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CAPP Presentation June 2011

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CAPP presentation by CAPP President, Dave Collyer on June 14th, 2011

CAPP presentation by CAPP President, Dave Collyer on June 14th, 2011

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  • 1. Canadian Oil & Gas Industry Outlook CADE Technical Luncheon Calgary - June 14, 2011 Dave Collyer, President
  • 2. Current Canadian Industry Trends• A period of political transition Federal Key provinces (BC, AB, ON)• Increasing divergence between crude oil & natural gas markets & business outlook……with commensurate shifts in activity• Increasing pressure on cost structure & skilled labor availability as activity ramps up• Increasing interest by Asian investors• Evolving public policy and regulatory context• Increasing collaboration among producers & along value chain to address reputation / social license issues
  • 3. Western Canadian Land Sales ALBERTA SASKATCHEWAN BRITISH COLUMBIA 3.0 1.2 3.0 Alberta record sale June 1/2011 $841mm Yr-to-date = $1.8 billion 2.5 1.0 2.5 2.0 0.8 2.0 $ billions $ billions$ billions 1.5 0.6 1.5 1.0 0.4 1.0 0.5 0.2 0.5 0.0 0.0 0.0 2007 2008 2009 2010 YTD 2007 2008 2009 2010 YTD 2007 2008 2009 2010 YTD 2011 2011 2011 PRIMARILY OIL NATURAL GAS
  • 4. Total Wells Drilled in Western Canada 2009 2010 2011E Alberta 5,297 7,090 8,340 British Columbia 632 552 520 28 000 Dry/Susp. Saskatchewan 1,979 2,517 2,660 Gas Manitoba 220 439 580 24 000 Oil 2007 20 000 = 18,000 2008 = 16,100 16 000 2011 E = 12,100 2010 = 10,702 12 000 800 2009 = 8,137 2,700 8 000 4 000 8,600 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 E Source – CAPP. Based on Rig Release
  • 5. Industry Capital Spending Cdn $billions Oil & Gas Investment Spending: 2009: $34 billion 2010: $42 billion (estimate) 2011: $46 billion (forecast) Northern Canada 2009 2010E 2011F $0.2 $0.5 $0.3 Oil Sands 2009 2010E 2011F $11 $13 $16 East Coast Offshore Western Canada 2009 2010E 2011F 2009 2010E 2011F $1.7 $2.5 $3.0 $20 $26 $27 `09 `10E `11F AB $12 $15 $17 BC $5 $7 $5Note: SK $3 $4 $5Excludes spending mergers & acquisitions
  • 6. Oil-Directed Well Licences Issued inW. Canada (Cumulative) 10 000 9 000 Emerging “Tight Oil” 8 000 Opportunities 7 000 6 000 5 000 2011 4 000 2010 3 000 2006 - 2008 2 000 2009 1 000 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov DecSource: Nickle’s DOB
  • 7. CAPP Conventional Oil ProductionForecast (2011 vs 2010) 1200 2011 Forecast 2010 forecast 1000 Thousand bbls/day 800 600 400 200 0 2010 2013 2016 2019 2022 2025
  • 8. Canadian Oil Sands and Conventional OilProduction Forecast (2011-2025) 5,000 Actual Forecast 4,500 4,000 Atlantic Canada 3,500 In Situ thousand bpd 3,000 2,500 2,000 Mining 1,500 1,000 Conventional Heavy 500 Conventional Light Pentanes/Condensate 0 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025
  • 9. W. Canada Natural Gas Production WCSB Field Receipts: 18 2008 – 15.7 bcf/d 2009 – 14.7 bcf/d 2010 – 14.3 bcf/d 17 billion cubic feet per day 2007 16 2008 15 2010 14 2011 2009 13 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov DecSource: FirstEnergy Capital
  • 10. Gas-Directed Well Licences Issued inW. Canada (Cumulative)18 00016 000 Slowdown in gas / CBM drilling14 00012 00010 000 2006 8 000 6 000 2007 & 2008 4 000 2009 & 2010 2 000 2011 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Source: Nickle’s DOB
  • 11. Cdn. Natural Gas Production Forecasts(Recovery and Continued Low Price Cases) 20 Price Recovery Case 18 Mackenzie Delta 16 14 Eastern Canada 12 Horn & Cordova Bcfd 10 8 Montney 6 4 CBM Note: Prices recover to at least a level of $5.50/GJ 2 Conventional 0 2005 2008 2011 2014 2017 2020 20 18 Continued Low Price Case 16 14 12 cfd 10 B 8 6 4 2 Note: Prices do not exceed $4/GJ over the forecast period 0 2005 2008 2011 2014 2017 2020
  • 12. Contribution to Upstream Revenue(% of Total Revenue by Commodity) 100% 90% As a Percent of Total Revenues 80% Natural Gas 70% 60% Oil Sands 50% 40% 30% 20% Crude Oil and Liquids 10% 0% 1990 1995 2000 2005 2010 2015 Source: CAPP, ARC Financial Corp. 12
  • 13. Canada’s Oil & Gas Industry Outlook• “3E” policy & regulatory framework Environmental performance Economic growth Energy security / reliability• Industry Priorities: Competitiveness • Fiscal, Regulatory, Market Access Social license • Performance + Communication• Key Enablers: Technology & innovation Collaboration• Key Challenges: Environmental performance People – capacity & skills

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