Workshop Jackson M. Sandeen Research Analyst Deepwater Gulf of - - PowerPoint PPT Presentation

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Workshop Jackson M. Sandeen Research Analyst Deepwater Gulf of - - PowerPoint PPT Presentation

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2014 OCS Advisory Board Workshop Jackson M. Sandeen Research Analyst Deepwater Gulf of Mexico The Woodlands, TX 23 January 2014 Trusted commercial intelligence www.woodmac.com Wood Mackenzie We are a global leader in commercial

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2014 OCS Advisory Board Workshop

Jackson M. Sandeen

Research Analyst – Deepwater Gulf of Mexico

The Woodlands, TX 23 January 2014

Trusted commercial intelligence

www.woodmac.com

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Wood Mackenzie

 We are a global leader in commercial intelligence for the

energy, metals and mining industries

 We use a foundation of robust proprietary data and

models to analyse, value and advise on assets, companies and markets.

 We have been a trusted source of knowledge for over 40

years and now employ over 950 professionals in 25

  • ffices around the world

 Our clients include all the major energy, metals and

mining companies, as well as governments, investment banks and institutional investors

 Our insight helps our clients to identify new

  • pportunities, define strategy and improve their

performance

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These slides have been prepared using the following Wood Mackenzie products:

Upstream Service

Forward-looking commercial analysis at the country and asset level from our regional experts.

Contains 120+ country reports, 3,000+ asset reports.

Covers exploration, development, production, transportation, fiscal and regulatory framework. Upstream Data Tool

Global E&P database and mapping tool containing over 700 commercial and technical attributes for: » 150 countries » 140,000 wells » 67,000 blocks » 30,000 fields Wood Mackenzie portal: http://portal.woodmac.com/web/woodmac/home-page For a copy of the entire presentation or additional information on Wood Mackenzie, please contact Felecia Williams via email (felecia.williams@woodmac.com) or telephone (713-470-1692).

Wood Mackenzie Upstream Research

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Agenda

  • 1. Deepwater GoM rig market then and now
  • 2. Gulf production leaders and key areas of growth
  • 3. Production profile and capex forecast by play-type
  • 4. Key emerging plays
  • 5. Global rig supply and demand
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Several operators experienced a rig crunch in mid-2012

 Inadequate rig positions and inequitable distribution  Lack of available rig slots and elevated day rates  Increased global competition particularly within the Golden Triangle  Permitting delays impacted smaller independents’ contracting strategy

By 2014, the deepwater GoM rig market has loosened up

 Operators turned to the newbuild market  Rig contract extensions improved rig positions  Rig sharing between operators continues  Rig fleet has been high-graded in terms of specifications

Deepwater GoM rig market then and now

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Agenda

  • 1. Deepwater GoM rig market then and now
  • 2. Gulf production leaders and key areas of growth
  • 3. Production profile and capex forecast by play-type
  • 4. Key emerging plays
  • 5. Global rig supply and demand
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Future growth lies predominantly in the frontier protraction areas of Keathley Canyon and Walker Ridge

Protraction Area Production (‘000 boed) 2014 2020 CAGR % 96 84 40 80 120 160

Alaminos Canyon

28 5 40 80 120 East Breaks

Keathley Canyon

57 341 120 240 360 480

Walker Ridge

51 23 40 80

Atwater Valley

526 538 200 400 600 800

Green Canyon

158 46 40 80 120 160

Garden Banks

498 573 200 400 600 800

Mississippi Canyon

  • 2%
  • 25%
  • 19%

58% 0.4% 35% 2%

  • 12%

14 218 80 160 240 28 42 40 80

Desoto Canyon

7%

Source: Wood Mackenzie Upstream Data Tool (UDT)

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Agenda

  • 1. Deepwater GoM rig market then and now
  • 2. Gulf production leaders and key areas of growth
  • 3. Capex forecast and production profile by play-type
  • 4. Key emerging plays
  • 5. Global rig supply and demand
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Lower Tertiary displaces Subsalt Miocene as key investment area as region approaches new capex peak in 2016

Development capex by play (2008-2020)

5 10 15 20

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Development capex (US$ billions)

Pleisto/Plio Miocene Subsalt Miocene Lower Tertiary Subsalt Plio/Mio Jurassic

Source: Wood Mackenzie Upstream Data Tool (UDT)

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Drilling moratorium results in production deferment which is finally trending upwards

Commercial production by play (2008-2020)

0.5 1 1.5 2

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Production (mmboed)

Pleisto/Pilo Miocene Subsalt Miocene Lower Tertiary Subsalt Plio/Mio Jurassic

Source: Wood Mackenzie Upstream Data Tool (UDT)

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Agenda

  • 1. Deepwater GoM rig market then and now
  • 2. Gulf production leaders and key areas of growth
  • 3. Capex forecast and production profile by play-type
  • 4. Key emerging plays
  • 5. Global rig supply and demand
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Lower Tertiary

 High yet-to-find volumes driven by commercial success to date  Marginal economics given current low recovery factors  HP/HT technology and EOR will be key driver to unlocking value

Jurassic

 Limited commercial success with fewer than 10 wells drilled  Appomattox field potentially a one-off discovery in terms of recoverable reserves  Uncertainties regarding near-term success, aerial extent and Eastern Gulf leasing  Economics favorable given higher permeability/porosity and shallower reservoir depths

relative to the Lower Tertiary

Two key emerging plays: Lower Tertiary and Jurassic

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Agenda

  • 1. Deepwater GoM rig market then and now
  • 2. Gulf production leaders and key areas of growth
  • 3. Capex forecast and production profile by play-type
  • 4. Key emerging plays
  • 5. Global rig supply and demand
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Global rig supply and demand

 2016 could potentially result in a pinch point for rig demand  Can rigs be built?

» 90 currently being built but a further 95 required to meet demand

 Can service sector and construction meet demand

» 170 new floating facilities and 220 sub sea tie-backs » Not to mention the hiring and training of staff

 New era of deepwater cost inflation on the horizon………

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Jackson M. Sandeen

 Jackson is currently a Research Analyst working on the Deepwater Gulf of Mexico Upstream Research

  • team. In this role he performs asset valuations, assists with consulting projects and publishes topical

reports on key regional trends. He has spent his time focusing on rig market constraints, play-level economics and the commercial impact of emerging plays.  Jackson earned dual degrees in Economics and Broadcast Journalism from Boston University.

Research Analyst – Deepwater Gulf of Mexico

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Disclaimer

 This report has been prepared for OCS Advisory Board Workshop 2014 by Wood

Mackenzie Limited. The report is intended solely for the benefit of audience members and its contents and conclusions are confidential and may not be disclosed to any other persons or companies without Wood Mackenzie’s prior written permission.

 The information upon which this report is based has either been supplied to us or

comes from our own experience, knowledge and databases. The opinions expressed in this report are those of Wood Mackenzie. They have been arrived at following careful consideration and enquiry but we do not guarantee their fairness, completeness or

  • accuracy. The opinions, as of this date, are subject to change. We do not accept any

liability for your reliance upon them. Strictly Private & Confidential

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Wood Mackenzie* is a global leader in commercial intelligence for the energy, metals and mining industries. We provide objective analysis and advice on assets, companies and markets, giving clients the insight they need to make better strategic decisions. For more information visit: www.woodmac.com *WOOD MACKENZIE is a Registered Trade Mark of Wood Mackenzie Limited