Legislative Finance Committee Ken McQueen, Cabinet Secretary NM - - PowerPoint PPT Presentation

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Legislative Finance Committee Ken McQueen, Cabinet Secretary NM - - PowerPoint PPT Presentation

Feb 07, 2023 111 likes •402 views

Legislative Finance Committee Ken McQueen, Cabinet Secretary NM Energy, Minerals and Natural Resources Department (EMNRD) Farmington, NM July 19, 2017 1 Radical Change in Landscape-Mostly Hz Data Courtesy of Baker Hughes 5% of NM Rigs are

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Ken McQueen, Cabinet Secretary NM Energy, Minerals and Natural Resources Department (EMNRD)

Farmington, NM July 19, 2017

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Legislative Finance Committee

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Radical Change in Landscape-Mostly Hz

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Data Courtesy of Baker Hughes

5% of NM Rigs are Drilling Verticals

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Switched Focus to Drilling for Oil

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Data Courtesy of Baker Hughes

3 No NM Rigs are Drilling for Gas

As of 7/14/2017

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Impact of 2014 Price Collapse on Rig Count

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State 2014 Max 2015 Min % of Rigs Lost 2017 High % of 2015 Min

WY 63 7 89% 25 40% ND 189 22 88% 53 28% NM 103 13 87% 59 57% TX 907 173 81% 466 51% CO 77 15 81% 37 48% OK 215 56 74% 134 62% LA 119 35 71% 67 56% US 1925 404 79% 952 49%

As of 7/14/2017

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Rig Count is a Lagging Indicator

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Rig Count by Basin

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Rig Count by Basin

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Rig Count Becoming Less Reliable Proxy for Predicting Production

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Rig Count is a Lagging Indicator

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New Mexico’s Top Ten Publicly Traded

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Operator 2017 YTD OIL (B0) % of Total 1 Concho 9,759,502 19.0% 2 EOG 7,125,400 13.9% 3 Devon 4,735,531 9.2% 4 OXY 4,443,346 8.7% 5 Mewbourne 3,452,515 6.7% 6 Apache 2,636,624 5.1% 7 Chevron 2,515,428 4.9% 8 Cimarex 2,315,966 4.5% 9 WPX 1,744,760 3.4% 10 ExxonMobil 1,609,229 3.1% 11 Matador 1,585,361 3.1% TOTAL 41,923,662 81.8%

As of 6/23/2017

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Possible Explanations for Valuation Variation

  • Debt
  • International Position
  • Oil-Gas Mix
  • Hedge Position
  • G&A
  • Vertical Integration

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Evolving Technologies & Innovations

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  • Extended Reach Horizontals
  • Multi-Well Pad Drilling
  • Zipper Fracs – More Economical – Better Results-Larger Size
  • Minimizes Surface Disturbance
  • Facility Optimization
  • Top Setting Surface Casing
  • Improved Gas Capture
  • Increased Use of Non-Potable Water Sources
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OCD Regulatory Initiatives

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  • Gas Capture
  • Horizontal Rules
  • Spill Rules
  • Stimulation Reporting (FracFocus)
  • OCD On-line Filing
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Outlookfor Future

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  • Permian Basin is most active in US
  • Major Acquisitions in both SE and NW
  • Natural Gas Prices depressed with Over Supply