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
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
Trusted commercial intelligence www.woodmac.com
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These slides have been prepared using the following Wood Mackenzie products:
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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
Trusted commercial intelligence www.woodmac.com
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Future growth lies predominantly in the frontier protraction areas of
Keathley Canyon and Walker Ridge
Protraction Area
Pro
du
cti
on
(‘0
00 b
oe
d)
2014 2020
CAGR %
96 84
0
40
80
120
160 Alaminos Canyon
28
5
0
40
80
120 East Breaks
Keathley Canyon
57
341
0
120
240
360
480 Walker Ridge
51
23
0
40
80Atwater Valley
526 538
0
200
400
600
800Green Canyon 158
46
0
40
80
120
160
Garden Banks
498 573
0
200
400
600
800Mississippi Canyon
-2%
-25% -19%
58%
0.4%
35%
2%
-12%
14
218
0
80
160
240
28
42
0
40
80Desoto 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
Trusted commercial intelligence www.woodmac.com
9
Lower Tertiary displaces Subsalt Miocene as key investment area as
region approaches new capex peak in 2016
Development capex by play (2008-2020)
0
5
10
15
20
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
De
ve
lop
me
nt
cap
ex
(U
S$
bil
lio
ns
)
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
0.5
1
1.5
2
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Pro
du
cti
on
(m
mb
oe
d)
Pleisto/Pilo Miocene Subsalt Miocene Lower Tertiary Subsalt Plio/Mio Jurassic
Source: Wood Mackenzie Upstream Data Tool (UDT)
Trusted commercial intelligence www.woodmac.com
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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
Trusted commercial intelligence www.woodmac.com
12
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
Trusted commercial intelligence www.woodmac.com
13
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
Trusted commercial intelligence www.woodmac.com
14
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
Trusted commercial intelligence www.woodmac.com
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Disclaimer
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