Can Politics Help the Permian Basin in 2019? September 20 th - - PowerPoint PPT Presentation
Can Politics Help the Permian Basin in 2019? September 20 th Petroleum Club of Midland January 31, 2019 Petroleum Club of Midland Who is the PBPA The Voice of the Permian Basin Our Mission To advocate for safe and responsible oil
January 31, 2019 Petroleum Club of Midland
September 20th Petroleum Club of Midland
Our Mission… To advocate for safe and responsible oil and gas development and to provide education on safety, legislation, regulation, and support services for the industry.
Midland, Texas Austin, Texas Santa Fe, New Mexico
As of last week, there were 492 rigs operating the Permian Basin of West
Texas and Southeast New Mexico.
46% of all rigs in the United States 73% of all rigs in Texas 97% of all rigs in New Mexico Through 2017, just in Texas 30 billion barrels of crude 75 trillion cubic feet of natural gas
Santa Rita #1
1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 3,500,000 4,000,000
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
BOE/Day
Oil & Natural Gas
Crude Oil Data from U.S. EIA Natural Gas Equivalent
2018 was another outperforming year for U.S. shale oil production,
but 2019 faces much more challenges:
The Q4 1
18 oil price decrease has been a a game-cha hange ger r for small- and mid- sized companies: es: completion activity is down more than 20%, while the rigs count was
stable until recently. Halliburton highlighted last week a modest improvement in completion activity in Q1 19.
Bottle
tlene neck ck issues are still l present and, even i if the risks decreased sed, they will l limit the produc ucti tion
ntial l until autumn 2019.
Midland WTI is trading at the smallest discount to benchmark Nymex crude futures since March 2018. WTI Midland +$1.30/bbl. to $2.25 under WTI at Cushing. Port capacity is the next bottleneck by 2021.
La
Last, but n not least, t, with 2018 as a bi big vi vintage on produc ucti tion
h, so will l the depleti tion
in 2 2019: More than two thirds of capex allocated to shale would
be used to offset the production decline in our view. Capex increases for Big Oils and decreases for others.
For FY 2019 – FY 2028 Abilene $538 million El Paso $612 million Lubbock $718 million Odessa $1.1 billion San Angelo $486 million
Total planned investments equals
50 100 150 200 250 300 350 400 450 2010 2011 2012 2013 2014 2015 2016 2017 Fatalities
Reportable Motor Vehicle Traffic Fatalities in Energy Sector Regions
Eagle Ford Shale Permian Basin
The Permian Basin contains 2% of Texas’ population but has 10% of the state’s traffic fatalities.
Crude Gas NGL
2017 Texas Legislature
6,499 bills were filled before deadline
Tracked over 400 bills, focused on 123
RRC Sunset and Funding 2017 New Mexico Legislature
507 bills passed by legislature
No bills were passed directly impacting O&G
Railroad Commission Budget New State Road Projects and Funding COL Increase for RRC, TxDOT & DPS Employees Physician Education Loan Repayment Program Family Medicine Residency Program Eminent Domain School Finance
Railroad Commission Budget
House & Senate both Cut RRC request
New State Road Projects and Funding
HB 42 – White – Severance Tax Allocation
COL Increase for TxDOT & DPS Employees
HB 917 – Craddick – Truck Safety
Physician Education Loan Repayment Program Family Medicine Residency Program Eminent Domain
HB 991 & SB 421 (companion bills)
Taxes and Revenues
Property Taxes
Around 100 property tax bills introduced so far 1/3 deal with exemptions Tax rate transparency and the creation of real-time tax notices Reduction in roll back rates
School Finance
Stated to be a priority by the Governor, Lt. Governor, and Speaker of the
House
House budget – adds $7 billion (no earmarks) Senate budget – adds $4.3 billion (with earmarks) HB 569 – Capriglione – School Finance HB 665 – K. King – School Finance Still awaiting bill containing recommendations from the School Finance
Commission final report
Sales Tax Franchise Tax
Stem the bleeding. All statewide office holders, and the majority in both the House and the Senate are of the same party.
HB 6 – Tax Changes HB 17 – Water Leases & Use of Leased Water Road Funding
HB 188 – Motor Vehicle Excise Tax to State Road Funds HB 189 – State Road Fund HB 201 – County Road Fund Tax Refund Donation
HB 206 – Environm
ronmental ental Review ew Act
HB 213 – Paid Family and Medical Leave Act Renewable Energy
HB 283 – Increase Renewable Portfolio Standards HB 289 – Fund Investment in Renewable Energy HB 291 – Renewable Use of Energy Act Changes
SB 186 – Oil Conserv
ervati tion
wers & Dut uties
January 31st Petroleum Club of Midland