The PetroNerds Podcast – Episode 1:
OPEC and Oil Prices, Dakota Access Pipeline
(DAPL), Enbridge Spectra Energy Merger,
Apache’s “Alpine High” Permian Basin
Discovery, and EOG’s purchase of Yates
Petroleum
September 2016
Trisha Curtis – Co-Founder, PetroNerds, LLC
PetroNerds LLC | www.petronerds.com | 970-329-1645
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About PetroNerds
PetroNerds, LLC is a Denver, CO based energy analytics and consulting firm with a focus on oil, gas,
and biofuels.
We provide detailed, data-driven, and actionable insights into the activity of energy companies,
markets, and policy developments. PetroNerds seeks to work closely with its clients and provided
personalized services. We tailor our projects to the exact requirements of our clients, large and small.
The founders of PetroNerds have nearly 15 years of experience in the oil and gas industry. They have
led research contracts with US Department of Defense and US Department of Energy, presented at
some of the world’s foremost oil and gas venues and universities, published in publications such as Oil
& Gas Journal and World Oil, and been quoted by the Economist and the Financial Times.
Your host, Trisha Curtis, is a co-founder of PetroNerds, LLC. She was formerly the Director of Research,
Upstream and Midstream, at the Energy Policy Research Foundation, Inc. Trisha is a research fellow at
the Oxford Institute for Energy Studies (OIES) and a non-resident fellow at the Energy Policy Research
Foundation, Inc.
© 2016 PetroNerds LLC | www.petronerds.com | 970-329-1645
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Podcast Outline
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Why are prices so stagnant?
What is the Dakota Access Pipeline?
Spectra Energy and Enbridge Merger
Apache’s “Alpine High” discovery
Yates Petroleum Acquisition by EOG
© 2016 PetroNerds LLC | www.petronerds.com | 970-329-1645
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Surprises to the Upside?
Source: IEA
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Where are those production declines?
Eagle Ford Reservior Production (Texas
Only)
Liquids b/d
2,000,000
1,500,000
1,000,000
500,000
3/1/2016
8/1/2015
1/1/2015
6/1/2014
11/1/2013
4/1/2013
9/1/2012
2/1/2012
7/1/2011
12/1/2010
5/1/2010
10/1/2009
3/1/2009
8/1/2008
Source: IEA, DrillingInfo raw data, PetroNerds
1/1/2008
-
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DAPL
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Energy Transfer Partners – DAPL - Bakken Pipeline Project
Source: Energy Transfer Partners, Barclays conference presentation, Sept 7, 2016, slides 21 and 22
PetroNerds LLC | www.petronerds.com | 970-329-1645
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U.S. crude by rail volumes continue decline – 363,000 b/d
U.S. and Williston Basin Crude by Rail Volumes
700,000 b/d
Sept 2015 vs.
320,000 b/d
June 2016
1,200
Thousand Barrels Per Day
1,000
800
600
400
200
Canada Receipts by Rail from U.S. of Crude Oil - Thousand b/d
U.S. Crude Oil by Rail -Thousand b/d
U.S. Receipts by Rail from Canada of Crude Oil - Thousand b/d
Williston Basin Crude by Rail Estimate - Thousand b/d
May-16
Mar-16
Jan-16
Nov-15
Sep-15
Jul-15
May-15
Jan-15
Mar-15
Nov-14
Jul-14
Sep-14
May-14
Jan-14
Mar-14
Nov-13
Jul-13
Sep-13
May-13
Jan-13
Mar-13
Sep-12
Nov-12
Jul-12
Mar-12
May-12
Jan-12
Sep-11
Nov-11
Jul-11
Mar-11
May-11
Jan-11
Sep-10
Nov-10
Jul-10
May-10
Mar-10
Jan-10
-
Source: EIA, NDPA
PetroNerds LLC | www.petronerds.com | 970-329-1645
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Enbridge Spectra Merger
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Enbridge Spectra (potential) Merger – Sept 6, 2016
Express
Pipeline –
280,000 b/d
Platte Pipeline – 164,000
b/d from Casper to
Guernsey; 145,000 b/d
Guernsey to Wood River
Source: Enbridge and Spectra Energy investor presentation, Sept 6, 2016
PetroNerds LLC | www.petronerds.com | 970-329-1645
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“Alpine High”
Apache’s southwestern
Permian Basin discovery
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Apache Recent Permian Discovery – “Alpine High”
Source: Apache Corporation website PDF and Barclays presentation, Sept 7, 2016
PetroNerds LLC | www.petronerds.com | 970-329-1645
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Apache’s Permian Position
WCNT
Well Count
1/1/2016
9/1/2014
5/1/2013
1/1/2012
9/1/2010
5/1/2009
1/1/2008
9/1/2006
5/1/2005
1/1/2004
9/1/2002
14,000
12,000
10,000
8,000
6,000
4,000
2,000
-
5/1/2001
140,000
120,000
100,000
80,000
60,000
40,000
20,000
-
1/1/2000
b/d
Apache Liquid Production in Permian
Basin
LIQ
June 2016 – Apache’s production
in the Permian Basin: 108,000
b/d
Source: DrillingInfo raw data Sept 13 2016, PetroNerds
PetroNerds LLC | www.petronerds.com | 970-329-1645
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Permian Basin Production by State and Drill Type
Permian Basin Production
2,500,000
18,000,000
16,000,000
2,000,000
1,000,000
900,000
800,000
700,000
600,000
500,000
400,000
300,000
200,000
100,000
-
14,000,000
b/d
10,000,000
8,000,000
1,000,000
6,000,000
4,000,000
500,000
2,000,000
New Mexico Vertical Liquid
Texas Horizontal Liquid
Texas Vertical Liquid
8/1/2015
9/1/2014
10/1/2013
11/1/2012
12/1/2011
1/1/2011
2/1/2010
3/1/2009
4/1/2008
5/1/2007
6/1/2006
7/1/2005
8/1/2004
9/1/2003
10/1/2002
11/1/2001
12/1/2000
New Mexico Horizontal Liquid
LIQ
GAS
5/1/2015
3/1/2014
1/1/2013
9/1/2010
11/1/2011
7/1/2009
5/1/2008
3/1/2007
-
1/1/2006
-
WTR
Source: DrillingInfo raw data Aug 28 2016, PetroNerds
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mcf/d
12,000,000
1,500,000
1/1/2000
B/D
Permian Basin Production by State and Drill
Type
New Mexico – Permian Basin – Horizontal Decline Curve
Permian Basin - New Mexico - Horizontal Decline Curve
Number of Wells Included in
Permian Basin –NM – Horizontal
Decline Curve
700
600
# of Wells
500
b/d
400
300
200
800
700
600
500
400
300
200
100
0
0 4 8 12 16 20 24 28 32 36 40 44 48 52 56 60 64 68 72
100
Months
0
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 54 56 58 60 62 64
Months
2011
2012
2013
2014
2015
2011
2012
2013
2014
2015
2016
2016
Source: DrillingInfo raw data Aug 28 2016, PetroNerds
PetroNerds LLC | www.petronerds.com | 970-329-1645
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EOG’s purchase of Yates
Petroleum
© 2016 PetroNerds LLC | www.petronerds.com | 970-329-1645
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“EOG Resources and Yates Agree to Combine”
Source: EOG website press release
PetroNerds LLC | www.petronerds.com | 970-329-1645
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Powder River Basin Production and Decline Curve
Powder River Basin Decline Curve
Powder River Basin Production
400
1,800,000
350
140,000
1,600,000
300
120,000
1,400,000
250
1,000,000
80,000
800,000
60,000
600,000
40,000
400,000
20,000
200,000
200
150
100
50
0
0 3 6 9 12 15 18 21 24 27 30 33 36 39 42 45 48 51 54 57 60 63
Months
2011
8/1/2015
9/1/2014
10/1/2013
11/1/2012
1/1/2011
12/1/2011
2012
2013
2014
2015
2016
Powder River Basin Wells Included
GAS
# of Wells
LIQ
2/1/2010
3/1/2009
4/1/2008
5/1/2007
6/1/2006
7/1/2005
8/1/2004
9/1/2003
10/1/2002
11/1/2001
12/1/2000
-
1/1/2000
-
mcf/d
1,200,000
100,000
b/d
b/d
160,000
1,000
800
600
400
200
0 3 6 9 12 15 18 21 24 27 30 33 36 39 42 45 48 51 54 57 60 63
Months
2011
2012
2013
2014
2015
2016
Source: DrillingInfo raw data Sept 2016, PetroNerds
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