unconventionals and the new commercial environment/media/files/insights/events/... ·...
TRANSCRIPT
![Page 1: Unconventionals and the new commercial environment/media/Files/Insights/Events/... · 2017-02-28 · Apache –Alpine High –considerable uncertainly remains about size and future](https://reader034.vdocument.in/reader034/viewer/2022042302/5ecd549c7b8a796bf06b98d4/html5/thumbnails/1.jpg)
Unconventionals and the
new commercial
environment
February 2017
![Page 2: Unconventionals and the new commercial environment/media/Files/Insights/Events/... · 2017-02-28 · Apache –Alpine High –considerable uncertainly remains about size and future](https://reader034.vdocument.in/reader034/viewer/2022042302/5ecd549c7b8a796bf06b98d4/html5/thumbnails/2.jpg)
• About BRG
• North American Unconventionals
– primer
• The Shale Revolution
– Technology and efficiency improvements
– Enablers
– Impact of the Shale Revolution
• The Permian Story
– Apache Alpine High
• Implications
2
Discussion Points
![Page 3: Unconventionals and the new commercial environment/media/Files/Insights/Events/... · 2017-02-28 · Apache –Alpine High –considerable uncertainly remains about size and future](https://reader034.vdocument.in/reader034/viewer/2022042302/5ecd549c7b8a796bf06b98d4/html5/thumbnails/3.jpg)
BRG brings global experience
![Page 4: Unconventionals and the new commercial environment/media/Files/Insights/Events/... · 2017-02-28 · Apache –Alpine High –considerable uncertainly remains about size and future](https://reader034.vdocument.in/reader034/viewer/2022042302/5ecd549c7b8a796bf06b98d4/html5/thumbnails/4.jpg)
• About BRG
• North American Unconventionals
– primer
• The Shale Revolution
– Technology and efficiency improvements
– Enablers
– Impact of the Shale Revolution
• The Permian Story
– Apache Alpine High
• Implications
4
Discussion Points
![Page 5: Unconventionals and the new commercial environment/media/Files/Insights/Events/... · 2017-02-28 · Apache –Alpine High –considerable uncertainly remains about size and future](https://reader034.vdocument.in/reader034/viewer/2022042302/5ecd549c7b8a796bf06b98d4/html5/thumbnails/5.jpg)
The Lower 48 has ~4.2 million wells of all types to
date, so success in unconventional drilling was
enabled in part by data availability
Source: Drilling Information
![Page 6: Unconventionals and the new commercial environment/media/Files/Insights/Events/... · 2017-02-28 · Apache –Alpine High –considerable uncertainly remains about size and future](https://reader034.vdocument.in/reader034/viewer/2022042302/5ecd549c7b8a796bf06b98d4/html5/thumbnails/6.jpg)
These ~ 4.2 million wells provided a wealth of
information about North America’s many gas and
oil/liquids unconventional plays
10
Basins
Gas Plays*
Oil/Liquids Plays*
*A “play” is an area in
which hydrocarbon
accumulations or prospects
of a given type occur.
Source: PacWest Consulting Partners (now IHS Markit)
![Page 7: Unconventionals and the new commercial environment/media/Files/Insights/Events/... · 2017-02-28 · Apache –Alpine High –considerable uncertainly remains about size and future](https://reader034.vdocument.in/reader034/viewer/2022042302/5ecd549c7b8a796bf06b98d4/html5/thumbnails/7.jpg)
Since 2007, there have been 379 thousand wells
drilled (107 thousand horizontal)
7
Other activity enablers included that combined to create intensive, economic drilling:
Favorable industry regulatory environments in key states, coincidence plays with private land
ownership service company and skilled labor availability, industry focus on key value drivers,
unprecedented sharing of learnings by operators, service companies, academics, industry groups, and
other consortiums , presence of existing infrastructure, etc.
Source: DrillingInfo
![Page 8: Unconventionals and the new commercial environment/media/Files/Insights/Events/... · 2017-02-28 · Apache –Alpine High –considerable uncertainly remains about size and future](https://reader034.vdocument.in/reader034/viewer/2022042302/5ecd549c7b8a796bf06b98d4/html5/thumbnails/8.jpg)
In oil and gas friendly Texas there were ~75 billion in
capital expenditures 3 years ago, which drove the “Texas
Miracle” economy
8
Permian Basin5.1 BCFD
1.61 MM BOPD
Eagle Ford5.5 BCFD
1.1 MM BOPD
East Texas3.3 BCFD
57 M BOPD
Barnett5.5 BCFD
3.2 M BOPD
Granite Wash0.43 BCFD
13 M BOPD
Low
High
Mid
:Current
Permitting Activity
Current Rigs
Wells
Source: DrillingInfo
![Page 9: Unconventionals and the new commercial environment/media/Files/Insights/Events/... · 2017-02-28 · Apache –Alpine High –considerable uncertainly remains about size and future](https://reader034.vdocument.in/reader034/viewer/2022042302/5ecd549c7b8a796bf06b98d4/html5/thumbnails/9.jpg)
Eagle Ford drilling activity was a key factor in
driving Texas oil and gas capital expenditures and
production growth
9
Eagle Ford development through 2007 –
6 total wellsEagle Ford development through 2016 YTD
– 17,587 total wells
Source: DrillingInfo
![Page 10: Unconventionals and the new commercial environment/media/Files/Insights/Events/... · 2017-02-28 · Apache –Alpine High –considerable uncertainly remains about size and future](https://reader034.vdocument.in/reader034/viewer/2022042302/5ecd549c7b8a796bf06b98d4/html5/thumbnails/10.jpg)
• About BRG
• North American Unconventionals
– primer
• The Shale Revolution
– Technology and efficiency improvements
– Enablers
– Impact of the Shale Revolution
• The Permian Story
– Apache Alpine High
• Implications
10
Discussion Points
![Page 11: Unconventionals and the new commercial environment/media/Files/Insights/Events/... · 2017-02-28 · Apache –Alpine High –considerable uncertainly remains about size and future](https://reader034.vdocument.in/reader034/viewer/2022042302/5ecd549c7b8a796bf06b98d4/html5/thumbnails/11.jpg)
The Shale “Revolution” had wide ranging impact
and consequences
11
Source: U.S. Energy Information Administration
![Page 12: Unconventionals and the new commercial environment/media/Files/Insights/Events/... · 2017-02-28 · Apache –Alpine High –considerable uncertainly remains about size and future](https://reader034.vdocument.in/reader034/viewer/2022042302/5ecd549c7b8a796bf06b98d4/html5/thumbnails/12.jpg)
It reversed the long term decline in US oil
production
12
Source: U.S. Energy Information Administration, IHS Global Insight, and DrillingInfo
![Page 13: Unconventionals and the new commercial environment/media/Files/Insights/Events/... · 2017-02-28 · Apache –Alpine High –considerable uncertainly remains about size and future](https://reader034.vdocument.in/reader034/viewer/2022042302/5ecd549c7b8a796bf06b98d4/html5/thumbnails/13.jpg)
It continued in the face of North American gas price
collapse as operators moved drilling activities to liquids
rich plays – termed the “shift to liquids”
13
Source: Baker Hughes
![Page 14: Unconventionals and the new commercial environment/media/Files/Insights/Events/... · 2017-02-28 · Apache –Alpine High –considerable uncertainly remains about size and future](https://reader034.vdocument.in/reader034/viewer/2022042302/5ecd549c7b8a796bf06b98d4/html5/thumbnails/14.jpg)
Improving well economics were, and continue to be,
driven by industry focus on key technologies
developments that improve productivity and lower costs
14
Source: str.llnl.gov
• Location information
• Drilling mechanics information
• Formation information
1) Lateral
length2) Well
placement
3) Fracture
density
and size
![Page 15: Unconventionals and the new commercial environment/media/Files/Insights/Events/... · 2017-02-28 · Apache –Alpine High –considerable uncertainly remains about size and future](https://reader034.vdocument.in/reader034/viewer/2022042302/5ecd549c7b8a796bf06b98d4/html5/thumbnails/15.jpg)
What does a 10,000’ horizontal well look like?
15
A typical (in some
plays) unconventional
well drilled to a
formation 10,000’ feet
deep with a lateral
length of 10,000’:
10,000 foot lateral would stretch 40 40 blocks
North (from the base of Central Park to the
playing fields North of the Jackie O’ Reservoir)
The empire state
building is 1,454
feet tall
10,000’ depth would be about
7 times the height of the
Empire state building
![Page 16: Unconventionals and the new commercial environment/media/Files/Insights/Events/... · 2017-02-28 · Apache –Alpine High –considerable uncertainly remains about size and future](https://reader034.vdocument.in/reader034/viewer/2022042302/5ecd549c7b8a796bf06b98d4/html5/thumbnails/16.jpg)
Productivity improvements were driven by
increasing lateral length…
16
Source: Drilling Information
Marcellus wells average perforated interval, feet
2007-2015
CAGR =
16%
Completion year
![Page 17: Unconventionals and the new commercial environment/media/Files/Insights/Events/... · 2017-02-28 · Apache –Alpine High –considerable uncertainly remains about size and future](https://reader034.vdocument.in/reader034/viewer/2022042302/5ecd549c7b8a796bf06b98d4/html5/thumbnails/17.jpg)
And improvements in industry’s ability to place
the well where in the best rock, while drilling
faster and cheaper: MWD and LWD
17
Source: slb.com; haliburton.com; Wikipedia
• Location information – ensures the well can
be drilled to plan and placed where desired
• Drilling
mechanics
information –
maximizes
penetration
rate, avoids
buckling the
drill string
• Formation information – allows the operator to adjust well
placement based on real-time information (faults, fractures, dip)
![Page 18: Unconventionals and the new commercial environment/media/Files/Insights/Events/... · 2017-02-28 · Apache –Alpine High –considerable uncertainly remains about size and future](https://reader034.vdocument.in/reader034/viewer/2022042302/5ecd549c7b8a796bf06b98d4/html5/thumbnails/18.jpg)
This combined with proppant and frac fluid
volume increases and increased number of frac
stages
18
![Page 19: Unconventionals and the new commercial environment/media/Files/Insights/Events/... · 2017-02-28 · Apache –Alpine High –considerable uncertainly remains about size and future](https://reader034.vdocument.in/reader034/viewer/2022042302/5ecd549c7b8a796bf06b98d4/html5/thumbnails/19.jpg)
The newest productivity improvement
advancement is termed “Mega-fracing”
19
“Proppagedon”
• October 2016:
Chesapeake’s
Black 2&11-15-
11 IH well in
the Haynesville
Shale
• The company
used over 50
million
pounds of
sand to frac the
nearly 10,000’
lateral well
![Page 20: Unconventionals and the new commercial environment/media/Files/Insights/Events/... · 2017-02-28 · Apache –Alpine High –considerable uncertainly remains about size and future](https://reader034.vdocument.in/reader034/viewer/2022042302/5ecd549c7b8a796bf06b98d4/html5/thumbnails/20.jpg)
The fracing operation – one part of the value
chain: ~ 2/3’s of well cost
• 2–15+ million gallons
of water
• One large truck for
each 100,000 lb of
sand (~50 to 500
truckloads)
• Proprietary mix of
chemicals
• Compressor chains
to pump fluid and
proppant into
wellbore
Source: BRG Research
![Page 21: Unconventionals and the new commercial environment/media/Files/Insights/Events/... · 2017-02-28 · Apache –Alpine High –considerable uncertainly remains about size and future](https://reader034.vdocument.in/reader034/viewer/2022042302/5ecd549c7b8a796bf06b98d4/html5/thumbnails/21.jpg)
Longer laterals require creative solutions:
dissolvable frac plug technology
21
Source: Brammer Engineering
• Longer laterals complicate the fracture stimulation process
• Drilling out fracture plugs at the toe-end of a 10,000’ lateral is
impossible in some cases
• Plugs that dissolve in a matter of days eliminate this problem –
enabling longer laterals and bigger frac jobs
![Page 22: Unconventionals and the new commercial environment/media/Files/Insights/Events/... · 2017-02-28 · Apache –Alpine High –considerable uncertainly remains about size and future](https://reader034.vdocument.in/reader034/viewer/2022042302/5ecd549c7b8a796bf06b98d4/html5/thumbnails/22.jpg)
Technology has played a huge role – year on year
productivity improvements have been astonishing…
22
Source: BRG analysis
Marcellus average well productivity by well vintage
MCF/D
![Page 23: Unconventionals and the new commercial environment/media/Files/Insights/Events/... · 2017-02-28 · Apache –Alpine High –considerable uncertainly remains about size and future](https://reader034.vdocument.in/reader034/viewer/2022042302/5ecd549c7b8a796bf06b98d4/html5/thumbnails/23.jpg)
…The pace of productivity improvements has not slowed
despite downturn in prices
Best wells
Utica/Marcellus exceed
30 mmcfd (Range,
Rice, Mag Hunter,
others)
Source: Drilling Info; Shale Experts: http://www.shaleexperts.com/articles/Top-IPs-Utica-Shale-Wells_999980406
Average Utica and
Marcellus 2016
investor presentation
well productivity type
curves yield high
IRRs even at today’s
prices
Utica
Marcellus
Marcellus average well productivity by well vintage
MCF/D
![Page 24: Unconventionals and the new commercial environment/media/Files/Insights/Events/... · 2017-02-28 · Apache –Alpine High –considerable uncertainly remains about size and future](https://reader034.vdocument.in/reader034/viewer/2022042302/5ecd549c7b8a796bf06b98d4/html5/thumbnails/24.jpg)
Drilling efficiency improvements also contributed
significantly to unconventional production
24
Rig productivity
improves from
17.5 to 43 wells
per year
Source: EOG Investor Presentation
![Page 25: Unconventionals and the new commercial environment/media/Files/Insights/Events/... · 2017-02-28 · Apache –Alpine High –considerable uncertainly remains about size and future](https://reader034.vdocument.in/reader034/viewer/2022042302/5ecd549c7b8a796bf06b98d4/html5/thumbnails/25.jpg)
Increased North American Rotary Rig Count combined
with increased drilling efficiency are key drivers of the
shale revolution
25
0
200
400
600
800
1,000
1,200
1,400
1,600
North American Totary Rig Count
Horizontal Directional Vertical
Shale Revolution
Source: Baker Hughes Rig Count
![Page 26: Unconventionals and the new commercial environment/media/Files/Insights/Events/... · 2017-02-28 · Apache –Alpine High –considerable uncertainly remains about size and future](https://reader034.vdocument.in/reader034/viewer/2022042302/5ecd549c7b8a796bf06b98d4/html5/thumbnails/26.jpg)
These factors all combined to drive steep
increases in play production
26
Example taken from the Eagle FordSource: EIA, Trends in US Oil and Natural Gas Upstream Costs, 3/2016
![Page 27: Unconventionals and the new commercial environment/media/Files/Insights/Events/... · 2017-02-28 · Apache –Alpine High –considerable uncertainly remains about size and future](https://reader034.vdocument.in/reader034/viewer/2022042302/5ecd549c7b8a796bf06b98d4/html5/thumbnails/27.jpg)
Technology improvements, coupled with the recent
uptick in oil prices have brought investors back
27
Technology
improvements
have enabled
some drillers to
achieve better
economics at
$50/bbl today,
than they saw
when oil was
$100/bbl
Source: Oxford Economics/Haver Analytics
![Page 28: Unconventionals and the new commercial environment/media/Files/Insights/Events/... · 2017-02-28 · Apache –Alpine High –considerable uncertainly remains about size and future](https://reader034.vdocument.in/reader034/viewer/2022042302/5ecd549c7b8a796bf06b98d4/html5/thumbnails/28.jpg)
The beginning of the next boom?
28
• These improved well economics are facilitating increased investment
• And, increasing investment is bringing back drilling activity, and
driving a rapid turn-around in U.S. oil production
Source: Wall Street Journal, The Daily Shot
![Page 29: Unconventionals and the new commercial environment/media/Files/Insights/Events/... · 2017-02-28 · Apache –Alpine High –considerable uncertainly remains about size and future](https://reader034.vdocument.in/reader034/viewer/2022042302/5ecd549c7b8a796bf06b98d4/html5/thumbnails/29.jpg)
There are several enablers of the “Revolution”
that are worth mentioning
• Adoption of the manufacturing mindset by operators
• Sharing of learnings by operators, service companies, academics, industry
groups, and other consortiums
– Across plays
– Between plays
• Infusion of capital as investors such as pension funds sought returns
• Coincidence of shale plays with private lands
• Not everyone wins
29
![Page 30: Unconventionals and the new commercial environment/media/Files/Insights/Events/... · 2017-02-28 · Apache –Alpine High –considerable uncertainly remains about size and future](https://reader034.vdocument.in/reader034/viewer/2022042302/5ecd549c7b8a796bf06b98d4/html5/thumbnails/30.jpg)
An era of cheap money sends investors to oil and gas
30
Source: https://fred.stlouisfed.org/series/FEDFUNDS
Effective Federal Funds Rate, percent
0
1
2
3
4
5
6
7
![Page 31: Unconventionals and the new commercial environment/media/Files/Insights/Events/... · 2017-02-28 · Apache –Alpine High –considerable uncertainly remains about size and future](https://reader034.vdocument.in/reader034/viewer/2022042302/5ecd549c7b8a796bf06b98d4/html5/thumbnails/31.jpg)
Energy Focused PE Firms – $133 Billion
31
Source: TPH, Money Book, 3/15
![Page 32: Unconventionals and the new commercial environment/media/Files/Insights/Events/... · 2017-02-28 · Apache –Alpine High –considerable uncertainly remains about size and future](https://reader034.vdocument.in/reader034/viewer/2022042302/5ecd549c7b8a796bf06b98d4/html5/thumbnails/32.jpg)
Most unconventional plays are located on
accessible private land, not federal lands
32
US Gas and Oil Shale Plays
Overlap area of shale plays
and Federal Lands
US Federal Lands (excl. BIA)
Source: Adam Sieminski, Testimony of the Energy Information Administration, U.S. House, Subcommittee on
Energy and Power Committee on Energy and Commerce, 2 August 2012
![Page 33: Unconventionals and the new commercial environment/media/Files/Insights/Events/... · 2017-02-28 · Apache –Alpine High –considerable uncertainly remains about size and future](https://reader034.vdocument.in/reader034/viewer/2022042302/5ecd549c7b8a796bf06b98d4/html5/thumbnails/33.jpg)
Some companies stumbled: One prime example is the
Sumitomo JV buy in to Devon’s Permian Basin assets
– Cline Shale/ Wolfcamp/ Mississippian
33
2014 active rigs and permitting heat map as of December 2014
Cline
Shale
Sumitomo /
Devon acreage
Bone Spring
Delaware
Wolfcamp/
Leonard
Wolffork
Source: Drilling Information; Internet research investor presentations
![Page 34: Unconventionals and the new commercial environment/media/Files/Insights/Events/... · 2017-02-28 · Apache –Alpine High –considerable uncertainly remains about size and future](https://reader034.vdocument.in/reader034/viewer/2022042302/5ecd549c7b8a796bf06b98d4/html5/thumbnails/34.jpg)
Impact of the shale revolution
• Pipeline reversals
– Seaway Cushing
– Multiple Texas pipes that originally flowed N-S
• Use of Rail to transport oil in mid-continent
– 600,000 bbls per day
• OPEC actions
• Lifting of crude export ban
• Complete reversal of projection that US needed to import gas to satisfy
increasing demand
– Import and regasification to LNG exports
– Perception of long term supply of cheap natural gas
– Structural damage to coal industry as gas supplants coal as cheap, clean
fuel source for power
34
![Page 35: Unconventionals and the new commercial environment/media/Files/Insights/Events/... · 2017-02-28 · Apache –Alpine High –considerable uncertainly remains about size and future](https://reader034.vdocument.in/reader034/viewer/2022042302/5ecd549c7b8a796bf06b98d4/html5/thumbnails/35.jpg)
Pipeline reversals and use of rail
35
Seaway
Pipeline
Source: RBN Energy
![Page 36: Unconventionals and the new commercial environment/media/Files/Insights/Events/... · 2017-02-28 · Apache –Alpine High –considerable uncertainly remains about size and future](https://reader034.vdocument.in/reader034/viewer/2022042302/5ecd549c7b8a796bf06b98d4/html5/thumbnails/36.jpg)
Pipeline Reversals and use of rail
36
Actual and estimates in 2010 Estimates in August 2016
Source: North Dakota Industrial Commission Oil and Gas Division
![Page 37: Unconventionals and the new commercial environment/media/Files/Insights/Events/... · 2017-02-28 · Apache –Alpine High –considerable uncertainly remains about size and future](https://reader034.vdocument.in/reader034/viewer/2022042302/5ecd549c7b8a796bf06b98d4/html5/thumbnails/37.jpg)
OPEC quota reliability is questionable
37Source: WSJ, The Daily Shot
OPEC consistently misses their quota… …Different this time?
Will shale fill the
curtailment as
prices rise?
![Page 38: Unconventionals and the new commercial environment/media/Files/Insights/Events/... · 2017-02-28 · Apache –Alpine High –considerable uncertainly remains about size and future](https://reader034.vdocument.in/reader034/viewer/2022042302/5ecd549c7b8a796bf06b98d4/html5/thumbnails/38.jpg)
The 40+ year old ban on exporting crude from the
U.S. is lifted.
38
12/2015: “Congressional
Leaders Agree to Lift 40-Year
Ban on Oil Exports” – WSJ
Tight oil production
Millions of barrels per day
7/2013: “The Case
for Allowing U.S.
Crude Oil Exports”
– Council on
Foreign Relations
3/2011 “Can We
Do Without the
Mideast” – New
York Times
12/1975: President
Ford signs into law
the Energy Policy
and Conservation
Act, banning export
of crude oil
9/2008: “Can
Offshore Drilling
Really Make the
U.S. Oil
Independent?” –
Scientific
American
2007: Congress
passes the Energy
Independence and
Security Act – The
White House
6/2015: “America’s
Self-Punishing Oil
Export Ban” – WSJ
Source: EIA, BRG Research
![Page 39: Unconventionals and the new commercial environment/media/Files/Insights/Events/... · 2017-02-28 · Apache –Alpine High –considerable uncertainly remains about size and future](https://reader034.vdocument.in/reader034/viewer/2022042302/5ecd549c7b8a796bf06b98d4/html5/thumbnails/39.jpg)
Shale gas production: from importing to exporting LNG
39
Source: EIA
![Page 40: Unconventionals and the new commercial environment/media/Files/Insights/Events/... · 2017-02-28 · Apache –Alpine High –considerable uncertainly remains about size and future](https://reader034.vdocument.in/reader034/viewer/2022042302/5ecd549c7b8a796bf06b98d4/html5/thumbnails/40.jpg)
• About BRG
• North American Unconventionals
– primer
• The Shale Revolution
– Technology and efficiency improvements
– Enablers
– Impact of the Shale Revolution
• The Permian Story
– Apache Alpine High
• Implications
40
Discussion Points
![Page 41: Unconventionals and the new commercial environment/media/Files/Insights/Events/... · 2017-02-28 · Apache –Alpine High –considerable uncertainly remains about size and future](https://reader034.vdocument.in/reader034/viewer/2022042302/5ecd549c7b8a796bf06b98d4/html5/thumbnails/41.jpg)
Even though activity has slowed, the Permian Basin is
still the hottest area today for drilling and land
investment activity
Source: DrillingInfo
Rig
Structure contour
Wells
El Capitan
![Page 42: Unconventionals and the new commercial environment/media/Files/Insights/Events/... · 2017-02-28 · Apache –Alpine High –considerable uncertainly remains about size and future](https://reader034.vdocument.in/reader034/viewer/2022042302/5ecd549c7b8a796bf06b98d4/html5/thumbnails/42.jpg)
El Capitan is the best outcrop of the Permian reef
complex that rimmed the Delaware basin
42
Capitan Reef
Capitan Reef
A view of the Permian aged Capitan reef looking up the
from the basin floor
Brushy Canyon
Channel (500+ ft.)
![Page 43: Unconventionals and the new commercial environment/media/Files/Insights/Events/... · 2017-02-28 · Apache –Alpine High –considerable uncertainly remains about size and future](https://reader034.vdocument.in/reader034/viewer/2022042302/5ecd549c7b8a796bf06b98d4/html5/thumbnails/43.jpg)
Mega-frac techniques generating sub $30
breakeven wells in the Midland Basin
43Source: Pioneer Natural Resources Analyst Presentation and Financial Times
![Page 44: Unconventionals and the new commercial environment/media/Files/Insights/Events/... · 2017-02-28 · Apache –Alpine High –considerable uncertainly remains about size and future](https://reader034.vdocument.in/reader034/viewer/2022042302/5ecd549c7b8a796bf06b98d4/html5/thumbnails/44.jpg)
Astoundingly, Permian has only produced 20% of
expected total production
44Source: Pioneer 2016 Investor presentation
![Page 45: Unconventionals and the new commercial environment/media/Files/Insights/Events/... · 2017-02-28 · Apache –Alpine High –considerable uncertainly remains about size and future](https://reader034.vdocument.in/reader034/viewer/2022042302/5ecd549c7b8a796bf06b98d4/html5/thumbnails/45.jpg)
Even though activity has slowed, the Permian Basin is
still the hottest area today for drilling and land
investment activity
Source: Drilling Information
Rig
Structure contour
Wells
El Capitan
Alpine High
![Page 46: Unconventionals and the new commercial environment/media/Files/Insights/Events/... · 2017-02-28 · Apache –Alpine High –considerable uncertainly remains about size and future](https://reader034.vdocument.in/reader034/viewer/2022042302/5ecd549c7b8a796bf06b98d4/html5/thumbnails/46.jpg)
The recently announced Apache Alpine High discovery is
near Fort Davis, MacDonald Observatory and Balmorhea
Springs
Rig
Structure contour
Wells
Alpine High
X
X’
Source: Drilling Information
![Page 47: Unconventionals and the new commercial environment/media/Files/Insights/Events/... · 2017-02-28 · Apache –Alpine High –considerable uncertainly remains about size and future](https://reader034.vdocument.in/reader034/viewer/2022042302/5ecd549c7b8a796bf06b98d4/html5/thumbnails/47.jpg)
Apache – Alpine High – considerable uncertainly
remains about size and future production
volumes
47
X X’
Source: Apache Investor Presentation, IHS Market; 9/27/16, FuelFix 2/14/17
We note that the
Alpine High
discovery is in an
area that has
been described
as “historically
underperforming”,
with recent
drilling results
termed
“disappointing” as
initial production
in new wells is
was not as strong
as in earlier
Alpine wells.
![Page 48: Unconventionals and the new commercial environment/media/Files/Insights/Events/... · 2017-02-28 · Apache –Alpine High –considerable uncertainly remains about size and future](https://reader034.vdocument.in/reader034/viewer/2022042302/5ecd549c7b8a796bf06b98d4/html5/thumbnails/48.jpg)
• About BRG
• North American Unconventionals
– primer
• The Shale Revolution
– Technology and efficiency improvements
– Enablers
– Impact of the Shale Revolution
• The Permian Story
– Apache Alpine High
• Implications
48
Discussion Points
![Page 49: Unconventionals and the new commercial environment/media/Files/Insights/Events/... · 2017-02-28 · Apache –Alpine High –considerable uncertainly remains about size and future](https://reader034.vdocument.in/reader034/viewer/2022042302/5ecd549c7b8a796bf06b98d4/html5/thumbnails/49.jpg)
Things we have not touched upon
• Environmental issues
– What about earth quakes in Oklahoma?
– Groundwater contamination?
– Will water needs be an issue?
• Political impact
– Impact of Trump administration on fracing?
– Why does New York ban fracing, what is the economic impact, how
does it compare to Pennsylvania?
– What about fracing within city limits?
• Business and commercial issues
– Emerging plays?
– Who are the best operators?
– Economics (micro and macro)?
• How do the DINOSAURS fit in?
49
![Page 50: Unconventionals and the new commercial environment/media/Files/Insights/Events/... · 2017-02-28 · Apache –Alpine High –considerable uncertainly remains about size and future](https://reader034.vdocument.in/reader034/viewer/2022042302/5ecd549c7b8a796bf06b98d4/html5/thumbnails/50.jpg)
Camarasaurus – Shell Wyoming
50Sources : Bob Simon – Dinosaur Safaris and Fukui Prefectural Dinosaur Museum (https://www.dinosaur.pref.fukui.jp/en/dic/Camarasaurus.html)
Shell Wyoming Camarasaurus is currently on display
at Fukui Prefectural Dinosaur Museum in Japan: