Arctic Gas Symposium American Conference Institute

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Arctic Gas Symposium American Conference
Institute

• November 18-19, 2002
• The Renaissance Houston Hotel
• Houston, Texas

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Arctic Gas SymposiumCanadian Oilfield
ServicesPerspective

• Discussion
• Canadian Drilling Activity Forecast
• Canadian Arctic Pipeline
• Kyoto Protocol

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• Canadian Drilling
• Activity Forecast

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• 2002 Forecast

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Arctic Gas SymposiumCanadian Oilfield
ServicesPerspective

• Document Highlights
• Total Meters Drilled by Area, By Status (Gas,
  Oil, etc.)
• Average Meters Drilled per Well by Area
• Break-Out Directional, Horizontal, Vertical
• Break-Out Developmental, Exploratory, Re-entry
• Average License to Spud Days per Area
• Average Spud to Rig Release Days per Area
• Top 20 Operators by Area
• License issued by Target Depth per Area

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Arctic Gas SymposiumCanadian Oilfield
ServicesPerspective
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Arctic Gas SymposiumCanadian Oilfield
ServicesPerspective

• 2002 Commodity Price Assumptions
• Avg. Gas price CDN (AECO) 4.00/Mcf
• Avg. Oil price US (WTI) 26.00/barrel
• Wells Drilled (Rig released) 15,100

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Arctic Gas SymposiumCanadian Oilfield
ServicesPerspective

• PSAC 2002 Rig Release Forecast Breakdown
• 2002 October
• Update
• AB 11,210
• BC 635
• SK 3,050
• MB 85
• North 60 12
• Other 108
• Total 15,100

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Arctic Gas SymposiumCanadian Oilfield
ServicesPerspective

• Well Type Breakdown
• 2002e
• Gas 61.6
• Oil 28.1
• Other 10.3

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Arctic Gas SymposiumCanadian Oilfield
ServicesPerspective

• Capital Expenditures (Cbillions)
• 2002e
• Drill Complete
• Capital Expenditures 6.0

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• 2003 Forecast

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Arctic Gas SymposiumCanadian Oilfield
ServicesPerspective

• 2003 Highlights
• Higher well count
• Strong commodity prices
• Increased activity in Foothills and NEBC
• Strong shallow gas drilling

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Arctic Gas SymposiumCanadian Oilfield
ServicesPerspective

• 2003 Commodity Price Assumptions
• Avg. Gas price CDN (AECO) 4.75/Mcf
• Avg. Oil price US (WTI) 24.25/barrel
• Wells Drilled (Rig released) 16,500

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Arctic Gas SymposiumCanadian Oilfield
ServicesPerspective

• Year to Year Comparisons (CND Billions)
• Drill Complete
• Year Capital Expenditures
• 2003e 7.0
• 2002e 6.0
• 2001e 9.0
• 2000e 8.0
• Source PSAC, FirstEnergy, ARC Financial

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Arctic Gas SymposiumCanadian Oilfield
ServicesPerspective

• PSAC 2002/3 Rig Release Forecast Breakdown
• 2002 2003
• Forecast Forecast
• AB 11,210 12,350
• BC 635 805
• SK 3,050 3,150
• MB 85 80
• North 60 12 15
• Other 108 100
• Total 15,100 16,500

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Arctic Gas SymposiumCanadian Oilfield
ServicesPerspective

• Well Type Breakdown
• 2003e 2002e
• Gas 62.3 61.6
• Oil 27.3 28.1
• Other 10.4 10.3

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• Canadian Arctic Pipeline

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Arctic Gas SymposiumCanadian Oilfield
ServicesPerspective

• Northern Canada
• Conventional Crude Oil Reserves (Billion Barrels)
• Canada 4.7
• North 60 0.1
• Gas Reserves (Tcf)
• Canada 65.6
• North 60 6.0

Source CAAP, PSAC
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Arctic Gas SymposiumCanadian Oilfield
ServicesPerspective

• Northern Canada Potential
• Potential Conventional Crude Oil Reserves
  (Billion barrels)
• North 60 2.0
• Potential Gas Reserves (Tcf)
• North 60 60

Source PSAC
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Arctic Gas SymposiumCanadian Oilfield
ServicesPerspective

• Northern Canada
• Oil production since 1943, currently 25,000
  bbl/day
• Gas production since 1972, currently 0.15 Bcf/day
• Approximately 1,400 wells drilled to date versus
  335,000 for the rest of Canada

Source CAAP
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Arctic Gas SymposiumCanadian Oilfield
ServicesPerspective

• Canadian Crude Oil North 60
• Production 2.2 million bbl/day 25,000
  bbl/day
• Exports 1.3 million bbl/day
• Canadian Natural Gas
• Production 17.4 Bcf/day 0.15
  Bcf/day
• Exports 10.6 Bcf/day

Source CAAP
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Arctic Gas SymposiumCanadian Oilfield
ServicesPerspective

• Mackenzie Gas Pipeline
• Project Developers
• Imperial Oil
• Conoco Canada
• Shell Canada
• Aboriginal Pipeline Group

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Arctic Gas SymposiumCanadian Oilfield
ServicesPerspective

• Mackenzie Gas Pipeline
• Developing onshore natural gas fields in the
  Mackenzie Delta (6 Tcf currently)
• Taglu (3 Tcf)
• Parsons Lake (1.8 Tcf)
• Niglintgak (1 Tcf)

Source Imperial Oil
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Arctic Gas SymposiumCanadian Oilfield
ServicesPerspective

• Mackenzie Gas Pipeline
• Project Costs
• C3 Billion pipeline construction
• C1 Billion field development

Source Imperial Oil
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Arctic Gas SymposiumCanadian Oilfield
ServicesPerspective

• Mackenzie Gas Pipeline
• Expected Production Rates (three existing fields)
• 800 Mcf/day to 1.0 Bcf/day in natural gas
  production
• 10,000 bbl/day to 15,000 bbl/day in associated
  NGLs

Source Imperial Oil
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Arctic Gas SymposiumCanadian Oilfield
ServicesPerspective

• Mackenzie Gas Pipeline
• Anticipated Timing
• Submission of applications for regulatory
  approval in 2003
• Production start up in 2007 to 2008

Source Imperial Oil
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Arctic Gas SymposiumCanadian Oilfield
ServicesPerspective

• Mackenzie Gas Pipeline
• Initial capacity of 1.2 Bcf/day
• Expandable to 1.9 Bcf/day through additional
  compression facilities

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Arctic Gas SymposiumCanadian Oilfield
ServicesPerspective

• Nature of Northern Work
• Seasonal
• Cyclical
• Long Term
• Expensive

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Arctic Gas SymposiumCanadian Oilfield
ServicesPerspective

• Managing Expectations
• Producers
• Local Aboriginal communities/businesses
• Service suppliers
• Government

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Arctic Gas SymposiumCanadian Oilfield
ServicesPerspective

• Local Communities/Business
• Go slow.take the time to do it right
• Lifestyle
• Jobs
• Training programs

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• Kyoto Protocol

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Arctic Gas SymposiumCanadian Oilfield
ServicesPerspective

• Kyoto Protocol Canadian Situation
• Target CO2 reductions 5 below 1990
• 1990 CO2 emissions 607 mega tonnes
• (2 world emissions)
• 2010 Projections - 810 mega tonnes (30
  reduction to meet target)

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Arctic Gas SymposiumCanadian Oilfield
ServicesPerspective

• Kyoto Protocol Canadian Situation
• Ratification
• Full-Soft
• Canadian Parliament December 2002

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Arctic Gas SymposiumCanadian Oilfield
ServicesPerspective

• Kyoto Protocol Canadian Situation
• Ratification
• Full-Soft
• Canadian Parliament December 2002

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Arctic Gas SymposiumCanadian Oilfield
ServicesPerspective

• What we need to do is end the debate about
  ratification and begin being clear about what the
  measures are that were going to need to
  implement. Nobody is going to come in and seize
  our property or charge us a penalty if we dont
  achieve the (Kyoto) targets..
• John Manley, Finance Minister
• November 14, 2002
• Calgary Herald

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Arctic Gas SymposiumCanadian Oilfield
ServicesPerspective

• Kyoto Protocol Poll Results
• Jun 02 Nov02
• Pro Con Pro Con
• Canada 86 14 74 26
• Ontario 87 13 75 25
• Alberta 72 28 40 60

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Arctic Gas SymposiumCanadian Oilfield
ServicesPerspective

• Kyoto Protocol Canadian Situation
• Personal Views

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Arctic Gas Symposium American Conference
Institute

• For further information or to subscribe to the
  document, please visit
• WWW.PSAC.CA