jan 2017 chart watch arc junior e&p index 17 us crude oil ...in the week.....ending january...
TRANSCRIPT
January 16, 2017
ARC Energy Charts 1www.arcenergyinstitute.com © 2017 ARC Energy Research Institute. All Rights Reserved.
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Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
ARC Junior E&P Inde x
S&P 500 E&P
S&P/TSX E& P Index
Indexed to Jan 2017
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Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Indexed to Jan 2017
Shanghai Composite
S&P/TSX Composite
Dow Jones
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Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Indexed to Jan 2017
Philadelphia Service I ndex
PSAC Cana dian In dex
US crude oil inventories rose by 4.1 MMB
The US oil rig count fell by 7 last week
Gas prices rallied late last week
US gas production is off to a slow start this year
The Cdn rig count rose close to a two year high
Spot WTI Crude
$US/B
Edmonton Light
$US/B
Spot Henry Hub
$US/MMBtu
Spot AECO
$Cdn/GJ
Spot AECO Basis
$US/MMBtu
Currency
$US/$Cdn
Please see Advisories and Disclaimers at the end of the publication for important cautionary advisory and disclaimer language
49.34 3.36 2.79 1.12 0.7621
Performance of Oil and Gas Equities Year-to-DateDaily Index Values; Indexed to January 2017
Oil & Gas Service Equities Year-to-DateDaily Index Values; Indexed to January 2017
Broad Equity Markets Year-to-DateDaily Index Values; Indexed to January 2017
Canadian Currency ExchangeDaily Close Values; Rolling 24-Month History
1 2
3 4
$0.65
$0.70
$0.75
$0.80
$0.85
$0.90
Jan-15 May-15 Sep-15 Jan-16 May-16 Sep-16 Jan-17
$US/$Cdn
Chart Watch
52.37
Visit www.arcenergyinstitute.com for more
information on this publication and the Institute
ARC Energy Charts
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Broad market indices are one the many vital signs measuring the health of the economy. Energy demand is a function of economic health.
Source: Bloomberg, ARC Financial Corp.
Performance of Canadian and US oil & gas equities are compared against each other.
Source: Bloomberg, ARC Financial Corp.
The performance of Canadian oil and gas service equities are plotted in tandem with the corresponding US index.
Source: Bloomberg, Petroleum Services Association of Canada
Much of Canada’s oil and gas production is sold in US dollars. As such, the exchange rate significantly impacts corporate revenues and profits.
Source: Bloomberg
Canadian large cap E&Ps have started the year down 4.4%.
Their US counterparts are flat on the year so far.
The DJIA and S&P/TSX Comp-osite started the year near... ...all-time highs.
They gained 13% and 18% in 2016 respectively.
The CAD is trading just over $US 0.76 compared to... ...less than $US
0.70 at this time last year.
July 3, 2006
ARC Energy Charts
January 16, 2017
ARC Energy Charts 2www.arcenergyinstitute.com © 2017 ARC Energy Research Institute. All Rights Reserved.
0
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4
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12
2010 2011 2012 2013 2014 2015 2016
MMB/dOffshore O il Production
Onshore O il Production
0
1
2
3
4
5
10
20
30
40
50
60
Jan-16 Mar-16 May-16 Jul-16 Sep-16 Nov-16 Jan-17
WTI D iff
WTI
WTI ($US/B) WTI Dif f to Brent ($US/B)
WTI Crude Oil Price and Differential to BrentNear-Month WTI and Brent Differential; Rolling 12-Month History
Canadian Heavy Oil Price Differential to WTI Western Canadian Select (WCS) Differential; Rolling 12-Month History
6
7 8
9 10
5
0
5
10
15
20
10
20
30
40
50
Jan-16 Mar-16 May-16 Jul-16 Sep-16 Nov-16 Jan-17
WCS Diff.
WCS
WCS ($US/B) WCS Dif f to WTI ($US/B)
50
52
54
56
58
60
62
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
WTI $US/B 2017
2018
2019
US Crude Oil FuturesWest Texas Intermediate (WTI) 2017 to 2019
Canadian Light Crude Oil Price Differential to WTIWTI and Edmonton Light differential; Rolling 12-Month History
0
1
2
3
4
5
20
30
40
50
60
Dec-15 Feb-16 Apr-16 Jun-16 Aug-16 Oct-16
Edm. Light Diff.
Edmonton L ight
Edm. Light ($US/B) Edm. Light Dif f to WTI ($US/B)
Ratio of Long to Short Contracts - WTIManaged Money - Futures and Options
Total US Oil ProductionMonthly; 2010 to Present
0
1
2
3
4
5
6
7
8
Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16
Long:Short
The differential should reflect the transportation cost from Alberta to Cushing. Greater discounts can result from infrastructure or refinery outages.
Source: Bloomberg
North American crude oil prices can sometimes disconnect from global prices depending on regional supply and demand dynamics.
Source: Bloomberg
Forward prices for WTI are plotted against months in the calendar year. Years are distinguished by color and symbol coding.
Source: Bloomberg
Canadian heavy crude oil differentials are becoming less volatile with growing access to new markets via pipeline and rail.
Source: Bloomberg
This represents the relative bullishness of money managers on the price of oil in the United States.
Source: Bloomberg, U.S. Commodity Futures Trading Commission
The advancement of drilling and completion methods boosted US crude oil production, prior to the downturn in prices.
Source: Bloomberg, U.S. Energy Information Administration
Crude Oil
WTI lost around $1.50/B last week on some concerns...
October produc-tion data showed a surprising uptick in US...
...onshore crude oil production. North Dakota and Texas...
...production gained 72 MB/d and 23 MB/d respectively.
The WCS diff narrowed to $13.50/B on Friday, the...
The long:short ratio of WTI contracts rose in the week...
...ending January 10th.
The forward curve is in contango for most of this... ...year, and then
is flat to slightly backwardated in 2018 and 2019.
On a CAD basis, Edm. Light closed the week at $64.49/B.
...around the OPEC cuts and Chinese economic health.
...narrowest since July of 2016.
Futures for the rest of 2017 are trading higher at $68.40/B.
The ratio is around the same level as August of 2014.
July 3, 2006
ARC Energy Charts
January 16, 2017
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0.0
1.0
2.0
3.0
4.0
5.0
6.0
Jan-13 Aug-13 Mar-14 Oct-14 May-15 Dec-15 Jul-16
MMB/d Crude Oil
Refined Products
-2.5
-2.0
-1.5
-1.0
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
2010 2011 2012 2013 2014 2015 2016
MMB/d
Global Oil Supply-Demand Balance Quarterly; 2010 to Present
28
29
30
31
32
33
34
35
Nov-11 Nov-12 Nov-13 Nov-14 Nov-15 Nov-16
MMB/d
OPEC Oil Production Monthly; Rolling 60-Month History
Alberta Oil Production
Monthly; Conventional and Oil Sands
16
11 12
13 14
15 US Weekly Crude Oil Imports from CanadaPipeline, Tanker and Barge Crude Imports; Rolling 24-Month History
1.8
2.0
2.2
2.4
2.6
2.8
3.0
3.2
3.4
3.6
3.8
Jan-15 May-15 Sep-15 Jan-16 May-16 Sep-16
MMB/d
6
7
8
9
10
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
MMB/d
US Crude Oil ImportsHistorical Tracks and Current Year Levels
20162017
US Exports of Crude Oil and Refined ProductsWeekly Data; 2013 to Present
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
Sep-11 Sep-12 Sep-13 Sep-14 Sep-15 Sep-16
MMB/d
Mil
lio
ns
Upgraded Oil Sands
Non-Upgraded Oil Sands
Conventional
Oversupply
Shortfall
Most of Canada’s oil production comes from Alberta; split between oil sands and conventional production.
Source: Alberta Energy Regulator
OPEC’s production levels relative to its sustainable and spare capacity influences global crude prices.
Source: Petroleum Intelligence Weekly
Negative numbers indicate a global crude shortfall, while positive numbers indicate an oversupply.
Source: International Energy Agency
Prior to the downturn, growing domestic supply was displacing crude oil imports. Crude oil imports for the current year are in blue.
Source: U.S. Energy Information Administration
Crude oil imports from Canada are taking market share from overseas imports.
Source: U.S. Energy Information Administration
The US exports more refined products than crude oil. If/when tight oil growth resumes, most export growth should come from crude oil exports.
Source: U.S. Energy Information Administration
Crude Oil
Last month the IEA reported that November OPEC...
...production was 34.2 MMB/d, an increase of 0.3 MMB/d from...
The IEA’s most recent quarterly balance shows a Q3 oversupply...
...October and a new record high.
...of 0.2 MMB/d. The Q4 imbala-nce will likely be larger as OPEC...
In 2016 US oil imports rose by 0.57 MMB/d from 2015.
...production grew in October and November.
The next forecast will be released this week.
US crude oil imports from Canada averaged just over...
...3.4MMB/d to start the year, similar to the start of 2016.
US total oil exports (including) products...
...started the year more than 1.5 MMB/d over last year.
July 3, 2006
ARC Energy Charts
January 16, 2017
ARC Energy Charts 4www.arcenergyinstitute.com © 2017 ARC Energy Research Institute. All Rights Reserved.
0
200
400
600
800
1000
1200
1400
1600
1800
0
100
200
300
400
500
600
Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17
# of Oil Rigs - Total# of Oil Rigs - Play Lev el
300
350
400
450
500
550
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
MMB
US Crude Oil Stocks Historical Tracks and Current Year Levels
17 18
19 20
21 22
2016
2017
75
80
85
90
95
100
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
%
US Refinery Utilization Rates (%)Historical Tracks and Current Year Levels
2016
2017
US Motor Gasoline ConsumptionHistorical Tracks and Current Year Levels
7.5
8.0
8.5
9.0
9.5
10.0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
MMB/d
2017
2016
Daily NGL Prices as a % of Edmonton Light Propane & Butane Spot Prices at Edmonton, AB
-20%
0%
20%
40%
60%
80%
100%
120%
140%
160%
Dec-14 Apr -15 Aug-15 Dec-15 Apr -16 Aug-16 Dec-16
% of Edm. Light
Cond ensate
Butane (Spot)
Propa ne (Spot)
US Oil Drilling ActivityBaker Hughes Horizontal Oil Rig Counts; 2014 to Present
Bakken
Total US (Right-Axis)
Permian
Eagle Ford
17
18
19
20
21
22
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
MMB/d
Total Weekly US Petroleum SuppliedHistorical Tracks and Current Year Levels
2016
2017
US crude oil stock levels can affect crude oil prices. Stock levels for the current year are represented by the blue line.
Source: U.S. Energy Information Administration
Refinery utilization rates change the supply of refined products, impacting price. Utilization for the current year is blue.
Source: U.S. Energy Information Administration
Petroleum supplied represents the total consumption of petroleum products in the US. Consumption for the current year is in blue.
Source: U.S. Energy Information Administration
Gasoline consumption accounts for almost half of all oil use in the US. Gasoline consumption for the current year is represented by the blue line.
Source: U.S. Energy Information Administration
Tracking US oil drilling by major play provides insight into the composition of US oil supply and growth trends.
Source: Baker Hughes
Natural gas liquids have become critical contributors to producer’s cash flow. Prices are influenced by the price of oil as well as local supply and demand.
Source: Bloomberg, ARC Financial Corp.
Crude Oil
US crude oil inventories grew by 4.1 MMB last week.
Stocks are curr-ently over the 5-year average by 128 MMB.
The US oil rig count fell to 522.
The drop was outside of the major tight oil plays, which...
...remained flat on the week.
The ratio of propane prices to Edmonton Light has risen...
...to its highest since the polar vortex of 2014.
US gasoline con-sumption in 2016 averaged 177 MB/d over...
...gasoline consumption in 2015.
July 3, 2006
ARC Energy Charts
January 16, 2017
ARC Energy Charts 5www.arcenergyinstitute.com © 2017 ARC Energy Research Institute. All Rights Reserved.
$0.00
$0.50
$1.00
$1.50
$2.00
$2.50
$3.00
$3.50
$4.00
Jan 15 Apr 15 Jul 14 Oct 12 Jan 10
25
27 28
26
2423 Near-Month North American Natural Gas Prices Daily Prices; Rolling 12-Month History
Henry Hub
$US/MMBtu
AECO
$C/GJ
US Natural Gas FuturesNymex (Henry Hub) 2017 to 2019
2.50
2.75
3.00
3.25
3.50
3.75
4.00
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
$US/MMBtu 2017
2018
2019
Canadian Natural Gas FuturesAECO Hub (Bloomberg Estimate) 2017 to 2019
US Coal and Natural Gas Power Generation Cost
Converted to a $/MWh Equivalent
$0
$10
$20
$30
$40
$50
2012 2013 2014 2015 2016
$US/MWh
Appalachian
CoalHenry
Hub
Global Natural Gas Prices
Japanese LNG, UK NBP, Henry Hub; Average Monthly Prices
0
2
4
6
8
10
12
14
16
18
20
Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
$US/MMBtu
Japanese
LNG
Henry
Hub
UK NBP
Ratio of Long to Short Contracts – Henry HubManaged Money – Futures and Options
Differential
$US/MMBtu
2.00
2.25
2.50
2.75
3.00
3.25
3.50
3.75
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
$C/GJ 2017
2018
2019
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16
Long:Short
Near-month prices at AECO track Henry Hub prices, the exchange rate and the cost of transportation. Local factors can also affect price.
Source: Bloomberg
Forward contract prices are plotted against months in the calendar year. Years are distinguished by color and symbol coding.
Source: Bloomberg
This represents the relative bullishness of money managers on the price of natural gas in the United States.
Source: U.S. Commodity Futures Trading Commission
AECO forward prices mimic Henry Hub futures plus a differential
Source: Bloomberg
International natural gas prices strongly impact the economics of proposed LNG projects.
Source: Bloomberg, Japanese Ministry of Economy, Trade and Industry
This graph illustrates when it may be economic to begin coal-gas switching in power generation. Average power plant efficiencies are assumed.
Source: Bloomberg
Natural Gas
Henry Hub gained 4% on the week; up to $3.42/MMBtu.
AECO gained by 3.4%; up to $C 2.85/GJ
Japanese LNG prices have risen to the highest since Jan ‘16.
Henry Hub gas futures are averaging $3.45/MMBtu...
...for the rest of 2017, compared to $3.18/MMBtu last week.
The drop between CAL 17 and CAL 18 AECO is less...
Coal prices have risen by over 40% since their lows in August.
The price rise has brought coal and gas more in line with each...
...than that of Henry Hub due to a narrowing differential.
...other for cost of power generation.
July 3, 2006
ARC Energy Charts
January 16, 2017
ARC Energy Charts 6www.arcenergyinstitute.com © 2017 ARC Energy Research Institute. All Rights Reserved.
0.0
1.0
2.0
3.0
4.0
5.0
6.0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Bcf /d
6
7
8
9
10
11
12
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Bcf /d
Closing Spot Prices at North American Natural Gas HubsSuperimposed on Relative Pipeline Flows
\
30 31
All prices in $US/MMBtu
Closing Spot Prices at North American Natural Gas HubsSuperimposed on Relative Physical Volumes Traded
AECO
Henry Hub
Kingsgate
Stanfield
Malin Opal
Socal
San Juan
Permian
Ventura ChicagoBoston
29
Dawn
Waddington
TGP Zone 4 -
Marcellus
US Natural Gas Exports – Excluding CanadaDaily; Historical Tracks and Current Year Levels
2017 2016
Pipeline Flows Out of Western CanadaDaily; Historical Tracks and Current Year Levels
2016
2017
The ability of gas producers to move gas out of the WCSB to eastern markets and the US is a major factor in local natural gas prices.
Source: Various Pipeline Companies
Between exports to Mexico and LNG shipments, the US is growing as a natural gas exporter. Robust US supply growth has driven this trend.
Source: Bentek
North America has an integrated natural gas market. Prices are determined by regional supply and demand, and pipeline flows.
Source: Bloomberg
Natural Gas
US$3.36
US$2.24
US$3.35
US$3.24
US$3.37
US$3.30
US$3.16
US$3.21
US$3.38
US$3.66
US$3.28
US$3.49
US$3.56
US$4.10
US$2.88
New takeaway capacity from the Marcellus is helping to...
US gas exports (excl. Canada) so far in 2017 have averaged 2.46...
...reduce price discounts relative to other hubs.
WCSB pipeline exports have started at the same level as...
...they did in 2016.
...Bcf/d over last year.
July 3, 2006
ARC Energy Charts
January 16, 2017
ARC Energy Charts 7www.arcenergyinstitute.com © 2017 ARC Energy Research Institute. All Rights Reserved.
2017
2016
0
50
100
150
200
250
300
1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52
HDDs
Week
32 33
34 35
36 37
Total US Dry Natural Gas ProductionHistorical Tracks and Current Year Levels
50
53
56
59
62
65
68
71
74
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Bcf /d
20172013
2016
40
50
60
70
80
90
100
110
120
130
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Bcf /d
US Total Natural Gas DemandDaily; Historical Tracks and Current Year Levels
2017
US Weekly Heating Degree DaysSource: NOAA
20162017
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Tcf
Total Working Natural Gas in US StorageHistorical Tracks and Current Year Levels
2016
2017
(350)
(300)
(250)
(200)
(150)
(100)
(50)
0
50
100
150
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Bcf
Weekly US Natural Gas Storage Net ChangeWeekly Injection or (Withdrawals); 2009 to Current
2016
2017
12
13
14
15
16
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Bcf /d
Daily Western Canadian ProductionEstimated Using Major Pipeline Receipts
2016
Weekly natural gas demand is directly tied to the weather. The current year is in dark blue.
Source: National Oceanic and Atmospheric Administration
Total US demand fluctuates between 60 Bcf/d in the summer and over 100 Bcf/d in the winter. Weather is the most important driver of consumption.
Source: Bentek
US production started ramping up in late 2007 and continues to grow year over year.
Source: Bentek
This includes receipts on the TCPL, Alliance, WestCoast and TransGas pipelines.
Source: Various Pipeline Companies
Weekly gas storage reports provide a snapshot of supply and demand. Current year changes are represented by the blue line.
Source: U.S. Energy Information Administration
The EIA reports changes in US natural gas inventories held in underground storage facilities on a weekly basis.
Source: U.S. Energy Information Administration
Natural Gas
Natural gas demand has risen early in the year... ...mostly due to a
rise in residen-tial and commer-cial heating.
Last week’s sto-rage draw came in at 151 Bcf, more than 3...
US gas storage is now 4 Bcf below the 5-year average.
Slightly warmer temperatures at the end of 2016/start of… ...2017 have con-
tributed to a fall in natural gas prices.
US natural gas production has started the year down about...
...2.2 Bcf/d below the same time last year.
...times the draw in the week prior.
The draw was in line with historical levels.
Just 5 weeks ago storage was 254 Bcf above the 5-yr avg.
July 3, 2006
ARC Energy Charts
January 16, 2017
ARC Energy Charts 8www.arcenergyinstitute.com © 2017 ARC Energy Research Institute. All Rights Reserved.
2015
2016
2010
2011
0
2
4
6
8
10
12
14
16
18
1 6 11 16 21 26 31 36 41 46 51
Week
Well Completions (000s)
0
50
100
150
200
250
300
350
400
0
20
40
60
80
100
120
140
Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17
# of Gas Rigs - Total# of Gas Rigs - Play Lev el
38 39
40 41
42 43
Weekly Canadian Oil and Gas Drilling ActivityBaker Hughes Average Rig Counts; Rolling 24-Month History
0
50
100
150
200
250
Jan-15 May-15 Sep-15 Jan-16 May-16 Sep-16
# of Rigs
Gas
Rigs
Oil
Rigs
US Gas Drilling ActivityBaker Hughes Horizontal Gas Rig Counts; 2014 to Present
Marcellus Total US (Right Axis)
Western Canadian Natural Gas Storage LevelsWeekly; Current Year and Historic Tracks
2016
0
100
200
300
400
500
600
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Bcf
2017
Alberta Natural Gas DemandTransCanada Intra-AB Deliveries; Current Year and Historical Tracks
2.5
3.0
3.5
4.0
4.5
5.0
5.5
6.0
6.5
7.0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Bcf /d
2017 2016
2012
Canadian Cumulative Well CompletionsCurrent Year vs Years Prior
2016
2014
Alberta Crown Land Sales – Excluding Oil SandsYear-over-Year; Cumulative
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
$ Billions
2017
2013
2012
2010
2011
Haynesville
Eagle Ford
Alberta natural gas demand has grown steadily in recent years, largely driven by new oil sands projects coming on line.
Source: TransCanada Pipelines
Canada’s natural gas storage level provides a good metric if the country is well stocked. Abnormally high or low storage can affect the basis.
Source: Bloomberg
Unlike US drilling activity, Canadian rigs are dispatched seasonally. Capital allocation by operators is driven by views of future oil and gas prices.
Source: Baker Hughes
Tracking US gas drilling by major play provides insight into the composition of US gas supply and growth trends.
Source: Baker Hughes
Land prices are an important component of F&D costs. In Alberta, sales of petroleum and natural gas rights are held every two weeks.
Source: Alberta Department of Energy
Relative year-over-year drilling activity is highlighted in this chart. Cumulative well completions for the current year are shown in blue.
Source: Daily Oil Bulletin/JWN
Natural Gas and Other Indicators
Western Cana-dian gas storage is only 7 Bcf over last year.
5 weeks ago this surplus was 55 Bcf.
The first land sale of 2017 brought in $12.73 million.
This was 6 times the total in the first land sale of 2016, and...
2015
2017
US gas activity has increased 55 rigs from the August low.
Half of this has been from the Marcellus and Haynesville.
AB natural gas demand has been strong so far in 2017, near all...
...time highs. Cold weather and higher oil sands demand...
...are driving the increase.
The rig count rose to almost a two year high, up to 314 rigs. There are
currently 170 oil rigs and 144 gas rigs.
...three times the per hectare price.
July 3, 2006
ARC Energy Charts
January 16, 2017
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Estimated Capital Flow in the Canadian Oil and Gas Economy for 2017Industry Revenue, Cash Flow, Reinvestment, Drilling Activity and Production
Oil & Gas
Prices
Production
Volume
Debt,
Equity
E&P
Revenue
Service Sector
Revenue
Land,
Acquisitions
Operating
Expenditures
Reserve
Additions
Capital Flow
in the
Canadian
Oil and Gas
Economy
Royalties
& Taxes
G&A
Exploration &
Development
Cash
Flow
CAPEX
Dividends and
Distributions
Foreign Investment
and Capital Outflow
Drilling
Activity
$C 42.64 per BOE
7.1 Million
BOE/day
$C 45.4
Billion
$C 110.1
Billion
$C 42.0
Billion
5,123
Wells
Canadian Industry Statistics: Historical Data and Forecast44
Canadian Industry Metrics
Advisories and Disclaimers: This document is provided for informational purposes only and none of the information contained herein is intended to provide, nor should be
construed as, investment, financial, legal or other advice and should not be relied upon as such. Certain of the information and data contained herein has been obtained or
prepared from publicly available documents and other sources prepared by third parties, and ARC has relied upon such information and data. ARC does not audit or
independently verify such information and data and ARC makes no representations or warranties as to the accuracy or completeness of such information and data nor the
conclusions derived therefrom. This document has been published on the basis that ARC shall not be responsible for, and ARC hereby expressly disclaims any responsibility
or liability for, any financial or other losses or damages of any nature whatsoever arising from or otherwise relating to any use of this document.
Certain information contained herein may constitute forward-looking information and forward-looking statements" (collectively, "forward-looking statements") under the
meaning of applicable Canadian securities laws. Forward-looking statements include estimates, plans, expectations, intentions, opinions, forecasts, projections, guidance or
other statements that are not statements of fact, including but not limited to global and industry economic conditions and policies, production, demand and commodity prices.
Although ARC believes that the assumptions underlying and expectations reflected in such forward-looking statements are reasonable, it can give no (and does not give any)
assurance that such assumptions and expectations will prove to have been correct. Such forward-looking statements involve known and unknown risks, uncertainties and
other factors outside of ARC's control that may cause actual results to differ materially from those expressed herein. Neither ARC nor any of its affiliates undertakes any
obligation to publicly revise such forward-looking statements to reflect subsequent events or circumstances, except as required by law.
Average
Price
Edmonton
Par AECO
Conv.
Liquids
Bitumen +
Synthet ic
Natural
Gas
Total
Volume
Total
Revenue
After-tax
Cash Flow
Conv. Oil
and Gas Oilsands
Reinvest
Rat io
Wells
Compl.
Avg Rig
Utiliz.
Oil
Wells
Gas
Wells
$/BOE $C/B $C/GJ
Average
M BOE/d
Average
M BOE/d
M BOE/d
(@ 6:1)
M BOE/d
(@ 6:1)
$C
millions
$C
millions
$C
millions
$C
millions x:1
# /
Year % % %
2008 68.22 102.66 7.75 1,994 1,207 2,700 5,864 145,425 83,255 36,293 18,113 0.65 16,877 41% 36% 56%
2009 42.26 66.42 3.79 1,840 1,331 2,514 5,683 89,057 36,680 22,335 11,227 0.91 8,368 25% 41% 51%
2010 48.41 77.55 3.79 1,830 1,403 2,434 5,668 101,056 43,569 35,666 17,195 1.16 12,119 40% 56% 40%
2011 55.32 95.24 3.44 1,873 1,482 2,386 5,740 115,890 53,448 40,139 22,491 1.10 12,827 52% 69% 31%
2012 50.60 86.38 2.27 1,905 1,743 2,327 5,975 111,389 48,908 39,733 27,199 1.37 11,067 44% 83% 17%
2013 55.95 93.47 3.02 2,023 1,940 2,343 6,306 128,787 54,711 43,165 30,809 1.35 11,071 42% 84% 16%
2014 61.20 95.07 4.23 2,086 2,163 2,445 6,694 149,530 71,846 46,872 33,868 1.12 11,226 45% 78% 22%
2015 35.34 57.63 2.56 1,983 2,373 2,479 6,835 88,170 24,109 30,551 22,948 2.22 5,394 24% 69% 31%
2016e 31.32 52.62 2.04 1,921 2,393 2,495 6,809 77,844 20,386 20,527 16,209 1.80 3,500 17% 60% 40%
2017e 42.64 68.19 3.25 1,868 2,655 2,548 7,070 110,052 45,351 28,768 13,242 0.93 5,123 24% 60% 40%
R einvestment D rilling Well Split
Canadian Industry Metrics
P rice P ro duct io n Vo lume C apital Inf lo w
We are now showing estim-ated metrics for 2017.