1

E I A E N E R G Y C O N F E R E N C E

J U N E 2 6 , 2 0 1 7

2

0 20 40 60 80 100 120 140 160

Ghawar, Saudi Arabia

Permian Basin, USA

Burgan, Kuwait

Safaniyah, Saudi Arabia

Eagle Ford Shale, USA

Samotlorskoye, Russia

Shaybah, Saudi Arabia

Romashkinskoye, Russia

ADCO, UAE

Zuluf, Saudi Arabia

Cantarell, Mexico

Total Recoverable Resource (BBOE)1

PERMIAN BASIN TAKES GLOBAL STAGE

“U.S. now holds more oil reserves than

Saudi Arabia” – Rystad Energy, July 4, 2016

1) Total recoverable resource includes oil and gas for all fields

Source: Wood Mackenzie for international fields; Permian Basin from internal estimates

Produced To Date Midland Basin Delaware Basin

“The Midland and Delaware basins hold the largest number of undrilled, low-cost tight

oil locations in the Lower 48. No other region comes close.” – Wood Mackenzie

3

IMPACT OF HORIZONTAL TECHNOLOGY IN THE MIDLAND BASIN

From 2009 to 2012, production growth primarily attributable to increased vertical activity

Post 2012, production growth driven by horizontal activity

Spraberry/Wolfcamp production has

increased ~1,000,000 BOEPD since 2009

Source: IHS Energy monthly data through March 2017 for the Spraberry, Credo East, Garden City South

and Lin Fields; 2-stream production data

Midland Basin Spraberry/Wolfcamp Production

4

0.0

0.5

1.0

1.5

2.0

2.5

3.0

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Mil

lio

n B

arre

ls O

il P

er

Da

yPERMIAN BASIN ONLY GROWING OIL SHALE PLAY

Eagle Ford

Bakken

Permian

Basin

Source: EIA, Drilling Productivity Report, June 2017

Permian Basin is the only growing major U.S. oil shale since downturn began

Niobrara

Nov. 2014

OPEC Decision

Other regions in

EIA’s Drilling

Productivity

Report

5

$0

$20

$40

$60

$80

$100

$120

$140

$160

-

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

2.0

'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17

WT

I P

ric

e (

$/

BB

L)

Da

ily

Oil

Pro

du

cti

on

(M

MB

OP

D)

PERMIAN BASIN HORIZONTALS ARE A GAME CHANGER

Source: Production data from EIA (U.S. tight oil production – selected plays) through May 2017; historical WTI price from EIA

The Permian Basin has produced >35 BBOE in the past 90 years with an

estimated >150 BBOE recoverable resource remaining

Oil Price

Permian Basin Tight

Oil Production

Horizontal Drilling Begins

6

4.5

5.0

5.5

6.0

6.5

7.0

7.5

8.0

8.5

9.0

9.5

10.0

Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17

MM

BO

PD

Average Monthly Oil Production

Weekly Data Monthly Data

U.S. OIL PRODUCTION

Source: EIA, monthly data through March 2017, weekly data through June 9th 2017

7

PRODUCTION GROWTH FORECAST

204

234

249

2015 2016 Q1 Q2 Q3 Q4 2026E52% Oil

Total Net Production (MBOEPD)

1) Assumes ethane rejection continues in Spraberry/Wolfcamp (~5 MBOEPD of ethane was rejected in Q1 2017)

>70% Oil

1

57% Oil

2017E1

~60% Oil

269 - 276

59% Oil

254 - 259

~1 MMBOEPD

8

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016

Ch

an

ge

in

We

ll P

rod

uc

tiv

ity

1

Ch

an

ge

in

We

ll C

ost

s2WELL PRODUCTIVITY AND COSTS CONTINUE TO IMPROVE

PXD D&C Cost per Well2

Permian Well

Productivity1

Increases in well productivity coupled with decreasing well costs

allow for strong returns in the current oil price environment

Q4

2014

Q1

2015

Q2

2015

Q3

2015

Q4

2015

Q1

2016

Q2

2016

Q3

2016

Q4

2016

1) Source: IHS Energy Blog “The Permian Basin: A magnet for risk capital” January 31, 2017

2) Drilling and completion costs per perforated lateral foot; represents all PXD horizontal wells in Spraberry/Wolfcamp since Q4 2014

Well Productivity Drivers

– Increased water volumes

– Increased sand volumes

– Reduced cluster spacing

– Longer lateral lengths

Cost Reduction Drivers

– Focused drilling on

3 zones vs. 8 zones

– Decreased drilling and

completion times

– Reduced service costs

9

THE TWO LARGEST U.S. OIL SHALE PLAYS

Eagle Ford

CondensateMarcellus

Bakken

Source: PXD

Niobrara

Wolfcamp D

“Cline”

Wolfcamp A

Wolfcamp B

L. Spraberry

M. Spraberry

Clear Fork

JoMill

Midland

Basin

Delaware

Basin

Avalon Shale

1st Bone Spring

2nd Bone Spring

3rd Bone Spring

Wolfcamp A / X-Y Ss

Wolfcamp D

Wolfcamp B

~75 BBOE recoverable resource potential

Midland Basin Delaware Basin

Estimates indicate

similar resource

potential to the

Midland Basin

10

MIDLAND BASIN: STACKED PLAY POTENTIAL

“Delta log R” (excess electrical resistance)

Red intervals indicate hydrocarbons

Petrophysical analysis indicates significantly more oil in place in the

Wolfcamp and Spraberry Shale intervals in the Midland Basin compared to

other major U.S. shale oil plays

20

0 f

t

Eagle Ford

Condensate

Barnett

Combo Marcellus

Barnett

Miss Lime

Woodford

Wolfcamp D

“Cline”

Wolfcamp A

Wolfcamp B

L. Spraberry

Shale

M. Spraberry

Shale

Clear Fork

Bakken

Jo Mill Shale

Midland Basin

Source: PXD

Dean

Wolfcamp C

U. Spraberry

Atoka

Strawn

Niobrara

11

EVOLUTION OF EIA’S US LOWER-48 PRODUCTION FORECAST

5.6

5.8

6.0

6.2

6.4

6.6

6.8

7.0

7.2

7.4

7.6

MM

BO

PD

Source: EIA Short Term Energy Outlook

May ‘17April ‘17

November ‘16

August ‘16

Forecast

Date

June ‘17