Texas proppant and frac sand trends. Does more sand really equal better wells? Energent Group takes a look at the frac sand data in Permian, Eagle Ford, and Granite Wash to identify key operators and trends.

1. TEXAS PROPPANT TRENDS:
MORE SAND = BETTER WELLS?
Frac Sand Supply & Logistics Conference
August 21, 2014
Todd Bush
todd.bush@energentgroup.com
http://www.energentgroup.com
@EnergentGroup

2. ABOUT ENERGENT GROUP
Energent Group is a boutique market research firm focused solely
on our client’s needs for oil & gas data and research products. We
help our clients identify top operators and peers in a play, discover
sales opportunities, evaluate business line and market expansion,
2
and detect trends in the completion & frac supply chain.

3. OBSERVATIONS
• Drilling “productivity” highest in Bakken
with Eagle Ford following
• Top operators focus on field development
and efficiency improvements
• Vertical and horizontal well strategies in the
Permian Basin
• Horizontal well focus in the Eagle Ford
• Contrasting two key counties
3

4. 30% OF RIGS IN PERMIAN BASIN
4
558
199194
79 77 69 62 45 44 34 25
Industry continues shift (+205) to Horizontal

5. BAKKEN PER RIG PRODUCTION
Source: EIA Drilling Productivity Report 5
0
900
100
950
1000
1050
500
1100
600
1150
200
300
400
Jan-12
Feb-12
Mar-12
Apr-12
May-12
Jun-12
Jul-12
Aug-12
Sep-12
Oct-12
Nov-12
Dec-12
Jan-13
Feb-13
Mar-13
Apr-13
May-13
Jun-13
Jul-13
Aug-13
Sep-13
Oct-13
Nov-13
Dec-13
Jan-14
Feb-14
Mar-14
Apr-14
May-14
Jun-14
Jul-14
Aug-14
Sep-14
Permian EFS Bakken Niabrara Rigs

6. OBSERVATIONS
• Drilling “productivity” highest in Bakken
with Eagle Ford following
• Top operators focus on field development
and efficiency improvements
• Vertical and horizontal well strategies in the
Permian Basin
• Horizontal well focus in the Eagle Ford
• Contrasting two key counties
6

7. TOP 5 OPERATORS ACROSS TEXAS
7

8. EOG LEADING LOWER 48
8
Source: EOG Investor presentations
EOG Activity YTD
EOG averages 10 million pounds of frac
sand per well in Eagle Ford

9. PIONEER’S PERMIAN FOCUS
• Increasing horizontal rigs
(5 to 16) while reducing
vertical rigs (11 to 9)
• Optimizing completions
– Increasing clusters per stage
– Increasing proppant per foot
– Reducing fluid volume
• 29% horizontal well
completions this year
9
Pioneer Activity YTD

10. ATHLON SCALING UP IN PERMIAN
• Scaling up oil
manufacturing with
7,308 drilling locations
• Vertical & horizontal
strategy in Permian
• 2% horizontal
• 134,000 net acres
• Active in Wolfberry
Athlon Permian Activity YTD
10

11. EP ENERGY’S SUCCESS DRIVERS
• Refining lateral
placement & improving
stimulation design
• Utilizing resin-coated
and white sand
• Cycle time reduction
• 100% horizontal in
Permian and Eagle Ford
11
EP Energy Activity YTD
Source: EP Energy’s investor presentations

12. OBSERVATIONS
• Drilling “productivity” highest in Bakken
with Eagle Ford following
• Top operators focus on field development
and efficiency improvements
• Vertical and horizontal well strategies in the
Permian Basin
• Horizontal well focus in the Eagle Ford
• Contrasting two key counties
12

13. PERMIAN BASIN TOP OPERATORS
• Average oil IP’s are
fairly consistent
across operators
• Sandridge and
Chevron have 100%
vertical activity
• COG and Energen
are outliers for gas
IP’s
13
182
149
114
94
81 77 75
60 59 57
200
180
160
140
120
100
80
60
40
20
-
800
700
600
500
400
300
200
100
-
Avg IP Gas (MCF) Avg IP Oil (BBL)

14. PERMIAN BASIN SAND USAGE
Midland Basin
Central Basin
Delaware Basin
14

15. OBSERVATIONS
• Drilling “productivity” highest in Bakken
with Eagle Ford following
• Top operators focus on field development
and efficiency improvements
• Vertical and horizontal well strategies in the
Permian Basin
• Horizontal well focus in the Eagle Ford
• Contrasting two key counties
15

16. EAGLE FORD BASIN TOP OPERATORS
• 99.6% horizontal
completions
• Rosetta having success
with new gas wells
• Carrizo using 8-15
million pounds of sand
per well
16
263
174
117
76 72
60 58 56
44 36
300
250
200
150
100
50
-
3,500
3,000
2,500
2,000
1,500
1,000
500
-
Avg IP Gas (MCF) Avg IP Oil (BBL)

17. EAGLE FORD SAND USAGE
17
Oil Window
Gas Window

18. OBSERVATIONS
• Drilling “productivity” highest in Bakken
with Eagle Ford following
• Top operators focus on field development
and efficiency improvements
• Vertical and horizontal well strategies in the
Permian Basin
• Horizontal well focus in the Eagle Ford
• Contrasting two key counties
18

19. TOP COUNTIES TELL THE STORY
19
Andrews La Salle
Well Completions 366 261
Oil IP24 Average (bbl) 86.8 905.3
Gas IP24 Average (mcf) 62.6 766.4
Water IP24 Average (bbl) 360.8 1129.6
Frac Sand Average (lbs) 277,685 9,255,944
Sand Volume (MM lbs) 69 1,073
Horizontal (%) 7% 99%
Oil (%) 100% 95%

20. OBSERVATIONS
• Drilling “productivity” highest in Bakken
with Eagle Ford following
• Top operators focus on field development
and efficiency improvements
• Vertical and horizontal well strategies in the
Permian Basin
• Horizontal well focus in the Eagle Ford
• Contrasting two key counties
20

21. CLOSING THOUGHTS
• Identify who is issuing horizontal permits in
areas near or adjacent to successful operators
or wells
• Determine operators taking manufacturing
approach using pad drilling to quantify sales
opportunities
• Assess well and frac sand locations for strategic
planning efforts
• Monitor upcoming “re-frac” market as
opportunity to win business
• Expect down-spacing and field development to
continue at this pace through Q4 2014
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