Statoil Unconventional Gas
     Press Briefing
     August 25, 2010

1-
     Stavanger, Norway
Agenda
     • What is unconventional gas?
     • How is shale gas produced?
     • Where is unconventional gas
       loca...
What is unconventional gas?

     • Many different types of
       unconventional resources
     • Low permeability and po...
How is shale gas produced?

     • To reach the deep target gas, a
       normal well is drilled
     • The bore is extend...
How is shale gas produced?




           A producing well pad

5-
How is shale gas produced?




     A Frac Site

6-
Where is unconventional gas located?
                                                                                     ...
Where is unconventional gas located?
                                          U.S. Shale Gas Basins




      Source: U.S...
Why did Statoil invest in North American
     shale gas?
                                                                 ...
Why did Statoil invest in North American
      shale gas?
                                                        US Gas P...
Why did Statoil invest in North American
      shale gas?
                                                          Strate...
Current status: Statoil’s JV with Chesapeake

      • JV with Chesapeake
      • Organisation in place
      • 50,000 boe/...
The central importance of HSE




       • Chesapeake proven track record
       • Standards above and beyond
       • Ali...
Next steps in Statoil’s
      unconventional gas journey

                                   • Early entrant
             ...
Thank you
      Statoil Unconventional Gas

      John Knight
      Senior Vice President, Global Unconventional Gas
     ...
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Statoil unconventional gas

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Statoil unconventional gas

  1. 1. Statoil Unconventional Gas Press Briefing August 25, 2010 1- Stavanger, Norway
  2. 2. Agenda • What is unconventional gas? • How is shale gas produced? • Where is unconventional gas located? • Why did Statoil invest in North American shale gas? • Current status: Statoil’s JV with Chesapeake • Next steps in Statoil’s unconventional gas journey • Q&A 2-
  3. 3. What is unconventional gas? • Many different types of unconventional resources • Low permeability and porosity - difficult for gas and liquids to flow through it Shale outcrop, Marcellus, New York 3-
  4. 4. How is shale gas produced? • To reach the deep target gas, a normal well is drilled • The bore is extended laterally to create a horizontal well • The well is hydraulically fractured, allowing gas to flow • At the surface gas enters pipelines that take it to market • The well produces for 40 years Source Chesapeake Energy 4-
  5. 5. How is shale gas produced? A producing well pad 5-
  6. 6. How is shale gas produced? A Frac Site 6-
  7. 7. Where is unconventional gas located? Europe Europe Resource: 145 tcf Resource: 145 tcf Production: 0.0 Production: 0.0 bcfd bcfd North America North America Resource: 1,348 Resource: 1,348 tcf tcf Production: 28.3 Production: 28.3 bcfd bcfd Asia Asia Resource: 203 tcf Resource: 203 tcf Africa Africa Production: 1.32 Production: 1.32 Resource: 83 tcf Resource: 83 tcf bcfd bcfd 100% Shale Increasing Attracts Investment Dollars Production: 0.0 Production: 0.0 90% bcfd bcfd 80% Percent of L48 CAPEX 70% 60% All Other Plays 50% Shale Plays 40% 30% Australia Australia 20% 10% Resource: 78 tcf Resource: 78 tcf 0% Latin America Latin America Middle East Middle East Production: 0.64 Production: 0.64 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Resource: 13 tcf Resource: 13 tcf Resource: 25 tcf Resource: 25 tcf bcfd bcfd Production: 0.04 Production: 0.04 Production: 0.0 Production: 0.0 bcfd bcfd bcfd bcfd Source: WoodMac 7-
  8. 8. Where is unconventional gas located? U.S. Shale Gas Basins Source: U.S. Department of Energy 8-
  9. 9. Why did Statoil invest in North American shale gas? Marcellus – low $ per MMBtu break evens $12.00 $10.26 $10.00 $8.87 $8.05 $8.00 $6.78 $6.86 $6.47 $6.48 $6.00 $5.30 $5.04 $5.16 $4.59 $3.68 $3.74 $3.79 $3.89 $4.00 $3.38 $3.43 $3.63 $3.08 $2.00 $0.00 e) X) n in e ll e ) d . rd ta . ce a t.) s en e ) re iz iz ro ag or n. m as l in nd or .T Fo n vi er or an or Co kk Hu xt df ho Ui er t ic (C tte rB Sa (V H H (E Ba oo .E ce e t( Av kla An ye gl s lle ve h s Pi y lle et W W l lu as ll u Ea ll e Fa .O S. vi Ri rn le vi t( ce W es ce Va U. es da Ba et W er ar ar yn te ne yn rn wd n M M ni Ha tto Ba Ha Pi Po ra Co G Source: Barcap 9-
  10. 10. Why did Statoil invest in North American shale gas? US Gas Production by Type 90 80 70 60 bcfd 50 40 30 20 10 0 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 Source: Wood Mackenzie Conventional Shale Tight CBM Transforming the world’s biggest energy market: •Energy independence •More viable energy mix •Job and wealth creation for thousands of Americans Source: WoodMac 10-
  11. 11. Why did Statoil invest in North American shale gas? Strategically positioned Pipeline to Canada • US unconventional industry is established − Liquid market Marcellus Area − Existing industrial infrastructure Cove Point • Marcellus - world class shale play Re-gas terminal − 7420 bcm of recoverable New York resources (US DoE) − Attractive break evens Gulf of Mexico − Close to market and pipeline capacity 11-
  12. 12. Current status: Statoil’s JV with Chesapeake • JV with Chesapeake • Organisation in place • 50,000 boe/d in 2012 • Now 300,000 mcfd (44,000 boepd) • 26 rigs in operation • 118 wells 12-
  13. 13. The central importance of HSE • Chesapeake proven track record • Standards above and beyond • Aligned on regulation, water management, testing and the disclosure of additives 13-
  14. 14. Next steps in Statoil’s unconventional gas journey • Early entrant • Learn and prepare • Build infrastructure and competence • Become a professional unconventional operator 14-
  15. 15. Thank you Statoil Unconventional Gas John Knight Senior Vice President, Global Unconventional Gas www.statoil.com 15-

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