Rockies Production Stacking it Up - petronerds.com · • Boutique energy analytics and advisory...

Rockies Production –Stacking it UpT R I S H A C U R T I S , P R E S I D E N T A N D C O - F O U N D E R , P E T R O N E R D S

T R I S H A @ P E T R O N E R D S . C O M

D U G R O C K I E S 2 0 1 8

A P R I L 2 5 , 2 0 1 8

1© PETRONERDS LLC | WWW.PETRONERDS.COM | 970-329-1645

© PETRONERDS LLC | WWW.PETRONERDS.COM | 970-329-1645 2

Source: Extraction rig, September 2017

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Pluses and Minuses for the Rockies


DJ

• Positives: Delineated play, continued opportunities, lower cost

• Negatives: Infrastructure constraints, election, capital competition, investor pressure

Williston

• Positives: Delineated play, known geology, completion growth opportunities

• Negatives: Capital competition, Investor pressure

Powder

• Positives: Upside potential, stacked pay, few players

• Negatives: Delineation, few players, acreage sales, investor pressure, high cost

Permian

Prices

FCF

Operators are Hedging


Source: HedgeAware, a PetroNerds Product

Production, CAPEX, Free Cash Flow


Source: HedgeAware, a PetroNerds Product

Rigs and Oil Prices


$-

$20

$40

$60

$80

$100

$120

-

100

200

300

400

500

600

WTI

/$ P

er B

arre

l

Rig

s

Permian Rig Count Decoupling in 2016

Permian Oil Cushing OK WTI Spot Price FOB $/bbl

820 vs. 453

$-

$20

$40

$60

$80

$100

$120

-

50

100

150

200

250

300

350

400

450

500

WTI

/$ P

er B

arre

l

Rig

s

DJ, Bakken, Eagle Ford Rig Count

DJ Oil Eagle Ford Oil Williston Oil Cushing OK WTI Spot Price FOB $/bbl

Source: PetroNerds, DrillingInfo data, EIA

Shale/Tight Oil Production – 5.6 mbd


$-

$20

$40

$60

$80

$100

$120

$140

$160

-

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,0001

/1/2

00

0

6/1

/20

00

11

/1/2

00

0

4/1

/20

01

9/1

/20

01

2/1

/20

02

7/1

/20

02

12

/1/2

00

2

5/1

/20

03

10

/1/2

00

3

3/1

/20

04

8/1

/20

04

1/1

/20

05

6/1

/20

05

11

/1/2

00

5

4/1

/20

06

9/1

/20

06

2/1

/20

07

7/1

/20

07

12

/1/2

00

7

5/1

/20

08

10

/1/2

00

8

3/1

/20

09

8/1

/20

09

1/1

/20

10

6/1

/20

10

11

/1/2

01

0

4/1

/20

11

9/1

/20

11

2/1

/20

12

7/1

/20

12

12

/1/2

01

2

5/1

/20

13

10

/1/2

01

3

3/1

/20

14

8/1

/20

14

1/1

/20

15

6/1

/20

15

11

/1/2

01

5

4/1

/20

16

9/1

/20

16

2/1

/20

17

7/1

/20

17

12

/1/2

01

7

WTI

/$ P

er B

arre

l

Bar

rels

Per

Day

Powder River Basin Production Denver Julesburg Basin Production Williston Basin Production

Eagle Ford Reservoir Production Permian Basin Production Cushing OK WTI Spot Price FOB $/bbl

Permian – 2.9 mbdWilliston – 1.1 mbdEagle Ford – 1.1 mbdDJ – 408 kbdPowder – 105 kbd

Source: PetroNerds, DrillingInfo data, EIA

Permian Basin Production and Decline Curve


-

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

8,000,000

-

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

1/1

/20

07

3/1

/20

08

5/1

/20

09

7/1

/20

10

9/1

/20

11

11

/1/2

01

2

1/1

/20

14

3/1

/20

15

5/1

/20

16

7/1

/20

17

mcf

/d

Bar

rels

Per

Day

–W

ater

an

d L

iqu

id

Total Liquid Production Horizontal Liquid Production

Horizontal Water Production Horizontal Gas Production

-

100

200

300

400

500

600

700

800

0 3 6 9 12 15 18 21 24 27 30 33 36 39 42 45 48 51

Bar

rels

Per

Day

Month

2013 2014 2015 2016 2017

# of Wells Included in Month 1

2013 1,154 2014 1,656 2015 1,838 2016 1,697 2017 2,604

Source: PetroNerds, DrillingInfo data

Measuring Productivity in the Permian Basin



-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

1/1

/08

9/1

/08

5/1

/09

1/1

/10

9/1

/10

5/1

/11

1/1

/12

9/1

/12

5/1

/13

1/1

/14

9/1

/14

5/1

/15

1/1

/16

9/1

/16

5/1

/17

FEET

Average Lateral Length

0

2

4

6

8

10

12

14

16

18

1/1

/08

8/1

/08

3/1

/09

10

/1/0

9

5/1

/10

12

/1/1

0

7/1

/11

2/1

/12

9/1

/12

4/1

/13

11

/1/1

3

6/1

/14

1/1

/15

8/1

/15

3/1

/16

10

/1/1

6

5/1

/17

BA

RR

ELS

PER

FO

OT

First 6 Month Cumulative Production Per Lateral Foot

Permian Complexity▪ Tremendous stacked pay potential

▪ Successful development will require lots of work and capital

▪ Stringent leasing requirements in the Permian Basin often prevent optimal asset delineation

▪ INFRASTRUCTURE – Gas, Water, Oil

▪ MIDLAND Differential Blowouts

▪ Land rush, Wall Street push, and high acreage costs

▪ Now operators are trying to delineate, develop, and maintain leasing requirements all at the same time

▪ Optimal spacing and completion design (frac) is key

▪ Well density, inventory, parent child problems, all coming into focus


Source: Diamondback, April 2018 Investor Presentation

DJ – Denver Julesburg Basin


Spud to Total Depth in Less than Three Days


Extraction Oil and Gas, September 2017

DJ Basin Production


-

500,000

1,000,000

1,500,000

2,000,000

2,500,000

-

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

1/1

/20

06

6/1

/20

06

11

/1/2

006

4/1

/20

07

9/1

/20

07

2/1

/20

08

7/1

/20

08

12

/1/2

008

5/1

/20

09

10

/1/2

009

3/1

/20

10

8/1

/20

10

1/1

/20

11

6/1

/20

11

11

/1/2

011

4/1

/20

12

9/1

/20

12

2/1

/20

13

7/1

/20

13

12

/1/2

013

5/1

/20

14

10

/1/2

014

3/1

/20

15

8/1

/20

15

1/1

/20

16

6/1

/20

16

11

/1/2

016

4/1

/20

17

9/1

/20

17

GA

S -

mcf

/day

WAT

ER a

nd

LIQ

UID

S –

Bar

rels

Per

Day

Total Liquid Production Horizontal Liquid Production Horizontal Water Production Horizontal Gas Production


DJ Basin Decline Curve


-

50

100

150

200

250

300

350

0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 50 52

Bar

rels

Per

Day

Months

2013 2014 2015 2016 2017



2013 841 2014 1,275 2015 1,177 2016 861 2017 1,605

Measuring Productivity in the DJ Basin


0

5

10

15

20

25

1/1

/20

10

7/1

/20

10

1/1

/20

11

7/1

/20

11

1/1

/20

12

7/1

/20

12

1/1

/20

13

7/1

/20

13

1/1

/20

14

7/1

/20

14

1/1

/20

15

7/1

/20

15

1/1

/20

16

7/1

/20

16

1/1

/20

17

7/1

/20

17

BA

RR

ELS

PER

FO

OT


-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

1/1

/20

10

7/1

/20

10

1/1

/20

11

7/1

/20

11

1/1

/20

12

7/1

/20

12

1/1

/20

13

7/1

/20

13

1/1

/20

14

7/1

/20

14

1/1

/20

15

7/1

/20

15

1/1

/20

16

7/1

/20

16

1/1

/20

17

7/1

/20

17

FEET



Top DJ Basin Operators by Production



Operator Daily Liquids b/dDaily Gas

mcf/d

1 ANADARKO PETROLEUM CORPORATION 110,214 766,411

2 NOBLE ENERGY, INC. 83,556 345,921

3 EXTRACTION OIL & GAS LLC 56,903 225,098

4 PDC ENERGY INC 44,448 307,711

5 SRC ENERGY INC 27,040 134,294

6 WHITING PETROLEUM CORPORATION 22,997 29,702

7 BILL BARRETT CORPORATION 16,862 53,732

8 CRESTONE PEAK RESOURCES OPERATING LLC 15,608 125,445

9 GREAT WESTERN OPERATING COMPANY LLC 13,233 47,783

10 EOG RESOURCES INCORPORATED 10,533 10,693

11 BONANZA CREEK ENERGY OPERATING COMPANY LLC 9,414 38,319

12 KAISER-FRANCIS OIL COMPANY 4,736 4,320

13 CONOCOPHILLIPS COMPANY 3,630 6,212

14 FIFTH CREEK ENERGY OPERATING COMPANY LLC 3,310 4,411

15 BAYSWATER EXPLORATION AND PRODUCTION LLC 3,012 3,600

DJ GOR and API Gravity



Infrastructure Constraining the DJ


The Bakken –Williston Basin


Williston Basin Production


-

500,000

1,000,000

1,500,000

2,000,000

2,500,000

1/1

/20

00

7/1

/20

00

1/1

/20

01

7/1

/20

01

1/1

/20

02

7/1

/20

02

1/1

/20

03

7/1

/20

03

1/1

/20

04

7/1

/20

04

1/1

/20

05

7/1

/20

05

1/1

/20

06

7/1

/20

06

1/1

/20

07

7/1

/20

07

1/1

/20

08

7/1

/20

08

1/1

/20

09

7/1

/20

09

1/1

/20

10

7/1

/20

10

1/1

/20

11

7/1

/20

11

1/1

/20

12

7/1

/20

12

1/1

/20

13

7/1

/20

13

1/1

/20

14

7/1

/20

14

1/1

/20

15

7/1

/20

15

1/1

/20

16

7/1

/20

16

1/1

/20

17

7/1

/20

17

1/1

/20

18

WAT

ER a

nd

Liq

uid

-B

arre

ls P

er D

ay a

nd

GA

S –

mcf

/day

LIQ GAS WTR


Williston Basin Decline Curve


-

100

200

300

400

500

600

700

800

0 1 2 3 4 5 6 7 8 9 10111213141516171819202122232425262728293031323334353637383940414243444546474849505152

Bar

rels

Per

Day

Month

2013 2014 2015 2016 2017 2018


# of Wells in Month 1

2013 2,157 2014 2,272 2015 1,419 2016 680 2017 799 2018 35

Measuring Productivity in the Williston Basin


-

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

3/1

/20

08

11

/1/2

00

8

7/1

/20

09

3/1

/20

10

11

/1/2

01

0

7/1

/20

11

3/1

/20

12

11

/1/2

01

2

7/1

/20

13

3/1

/20

14

11

/1/2

01

4

7/1

/20

15

3/1

/20

16

11

/1/2

01

6

7/1

/20

17

FEET



0

2

4

6

8

10

12

1/1

/20

08

7/1

/20

08

1/1

/20

09

7/1

/20

09

1/1

/20

10

7/1

/20

10

1/1

/20

11

7/1

/20

11

1/1

/20

12

7/1

/20

12

1/1

/20

13

7/1

/20

13

1/1

/20

14

7/1

/20

14

1/1

/20

15

7/1

/20

15

1/1

/20

16

7/1

/20

16

1/1

/20

17

7/1

/20

17

BA

RR

ELS

PER

FO

OT


Top Williston Basin Operators by Production

Operator Daily Liquids Daily Gas

1 CONTINENTAL RESOURCES, INC. 140,719 283,588

2 WHITING PETROLEUM CORPORATION 91,245 229,628

3 HESS BAKKEN INVESTMENTS II, LLC 88,313 190,804

4 CONOCOPHILLIPS COMPANY 83,386 116,086

5 EXXON MOBIL CORPORATION 75,387 174,735

6 OASIS PETROLEUM NORTH AMERICA LLC 66,851 162,765

7 MARATHON OIL COMPANY 66,752 85,181

8 STATOIL OIL & GAS LP 50,388 82,790


10 WPX ENERGY WILLISTON, LLC 42,499 51,539

11 QEP ENERGY COMPANY 33,237 72,699

12 BRUIN E&P OPERATING, LLC 33,203 43,887

13 NEWFIELD EXPLORATION COMPANY 27,007 58,727

14 PETRO-HUNT CORPORATION 23,883 39,466

15 SLAWSON EXPLORATION COMPANY, INC. 23,314 25,604



PRB – Powder River Basin


-

200

400

600

800

1,000

1,200

1,400

-

50,000

100,000

150,000

200,000

250,000

300,000

1/1

/20

00

8/1

/20

00

3/1

/20

01

10

/1/2

001

5/1

/20

02

12

/1/2

002

7/1

/20

03

2/1

/20

04

9/1

/20

04

4/1

/20

05

11

/1/2

005

6/1

/20

06

1/1

/20

07

8/1

/20

07

3/1

/20

08

10

/1/2

008

5/1

/20

09

12

/1/2

009

7/1

/20

10

2/1

/20

11

9/1

/20

11

4/1

/20

12

11

/1/2

012

6/1

/20

13

1/1

/20

14

8/1

/20

14

3/1

/20

15

10

/1/2

015

5/1

/20

16

12

/1/2

016

7/1

/20

17

Wel

l Co

un

t

Liq

uid

an

d W

ATER

–B

arre

ls P

er D

ay a

nd

GA

S –

mcf

/d

Horizontal Well Count Total Liquid Horizontal Liquid Horizontal Gas Horizontal Water

Powder River Basin Production


Total production – 115,000 b/d

1,200 horizontal wells producing 85,000 b/d

Powder River Decline Curve


-

100

200

300

400

500

600

700

800

900

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52

Bar

rels

Per

Day

Month2013 2014 2015 2016 2017 2018


2013 1862014 3312015 2112016 572017 1302018 4


Parkman Reservoir Horizontal Decline Curve


-

200

400

600

800

1,000

1,200

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52

Bar

rels

Per

Day

Month

2013 2014 2015 2016 2017


2013 432014 852015 602016 102017 21


Top Powder River Basin Operators by Production

Operator Daily Liquids Daily Gas


2 DEVON ENERGY CORPORATION 19,401 22,291

3 EOG Y RESOURCES, INC. 7,593 46,158

4 CHESAPEAKE ENERGY CORPORATION 7,271 50,494

5 BALLARD PETROLEUM HOLDINGS, LLC 5,830 8,576

6 DENBURY RESOURCES INC. 5,437 116,659

7 SM ENERGY COMPANY 4,983 13,519

8 PEAK POWDER RIVER RESOURCES LLC 3,996 9,671

9 SAMSON INVESTMENT COMPANY 2,753 4,710

10 SHERIDAN PRODUCTION COMPANY, LLC 2,000 557

11 MERIT ENERGY COMPANY 1,931 -

12 TRUE COMPANIES 1,579 850

13 WOLD ENERGY PARTNERS LLC 1,473 4,965

14 HELIS OIL & GAS COMPANY LLC ESTATE 1,142 3,621

15 MCL 1 OIL & GAS WYOMING LLC 1,112 8,523



Rockies Production Stacking it Up - petronerds.com · • Boutique energy analytics and advisory...

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Transcript of Rockies Production Stacking it Up - petronerds.com · • Boutique energy analytics and advisory...