Uinta Basin
Fall 2012
Utah Information
• Rich in natural resources, energy use and development is
• central to the state of Utah and its citizens.
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Governor: Gary R. Herbert (Rep.)
Capital:
Salt Lake City
Population:
2.8 million people⁽¹⁾
Crude oil production: 72,000 bbl/d⁽²⁾
Proven liquids reserves: 650 Mmbbl⁽³⁾
Oil proven reserves: 449 Mmbbl⁽⁴⁾
Refining capacity : Total capacity over 165,000 bbl/d⁽⁵⁾ (Big West Oil, Chevron, Holly Refining, Silver Eagle, Tesoro West Coast) 1.
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Utah Population Estimates Committee, July 2011.
2011 average daily production based on US Crude oil production by state at year end 2011.
US Energy Information Administration, US Proved Reserves of Crude Oil and Natural Gas Liquids by State, December 31, 2010.
US Energy Information Administration, US Proved Reserves of Crude Oil and Natural Gas Liquids by State, December 31, 2010.
US Energy Information Administration, Utah Energy Fact Sheet, as of December 31, 2011.
Uinta Basin | Fall 2012
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Uinta Basin
• Discovered in early 1950s
• Encompasses an area of more
than 9,300 square miles (14,900
km²) in NE Utah⁽¹⁾
• Located in Duchesne and Uintah
counties of Utah
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Basin production: >50,000 bbl/d⁽²⁾
Current Oil drilling rigs: approximately 20⁽³⁾
2012 Oil wells completed to date in basin: >275⁽⁴⁾
First production in 1948⁽⁵⁾
>630 Mmbbl cumulative oil recovered to date⁽⁶⁾
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US Department of Energy Reservoir Characterization of the Lower Green River formation, Southwest Uinta Basin, Utah.
2011 average daily production based on gross US Crude oil production by county at year end 2011.
Oil rig count provided by Baker Hughes, September 2012 for Uintah and Duchesne counties.
Utah Division of Oil, Gas and Mining. Drilling results for Producing Oil Wells in Duchesne and Uintah counties as of October 2012.
Wood Mackenzie & HPDi
Utah Division of Oil, Gas and Mining. Cumulative Lifetime Oil production for Duchesne and Uintah counties as of October 2012.
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Uinta Basin Geology
• Formed during late
Cretaceous to Eocene
time
• 3 main petroleum
systems:
1. Green River System
(Oil)
• High paraffin content
(15%)
• Black wax crude (32°
API)
2.
Wasatch overpressure system (Oil)
• High paraffin content
(15%)
• Yellow wax crude
(42°API)
3.
Mesaverde (Gas)
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Uinta Stratigraphic Complex
Green River (Black Wax)
SW
9000 ft
Central Basin
Green River Formation
X
Altamont Oil Field
Marsing
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Brotherson 1‐11‐B4
X’
N
Duchesne River fm.
9000 ft
6000 ft
6000 ft
3000 ft
3000 ft
Uinta fm.
Sandstone and limestone facies
Saline facies
Sea level
‐3000 ft
‐6000 ft
‐9000 ft
Sea level
Alluvial Facies
Sandstone, conglomerate, and red to gray claystone of alluvial fan, high mud flat, lower deltaic plain and paludal origin
Marginal Lacustrine Facies
Sandstone, gray‐green claystone and carbonate of deltaic, interdeltaic, and lake‐margin carbonate flat origin
Open Lacustrine Facies
Gray and brown claystone and mud‐ supported carbonate of nearshore and offshore open‐
lacustrine origin
‐3000 ft
Parachute Creek member
Green shale facies
Black Shale facies (upper)
Black Shale facies (lower)
‐6000 ft
Colton fm.
ft
m
‐9000 ft
2000
Flagstaff member
6000
Wasatch fm.
1000
3000
North Horn fm.
4
0
5
8
10
12
15
16
20 ml
20 KM
Wasatch (Yellow Wax)
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USGS generalized stratigraphic cross section of the Green River Total Petroleum System (modified from Frouch and others, 1992)
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Central Basin Oil
Uinta Basin historically produced oil pool
• The central basin is the intersection of two main plays: the Wasatch
(Alamont-Bluebell) and the Green River (Monument Butte)
• Recently released for development, the majority of the central basin is
undeveloped
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Uinta Basin Production History
Uinta Basin historically produced oil pool
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Active oil and gas development in the Uinta basin since 1950s
Over 30,000⁽¹⁾ wells have been drilled in the basin
Recently released tribal lands give operators access to the central basin
Increased recovery potential through horizontal drilling and multi-stage
fracture stimulation
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1.
Wood Mackenzie & HDPi
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Central Basin Tribal History
• 1828 – 1887: Removal, Reservation and Treaty Period – the US
government created treaties for Indian land which relinquished
the right for self governance on reservations. Minerals were
ceded to the government and held in trust for the tribes
• 1916: President Woodrow Wilson allocated 89,000 acres of
undeveloped Uinta land to the Naval Oil Shale Reserves No. 2 as
a source of oil shale for the US Navy
• January 2000: United States Department of Energy Secretary B.
Richardson signed an agreement for the largest voluntary return
of land to Native Americans in the Lower-48 states
• The act provided for the return of Ute Tribe land and minerals
back to Trial ownership and control
• Under self-governance, the Ute Tribe is able to exploit minerals
• Exploration and Development Agreements (“EDAs”) provide
access to Tribal minerals
• First EDA issued in 2004⁽¹⁾
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EDA issued at Lake Canyon on July 13, 2004 among the Ute Indian Tribe, Bill Barrett Corporation, Berry Petroleum and the Ute Distribution Corporation.
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Tribal Lands & EDAs
• Oil and gas royalties and severance tax provide significant
sources of revenue to the Tribe
• EDAs have been approved by the Bureau of Indian Affairs and
the Ute Indian Tribe
• EDAs provide up to 15 years on tribal mineral lands
• Numerous producers a have long track record of activity on tribal
lands
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Uinta Basin Production
Crude Oil Production History⁽¹⁾
60,000
Production (bbl/d⁽²⁾)
50,000
40,000
30,000
20,000
10,000
0
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Year
• Uinta Basin has grown from approximately 20,000 bbl/d in 2002
to more than 50,000 bbl/d by year end 2011⁽¹⁾
• The development of the central basin will continue this growth
Uinta Basin | Fall 2012
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Utah Division of Oil, Gas and Mining. Annual production data for Duchesne and Uintah counties.
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Drilling Upside
• Vertical wells encounter
stacked pay within a 1,000
to 3,000 foot gross
interval⁽¹⁾
• Vertical development of
160 acre spacing with
potential for further down
spacing⁽²⁾
• Horizontal drilling targets
in several zones; Black
Shale, Uteland Butte and
Upper Wasatch
• Waterflood success seen
in Monument Butte
• Several waterflood pilots
ongoing in the basin
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Based on Isopach gross pay map.
Spacing indicative of average central basin spacing. Spacing varies from 320 acres to 20 acres throughout the central basin.
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Waterflood Potential
• Waterflood study in Monument Butte has over 20 years of history
• Current waterflood of Monument Butte
• Green River formation waterflood demonstration estimates recovery of OOIP⁽²⁾
increase by 20%⁽¹⁾
4 section waterflood study
initiated September, 1987⁽¹⁾
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Greater Monument Butte Oil Field, 2008, Hydrocarbon Systems and Production in the Uinta Basin, Utah, Craig D. Morgan
Original Oil in Place (OOIP) is equivalent to Discovered Petroleum Initially-in-Place (DPIIP) as defined in this presentation.
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Uinta Major Players
• Competitor wells show the past 2 years of drilling
• Operators are focused on development of the central basin
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HDPi Uinta Basin wells with first production after 1/1/2010.
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Major Players Stats
Uinta Producer
Net Acres of Land
Net Location Inventory
Current Production Newfield⁽¹⁾
230,000
6,000
39,000 boe/d⁽⁵⁾
Crescent Point
173,000
1,000
7,800 boe/d⁽⁵⁾
Berry Pet.⁽²⁾
165,000
1,400
5,940 boe/d⁽⁵⁾
Bill Barret⁽³⁾
122,485
616
6,285 boe/d⁽⁵⁾
QEP⁽⁴⁾
32,300
3,200
12,000 boe/d⁽⁵⁾
• Newfield is the largest oil producer in the state of Utah
• Competitors all have relationships with the Ute Tribe and a history of production on tribal lands
• QEP is currently evaluating down spacing to 10 acres⁽⁴⁾
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Newfield corporate presentation 2012. Uinta Basin / Greater Monument Butte Presentation, July 20, 2011.
Berry Petroleum Corporate Presentation, November 2012.
Bill Barrett Corporate Presentation, November 2012.
QEP third quarter results, October 30, 2012 and November 2012 corporate presentation.
As disclosed.
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Infrastructure and Refining markets
• Uinta Basin oil is mostly trucked to Salt Lake City
• 5 major petroleum refiners located outside of Salt Lake city
• Ability to rail to other markets
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Oil and Gas Fields Maps of Utah, Utah Geological Survey, updated February 2005.
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Marketing Options
$120
$0
($2)
$110
($4)
($8)
$90
($10)
($12)
$80
($14)
$70
($16)
03-Oct-12
03-Sep-12
03-Aug-12
03-Jul-12
03-Jun-12
03-May-12
03-Apr-12
03-Mar-12
03-Feb-12
03-Jan-12
03-Dec-11
03-Oct-11
03-Nov-11
03-Sep-11
03-Aug-11
03-Jul-11
03-Jun-11
03-May-11
03-Apr-11
03-Mar-11
($18)
03-Feb-11
$60
03-Jan-11
US$/bbl
($6)
WTI Differential (US$/bbl)
$100
NYMEX WTI
Uinta Basin Black Wax
Altamont Yellow Wax
Differential (20-Day Average of Black & Yellow)
Source: FactSet, Chevron Crude Marketing
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• Wax crude trades at 16 – 18%
differential to WTI
• 2 major refiners have
announced plans to expand
wax volumes
• Holly Frontier announced
14,000 bbl/d expansion by
late 2014⁽¹⁾
• Tesoro announced
conversion of Salt Lake
refinery to handle 21,000
bbl/d of waxy crude oil⁽²⁾
Holly Frontier investor presentation, Fall 2012
Tesoro public presentation, 2012
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Summary
Low‐risk comingled vertical development
• Optimal intersection of Green River and Wasatch plays
Emerging horizontal development
• Horizontal drilling targets carbonate rich zones such as the Uteland Butte to increase recovery factors
Additional upside through infill drilling
• Potential to down space further than 160 acre spacing
Waterflood Optimization will increase recovery factors over time
• 6 existing waterfloods in nearby analog fields
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Definitions
1.
Original Oil In Place (OOIP) is equivalent to Discovered Petroleum Initially‐In‐Place (DPIIP). DPIIP, as defined in the Canadian Oil and Gas Evaluations Handbook (COGEH), is that quantity of petroleum that is estimated, as of a given date, to be contained in known accumulations prior to production. The recoverable portion of DPIIP includes production, reserves and contingent resources; the remainder is unrecoverable.
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Forward-Looking Statements
This presentation contains "forward‐looking statements" including estimates of future production, cash flows and reserves, business plans for drilling and exploration, the estimated amounts and timing of capital expenditures, the assumptions upon which estimates are based and related sensitivity analyses, and other expectations, beliefs, plans, objectives, assumptions or statements about future events or performance (often, but not always, using words or phrases such as "expects" or "does not expect", "is expected", "anticipates" or "does not anticipate", "plans", "estimated" or "intends", or stating that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved). Forward‐looking statements are based on current expectations, estimates and projections that involve a number of risks and uncertainties, which could cause actual results to differ materially from those reflected in the statements. Forward‐looking statements are based on the estimates and opinions of the Company's management at the time the statements are made. Crescent Point assumes no obligation to update forward‐looking statements should circumstances or management's estimates or opinions change.
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www.crescentpointenergy.com
BANKER
Bank of Nova Scotia
AUDITOR
PricewaterhouseCoopers LLP
LEGAL COUNSEL
EVALUATION ENGINEERS
REGISTRAR & TRANSFER AGENT
INVESTOR CONTACTS
Norton Rose Canada LLP
GLJ Petroleum Consultants Ltd
Sproule Associates Ltd
Olympia Trust Company
Scott Saxberg, President & CEO
Greg Tisdale, CFO
Trent Stangl, VP Marketing & IR
403.693.0020
Bryan Mills Iradesso
403.503.0144
Suite 2800, 111 - 5th Avenue SW, Calgary, Alberta T2P 3Y6
T: 403.693.0020 F: 403.693.0070 TF: (Canada & USA) 1.888.693.0020
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