US Oil and Gas – Shale RockBY: PAUL YOUNG CPA, CGA

Agenda

What is Shale oil USA Oil Production by Year Canada and USA Energy Trade What is next for Shale? Canada and USA Energy Trade US Refining Canada Oil

Oil and Gas outlook – Houston Summit

Source - http://www.industryweek.com/growth-strategies/energy-trends-10-observations-ceraweek?NL=IW-07&sfvc4enews=42&cl=article_1&utm_rid=CPG03000001519274&utm_campaign=17924&utm_medium=email&elq2=b5a38ad76f6e4fc982fa41ecfe176947 – March 10, 2017

1. Optimism returns. 2. Demographics are in our favor. 3. Getting on the right side of climate change. 4. The hunt for peak demand proves, well,

demanding. 5. Sensible regulation needed. 6. Value, value, value. 7. Natural gas is the one we love. 8. Technology at every point in the business. 9. Public relations has not been our forte. 10.Power to the people.

What is shale oil Shale oil is an unconventional oil produced from oil shale rock fragments by

pyrolysis, hydrogenation, or thermal dissolution. These processes convert the organic matter within the rock (kerogen) into synthetic oil and gas.

Source - http://diagramschart.com/tag/shale-oil-diagram/

USA Oil Production

Source – US Energy

Canada Oil Exports to USA

Source – US Energy

What is next for Shale?

Source – Next Big future – March 12, 2017

• OPEC's price war did spark a wave of bankruptcies, painful job cuts and a dip in U.S. oil production as crude plummeted to as low as $26 a barrel. Domestic output peaked at an impressive 9.6 million barrels per day in April 2015.

• But the oil boom didn't collapse completely. U.S. oil output fell only a little, bottoming out at 8.7 million barrels in July 2016 and has since stabilized. 

• All eyes are on the frenzy of shale activity in the Permian region. Frackers have scrambled to add rigs in the Permian. The rig count has nearly tripled from a low of 132 last April to 308 now.

Refining Capacity

Source – US Energy

Canada Oil

Source – Bloomberg – March 10, 2017

• For a country that sent about 99 percent of its crude exports to the U.S. last year, the recent flow to Asia is a welcome sign of diversification to many Canadian producers and political leaders. While the shipments represent baby steps in efforts to wean Canada off the almost exclusive dependence on the juggernaut to the south, they are part of a broader move that includes three major pipeline projects. – Bloomberg – March 10, 2017

• "We want to expand our export markets," said James Carr, Canada’s energy minister, in comments at CERAWeek on Wednesday. "Ninety-eight percent of Canadian oil and gas exports go to the United States. We love you! But we want to love others, too.“

CPC/Harper• Signed FIPA deals with China• Established specific policies for LNG• Started the groundwork for more initial trade deals for Energy with Southeast Asia• Pushed for pipeline (KinderMorgan, Keystone, etc)

• KinderMorgan final approval happen under the Liberals• Pipelines can take 3-5 years before approval is granted • East-West Pipeline has not been approved (Ontario and Quebec)