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Platts Rockies Oil & Gas North Dakota Pipeline Authority Justin J. Kringstad April 14, 2014 – Denver, CO

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Page 1: Platts Rockies Oil & Gas

Platts Rockies Oil & Gas North Dakota Pipeline Authority

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

Page 2: Platts Rockies Oil & Gas

2 JJ Kringstad - North Dakota Pipeline Authority

Page 3: Platts Rockies Oil & Gas

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

Page 4: Platts Rockies Oil & Gas

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

Page 5: Platts Rockies Oil & Gas

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

Page 6: Platts Rockies Oil & Gas

April 10, 2014 – 189 Drilling Rigs

6 JJ Kringstad - North Dakota Pipeline Authority

Page 7: Platts Rockies Oil & Gas

ND Drilling Stats

7 JJ Kringstad - North Dakota Pipeline Authority

Page 8: Platts Rockies Oil & Gas

Forecasted Drilling Rigs

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

Page 9: Platts Rockies Oil & Gas

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.

Page 10: Platts Rockies Oil & Gas

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

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Forecasting Challenges

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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

Page 12: Platts Rockies Oil & Gas

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

Page 13: Platts Rockies Oil & Gas

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

Page 14: Platts Rockies Oil & Gas

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

Page 15: Platts Rockies Oil & Gas

Oil Loading Rail Facilities

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Page 16: Platts Rockies Oil & Gas

February 2014

Estimated Williston Basin Oil Transportation

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Page 17: Platts Rockies Oil & Gas

Estimated Williston Basin Oil Transportation

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Page 18: Platts Rockies Oil & Gas

Estimated Williston Basin Oil Transportation

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Page 19: Platts Rockies Oil & Gas

Estimated ND Rail Export Volumes

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Page 20: Platts Rockies Oil & Gas

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

Page 21: Platts Rockies Oil & Gas

Confirmed Pipeline Projects

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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

Page 22: Platts Rockies Oil & Gas

Pipeline Projects In Business Development or Regulatory

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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

Page 23: Platts Rockies Oil & Gas

23

Crude Oil Gathering

Page 24: Platts Rockies Oil & Gas

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

Page 25: Platts Rockies Oil & Gas

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

Page 26: Platts Rockies Oil & Gas

Red – Trucked Blue – Pipeline

Sep 2013 Estimates Some data incomplete or unavailable

All ND Production

ND Oil Gathering

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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%

Page 27: Platts Rockies Oil & Gas

~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

Page 28: Platts Rockies Oil & Gas

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Estimated YOY Oil Gathering Change

Sep 2012 to Sep 2013

Page 29: Platts Rockies Oil & Gas

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Estimated YOY Daily Truckload Change

Sep 2012 to Sep 2013 Assumes - 225 bbls/truck

Page 30: Platts Rockies Oil & Gas

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Closer Look at Gathering Type

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

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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

Page 34: Platts Rockies Oil & Gas

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

Page 35: Platts Rockies Oil & Gas

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

*

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Solving the Flaring Challenge

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New NDPA Natural Gas Report

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Strengthening Landowner Relations

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Page 39: Platts Rockies Oil & Gas

NDPA Publications & Presentations

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Visit: www.northdakotapipelines.com

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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: [email protected]

Websites:

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

40 JJ Kringstad - North Dakota Pipeline Authority

Contact Information

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