Cohen & Company
Utica / Point Pleasant shale play briefingp y g
November 19, 2013
Vince Bevacqua
E V P ShaleCommE.V.P, Sha...
The State of O & NG in the U S AThe State of O & NG in the U.S.A
Shale Energy = Game changer
'It's difficult to overstate ...
The State of O & NG in the U S AThe State of O & NG in the U.S.A
Shale Energy = Game changer
"Barring any major environmen...
The State of O & NG in the U S AThe State of O & NG in the U.S.A
Initial Benefits - National
1.2 million jobs directly or ...
The State of O & NG in the U S AThe State of O & NG in the U.S.A
Six major shale plays in U.S
Bakken (ND)
Barnett (TX)Barn...
The State of O & NG in OhioThe State of O & NG in Ohio
Initial Benefits - Ohio
$34 billion outside investment in Ohio by 2...
The State of O & NG in OhioThe State of O & NG in Ohio
Initial benefits - Ohio
Tax Collection Increase
21% increase in sal...
The State of O & NG in OhioThe State of O & NG in Ohio
Initial benefits - Ohio
Road improvements
RUMA (Road Use Maintenanc...
Current state of Utica / Point Pleasant playCurrent state of Utica / Point Pleasant play
Unproven…but with
i lgreat potent...
Current state of Utica / Point Pleasant playCurrent state of Utica / Point Pleasant play
End of October 2013
953 Utica wel...
Current state of Utica / Point Pleasant playCurrent state of Utica / Point Pleasant play
93% ^ oil production from 201193%...
Current state of Utica / Point Pleasant playCurrent state of Utica / Point Pleasant play
Current top producers in Ohio
# 1...
Current state of Utica / Point Pleasant playCurrent state of Utica / Point Pleasant play
Current top producing Counties in...
Current state of Utica / Point Pleasant playCurrent state of Utica / Point Pleasant play
Reasons for optimismReasons for o...
Current state of Utica / Point Pleasant playCurrent state of Utica / Point Pleasant play
Reasons for optimismReasons for o...
Current state of Utica / Point Pleasant playCurrent state of Utica / Point Pleasant play
Reasons for optimismReasons for o...
Current state of Utica / Point Pleasant playCurrent state of Utica / Point Pleasant play
Reasons for optimismReasons for o...
What’s next?What s next?
Processing plants Pipelines midstream investmentsProcessing plants, Pipelines, midstream investme...
What’s next?What s next?
Examples Processing plantsExamples - Processing plants
MarkWest
•$2.2 billion
Cadiz Harrison Coun...
What’s next?What s next?
Examples PipelinesExamples - Pipelines
Antero – water line from Ohio River to Tyler and Ritchie C...
What’s next?What s next?
Examples PipelinesExamples - Pipelines
Hilcorp Corp. and PVR Partners
45 miles- connecting Utica ...
What’s next?What s next?
midstream investments
Halcón Field ServicesHalcón Field Services
Oil storage & rail transfer stat...
“New” Rock?New Rock?
U D i f tiUpper Devonian formation
• Originally drilled in 1970’s
• Above Utica and Marcellus
• PA & ...
OutlookOutlook
Locally, production numbers are inconclusive due to lack of data.
However, if this play comes close to expe...
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Utica Shale Briefing: Client CPE Day 2013

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An explanation of the current state of the shale industry in Ohio. Presented by Vince Bevacqua of ShaleComm at Cohen & Company's Client CPE Day.

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Utica Shale Briefing: Client CPE Day 2013

  1. 1. Cohen & Company Utica / Point Pleasant shale play briefingp y g November 19, 2013 Vince Bevacqua E V P ShaleCommE.V.P, ShaleComm
  2. 2. The State of O & NG in the U S AThe State of O & NG in the U.S.A Shale Energy = Game changer 'It's difficult to overstate the shale revolution's profound contributions to the U.S. economy'’p y Source: IHS study reported in several national media outlets 9/4/13 In 2011, the U.S. became a net exporter of petroleum, p p products for the first time in 60 years. Source: Bloomberg Businessweek 9/3/13 Crude oil imports DOWN 19% (first half of 2013) = $31.6 Billion off the trade deficit Source: IHS study reported in several national media outlets 9/4/13y p
  3. 3. The State of O & NG in the U S AThe State of O & NG in the U.S.A Shale Energy = Game changer "Barring any major environmental accidents related to onshore shale drilling, which could slow or reverse i d h h U S hindustry growth, we expect the U.S. to approach energy self-sufficiency toward the end of this decade." David Wood a managing director in Standard & Poor's Corporate Ratings groupDavid Wood, a managing director in Standard & Poor s Corporate Ratings group Source: Akron Beacon Journal- 5/22/13 F t Gl b l 500Fortune Global 500 7 of top 10 companies = Energy Companies Most Profitable = Exxon Mobil $44.9 billion
  4. 4. The State of O & NG in the U S AThe State of O & NG in the U.S.A Initial Benefits - National 1.2 million jobs directly or indirectly linked to shale energy exploration Will grow to 3.3 million by 2020 58% i i NG i 2007• 58% increase in NG reserves since 2007 • NG price DOWN NEARLY 75% • $120 billion in U.S based investment - 2012 Source: IHS study reported in several national media outlets 9/4/13
  5. 5. The State of O & NG in the U S AThe State of O & NG in the U.S.A Six major shale plays in U.S Bakken (ND) Barnett (TX)Barnett (TX) Haynesville (LA) Eagle Ford (TX) Marcellus (PA) Utica (OH)
  6. 6. The State of O & NG in OhioThe State of O & NG in Ohio Initial Benefits - Ohio $34 billion outside investment in Ohio by 2015 Last 2 years = 38,000 Ohio jobs $793 million annual Ohio salaries$793 million annual Ohio salaries Source: OOGEEP
  7. 7. The State of O & NG in OhioThe State of O & NG in Ohio Initial benefits - Ohio Tax Collection Increase 21% increase in sales tax receipts in shale counties 1.4 % increase in non-shale counties $12.3 billion in 2011 to $14.9 billion in 2012 T b ll P t M h i W St kTrumbull, Portage, Mahoning, Wayne, Stark, Columbiana, Holmes and Carroll Source: Cleveland State University Study
  8. 8. The State of O & NG in OhioThe State of O & NG in Ohio Initial benefits - Ohio Road improvements RUMA (Road Use Maintenance Agreement) Mahoning County doubled its paving program withMahoning County doubled its paving program with O & NG money NiS $1 5 illiNiSource - $1.5 million Halcón Resources- $500,000
  9. 9. Current state of Utica / Point Pleasant playCurrent state of Utica / Point Pleasant play Unproven…but with i lgreat potential.
  10. 10. Current state of Utica / Point Pleasant playCurrent state of Utica / Point Pleasant play End of October 2013 953 Utica wells permitted 427 Drilled 164 Producing 1 000 NEW wells expected to be1,000 NEW wells expected to be IN PRODUCTION by 2015 Source: Media reports of ODNR data
  11. 11. Current state of Utica / Point Pleasant playCurrent state of Utica / Point Pleasant play 93% ^ oil production from 201193% ^ oil production from 2011 80% ^ gas production from 2011 • SO FAR, the Utica is primarily a “wet gas” play • Currently selling for 85% of crude oil value • Ethane, Butane & Propane Source: Media reports of ODNR report 5/22 /13
  12. 12. Current state of Utica / Point Pleasant playCurrent state of Utica / Point Pleasant play Current top producers in Ohio # 1 Chesapeake (Oil & NG) # 2 Anadarko (oil) # 2 Hess (NG)# 2 Hess (NG) 24 Other E & P companies in Ohio including: BPBP Chevron CONSOL Halcón ResourcesHalcón Resources Hilcorp EnverVest Antero Resources Source: Media reports of ODNR report 5/22 /13
  13. 13. Current state of Utica / Point Pleasant playCurrent state of Utica / Point Pleasant play Current top producing Counties in OhioCurrent top producing Counties in Ohio Permits Drilled Producing Carroll 339 148 94 Harrison 141 74 20Harrison 141 74 20 Columbiana 91 47 8 Noble 70 40 11 Guernsey 60 22 20Guernsey 60 22 20 *(400% - 600% growth since 2012) Trumbull 13 7 1 Mahoning 28 8 0 Stark 12 5 1 Portage 14 7 2 Source: Media reports of ODNR report 5/22 /13
  14. 14. Current state of Utica / Point Pleasant playCurrent state of Utica / Point Pleasant play Reasons for optimismReasons for optimism A single Utica well produces as much oil as 312 conventional wells A single Utica well produces as much natural gas asg p g 448 conventional wells * 34 Rigs currently working Ohio’s Utica Shale* 34 Rigs currently working Ohio s Utica Shale Source: Media reports of ODNR data
  15. 15. Current state of Utica / Point Pleasant playCurrent state of Utica / Point Pleasant play Reasons for optimismReasons for optimism Chesapeake “The Utica is outstanding, and we have several other emerging areas that are in the evaluation process that we’ll be looking at.” * Gas production DOUBLED in 3Qp Q EV Energy Partners “The pace of Utica drilling at this early stage of itsThe pace of Utica drilling at this early stage of its history exceeds that of the other major shale plays at a similar stage.”
  16. 16. Current state of Utica / Point Pleasant playCurrent state of Utica / Point Pleasant play Reasons for optimismReasons for optimism McClendon betting on Ohio • Former chairman and CEO of Chesapeake Energy • American Energy Partners • Has raised $1 billion for new venture• Has raised $1 billion for new venture • “Staking his comeback” on the Utica Shale play • Guernsey, Belmont, Harrison and Noble counties
  17. 17. Current state of Utica / Point Pleasant playCurrent state of Utica / Point Pleasant play Reasons for optimismReasons for optimism McClendon betting on Ohio Utica shale (is) going to be the biggest thing to hit the Ohio economy “since maybe the plow.” Estimates $500 billion worth of oil and gas under Ohiounder Ohio
  18. 18. What’s next?What s next? Processing plants Pipelines midstream investmentsProcessing plants, Pipelines, midstream investments $$7.2 billion in plant and pipelines in eastern Ohio planned • 7 processing-separation plants • Several pipeline networks• Several pipeline networks Source: Media reports
  19. 19. What’s next?What s next? Examples Processing plantsExamples - Processing plants MarkWest •$2.2 billion Cadiz Harrison CountyCadiz, Harrison County •$1 billion Urichville, Tuscarawas County Momentum M3Momentum M3 •Kensington, Columbiana County • Leesville, Carroll County •Hub- Harrison County $1 billion + combined investment$1 billion + combined investment Cracker Plant(s) Shell Chemical Monaca PAMonaca, PA “seeking ethane suppliers” $3.2 billion Ethane > Ethylene (plastics)
  20. 20. What’s next?What s next? Examples PipelinesExamples - Pipelines Antero – water line from Ohio River to Tyler and Ritchie Counties 80 miles - $525 million$ Spectra Energy 70 miles- Columbiana County, Carroll, Jefferson, Belmont and Monroe ( ibl M h i & T b ll)(possibly Mahoning & Trumbull) NiSource Services “Hickory Bend”y 50 miles- Columbiana County, Carroll, Jefferson, Harrison & Belmont Counties $300 million
  21. 21. What’s next?What s next? Examples PipelinesExamples - Pipelines Hilcorp Corp. and PVR Partners 45 miles- connecting Utica with Texas Eastern and Rockies Expressesg p interstate pipelines $125 million Willi C i I d B d lk Pi li P t LPWilliams Companies Inc. and Boardwalk Pipeline Partners LP Bluegrass pipeline - connecting Utica and Marcellus with storage in Louisiana
  22. 22. What’s next?What s next? midstream investments Halcón Field ServicesHalcón Field Services Oil storage & rail transfer station Ohio Commerce Center, Lordstown $70 million
  23. 23. “New” Rock?New Rock? U D i f tiUpper Devonian formation • Originally drilled in 1970’s • Above Utica and Marcellus • PA & WV “C t hi ” il d f• “Catching” oil and gas from Marcellus • Could be more “liquids rich” than Marcellus
  24. 24. OutlookOutlook Locally, production numbers are inconclusive due to lack of data. However, if this play comes close to expectations, the Utica / Point Pleasant formation will produce oil and natural gas for the next 40 years.the next 40 years. After 2015- 1,000 new wells a year for 20 years Lease sales/ M & A will create new wave of E & P activity Royalty payments will continue throughout the duration of production New technology could enhance production, just as horizontal d illi d f i t h i h t d thi t itdrilling and new fracing techniques have created this opportunity Source: Media reports and expert interviews
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