1. State of the
Industry
Don Briggs
Thursday, January 26, 12
2. Office of the Press Secretary
For Immediate Release - January 25, 2012
• To save the economy, President
Obama will announce today that he
is ordering the immigration
department to start deporting old
people in order to lower Social
Security and Medicare costs
• President Obama insist that old
people are easier to catch and will not
remember how to get back home.
Thursday, January 26, 12
3. Roy
Culle
n
Clint Murchison
n
hardso
Sid Ric
H.L. Hunt
Thursday, January 26, 12
5. The advanced
technology of
hydraulic fracturing
and lateral drilling
has revolutionized the
domestic oil and gas
industry
Thursday, January 26, 12
6. 2012 Projected Global Crude
oil demand & supply
Million Barrels Per Day
Global Demand 89.3
Global Supply 89.04
US Demand 18.96
Thursday, January 26, 12
7. Global Top Five Producing &
Consuming Countries
Top five producing top five consuming
countries countries
countries Production countries consumption
Million Barrels per day Million barrels per day
Russia 10.2 million 12% United States 19.8 million 22%
Saudi Arabia 10.1 million 12% China 8.3 million
United States 9.6 million 11% Japan 4.6 million
China 4.26 million 5.0% India 3.1million
Iran 4.2 million 4.9% Russia 2.7 million
Thursday, January 26, 12
8. Global Top Five Producing &
Consuming Countries
Top five producing top five consuming
countries countries
countries Production countries consumption
Million Barrels per day Million barrels per day
Russia 10.2 million 12% United States 19.8 million 22%
Saudi Arabia 10.1 million 12% China 8.3 million
United States 9.6 million 11% Japan 4.6 million
China 4.26 million 5.0% India 3.1million
Iran 4.2 million 4.9% Russia 2.7 million
Thursday, January 26, 12
9. Global Top Five Producing &
Consuming Countries
Top five producing top five consuming
countries countries
countries Production countries consumption
Million Barrels per day Million barrels per day
Russia 10.2 million 12% United States 19.8 million 22%
Saudi Arabia 10.1 million 12% China 8.3 million
United States 9.6 million 11% Japan 4.6 million
China 4.26 million 5.0% India 3.1million
Iran 4.2 million 4.9% Russia 2.7 million
Thursday, January 26, 12
11. Threat to the global oil market
14 Tankers carrying 15.5
million barrels of crude
oil pass through the strait
every day.
Represents 35% of the
world’s seaborne oil
shipments, and 20% of oil
traded worldwide, in 2011
One of the worlds most
strategically important
choke points
Thursday, January 26, 12
12. U.S. Liquid Fuels Supply / Consumption 2011
Data Source EIA
Liquid Fuels Source Million Barrels Percent
per day of Total
U.S. Crude Oil Production 5.6 29%
Natural Gas Liquids 2.2 12%
Refinery Processing Gains 1.1 6%
Biofuels 0.9 5%
Other 0.2 1%
Total U.S. Liquid Fuel Supply 10.0
Net Imports 8.9 47%
Total U.S. Liquid Fuel Supply 18.9 100%
Total U.S. Liquids Consumption 18.9
Thursday, January 26, 12
26. Global Shift to
unconventionl Energy
• Energy companies are shifting their focus away from
the Middle East and toward the West - with profound
implications for the companies, global politics and
consumers.
• By 2020 shale sources will make up about a third of
U.S. oil and gas production
• By 2020 U.S. will be the top global oil and gas
producer, passing Russia and Saudi Arabia.
Thursday, January 26, 12
27. GLOBAL
FRASER INSTITUTE
PETROLEUM SURVEY
• A total of 502
respondents
completed the
survey to evaluate
136 jurisdictions
around the globe
Thursday, January 26, 12
29. NORTH AMERICA THE INVESTMENT
CLIMATE HOT SPOT
• #1 Mississippi
• #5 Texas
• #14 Louisiana
• The Gulf of Mexico
dropped from 11th in
investment
attractiveness this
year to 60th
Thursday, January 26, 12
31. Institute for Energy Research in a recent study -
North America holds the world’s largest combined oil,
coal, and natural gas resources in the world,enough to
fuel our present needs for 250 years.
Thursday, January 26, 12
32. UNCONVENTIONAL ENERGY
➡“It’s the elixir of economic life, providing business
longevity and renewal and ...apparently.....about to turn the US
back into an industrial powerhouse” The Australian.
➡ "This shale gas development is a game-changer of huge
proportions," said Dan DiMicco, chief executive officer of Nucor
Corp
➡ “We are in the midst of a significant global shift as
unconventional energy sources become more attractive to oil
and gas companies” BDO USA
➡ Youngstown Steel & Tube building $650 million Plant in
Youngstown, Ohio all made possible by cheap shale gas from
Pennsylvania
Thursday, January 26, 12
33. WORLD OIL POWERS BUY
INTO U.S. SHALE PLAYS
Thursday, January 26, 12
36. federal
issues
• Investment incentives
• Hydraulic Fracturing
• Gulf of Mexico
• Keystone Pipe Line
Thursday, January 26, 12
37. Investment Incentives
• Repeal expensing of intangible drilling cost
• Repeal deductions for tertiary recovery
• Repeal percentage depletion allowance for oil
and gas wells
• Repeal domestic manufacturing deductions
for oil and gas companies
• Increase geological and geophysical
amortization for independent producers to 7
years
Thursday, January 26, 12
39. Hydraulic Fracturing
➡First commercial “frac” job
was conducted in 1947
➡States regulate hydraulic
fracturing
➡More than 1 million wells had
been completed using this
method by 1988
➡Estimated that nearly 85% of
wills drilled today are
completed using hydraulic
fracturing
➡Multiple federally funded
studies have shown that there
is no risk associated with
hydraulic fracturing
Thursday, January 26, 12
42. Gulf of Mexico
Unprecedented Uncertainty
• GOM oil production has • Approval of exploration
declined from 1.6 to 1.3 plans have slowed to 131
million barrels of oil per day days from a pre moratorium
of 36 days
• Regulatory web continues to
be more burdensome and • “On Aggregate, in the 12
complex months following the lifting
of the moratorium, the 51
• Safety & Environmental permits approved result in
System (SEMS) 1 & 2, along an annual rate of approval
with Idle Iron NTL 2010 will that was 32% of the
send the independents historical average
onshore (151)permits.” IHS-CERA
Thursday, January 26, 12
43. No to Standby
Vessel Legislation
• Landry Amendment to • The cost to industry will
HR 2838 Coast Guard be in the $100s of millions.
Reauthorization bill One company alone the
would require operators cost will be $50 million
in the GOM to have
standby vessels near their • Industry has emergency
facilities. supports systems,
helicopters, field vessels,
• The Standby Vessel emergency evacuation
legislation will require an plans and drills, life
estimated 200 additional saving equipment, crafts,
vessels in the the GOM rafts
daily.
Thursday, January 26, 12
52. BROWN DENSE Louisiana
HAYNESVILLE SHALE
COTTON VALLEY Shale & Ultra
Deep Plays
TUSCALOOSA MARINE SHALE/
EAGLE FORD LA SHALE
WILCOX
ULTRA DEEP FRONTIER
Thursday, January 26, 12
54. Haynesville
Shale
#1 Producing Natural Gas Field in US
$14 Billion Est. Economic Impact in 2012
60,000 Plus Jobs Supported by Shale in 2012
1,700 Plus Producing Wells
2,207 Units as of 12/15/11
Thursday, January 26, 12
55. Since 1997, more than 13,500 gas
wells completed in the Barnett
Text
Thursday, January 26, 12
