Mike [email protected]
Oliver [email protected]
J ohn [email protected]
Houston - (800) 507-2400
Scott [email protected]
Seth [email protected]
Ally [email protected]
New York - (800) 507-2400
J ason [email protected]
Denver
New YorkCraig [email protected]
J ames [email protected]
Harry [email protected]
London
J onathan Wright**+44 20 3008 [email protected]
Macro
Dave [email protected]
Brandon [email protected]
Midstream
Brandon [email protected]
J eff Schmidt, [email protected]
Colton [email protected]
Erik [email protected]
Utilities / Power
Neel [email protected]
Ryan [email protected]
E&P
W. Mark [email protected]
Matt [email protected]
Michael [email protected]
J eoffrey [email protected]
J amaal [email protected]
Sameer [email protected]
Oliver [email protected]
E&P International
Anish Kapadia**+44 20 3008 [email protected]
Shola Labinjo**+44 20 3008 [email protected]
David Gamboa**+44 20 3427 [email protected]