Upload
duongcong
View
213
Download
0
Embed Size (px)
Citation preview
A New Dawn?Mike Beveridge - Managing Director
2SIMMONS & COMPANY INTERNATIONAL | ENERGY SPECIALISTS OF PIPER JAFFRAY
January 2017… Fit at 50?
3SIMMONS & COMPANY INTERNATIONAL | ENERGY SPECIALISTS OF PIPER JAFFRAY
January 2018… Life Begins At 70?
4SIMMONS & COMPANY INTERNATIONAL | ENERGY SPECIALISTS OF PIPER JAFFRAY
1 Source: Capital IQ as at 22/01/2018
What A Difference A Year Makes: From $55/bbl to $70/bbl
40
45
50
55
60
65
70
75
$USLTM Max:
$70
LTM Min:$44
LTM Avg:$55
5SIMMONS & COMPANY INTERNATIONAL | ENERGY SPECIALISTS OF PIPER JAFFRAY
Example Oil Price Macro Influences
Demand growth (EVs)? Saudi Arabia
OPEC cuts
Non-OPEC accord
Oil Price
Record L48 production
Non-OPEC production growth
Political tensions in IranGlobal inventories
Are we heading towards a more
balanced oil market in 2018?
6SIMMONS & COMPANY INTERNATIONAL | ENERGY SPECIALISTS OF PIPER JAFFRAY
From Peak Oil Supply….. To Peak Oil Demand
2005 2017
7SIMMONS & COMPANY INTERNATIONAL | ENERGY SPECIALISTS OF PIPER JAFFRAY
A Sign Of The Times
“Schlumberger plans to exit the marine and land seismic acquisition business”Jan-18
“Weatherford plans to divest assets to ease debt load”Nov-17
“Maersk Drilling in "extensive talks" about the future”Aug-17
8SIMMONS & COMPANY INTERNATIONAL | ENERGY SPECIALISTS OF PIPER JAFFRAY
1 Source: IEA Report as at 19/01/2018
75
80
85
90
95
100
105
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
mb/d
• CAGR: 1.88%
Global Oil Demand 2009 – 2018
Global Oil Demand: • 85.4 mb/d in 2009• Expected to grow to 99.1 mb/d by
2018
9SIMMONS & COMPANY INTERNATIONAL | ENERGY SPECIALISTS OF PIPER JAFFRAY
“A Tale Of Two Cities”
(0.50)
0.00
0.50
1.00
1.50
2.00
2.50
3.00
Y/Y
Dem
and
Cha
nge
(mb/
d)
Non-OECD Demand
Africa Middle East Latin America Other AsiaEurope China FSU
$0
$20
$40
$60
$80
$100
$120
(2.1)
(1.8)
(1.5)
(1.2)
(0.9)
(0.6)
(0.3)
0.0
0.3
0.6
0.9
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
E20
18E
2019
E20
20E
Bren
t Pric
e ($
/bbl
)
Y/Y
Dem
and
Cha
nge
(mb/
d)
OECD Demand
United States North America ex US Europe
Pacific Average Brent Price
Source: IEA, SCI
10SIMMONS & COMPANY INTERNATIONAL | ENERGY SPECIALISTS OF PIPER JAFFRAY
Demand Drivers Are Shifting
-4 -3 -2 -1 0 1 2 3 4 5
Petrochemicals
Aviation
Freight
Maritime
Passenger Cars
Buildings
Power Generation
Change In Demand By Sector, 2015 – 2040
Source: IEA
Million bbl/day
11SIMMONS & COMPANY INTERNATIONAL | ENERGY SPECIALISTS OF PIPER JAFFRAY
Electric Vehicles: Impact On Oil Demand?
Source: IEA, SCI
0
500
1000
1500
2000
2500
2010 2011 2012 2013 2014 2015 2016
China USA Rest of World
Electric car stocks
(000s)
12SIMMONS & COMPANY INTERNATIONAL | ENERGY SPECIALISTS OF PIPER JAFFRAY
Fuel Demand From Cars Continues To Rise
1923
23
0
5
10
15
20
25
30
35
40
45
2015 Growth indemand for
travel
Gains in fuelefficiency
Switching tonatural gas
vehicles
Switching toelectric vehicles
2035
Decomposing Changes In Liquids Demand From Cars: 2015 - 2035
(17)
Mb/d
Source: BP 2017 Energy Outlook
(0.2) (1.2)
13SIMMONS & COMPANY INTERNATIONAL | ENERGY SPECIALISTS OF PIPER JAFFRAY
1 Source: Simmons, IEA, EIA, BHI
Lower 48 Crude Oil Production¹
300
500
700
900
1,100
1,300
1,500
1,700
1,900
6,000
6,400
6,800
7,200
7,600
8,000
8,400
8,800Ja
n-15
Mar
-15
May
-15
Jul-1
5Se
p-15
Nov
-15
Jan-
16M
ar-1
6M
ay-1
6Ju
l-16
Sep-
16N
ov-1
6Ja
n-17
Mar
-17
May
-17
Jul-1
7Se
p-17
Nov
-18E
Jan-
18E
Mar
-18E
May
-18E
Jul-1
8ESe
p-18
EN
ov-1
8E
L48 Production Forecasts (Black Oil)
Actual SCI IEA EIA Rig Count Actual Rig Count Forecast
Lower 48 Crude Production kb/d
BHI US Oil Rig Count / SCI
Forecast
14SIMMONS & COMPANY INTERNATIONAL | ENERGY SPECIALISTS OF PIPER JAFFRAY
International Non-OPEC Supply
(600)
(400)
(200)
0
200
400
600
800
2013 2014 2015 2016 2017E 2018E 2019E 2020E 2021E 2022E
Y/Y
Cha
nge
(KBD
)International Non-OPEC Y/Y Change
International Non-Opec Y/Y Change 2013-2015 Average
2015-2018 Average 2019-2022 Average
“Robust growth”
“Stagnation”
“Secular Decline”
Source: SCI
15SIMMONS & COMPANY INTERNATIONAL | ENERGY SPECIALISTS OF PIPER JAFFRAY
OPEC Resolve…. And Non-OPEC Accord
“Russia And Saudi Arabia: A New Oil Bromance?”“OPEC agrees to extend oil supply cuts into 2018”
16SIMMONS & COMPANY INTERNATIONAL | ENERGY SPECIALISTS OF PIPER JAFFRAY
OPEC Compliance: 9/10 Ain’t Bad
0 0.1 0.2 0.3 0.4 0.5 0.6
OPEC Crude Production Cuts
Actual Cut in Nov 17 Agreed Cut
(million barrels per day)
Source: IEA, SCI1 As at Nov 2017
2017 Average Compliance1
120%
44%
54%
100%
63%
119%
82%
133%
62%
27%
~ 90%
Saudi Arabia
Iraq
UAE
Kuwait
Venezuela
Angola
Algeria
Qatar
Ecuador
Gabon
17SIMMONS & COMPANY INTERNATIONAL | ENERGY SPECIALISTS OF PIPER JAFFRAY
Heightened Geopolitical Risk
18SIMMONS & COMPANY INTERNATIONAL | ENERGY SPECIALISTS OF PIPER JAFFRAY
Global Rig Count1
1 Baker Hughes2 Note: Excludes Russia and China
0
500
1000
1500
2000
2500
3000
3500
International Rig Count US Rig Count
19SIMMONS & COMPANY INTERNATIONAL | ENERGY SPECIALISTS OF PIPER JAFFRAY
1 Spears and Associates
Offshore Rig Count
391 400
355380 380
352377 389
324
248229 234
0
50
100
150
200
250
300
350
400
450
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017E 2018E
20SIMMONS & COMPANY INTERNATIONAL | ENERGY SPECIALISTS OF PIPER JAFFRAY
Subsea Construction Backlog
32.7 32.1 32.033.7
35.0
38.940.3 40.1
39.1
46.5
41.2
37.2
34.5
31.029.8
26.524.6 25.3
23.7
19.4
22.5
19.718.5
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
45.0
50.0$
McDermott TechnipFMC Saipem Subsea 7 Brent Crude Oil $/bbl
$115.06
$57.54
Source: Company Documents
21SIMMONS & COMPANY INTERNATIONAL | ENERGY SPECIALISTS OF PIPER JAFFRAY
Recent Major Project Sanctions
Source: SCI, Company Documents
ProjectPeak Oil
Production (kb/d)
Peak Total Production
(kboe/d)
Year of Sanction
Expected Start Up Country Oil/Gas Project Type Operator Development
Capex ($B)
ReoverableResources
(bboe)
Implied Development Costs ($/boe)
$k/boedof
Flowing Barrel
Johan Sverdup Phase 1 460 440 2014 2019 Norway Oil Deepwater STO $11.5 1.9 $6.1 $26.2
Tengiz Future Growth/ WPMP 260 260 2016 2022 Kazakhstan Oil EOR CVX $36.8 1.6 $23.0 $73.6
Johan Castberg 180 180 2017 2022 Norway Oil Deepwater STO $5.9 0.55 $10.7 $32.8
Appomattox 175 175 2015 2020 USA Oil Deepwater RDS N/A 0.65 N/A N/A
Mad Dog 2 140 140 2016 2021 USA Oil Deepwater BP $9.0 0.5 $18.0 $64.3
Liza Phase 1 120 120 2017 2020 Guyana Oil Deepwater XOM $4.4 0.45 $9.8 $36.7
Kg-DWN-98/2 78 175 2016 2020 India Oil/Gas Deepwater OTHER $5.1 1.05 $4.9 $29.1
West White Rose Expansion 75 75 2017 2022 Canada Oil Deepwater HSE.TO $5.2 0.21 $24.3 $69.3
Thunder Horse South Expansion 50 50 2015 2017 USA Oil Deepwater BP $0.9 N/A N/A $17.0
Offshore Cape Three Points 50 85 2015 2017 Ghana Oil/Gas Deepwater E $6.0 0.38 $16.0 $70.6
Peregrino South 45 45 2016 2020 Brazil Oil Deepwater CAELUS $3.5 0.25 $14.0 $77.8
Kaikias Phase 1 40 40 2017 2019 USA Oil Deepwater RDS N/A 0.1 N/A N/A
Trestakk 40 60 2016 2019 Norway Oil/Gas Deepwater STO $0.7 0.08 $8.7 $11.0
Greater Enfield 40 40 2016 2019 Australia Oil Shallow Water WINTERSHALL $1.9 0.07 $27.5 $47.5
Snorre 2040 39 39 2017E 2020 Norway Oil Deepwater STO $2.9 0.2 $14.5 $47.4
Njord Future 35 50 2017 2020 Norway Oil/Gas Deepwater STO $1.8 0.18 $10.3 $36.0
GMT-1 30 30 2015 2108 USA Oil Conventional COP $0.9 N/A N/A $30.0
Maria 30 32 2015 2017 Norway Oil/Gas Deepwater OTHER $1.5 0.18 $8.4 $47.5
Red Emperor 28 38 2015 2019 Vietnam Oil/Gas Deepwater REPSOL $1.1 0.67 $1.6 $29.3
Culzean 25 100 2015 2019 UK Oil/Gas Conventional MAERSK $4.0 0.27 $14.7 $40.0
Tyra Future 20 60 2017 2022 Denmark Oil/Gas Deepwater TOT $2.7 0.2 $13.5 $45.0
Oseberg Vestflanken 2 20 20 2016 2018 Norway Oil Shallow Water STO $0.8 0.11 $7.5 $41.0
22SIMMONS & COMPANY INTERNATIONAL | ENERGY SPECIALISTS OF PIPER JAFFRAY
Average Breakeven Oil Prices
Source: Rystad Energy UCube
Current
$50/bbl
23SIMMONS & COMPANY INTERNATIONAL | ENERGY SPECIALISTS OF PIPER JAFFRAY
Source: Capital IQ as at 22/01/2018
- 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0
FY14
FY15
FY16
FY17
E
FY18
E
$bn
- 2.0 4.0 6.0 8.0
10.0 12.0 14.0 16.0 18.0
FY14
FY15
FY16
FY17
E
FY18
E
$bn
Public Company Trading Performance
- 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0
FY14
FY15
FY16
FY17
E
FY18
E
$bn
- 0.5 1.0 1.5 2.0 2.5 3.0 3.5
FY14
FY15
FY16
FY17
E
FY18
E
$bn
EV/EBITDA
FY17
FY18
4.3x
6.3x
EV/EBITDA
FY17
FY18
11.1x14.4x
EV/EBITDA
FY17
FY18
13.4x
9.2x
EV/EBITDA
FY17
FY18
6.6x
8.9x
20.0
25.0
30.0
35.0
40.0$
10.011.012.013.014.015.016.017.0
Jan-
17
Apr-1
7
Jul-1
7
Oct
-17
Jan-
18
$
10.0
15.0
20.0
25.0
30.0
35.0$
80.090.0
100.0110.0120.0130.0140.0150.0$
24SIMMONS & COMPANY INTERNATIONAL | ENERGY SPECIALISTS OF PIPER JAFFRAY
M&A Activity This Time Last Year!
25SIMMONS & COMPANY INTERNATIONAL | ENERGY SPECIALISTS OF PIPER JAFFRAY
Deal Activity In 2017
Consolidations
Logos for example only, not exhaustive
26SIMMONS & COMPANY INTERNATIONAL | ENERGY SPECIALISTS OF PIPER JAFFRAY
Deal Activity In 2017 (Continued)
Logos for example only, not exhaustive
* Denotes transactions where PJL advised
Mergers & Acquisitions
* * *
*
*
*
**
*
*
27SIMMONS & COMPANY INTERNATIONAL | ENERGY SPECIALISTS OF PIPER JAFFRAY
Deal Activity In 2017 (Continued)
New Entrants Balance Sheet Restructurings
Logos for example only, not exhaustive
28SIMMONS & COMPANY INTERNATIONAL | ENERGY SPECIALISTS OF PIPER JAFFRAY
Evolution Of The OFS Landscape
Market Cap - Select OFS Companies (Dec 2014 Vs. Dec 2017)
10488
37 3723
13 13 14 104 13
7 3 1 2 1
9
8
-
25
50
75
100
125
150
GE /BHI
SLB /CAM
HAL NOV FMC /TEC
WFT COSL SPN OIS
Combined Market Cap (Dec 2014): $232 billion2
Combined Market Cap (Dec 2017): $178 billion2
USDbn
BHI Dec’14 $27bn
BHGE Dec’17 $15bn1
1 Including Minority Interests2 Excludes Baker Hughes / GE
12
9
29SIMMONS & COMPANY INTERNATIONAL | ENERGY SPECIALISTS OF PIPER JAFFRAY
Changing Face Of The UKCS
Logos for example only, not exhaustive
Operators
Industry Bodies
“UK offshore licensing round attracts offers from 68 oil & gas companies”
OGA
“Shell’s redevelopment of Penguins will deliver a
‘significant boost’ to north-east communities”
Scottish Government
30SIMMONS & COMPANY INTERNATIONAL | ENERGY SPECIALISTS OF PIPER JAFFRAY
Plenty To Look Forward To
Decommissioning Offshore WindNew Project Investments
Global Centre Of Excellence
Role OfTechnology Tax Reforms
31SIMMONS & COMPANY INTERNATIONAL | ENERGY SPECIALISTS OF PIPER JAFFRAY