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US Shale Oil: The road to recovery? T R I S H A C U R T I S P R E - PowerPoint PPT Presentation

Nov 20, 2023 •375 likes •577 views

US Shale Oil: The road to recovery? T R I S H A C U R T I S P R E S I D E N T / C E O A N D C O - F O U N D E R E P R I N C A L U M A N D D I S T I N G U I S H E D F E L L O W T R I S H A @ P E T R O N E R D S . C O M J U L Y 7 ,

  1. US Shale Oil: The road to recovery? T R I S H A C U R T I S – P R E S I D E N T / C E O A N D C O - F O U N D E R E P R I N C – A L U M A N D D I S T I N G U I S H E D F E L L O W T R I S H A @ P E T R O N E R D S . C O M J U L Y 7 , 2 0 2 0 1 PETRONERDS LLC | WWW.PETRONERDS.COM | 970-329-1645

  2. Changing Dynamics in the Oil Market $160 Jan 2011 to Dec 2014 WTI - $95 $140 Brent - $108 $120 Jan 2015 to Feb 2020 WTI - $53 $100 $ Per Barrel Brent - $57 $80 $60 $40 $20 $- Jan-08 Aug-08 Mar-09 Oct-09 May-10 Dec-10 Jul-11 Feb-12 Sep-12 Apr-13 Nov-13 Jun-14 Jan-15 Aug-15 Mar-16 Oct-16 May-17 Dec-17 Jul-18 Feb-19 Sep-19 Apr-20 Europe Brent Spot Price FOB $/bbl Cushing OK WTI Spot Price FOB $/bbl March 2020 to June 2020 WTI - $28 Source: EIA Brent $30 2 PETRONERDS LLC | WWW.PETRONERDS.COM | 970-329-1645

  3. US Production Declines 700,000 b/d 700,000 b/d decline 14,000 $160 from March to April $140 12,000 $120 Thousand Barrels Per Day 10,000 $100 $ Per Barrel 8,000 $80 6,000 $60 4,000 $40 2,000 $20 - $- Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18 Jul-18 Oct-18 Jan-19 Apr-19 Jul-19 Oct-19 Jan-20 Apr-20 Federal Offshore - Gulf of Mexico New Mexico Texas Colorado California Oklahoma Wyoming North Dakota Alaska U.S. Field Production Cushing OK WTI Spot Price FOB $/bbl Source: EIA 3 PETRONERDS LLC | WWW.PETRONERDS.COM | 970-329-1645

  4. From Covid to Climate Investors have a critical role to play. All investments made today must factor in long-term climate and societal implications. Indeed, the shift to a zero-carbon, inclusive business model is already well under way…. We need to invest in them with the same sense of urgency that people have demanded in mitigating the pandemic. There is an obvious, if uncomfortable, parallel between our still inadequate responses to the tragic suffering of Covid-19 and to the fast- growing consequences of the climate crisis. We ignored the warnings of respected epidemiologists and virologists about the likelihood of a deadly pandemic such as the one we are now struggling to vanquish. Similarly, climate scientists have warned us with ever greater urgency about the consequences of the climate crisis. 4 PETRONERDS LLC | WWW.PETRONERDS.COM | 970-329-1645

  5. Combined Free Cash Flow, Production, and CAPEX 5 PETRONERDS LLC | WWW.PETRONERDS.COM | 970-329-1645

  6. Operators Shift Gears in Response to Crisis 6 PETRONERDS LLC | WWW.PETRONERDS.COM | 970-329-1645

  7. Source: PetroNerds, Enervus/DrillingInfo Permian Basin Production BARRELS PER DAY 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 - 1/1/2008 5/1/2008 9/1/2008 1/1/2009 5/1/2009 9/1/2009 1/1/2010 5/1/2010 9/1/2010 1/1/2011 Total Liquid PETRONERDS LLC | WWW.PETRONERDS.COM | 970-329-1645 5/1/2011 9/1/2011 1/1/2012 5/1/2012 9/1/2012 Vertical Liquid 1/1/2013 5/1/2013 9/1/2013 1/1/2014 5/1/2014 9/1/2014 Horizontal Liquid 1/1/2015 5/1/2015 9/1/2015 1/1/2016 5/1/2016 9/1/2016 1/1/2017 5/1/2017 9/1/2017 1/1/2018 5/1/2018 9/1/2018 1/1/2019 5/1/2019 9/1/2019 1/1/2020 7

  8. Shale Production by Play 6,000,000 10,000,000 9,000,000 5,000,000 8,000,000 7,000,000 BARRELS PER DAY Barrels Per Day 4,000,000 6,000,000 5,000,000 3,000,000 4,000,000 2,000,000 3,000,000 2,000,000 1,000,000 1,000,000 - - 1/1/2000 6/1/2001 11/1/2002 4/1/2004 9/1/2005 2/1/2007 7/1/2008 12/1/2009 5/1/2011 10/1/2012 3/1/2014 8/1/2015 1/1/2017 6/1/2018 11/1/2019 1/1/2000 5/1/2001 9/1/2002 1/1/2004 5/1/2005 9/1/2006 1/1/2008 5/1/2009 9/1/2010 1/1/2012 5/1/2013 9/1/2014 1/1/2016 5/1/2017 9/1/2018 1/1/2020 Permian Liquid Williston Liquid Eagle Ford Liquid Permian Liquid Williston Liquid Eagle Ford Liquid DJ Liquid Anadarko Liquid Powder Liquid DJ Liquid Anadarko Liquid Powder Liquid Source: PetroNerds, Enervus/DrillingInfo 8 PETRONERDS LLC | WWW.PETRONERDS.COM | 970-329-1645

  9. US Oil Rig Count 2011 Onward 2019 Onward 1,800 $120 1,000 $70 900 1,600 $60 $100 800 1,400 $50 700 1,200 $80 $ Per Barrel 600 $ Per Barrel # of Rigs $40 # of Rigs 1,000 500 $60 $30 800 400 600 $40 300 $20 200 400 $10 $20 100 200 - $- - $- 1/4/2019 2/4/2019 3/4/2019 4/4/2019 5/4/2019 6/4/2019 7/4/2019 8/4/2019 9/4/2019 10/4/2019 11/4/2019 12/4/2019 1/4/2020 2/4/2020 3/4/2020 4/4/2020 5/4/2020 6/4/2020 DJ Oil Eagle Ford Oil DJ Oil Eagle Ford Oil Permian Oil Williston Oil Permian Oil Williston Oil Total Oil Cushing OK WTI Spot Price FOB $/bbl Total Oil Cushing OK WTI Spot Price FOB $/bbl Source: Baker Hughes, EIA 9 PETRONERDS LLC | WWW.PETRONERDS.COM | 970-329-1645

  10. Historical Rig Count by Basin 1400 1200 1000 800 600 400 200 0 Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec Feb Apr Jun 2014 2014 2014 2014 2015 2015 2015 2015 2015 2015 2016 2016 2016 2016 2016 2016 2017 2017 2017 2017 2017 2017 2018 2018 2018 2018 2018 2018 2019 2019 2019 2019 2019 2019 2020 2020 2020 ANADARKO CENTRAL BASIN PLATFORM DELAWARE MIDLAND DENVER-JULESBURG GULF COAST WEST POWDER RIVER WILLISTON Source: PetroNerds, Enervus/DrillingInfo 10 PETRONERDS LLC | WWW.PETRONERDS.COM | 970-329-1645

  11. Monthly Well Additions 400 400 Source: PetroNerds, Enervus/DrillingInfo 11 PETRONERDS LLC | WWW.PETRONERDS.COM | 970-329-1645

  12. Where Could Production Go? Stacked Play - Decline Stacked Play – Well Count to Zero 8,000,000 8,000,000 7,000,000 7,000,000 6,000,000 6,000,000 5,000,000 5,000,000 Barrels Per Day Barrels Per Day 4,000,000 4,000,000 3,000,000 3,000,000 2,000,000 2,000,000 1,000,000 1,000,000 - - Nov-09 May-10 Nov-10 May-11 Nov-11 May-12 Nov-12 May-13 Nov-13 May-14 Nov-14 May-15 Nov-15 May-16 Nov-16 May-17 Nov-17 May-18 Nov-18 May-19 Nov-19 May-20 Nov-20 May-21 Nov-21 May-22 Nov-09 May-10 Nov-10 May-11 Nov-11 May-12 Nov-12 May-13 Nov-13 May-14 Nov-14 May-15 Nov-15 May-16 Nov-16 May-17 Nov-17 May-18 Nov-18 May-19 Nov-19 May-20 Nov-20 May-21 Nov-21 May-22 Bakken Decline Forecast - 40 Wells/Month and 9,800 FT Lateral Length Permian Historical Production Permian 0 Wells/Month Bakken Historical Production Eagle Ford Decline Forecast - 50 Wells/Month and 7,000 FT Lateral Length Eagle Ford Historical Production Eagle Ford 0 Wells/Month Eagle Ford Historical Production Bakken Historical Production Bakken 0 Wells/Month Permian Decline Forecast - 200 Wells/Month at 8,000 FT Lateral Length Source: PetroNerds, DrillingInfo/Enervus, EIA Permian Historical Production 12 PETRONERDS LLC | WWW.PETRONERDS.COM | 970-329-1645

  13. Productivity Source: PetroNerds, Enervus/DrillingInfo 13 PETRONERDS LLC | WWW.PETRONERDS.COM | 970-329-1645

  14. Permian Basin Drilled but Uncompleted Wells (DUCs) Permian DUCs 4,000 250 200 3,500 DRILLIED/COMPLETED DUCS 150 3,000 100 2,500 TOTAL DUCS 50 2,000 0 1,500 -50 1,000 -100 500 -150 0 -200 DRILLED BUT UNCOMPLETED COMPLETED TOTAL DUCs Source: PetroNerds, Enervus/DrillingInfo 14 PETRONERDS LLC | WWW.PETRONERDS.COM | 970-329-1645

  15. US Weekly Product Supplied/Demand 25,000 $80 $70 Thousand Barrels Per Day 20,000 $60 $50 $ Per Barrel 15,000 $40 10,000 $30 $20 5,000 $10 - $- 1/5/2018 2/5/2018 3/5/2018 4/5/2018 5/5/2018 6/5/2018 7/5/2018 8/5/2018 9/5/2018 10/5/2018 11/5/2018 12/5/2018 1/5/2019 2/5/2019 3/5/2019 4/5/2019 5/5/2019 6/5/2019 7/5/2019 8/5/2019 9/5/2019 10/5/2019 11/5/2019 12/5/2019 1/5/2020 2/5/2020 3/5/2020 4/5/2020 5/5/2020 6/5/2020 U.S. Product Supplied of Petroleum Products Distillate Fuel Oil Residual Fuel Oil Propane and Propylene Finished Motor Gasoline Kerosene-Type Jet Fuel Other Oils Cushing OK WTI Spot Price FOB $/bbl 15 PETRONERDS LLC | WWW.PETRONERDS.COM | 970-329-1645

  16. Global Oil Demand, GDP Growth, and Unemployment 1.4 mbd demand drop in 2008. Recession did not World Oil Consumption, World GDP Per Capita Growth, and World Unemployment end until 2010 when 10 120,000 East Asian crisis - employment began 6 mbd demand little to no fall in recovering 8 % - GDP, Oil Demand % Change, Unemployment 100,000 decline after two demand 6 major price shocks Thousand Barrels Per Day 80,000 4 2 60,000 0 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 40,000 -2 20,000 -4 -6 - World - GDP per capita growth (annual %) (World Bank) World - Unemployment, total (% of total labor force) (modeled ILO estimate) (World Bank) World Oil Demand - YoY % Change Total World Oil Concumption Thousand b/d (BP) 16 PETRONERDS LLC | WWW.PETRONERDS.COM | 970-329-1645

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