OIL … EDMONTON’S REAL ESTATE INVESTING
FOUNTAIN OF YOUTH
PROPERTY OF STEP AHEAD INVEST 2013
THERE ARE 5 KEY STEPS TO
REAL ESTATE PROFITS
PROPERTY OF STEP AHEAD INVEST 2013
5 KEY STEPS TO REAL ESTATE PROFITS
PROPERTY OF STEP AHEAD INVEST 2013
Drives Population Growth - Immigration
IntraProvinci...
OIL DRIVES REAL ESTATE PROFITS
PROPERTY OF STEP AHEAD INVEST 2013
Results in Real Estate Profits
Positive Cash Flow Apprec...
WHY IS OIL SO IMPORTANT TO THE WORLD?
PROPERTY OF STEP AHEAD INVEST 2013
 Before we can look at the 5 key steps to profit...
WHY IS OIL SO IMPORTANT TO THE WORLD?
PROPERTY OF STEP AHEAD INVEST 2013
 Oil provides over 1/3 of the worlds energy requ...
WHY IS OIL SO IMPORTANT TO THE WORLD?
PROPERTY OF STEP AHEAD INVEST 2013
 Food Consumption
 For every 1 calorie of food ...
CAN ALTERNATIVE ENERGY REPLACE OIL?
PROPERTY OF STEP AHEAD INVEST 2013
 Electricity – Wind, Solar, & Battery
 No infrast...
SUMMARY OF ALTERNATIVE ENERGY
PROPERTY OF STEP AHEAD INVEST 2013
 Most alternatives fuels don’t have the cost and energy ...
WHAT COUNTRIES HAVE THE OIL?
PROPERTY OF STEP AHEAD INVEST 2013
WORLD OIL RESERVES
ALBERTA 3RD LARGEST
PROPERTY OF STEP AHEAD INVEST 2013
81% OF WORLD OIL INVESTMENT IS RESTRICTED
PROPERTY OF STEP AHEAD INVEST 2013
ALBERTA HAS 55% OF THE INVESTIBLE OIL
PROPERTY OF STEP AHEAD INVEST 2013
Canada has 56% of the worlds
only investible oil
...
WORLD OIL RESERVES
PROPERTY OF STEP AHEAD INVEST 2013
 Alberta has the 3rd largest proven reserves in the world at 171BB ...
 Requires significantly more energy to
mine and refine
 Oil Sands takes 1 BTU to produce 3
BTU
 Alberta and Venezuela h...
WORLD OIL SUPPLY VS. OIL DEMAND
PROPERTY OF STEP AHEAD INVEST 2013
Oil Shortfall?
100% INCREASE IN WORLD CAPITAL
SPENDING ON OIL PROJECTS
PROPERTY OF STEP AHEAD INVEST 2013
$300B
$600B
WORLD OIL SUPPLY IS FLAT
DESPITE $300B SPENDING INCREASES
PROPERTY OF STEP AHEAD INVEST 2013
WORLD OIL PRODUCTION FALLING SHORT
PROPERTY OF STEP AHEAD INVEST 2013
 Production of transportation fuels for the last 12...
ALBERTA OIL OUTPUT GROWING
WHILE OTHERS ARE IN DECLINE
PROPERTY OF STEP AHEAD INVEST 2013
Alberta has 98% of
Canada’s Oil
THE WEALTH SHIFT IS STARTING
PROPERTY OF STEP AHEAD INVEST 2013
WHERE IS THE DEMAND FOR OIL COMING FROM?
PROPERTY OF STEP AHEAD INVEST 2013
WORLD OIL CONSUMPTION
PROPERTY OF STEP AHEAD INVEST 2013
BRIC COUNTRIES OIL CONSUMPTION
EQUALED THE US IN 2011
PROPERTY OF STEP AHEAD INVEST 2013
BY 2040 CHINA’S ENERGY
USE WILL BE DOUBLE US
PROPERTY OF STEP AHEAD INVEST 2013
WORLD OIL DEMAND CONTINUES TO GROW
PROPERTY OF STEP AHEAD INVEST 2013
 Despite a slow down in the industrialized world em...
CARS PUTTING THE STRAIN ON OIL
PROPERTY OF STEP AHEAD INVEST 2013
CHINA THIRST FOR OIL
PROPERTY OF STEP AHEAD INVEST 2013
 China is the largest auto market in the world
 50% larger than ...
OTHER OIL DEMAND PRESSURES
PROPERTY OF STEP AHEAD INVEST 2013
 Saudi Arabia
 Population continues to grow consuming more...
OIL COST TO THE WORLD IS GROWING
PROPERTY OF STEP AHEAD INVEST 2013
Year Oil Brent Price World Oil Bill
2000 76mb/d $28.50...
IS THERE AN OIL SUPPLY SHORTFALL?
PROPERTY OF STEP AHEAD INVEST 2013
IS SAUDI ARABIA RUNNING OUT OF OIL?
PROPERTY OF STEP AHEAD INVEST 2013
HOW RELIABLE IS OPEC
AND SAUDI ARABIA?
PROPERTY OF STEP AHEAD INVEST 2013
 OPEC/Saudi Arabia
 2/3rds of the worlds expor...
THE ONCE GREAT SAUDI ARABIA OIL FIELDS
PROPERTY OF STEP AHEAD INVEST 2013
 5 oil fields represent 90% of their production...
DO THEY HAVE WHAT THEY SAY
THEY HAVE?
PROPERTY OF STEP AHEAD INVEST 2013
 Saudi Arabia states that they have about 260BB ...
THE BIG COVER UP
PROPERTY OF STEP AHEAD INVEST 2013
 In 1982 OPEC including SA stopped reporting their reserves
 8 years...
THE BIG COVER UP
PROPERTY OF STEP AHEAD INVEST 2013
 These fields have been aggressively mined and their life expectancy
...
BIG COVER UP
PROPERTY OF STEP AHEAD INVEST 2013
 It is suspected that Venezuela and other nationally
controlled reserves ...
USA TO BE ENERGY INDEPENDENT …
REALLY?
PROPERTY OF STEP AHEAD INVEST 2013
USA TO BE NET EXPORTER
OF OIL IN FUTURE
PROPERTY OF STEP AHEAD INVEST 2013
 Largest consumer of oil in the world at about...
SHALE OIL TO GIVE U.S. OIL INDEPENDENCE
… NOT!
PROPERTY OF STEP AHEAD INVEST 2013
 The recent shale oil discoveries in th...
EIA FORECAST FOR OIL SUPPLY & DEMAND
PROPERTY OF STEP AHEAD INVEST 2013
Demand
60mb/d
PROJECTED OIL SHORTFALL
PROPERTY OF STEP AHEAD INVEST 2013
 The EIA projects the decline of all known oil projects
 US s...
WE NOW KNOW HOW IMPORTANT OIL IS!
PROPERTY OF STEP AHEAD INVEST 2013
Cheap Oil Expensive Oil
Abundance Shortage
STEP 1 - OIL ATTRACTS INVESTMENT
PROPERTY OF STEP AHEAD INVEST 2013
Drives Population Growth - Immigration
IntraProvincial...
MINING ALBERTA’S BLACK GOLD
PROPERTY OF STEP AHEAD INVEST 2013
WHERE ARE THE OIL SANDS?
PROPERTY OF STEP AHEAD INVEST 2013
TOTAL INVESTMENT IN ALBERTA
CONTINUES TO GROW
PROPERTY OF STEP AHEAD INVEST 2013
2013 Over $70B in Total
HISTORICAL OIL & GAS INVESTMENT
IN ALBERTA
PROPERTY OF STEP AHEAD INVEST 2013
$48.1B
PROJECTED INVESTMENT IN OIL & GAS
PROPERTY OF STEP AHEAD INVEST 2013
Oil & Gas investment remains at
nearly $50B out to 20...
OIL SANDS - ONLY
CAPEX INVESTMENT GROWING
PROPERTY OF STEP AHEAD INVEST 2013
ALBERTA OIL IS REFINED
IN ALBERTA AND US
PROPERTY OF STEP AHEAD INVEST 2013
 Bitumen (Oil Sands) after it is refined is o...
OIL PRICES ARE FORECASTED TO INCREASE
PROPERTY OF STEP AHEAD INVEST 2013
Higher Oil Prices Drives
Investment
ALBERTA OIL PRODUCTION
FORECASTED TO DOUBLE
PROPERTY OF STEP AHEAD INVEST 2013
6.5mb/d
3mb/d
WHO ARE ALBERTA’S OIL CUSTOMERS?
PROPERTY OF STEP AHEAD INVEST 2013
ALBERTA IS THE LARGEST SUPPLIER TO U.S.
PROPERTY OF STEP AHEAD INVEST 2013
CANADA IS THE ONLY COUNTRY GROWING
EXPORTS TO U.S.
PROPERTY OF STEP AHEAD INVEST 2013
U.S. needs the Keystone Pipeline
THE U.S. WILL CONTINUE TO NEED OUR OIL
PROPERTY OF STEP AHEAD INVEST 2013
PIPELINE IS THE MAJOR MEANS OF
TRANSPORTATION
PROPERTY OF STEP AHEAD INVEST 2013
 There are 4 key major pipelines being p...
4 MAJOR PIPELINES PROPOSED
3. Eastern Pipeline to Canada’s east coast (850kb/d – 1,200,000kb/d)
1. Eastern Canada imports ...
PROPERTY OF STEP AHEAD INVEST 2013
Keystone
East
Coast
Gateway
Trans
Mountain
ALBERTA INVESTMENT SUMMARY
PROPERTY OF STEP AHEAD INVEST 2013
 We have demonstrated the world’s need for oil for many yea...
STEP 2 – OIL INVESTMENT DRIVES THE
ECONOMY
PROPERTY OF STEP AHEAD INVEST 2013
Drives Population Growth - Immigration
Intra...
ALBERTA GDP GROWING AT STEADY RATE
PROPERTY OF STEP AHEAD INVEST 2013
Growth Rate at 3% to 4%
CALGARY AND EDMONTON GDP
HAS FASTEST GROWTH
PROPERTY OF STEP AHEAD INVEST 2013
GDP GROWTH DRIVES JOB
AND WAGE GROWTH
PROPERTY OF STEP AHEAD INVEST 2013
 The tremendous investment into Alberta is creat...
ALBERTA HISTORICAL EMPLOYMENT &
UNEMPLOYMENT RATE
PROPERTY OF STEP AHEAD INVEST 2013
Employment
Unemployment
ALBERTA’S POSITIVE QUARTERLY
EMPLOYMENT GROWTH
PROPERTY OF STEP AHEAD INVEST 2013
TOTAL OIL SANDS EMPLOYMENT IMPACT
PROPERTY OF STEP AHEAD INVEST 2013
ALBERTA CONSTRUCTION JOBS FORECAST
PROPERTY OF STEP AHEAD INVEST 2013
ALBERTA PROJECTED TO HAVE VERY LOW
UNEMPLOYMENT
PROPERTY OF STEP AHEAD INVEST 2013
ALBERTA WAGES ARE INCREASING
PROPERTY OF STEP AHEAD INVEST 2013
ALBERTA HAS HIGHEST WEEKLY EARNINGS
PROPERTY OF STEP AHEAD INVEST 2013
EDMONTON ALSO SEEING THE JOB
AND WAGE GROWTH
PROPERTY OF STEP AHEAD INVEST 2013
EDMONTON NUMBER OF EMPLOYED
GROWING
PROPERTY OF STEP AHEAD INVEST 2013
EDMONTON QUARTERLY NUMBER
OF JOBS GROWING
PROPERTY OF STEP AHEAD INVEST 2013
EDMONTON UNEMPLOYMENT RATE
DECLINING
PROPERTY OF STEP AHEAD INVEST 2013
JOBS DRIVE IMMIGRATION
& POPULATION GROWTH
PROPERTY OF STEP AHEAD INVEST 2013
STEP 3 – POPULATION GROWTH
PROPERTY OF STEP AHEAD INVEST 2013
Drives Population Growth - Immigration
IntraProvincial Forei...
ALBERTA POPULATION GROWTH CONTINUES
PROPERTY OF STEP AHEAD INVEST 2013
QUARTERLY ALBERTA
POPULATION GROWTH
PROPERTY OF STEP AHEAD INVEST 2013
ALBERTA LEADS CANADA IN GROWTH
PROPERTY OF STEP AHEAD INVEST 2013
JOBS ATTRACT POPULATION GROWTH
PROPERTY OF STEP AHEAD INVEST 2013
Consecutive Quarters
of Growth
TREND FOR POPULATION GROWTH
TO CONTINUE
PROPERTY OF STEP AHEAD INVEST 2013
ALBERTA PROJECTED POPULATION
GROWTH
PROPERTY OF STEP AHEAD INVEST 2013
ALBERTA PROJECTED POPULATION TO
DOUBLE IN 15 YEARS
PROPERTY OF STEP AHEAD INVEST 2013
EDMONTON IS BENEFITING FROM ALBERTA
NET MIGRATION
PROPERTY OF STEP AHEAD INVEST 2013
POPULATION GROWTH INCREASES THE
DEMAND FOR HOUSING
PROPERTY OF STEP AHEAD INVEST 2013
STEP 4 – INCREASED RENTAL DEMAND
PROPERTY OF STEP AHEAD INVEST 2013
Results in Real Estate Profits
Positive Cash Flow Appr...
EDMONTON RENTAL RATES CONTINUE TO
INCREASE
PROPERTY OF STEP AHEAD INVEST 2013
EDMONTON VACANCY RATES FALLING
& BELOW 4%
PROPERTY OF STEP AHEAD INVEST 2013
4% Balanced Market
Q2 2013 VACANCY AT 1.2% -
WELL BELOW FORECAST OF 2.3%
PROPERTY OF STEP AHEAD INVEST 2013
LOW VACANCIES AND HIGHER RENTS
PUSHES REAL ESTATE PRICES HIGHER
PROPERTY OF STEP AHEAD INVEST 2013
STEP 5 – HIGHER REAL ESTATE PRICES
PROPERTY OF STEP AHEAD INVEST 2013
Results in Real Estate Profits
Positive Cash Flow Ap...
EDMONTON HOME PRICES SHOWING
SOLID GROWTH
PROPERTY OF STEP AHEAD INVEST 2013
MULTI-FAMILY SALES PRICE/DOOR
INCREASING
PROPERTY OF STEP AHEAD INVEST 2013
WHY INVEST IN EDMONTON?
PROPERTY OF STEP AHEAD INVEST 2013
REFINERY ROW RIPPLE EFFECT
PROPERTY OF STEP AHEAD INVEST 2013
ONE OF THE BEST PLACES TO INVEST
IN THE WORLD
PROPERTY OF STEP AHEAD INVEST 2013
 Edmonton is the major hub that supports...
OIL + REAL ESTATE = PROFITS
PROPERTY OF STEP AHEAD INVEST 2013
Results in Real Estate Profits
Positive Cash Flow Appreciat...
AN INVESTMENT OF A LIFE TIME
PROPERTY OF STEP AHEAD INVEST 2013
 Alberta has been blessed with what the world needs
 Oil...
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Oil edmonton's re investing final aug13

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Oil edmonton's re investing final aug13

  1. 1. OIL … EDMONTON’S REAL ESTATE INVESTING FOUNTAIN OF YOUTH PROPERTY OF STEP AHEAD INVEST 2013
  2. 2. THERE ARE 5 KEY STEPS TO REAL ESTATE PROFITS PROPERTY OF STEP AHEAD INVEST 2013
  3. 3. 5 KEY STEPS TO REAL ESTATE PROFITS PROPERTY OF STEP AHEAD INVEST 2013 Drives Population Growth - Immigration IntraProvincial Foreign Drives the Economy & GDP Growth Increased Jobs Increased Wages Alberta Oil Reserves Attracts Investment Infrastructure/Operations Step 1 Step 2 Step 3
  4. 4. OIL DRIVES REAL ESTATE PROFITS PROPERTY OF STEP AHEAD INVEST 2013 Results in Real Estate Profits Positive Cash Flow Appreciation/Principle Pay Down Higher Real Estate Prices Homes Apartments Increased Rental Demand Higher Rents Lower Vacancies Step 4 Step 5 Profits
  5. 5. WHY IS OIL SO IMPORTANT TO THE WORLD? PROPERTY OF STEP AHEAD INVEST 2013  Before we can look at the 5 key steps to profitable real estate investing, we must first determine how important oil is to the world  We will look at which countries have oil, the world demand for oil and finally the world supply of oil
  6. 6. WHY IS OIL SO IMPORTANT TO THE WORLD? PROPERTY OF STEP AHEAD INVEST 2013  Oil provides over 1/3 of the worlds energy requirements everyday  Oil is the world’s transit fuel  Approximately 90% of every barrel of oil is consumed through transportation Cars Trucking Rail Air Shipping
  7. 7. WHY IS OIL SO IMPORTANT TO THE WORLD? PROPERTY OF STEP AHEAD INVEST 2013  Food Consumption  For every 1 calorie of food that you eat …  10 calories of fossil fuels are used to process & transport it to your table  Energy from Oil is Unique vs. Other Sources  Natural gas has only 2/3 the energy of oil  Oil has two times the energy of coal  Inexpensive Energy Source  Oil does not spoil  Can be stored easily … not like electricity  Has an established world wide infrastructure  Easily moved through pipelines, trucks, rail and tankers
  8. 8. CAN ALTERNATIVE ENERGY REPLACE OIL? PROPERTY OF STEP AHEAD INVEST 2013  Electricity – Wind, Solar, & Battery  No infrastructure set up to handle the demand as a transportation fuel  Electricity is extremely difficult and costly to store  Natural Gas  Infrastructure is the biggest hurdle and will take decades to become a reliable alternative  Alberta has one of the largest natural gas reserves as well  Coal  Does not have energy equivalent to compete with oil  Primarily used for electricity  40% of the world’s electricity comes from coal and 75% is for China  Coal is 20% dirtier than oil and 2 times more than Natural Gas  Alberta also has large coal reserves to supply the world
  9. 9. SUMMARY OF ALTERNATIVE ENERGY PROPERTY OF STEP AHEAD INVEST 2013  Most alternatives fuels don’t have the cost and energy advantages of oil  It will take trillions of dollars to build out the infrastructure for alternatives  This will take several decades if it started now and will require both a national and international energy plan  None of this has been started or is even being discussed  It will take a major crisis before governments around the world turn this into a reality
  10. 10. WHAT COUNTRIES HAVE THE OIL? PROPERTY OF STEP AHEAD INVEST 2013
  11. 11. WORLD OIL RESERVES ALBERTA 3RD LARGEST PROPERTY OF STEP AHEAD INVEST 2013
  12. 12. 81% OF WORLD OIL INVESTMENT IS RESTRICTED PROPERTY OF STEP AHEAD INVEST 2013
  13. 13. ALBERTA HAS 55% OF THE INVESTIBLE OIL PROPERTY OF STEP AHEAD INVEST 2013 Canada has 56% of the worlds only investible oil Alberta 171
  14. 14. WORLD OIL RESERVES PROPERTY OF STEP AHEAD INVEST 2013  Alberta has the 3rd largest proven reserves in the world at 171BB (Billion Barrels)  They have mined only 3BB since the start of mining in the oil sands  Alberta has total reserves of over 2 Trillion Barrels which include all 3 categories of (proven, probable and additional probable)  This is more than all other countries proven reserves combined  81% of the worlds known reserves are owned by their respective governments  Canada has 56% of the investible reserves with Alberta controlling 55%  Companies can not or will not invest in government owned reserves for fear of nationalization like what has happened in Russia and Venezuela  Triple digit oil prices will shift the economic and political power from the major oil consuming countries to the major oil exporting countries  As oil shortages begin to appear, countries will begin to hoard oil creating even more of a supply issue
  15. 15.  Requires significantly more energy to mine and refine  Oil Sands takes 1 BTU to produce 3 BTU  Alberta and Venezuela have the largest reserves  All deep water drilling and new shale plays are consider non-conventional  Requires very little processing  Takes 1 BTU of energy to produce 100 BTU’s  OPEC is the largest supplier  US is the second largest producer but consumes 100% TWO MAJOR CLASSIFICATIONS OF OIL Conventional Non-Conventional PROPERTY OF STEP AHEAD INVEST 2013
  16. 16. WORLD OIL SUPPLY VS. OIL DEMAND PROPERTY OF STEP AHEAD INVEST 2013 Oil Shortfall?
  17. 17. 100% INCREASE IN WORLD CAPITAL SPENDING ON OIL PROJECTS PROPERTY OF STEP AHEAD INVEST 2013 $300B $600B
  18. 18. WORLD OIL SUPPLY IS FLAT DESPITE $300B SPENDING INCREASES PROPERTY OF STEP AHEAD INVEST 2013
  19. 19. WORLD OIL PRODUCTION FALLING SHORT PROPERTY OF STEP AHEAD INVEST 2013  Production of transportation fuels for the last 12 years has remained very tight within a 5% range  Despite higher oil prices over the last decade, this has not produced additional production  Capital spending has doubled for exploration from $300B to $600B to deliver the same  This is why oil cost $100/b and is rising  It is estimated that if China and India continue to grow their imports at current rates it will cause the world to run out of available oil for export before 2030  In time nearly every country in the world will become a net importer of oil including Saudi Arabia  This leaves Alberta in a very powerful position
  20. 20. ALBERTA OIL OUTPUT GROWING WHILE OTHERS ARE IN DECLINE PROPERTY OF STEP AHEAD INVEST 2013 Alberta has 98% of Canada’s Oil
  21. 21. THE WEALTH SHIFT IS STARTING PROPERTY OF STEP AHEAD INVEST 2013
  22. 22. WHERE IS THE DEMAND FOR OIL COMING FROM? PROPERTY OF STEP AHEAD INVEST 2013
  23. 23. WORLD OIL CONSUMPTION PROPERTY OF STEP AHEAD INVEST 2013
  24. 24. BRIC COUNTRIES OIL CONSUMPTION EQUALED THE US IN 2011 PROPERTY OF STEP AHEAD INVEST 2013
  25. 25. BY 2040 CHINA’S ENERGY USE WILL BE DOUBLE US PROPERTY OF STEP AHEAD INVEST 2013
  26. 26. WORLD OIL DEMAND CONTINUES TO GROW PROPERTY OF STEP AHEAD INVEST 2013  Despite a slow down in the industrialized world emerging market growth is more than off-setting the decline  Emerging market demand is growing at 10%/yr.  The greatest demand is coming from Asia and the Middle East  Many of the top exporters are seeing continued domestic demand erode their exports and will become net importers in the near future  BRIC countries are growing at 20% - 30%  Much of the growth is coming from additional vehicles on the road  There are 42 gallons of gas in 1 barrel of oil  There are 159 liters of gas in 1 barrel of oil
  27. 27. CARS PUTTING THE STRAIN ON OIL PROPERTY OF STEP AHEAD INVEST 2013
  28. 28. CHINA THIRST FOR OIL PROPERTY OF STEP AHEAD INVEST 2013  China is the largest auto market in the world  50% larger than the USA  1000 new cars are going on the road on Beijing road system each day  Car ownership is 1/10th of the USA with massive upside potential  Sold 18M cars in 2011 and expected to grow to 35M by 2020  Sells more cars than any country in the world  Gas is subsidized by the government
  29. 29. OTHER OIL DEMAND PRESSURES PROPERTY OF STEP AHEAD INVEST 2013  Saudi Arabia  Population continues to grow consuming more and more gas at a growth rate of 5%/yr  Saudi Arabia and most of the OPEC countries subsidize gasoline  Currently burning over 1mb/d of oil to run desalination plants  The large demand for water is causing their aquifers to dry up and therefore the number of plants continue to grow  India  Sells 11M cars per year and growing  Gasoline is also subsidized  Japan  Nuclear power represented 1/3rd of all their energy needs until it was shutdown  Oil had represented 50% of their needs but has now become a growing part of their needs since the nuclear issue  Countries are terrified to cut their fuel subsidies for fear of riots
  30. 30. OIL COST TO THE WORLD IS GROWING PROPERTY OF STEP AHEAD INVEST 2013 Year Oil Brent Price World Oil Bill 2000 76mb/d $28.50 $791B 2010 87mb/d $79.50 $2.5T 2011 90mb/d $100.00 $3.0T 2015  There are 2B people not currently consuming oil and gas  There is a tremendous wealth transfer taking place in the world  Cash is moving from the oil consuming countries to the oil producing countries like Russia, Venezuela and Canada/Alberta
  31. 31. IS THERE AN OIL SUPPLY SHORTFALL? PROPERTY OF STEP AHEAD INVEST 2013
  32. 32. IS SAUDI ARABIA RUNNING OUT OF OIL? PROPERTY OF STEP AHEAD INVEST 2013
  33. 33. HOW RELIABLE IS OPEC AND SAUDI ARABIA? PROPERTY OF STEP AHEAD INVEST 2013  OPEC/Saudi Arabia  2/3rds of the worlds exportable oil comes from the 12 member states which equals about 30mb/d  Saudi Arabia represents about a 1/3rd or 10mb/d
  34. 34. THE ONCE GREAT SAUDI ARABIA OIL FIELDS PROPERTY OF STEP AHEAD INVEST 2013  5 oil fields represent 90% of their production  Ghawar is the largest and oldest currently producing 60% of the country’s output  It has produced over 55 BB to-date  It was founded in 1940 which is over 70 years ago  Safaniya and Abqaiq make up two of the other fields and were found at about the same time  There have been no significant oil field discoveries in Saudi Arabia to compare with Ghawar  All other fields are much smaller
  35. 35. DO THEY HAVE WHAT THEY SAY THEY HAVE? PROPERTY OF STEP AHEAD INVEST 2013  Saudi Arabia states that they have about 260BB of proven reserves  This has not and cannot be verified  1979 was the last time an independent party audited their reserves and they said  110BB proven reserves  66BB probable reserves  69BB additional probable  Total 245BB  No company was allowed into SA after 1979
  36. 36. THE BIG COVER UP PROPERTY OF STEP AHEAD INVEST 2013  In 1982 OPEC including SA stopped reporting their reserves  8 years later SA changed their reporting to 260BB proven reserves from 110BB  All the probable and possible reserves were moved to proven  The world only uses proven to determine reserves  There was never any announcement of any new oil fields found  They are extracting about 3BB/yr. and since 1980 they have extracted between 90- 100BB of oil … yet their total reserves have not changed???
  37. 37. THE BIG COVER UP PROPERTY OF STEP AHEAD INVEST 2013  These fields have been aggressively mined and their life expectancy has been significantly shortened because they are pumping water into them to maintain pressure  The 1979 projections had these fields starting to decline by the 1990’s  Saudi Arabia and OPEC do not want the world to know the true numbers because they would lose control and influence in the world
  38. 38. BIG COVER UP PROPERTY OF STEP AHEAD INVEST 2013  It is suspected that Venezuela and other nationally controlled reserves are also being fudged to protect influence  Remember if Alberta combined all 3 types of reserves they would have over 2 Trillion Barrels of oil
  39. 39. USA TO BE ENERGY INDEPENDENT … REALLY? PROPERTY OF STEP AHEAD INVEST 2013
  40. 40. USA TO BE NET EXPORTER OF OIL IN FUTURE PROPERTY OF STEP AHEAD INVEST 2013  Largest consumer of oil in the world at about 19mb/d  Currently the second largest producer of oil in the world Produce 8 - 9mb/d No oil is exported and they import 8 – 10mb/d Reached peak oil in 1970 and oil production has been declining ever since until the recent shale oil discovery
  41. 41. SHALE OIL TO GIVE U.S. OIL INDEPENDENCE … NOT! PROPERTY OF STEP AHEAD INVEST 2013  The recent shale oil discoveries in the US have been known for several decades  It was never mined because it requires over $75/b to mine cost effectively  It is forecasted that under the best case scenario all shale reserves combined will produce 3mb/d by 2020  If we assume no decline in their current production (Unrealistic – Peak Oil 1970) they would be producing up to 12mb/d  This is significantly short of their current 17 – 19bb/d requirement
  42. 42. EIA FORECAST FOR OIL SUPPLY & DEMAND PROPERTY OF STEP AHEAD INVEST 2013 Demand 60mb/d
  43. 43. PROJECTED OIL SHORTFALL PROPERTY OF STEP AHEAD INVEST 2013  The EIA projects the decline of all known oil projects  US shale boom is projected to peak at only 3mb/d (million, barrels/day)  Production to slip from 85mb/d of crude oil to just 45mb/d between 2012 and 2030  IEA forecasted in 2010 that 80% of the oil fields operating today won’t be producing in 25 yrs.  Total oil supply is declining at about 4mb/d per year  2030 is only 17 years away  The projected shortage is compounded by the fact that oil companies don’t talk about their oil reserve shortages because that lowers their valuations
  44. 44. WE NOW KNOW HOW IMPORTANT OIL IS! PROPERTY OF STEP AHEAD INVEST 2013 Cheap Oil Expensive Oil Abundance Shortage
  45. 45. STEP 1 - OIL ATTRACTS INVESTMENT PROPERTY OF STEP AHEAD INVEST 2013 Drives Population Growth - Immigration IntraProvincial Foreign Drives the Economy & GDP Growth Increased Jobs Increased Wages Alberta Oil Reserves Attracts Investment Infrastructure/Operations Step 1 Step 2 Step 3
  46. 46. MINING ALBERTA’S BLACK GOLD PROPERTY OF STEP AHEAD INVEST 2013
  47. 47. WHERE ARE THE OIL SANDS? PROPERTY OF STEP AHEAD INVEST 2013
  48. 48. TOTAL INVESTMENT IN ALBERTA CONTINUES TO GROW PROPERTY OF STEP AHEAD INVEST 2013 2013 Over $70B in Total
  49. 49. HISTORICAL OIL & GAS INVESTMENT IN ALBERTA PROPERTY OF STEP AHEAD INVEST 2013 $48.1B
  50. 50. PROJECTED INVESTMENT IN OIL & GAS PROPERTY OF STEP AHEAD INVEST 2013 Oil & Gas investment remains at nearly $50B out to 2016 and will stay the same or increase as new projects are announced in the future
  51. 51. OIL SANDS - ONLY CAPEX INVESTMENT GROWING PROPERTY OF STEP AHEAD INVEST 2013
  52. 52. ALBERTA OIL IS REFINED IN ALBERTA AND US PROPERTY OF STEP AHEAD INVEST 2013  Bitumen (Oil Sands) after it is refined is of higher quality than Saudi Arabian oil and trades at a premium  Operating expenditures alone on oil and gas are approximately $20B/yr. and growing
  53. 53. OIL PRICES ARE FORECASTED TO INCREASE PROPERTY OF STEP AHEAD INVEST 2013 Higher Oil Prices Drives Investment
  54. 54. ALBERTA OIL PRODUCTION FORECASTED TO DOUBLE PROPERTY OF STEP AHEAD INVEST 2013 6.5mb/d 3mb/d
  55. 55. WHO ARE ALBERTA’S OIL CUSTOMERS? PROPERTY OF STEP AHEAD INVEST 2013
  56. 56. ALBERTA IS THE LARGEST SUPPLIER TO U.S. PROPERTY OF STEP AHEAD INVEST 2013
  57. 57. CANADA IS THE ONLY COUNTRY GROWING EXPORTS TO U.S. PROPERTY OF STEP AHEAD INVEST 2013 U.S. needs the Keystone Pipeline
  58. 58. THE U.S. WILL CONTINUE TO NEED OUR OIL PROPERTY OF STEP AHEAD INVEST 2013
  59. 59. PIPELINE IS THE MAJOR MEANS OF TRANSPORTATION PROPERTY OF STEP AHEAD INVEST 2013  There are 4 key major pipelines being proposed to accommodate the oil sands growth 1. Keystone pipeline to US Gulf (800kb/d – 900kb/d) 1. Requires presidential approve and is expected 2013 – 2014 2. Northern Gateway pipeline (800kb/d – 900kb/d) 1. Provides access to the west coast and the Asian market 2. Currently under environmental review and expected decision by 2015
  60. 60. 4 MAJOR PIPELINES PROPOSED 3. Eastern Pipeline to Canada’s east coast (850kb/d – 1,200,000kb/d) 1. Eastern Canada imports 700kb/d of oil 2. Will allow Canada to become truly energy independent 3. Provides access to Europe 4. Completion expected by 2017 4. Trans Mountain Pipeline Expansion to Canada’s west coast 1. Expansion from 300kb/d to 890kb/d 2. Access to Asia and US by ship
  61. 61. PROPERTY OF STEP AHEAD INVEST 2013 Keystone East Coast Gateway Trans Mountain
  62. 62. ALBERTA INVESTMENT SUMMARY PROPERTY OF STEP AHEAD INVEST 2013  We have demonstrated the world’s need for oil for many years to come  Alberta will be one of the only places in the world to supply that oil … tremendous wealth and influence transfer  This will attract continued investment into Alberta and Edmonton economy for many decades to come  Edmonton is the hub that services the oil and gas industry
  63. 63. STEP 2 – OIL INVESTMENT DRIVES THE ECONOMY PROPERTY OF STEP AHEAD INVEST 2013 Drives Population Growth - Immigration IntraProvincial Foreign Drives the Economy & GDP Growth Increased Jobs Increased Wages Alberta Oil Reserves Attracts Investment Infrastructure/Operations Step 1 Step 2 Step 3
  64. 64. ALBERTA GDP GROWING AT STEADY RATE PROPERTY OF STEP AHEAD INVEST 2013 Growth Rate at 3% to 4%
  65. 65. CALGARY AND EDMONTON GDP HAS FASTEST GROWTH PROPERTY OF STEP AHEAD INVEST 2013
  66. 66. GDP GROWTH DRIVES JOB AND WAGE GROWTH PROPERTY OF STEP AHEAD INVEST 2013  The tremendous investment into Alberta is creating continued job growth and very low unemployment which in turn drives rents up and vacancies down  Some forecasts project that Alberta will create over 20k new jobs per year
  67. 67. ALBERTA HISTORICAL EMPLOYMENT & UNEMPLOYMENT RATE PROPERTY OF STEP AHEAD INVEST 2013 Employment Unemployment
  68. 68. ALBERTA’S POSITIVE QUARTERLY EMPLOYMENT GROWTH PROPERTY OF STEP AHEAD INVEST 2013
  69. 69. TOTAL OIL SANDS EMPLOYMENT IMPACT PROPERTY OF STEP AHEAD INVEST 2013
  70. 70. ALBERTA CONSTRUCTION JOBS FORECAST PROPERTY OF STEP AHEAD INVEST 2013
  71. 71. ALBERTA PROJECTED TO HAVE VERY LOW UNEMPLOYMENT PROPERTY OF STEP AHEAD INVEST 2013
  72. 72. ALBERTA WAGES ARE INCREASING PROPERTY OF STEP AHEAD INVEST 2013
  73. 73. ALBERTA HAS HIGHEST WEEKLY EARNINGS PROPERTY OF STEP AHEAD INVEST 2013
  74. 74. EDMONTON ALSO SEEING THE JOB AND WAGE GROWTH PROPERTY OF STEP AHEAD INVEST 2013
  75. 75. EDMONTON NUMBER OF EMPLOYED GROWING PROPERTY OF STEP AHEAD INVEST 2013
  76. 76. EDMONTON QUARTERLY NUMBER OF JOBS GROWING PROPERTY OF STEP AHEAD INVEST 2013
  77. 77. EDMONTON UNEMPLOYMENT RATE DECLINING PROPERTY OF STEP AHEAD INVEST 2013
  78. 78. JOBS DRIVE IMMIGRATION & POPULATION GROWTH PROPERTY OF STEP AHEAD INVEST 2013
  79. 79. STEP 3 – POPULATION GROWTH PROPERTY OF STEP AHEAD INVEST 2013 Drives Population Growth - Immigration IntraProvincial Foreign Drives the Economy & GDP Growth Increased Jobs Increased Wages Alberta Oil Reserves Attracts Investment Infrastructure/Operations Step 1 Step 2 Step 3
  80. 80. ALBERTA POPULATION GROWTH CONTINUES PROPERTY OF STEP AHEAD INVEST 2013
  81. 81. QUARTERLY ALBERTA POPULATION GROWTH PROPERTY OF STEP AHEAD INVEST 2013
  82. 82. ALBERTA LEADS CANADA IN GROWTH PROPERTY OF STEP AHEAD INVEST 2013
  83. 83. JOBS ATTRACT POPULATION GROWTH PROPERTY OF STEP AHEAD INVEST 2013 Consecutive Quarters of Growth
  84. 84. TREND FOR POPULATION GROWTH TO CONTINUE PROPERTY OF STEP AHEAD INVEST 2013
  85. 85. ALBERTA PROJECTED POPULATION GROWTH PROPERTY OF STEP AHEAD INVEST 2013
  86. 86. ALBERTA PROJECTED POPULATION TO DOUBLE IN 15 YEARS PROPERTY OF STEP AHEAD INVEST 2013
  87. 87. EDMONTON IS BENEFITING FROM ALBERTA NET MIGRATION PROPERTY OF STEP AHEAD INVEST 2013
  88. 88. POPULATION GROWTH INCREASES THE DEMAND FOR HOUSING PROPERTY OF STEP AHEAD INVEST 2013
  89. 89. STEP 4 – INCREASED RENTAL DEMAND PROPERTY OF STEP AHEAD INVEST 2013 Results in Real Estate Profits Positive Cash Flow Appreciation/Principle Pay Down Higher Real Estate Prices Homes Apartments Increased Rental Demand Higher Rents Lower Vacancies Step 4 Step 5 Profits
  90. 90. EDMONTON RENTAL RATES CONTINUE TO INCREASE PROPERTY OF STEP AHEAD INVEST 2013
  91. 91. EDMONTON VACANCY RATES FALLING & BELOW 4% PROPERTY OF STEP AHEAD INVEST 2013 4% Balanced Market
  92. 92. Q2 2013 VACANCY AT 1.2% - WELL BELOW FORECAST OF 2.3% PROPERTY OF STEP AHEAD INVEST 2013
  93. 93. LOW VACANCIES AND HIGHER RENTS PUSHES REAL ESTATE PRICES HIGHER PROPERTY OF STEP AHEAD INVEST 2013
  94. 94. STEP 5 – HIGHER REAL ESTATE PRICES PROPERTY OF STEP AHEAD INVEST 2013 Results in Real Estate Profits Positive Cash Flow Appreciation/Principle Pay Down Higher Real Estate Prices Homes Apartments Increased Rental Demand Higher Rents Lower Vacancies Step 4 Step 5 Profits
  95. 95. EDMONTON HOME PRICES SHOWING SOLID GROWTH PROPERTY OF STEP AHEAD INVEST 2013
  96. 96. MULTI-FAMILY SALES PRICE/DOOR INCREASING PROPERTY OF STEP AHEAD INVEST 2013
  97. 97. WHY INVEST IN EDMONTON? PROPERTY OF STEP AHEAD INVEST 2013
  98. 98. REFINERY ROW RIPPLE EFFECT PROPERTY OF STEP AHEAD INVEST 2013
  99. 99. ONE OF THE BEST PLACES TO INVEST IN THE WORLD PROPERTY OF STEP AHEAD INVEST 2013  Edmonton is the major hub that supports the oil and gas industry  Fort Saskatchewan is one of the major refining locations for petrochemicals and is supported by Edmonton  Most of the fabrication for the oil sands is done in Edmonton  The massive gas plays in Northern BC and Alberta are supported by Edmonton  Alberta/Edmonton is economically and politically stable  Has the lowest cost of living with no sales taxes and one of the highest per capita incomes  The province supports real estate investors and has the least amount of rent controls in the country  There is no land transfer tax in Alberta  Alberta is one of the only world jurisdictions that still has a AAA rating  A KPMG study once found that Edmonton was the 2nd most diversified economy in all of North America
  100. 100. OIL + REAL ESTATE = PROFITS PROPERTY OF STEP AHEAD INVEST 2013 Results in Real Estate Profits Positive Cash Flow Appreciation/Principle Pay Down Higher Real Estate Prices Homes Apartments Increased Rental Demand Higher Rents Lower Vacancies Step 4 Step 5 Profits
  101. 101. AN INVESTMENT OF A LIFE TIME PROPERTY OF STEP AHEAD INVEST 2013  Alberta has been blessed with what the world needs  Oil, Gas and Coal  Mining these resources will provide the fuel needed to drive real estate for many more decades to come  Remember … 4 green houses equals one big red hotel  So what are you waiting for … Invest in Alberta Real Estate Now!

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