through the pipeline - ward petroleumward petroleum—june 2015 . 3 . geological areas where the...

Ward Petroleum—June 2015

1

In this issue:

The Big Picture 1-6

Engineering moved ! 6

Quotes

Recipes

6

Calendar

FYI

7

Around Ward

8

THE BIG PICTURE

Resource Play act iv i ty i n a st ressed Pri ce

Environment

DAVE STONE

VICE PRESIDENT-

EXPLORATION

June 2015

Start by doing what's

necessary; then do what's

possible; and suddenly you

are doing the impossible.

—Francis of Assisi

Through the Pipeline

When looking at the product price environment we have today, questions arise concerning resource plays in

the Continental United States. We have seen the declining rig activity, now down almost 60% from peak num-

bers of approximately 1,800 rigs, so where will be the focus of the drilling activity be in the future? Resource

plays have wide variability and economics, both when comparing the different plays, as well as within the plays

themselves. Close to home, consider the Woodford Shale in the SCOOP play. The economics are significant-

ly superior in the Wet Gas/Condensate play fairway compared to the Oil Window of the play. Well recover-

ies can be almost double in the Wet Gas/Condensate Window, with less than 30% cost uplift. So where your

leasehold is positioned will greatly influence drilling activity, which is what we are seeing today as the active rigs

re-focus to the better economic play areas.

The map below of the Resource plays in the Continental U. S. outlines the geographical boundaries of these

plays. The dark blue shaded areas represent the areas where these plays will likely be condensed. In addition

many of the plays simply are not commercial (as noted by the red NC over those areas), as the costs are simp-

ly either too high, and/or the geology is not conducive for commercial development in this price environment

in even their core areas of development. It will be interesting to look into the future as product prices begin

to improve and well costs continue dropping, as to how some of these plays will resume activity.

N

N

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NC

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N

Continued on Page 2


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Analyzing the data further, one can understand why the plays are contracting to the core areas. The next set of

slides will walk the reader through the technical and economic reasons by geographical area, the where and why

for each of the key plays.

Looking at the Northeastern United States, the location of the largest gas resource play in the US, namely the

Marcellus Shale, has development concerns. Well results have been outstanding in core areas of development,

but infrastructure is limited, and political issues are extremely high as New York and New Jersey have banned

“fracking”. It will be interesting to see what happens in Pennsylvania, mainly the Northeastern area to better

understand future activity. Likewise Eastern Ohio is also having significant political concerns.

Next let’s look at the Southeastern United States. Several of the plays are simply not commercial in today’s

environment, as they are primarily either dry gas plays only, or in

Continued on Page 3


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geological areas where the reservoir is limited to allow for commercial development. For example, the

Haynesville Shale play in East Texas and Northwest Louisiana, is a dry gas play only, with high well costs.

The wells have strong gas production, but a product price of $5.00/MCF is needed for commerciality, as

production that peaked in 2012 at 7.5 BCFPD has dropped to 4 BCFPD. Similar results have happened in

the Fayetteville Shale and Barnett Shale, but not as dramatic.

Looking at Oklahoma and West/South Texas, the Woodford Shale in SCOOP (Oklahoma Anadarko

Basin) has stayed fairly consistent in the Wet Gas/Condensate fairway, while activity for Woodford on

the Anadarko Shelf is coming to a halt, as the oil window reservoir on the Anadarko Shelf is dealing

with poor reservoir conditions resulting in very steep production declines. Even the “US Flagship play

” the Eagle Ford Shale in south Texas is rapidly re-focusing

Continued on Page 4


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The West Texas Permian Basin had been seen as the fastest rising resource play in the Lower Continental United

States before the product price drop, but it also had seen sharp declines in Industry activity. As the “newest”

resource play in the Lower 48, it is unknown how this play will perform as limited full field development has not

yet occurred, namely drilling multiple wells in Drilling and Spacing Units. When considering hydrocarbons in Place,

likely when prices improve, focus of activity will return to the Permian Basin.

Last, looking at the Rockies Basins, the location of one of the largest oil resources plays in the US, namely the

Bakken Play in the Williston Basin of North Dakota and Montana, activity has dropped significantly. The rig count

has dropped from 200 rigs (peak) to under 75 rigs today. One main reason is high price differentials for this oil as

compared to other areas, as large volumes are shipped by train.

The next two slides discuss these play areas.

activity in the over-pressured area within the Wet Gas/Volatile Oil fairway, while significantly limiting

activity in other areas.

Continued on Page 5


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Continued on Page 6


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Perfection is not attaina-

ble, but if we chase per-

fection we can catch

excellence.

—Vince Lombardi

Your work is going to fill

a large part of your life,

and the only way to be

truly satisfied is to do

what you believe is great

work. And the only way

to do great work is to

love what you do. If you

haven't found it yet, keep

looking. Don't settle. As

with all matters of the

heart, you'll know when

you find it.

—Steve Jobs

We can't help everyone,

but everyone can help

someone.

—Ronald Reagan

A successful man is one

who can lay a firm foun-

dation with the bricks

others have thrown at

him.

—David Brinkley

Management is doing

things right; leadership is

doing the right things.

—Peter Drucker

“I fear that we live in an

ahistorical age in which

we believe that we are so

wise that we no longer

need the lessons of the

past, perhaps most dis-

turbingly of all that tech-

nology has put us beyond

the lessons of the past.”

― J. Rufus Fears, Books

That Have Made History:

Books That Can Change

Your Life

QUOTES

Bacon Wrapped Cheese Hot Dogs

Ingredients:

8 hot dogs

1/2 cup shredded cheese

16 slices bacon, pre-cooked

8 hot dog buns, toasted

Directions:

Preheat oven to 450º. Slice each hot dog lengthwise down the middle almost, but not all the way through. Fill the pocket with a little shredded cheese. (I used Shredded Colby Monterey Jack.)

Wrap the hot dog with two slices of thin-sliced, pre-cooked bacon. Secure bacon with toothpicks if necessary. (I used Costco Hormel frozen fully cooked bacon that I thawed in the microwave for about 30 seconds so that it was easier to wrap around the hot dogs.)

Bake approximately 10 minutes until cheese is melted and bacon and hot dog are hot.

Engineering has moved……

….to Bldg 2

New Conference Room— Mark

Jopling, Judy Trook and Wally Gil-

breath listening to a presentation

New Blinds “Mr. Pioneer Telephone” Wendell

making equipment changes

Jody Kuberskey & Lynn Combs

making adjustments to the

bulletin board

Jody Kuberskey moving lots of

boxes

In summary, we are indeed in interesting times, and our industry has prevailed in the past, even as

OPEC attempts to “undermine” our drive to be less dependent on their product. Prices will re-

cover, costs have come down, and Ward is positioned properly in the highest value plays within

our basins of activity. So we will stay diligent to execute properly and effectively, and look for

opportunities to expand in our core areas at reasonable costs.

More to come.

Dave


7

JUNE

BIRTHDAYS

Gary Guest 6-01

Connie Claypole 6-04

Pat Douglass 6-06

John Keeling 6-14

Jordan Revielle 6-14

Rick Tozzi 6-27

Mike Cocheres 6-30

ANNIVERSARIES

Susan Hessel 6-11

14 years

Kevin Smith 6-15

28 years

Melodie Turnbow 6-19

26 years

Ryan Phillips 6-23

1 year

The first American president to support the concept of Father's day was President Calvin Coolidge, who did so in 1924.

It was in the year 1966 that President Lyndon Johnson signed a presidential proclamation that resulted in the declara-tion of the third Sunday of June as Father's Day.

The declaration of 3rd Sunday of June as Father's Day was signed as a law, and made permanent, by President Richard Nixon, in the year 1972.

JULY

BIRTHDAYS

Myra Ward 7-01

Kevin Smith 7-01

Cheryl Holmes 7-04

Carol Ryan 7-19

Lew Ward 7-24

Lynn Combs 7-28

ANNIVERSARIES

Bob McKinnon 7-01-80 35 years

Steven Eckert 7-02-84 31 years

Karen Hurley 7-11-83 32 years

Judy Trook 7-23-07 8 years

Sun Mon Tue Wed Thu Fri Sat

1 2 3 4 5 PD 6

D Day WWII

7 8 9 10 8 Blood

Mobile 12 13

14

Flag Day 15 16 17 18 19 PD 20

21

Father’s Day 22 23 24 25 26 27

28 29 30

June 2015

Sun Mon Tue Wed Thu Fri Sat

1 2 3 PD 4

Independence

Day

5 6 7 8 9 10 11

12 13 14 15 16 17 PD 18

19 20 21 22 23 24 25

26 27 28 29 30 31 PD

July 2015

Ward Picnic will be

July 22nd

RSVP Jody


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We’re on the Web

wardpetroleum.com

Ward Petroleum Corporation

FOREIGN OIL IMPORTS DID NOT MAKE THIS NEWSLETTER POSSIBLE

Around Ward Allie Webb s a Graphic Design student at Autry Technology

Center and the granddaughter of Ward Employee June Webb.

Allie is President of the 2015-16 SkillsUSA Oklahoma State

Officer Team.

"My goal in life is to help other people achieve their goals, as well

as true happiness. I hope I can do this by meeting new people

throughout the state and showing them that they are just as

important and I am. As long as I'm helping people for the rest of

my life, I'm doing something right."

When asked what the 11,987 SkillsUSA Oklahoma membership

number meant to her, she replied..

" This isn't just a number to me. It represents the students as

individuals, coming together for a common objective. It

represents each person stepping out of the comfort zone they've

put themselves in, and making huge improvements for themselves,

no matter how scary it may seem. Each person is so unique and

special, and without them, we wouldn't have anything. We work

to serve those 11,987 people, and we are very humble when

doing so."

Allie Webb, SkillsUSA Oklahoma President,

Enid Office

502 S. Fillmore

Enid, OK 73703

Phone: 580-234-3229

Fax: 580-242-6850

Fort Collins Office

215 W. Oak, Ste 1000

Fort Collins, CO 80521

Phone: 970-449-4632

Fax: 970-449-4637

Oklahoma City Office

14000 Quail Springs Parkway, Ste 3500

Oklahoma City, OK 73134

Phone: 405-242-4484

Fax: 405-242-4334

SkillsUSA Oklahoma is not an

extracurricular activity like a

drama club or a basketball

team. Students are motivated

to excel as they acquire job and

leadership skills; to understand

the democratic process

through their local chapter

work; to work together to

improve school, workplace, and

community; and to earn individ-

ual recognition for both skill

and leadership achievement.

LeaAnn has a New Granddaughter!

Harper Mae Turley

Born 5/7/2015 at 11:46 p.m. at

Mercy Hospital Northwest Arkansas

6.6 lbs

Parents – Jill and Michael Turley (Fayetteville AR)

Grandparents – Lea Ann and Richard Strait

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