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7/29/2019 2012 Analyst East Med
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Noble EnergyAnalyst Conference
December 6, 2012
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Eastern Mediterranean
Rodney Cook
Senior Vice President International
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Eastern MediterraneanGrowing domestic demand driving near-term value
Tamar to have Significant Impactfor All Stakeholders
Natural Gas the Fuel of Choice for Israel
Total demand grows at 15% CAGR 2012 2017
Leviathan Expected to SupplyDomestic Markets in 2016
Advancing Export Options withTarget Start-Up around 2018
Strategic Partner Selected for Leviathan
102
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Eastern MediterraneanExisting asset position
Six Consecutive Discoveries
Over 35 Tcf gross resources
12 Tcf net, 2.2 Tcf net booked reserves
Noa and Pinnacles BridgingSupplies Until Tamar Start-Up
Tamar on Scheduleand on Budget
Positioning LeviathanDevelopment
Appraising Cyprus A
Mesozoic Oil ExplorationTargeted for 4Q 2013
103
Leviathan40% WI
Dolphin40% WI
Mari-B47% WI
Cyprus70% WI
Tamar36% WI
Dalit36% WI
Noa47% WI
AOT47% WI
Tanin47% WI
Pinnacles47% WI
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0
500
1,000
1,500
2,000
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
MMcf/d
Electricity Industrials Announced Coal Conversion
Israel Natural Gas DemandSupports faster and earlier development of discovered resources
Gas is The Fuel of Choice
Shift to base load with less swing
Strong electricity and industrial demand
Potential for converting coal-fired electricity generation
104
Annual Average Natural Gas Demand
Demand Swing(lower swing % over time)
15% CAGR
2012 2017
Source: Poten and Partners, Noble Energy estimates
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Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec
System Capacity
Historical Avg. Sales
Historical Seasonal
Future Curve
Future Avg. Sales
Israel Gas Demand ShiftGrowing base load increases system uti lization
Growth from Industrial Customers and Coal ReplacementCreates a Flatter Demand Profile with Less Swing
Higher Sales per Unit of Installed System Capacity
105
HigherSales
Base Demand Increasing, Higher Sales Evolving Demand Mix*
* Excludes coal conversion, which further
flattens of gas demand swing
100%90%
60%
2004 2010 2020Electricity Industrial
Source: Economics Models Ltd, Noble Energy estimates
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6.6
14.5
Israel Texas
Electricity Market in IsraelNatural gas fueling Israel s future
All New Generation Capacity is Gas-Fired
Economic and environmental benefits
Per Capita Use of Electricity in Israel is Lower than Average
OECD Countries
With Israels Economic Growth, Electricity ConsumptionShould Reach Current per Capita Texas Levels
106
2010
56TWh
2020
85TWh
Electricity GenerationGrowth Forecast
4.3% CAGR 2010 2020
2011 Electricity Consumption(KWh per capita)
Israels GDP9% CAGR 2004 2012
0
75
150
225
300
2004 2006 2008 2010 2012
Source: Electricity Forecast Economics Models Ltd, GDP World Bank
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Industrial Market in IsraelFast growing base load demand
Current Customers have Switched from Liquid Fuelto Natural Gas
Segment Enabled by Growing Natural Gas Supply
By 2020 New Projects will Make Up ~30% of Industrial Demand
107
0
200
400
600
2009 2011 2013 2015 2017 2019 2021
MMcf/d Annual Industrial Natural Gas Demand
Source: Poten and Partners
Note: Industrial sectors include refining, chemicals, desalination, paper mill, cement, among others
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Coal Conversion in IsraelStrong incentives to convert to natural gas
Coal ~40% of Israel Electric Installed GenerationCapacity and ~60% of Actual Generation
Coal Plants Required to Reduce NOx and SOx
Emissions by 2016 Significantly Cheaper to Convert Coal Boilers to
Burn Natural Gas
10:1 cost difference
Hadera A Coal Unit Conversion Already Announced
Multiple Benefits of Gas Over Coal State GasRevenues, Energy Security, EnvironmentalEmissions Reduction
Coal Conversion Shifts Gas Demand to Base Load
108
Source: Israel Electric, Noble Energy estimates
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Tamar ProjectOnline four years from discovery
On Schedule and on Budget
Start-up expected April 2013
$3.25 B gross investment
Industry Leading Cycle Time
2.5 years from sanction
Worlds Longest Subsea Tieback
93 miles tieback, 5,505 ft. water depth Excellent Safety Record
Initial Capacity Already Contracted
109
Topsides in YardTopsides in Yard
Jacket in PlaceJacket in Place
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Tamar in PicturesWorld-class execution
110
Jacket SailawayJacket Sailaway Topsides SailawayTopsides Sailaway
Subsea Manifold InstallationSubsea Manifold Installation Flowback TestFlowback Test
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Tamar Timeline to Start-UpIn the final stages
111
First Production
Hookup and Commissioning
Mari-B Brownfield
Drilling and Completions
AOT Modifications
Subsea Field
Project Sanction
2011 2012 2013Project Phase 2010
Platform
NOW
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0
400
800
1,200
1,600
Phase 1 Compression SystemOptimization or
Storage
MMcf/d
Tamar ExpansionsSignificant capacity expansion targeted for 2015
Phase 1 Onshore Capacity985 MMcf/d
Future Expansion Phases
Increase Capacity to 1.5 Bcf/d Compression at onshore terminal
Existing system optimization orstorage at Mari-B*
Evaluating Tamar FloatingLNG Export Project
112
Tamar Capacity Progression
+25%
+22%
* Pending regulatory approvals
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Israel Blended Pricing 2013-2015Tamar to meet remaining Mari-B contractual commitments
113
Tamar Sales ($5.75)
Tamar
Start Up
2013 2014
Tamar Sales ($5.95)
Blended Price $5.20/Mcf Blended Price $5.50/Mcf
2015
Tamar Sales ($5.90)
Blended Price $5.60/Mcf
Note: Arrow size represents relative sales volume
Mari-BSales
($5.10)
Mari-B Sales($3.35 using Tamar gas)
Mari-B Sales($3.30 using Tamar gas)
Mari-B Sales($3.50 using Tamar gas)
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Tamar ImpactSignificant long-term value for all stakeholders
Long Plateau Asset
Condensate Gross Revenue ~$50 Million per Year
Condensate yield 1.2 1.5 Bbl/MMcf
Israel Energy Savings and Revenue ~$130 Billion*
CO2 Emissions Reduction ~195 Million Metric Tons*
Equivalent to CO2 emissions from all cars in Israel for ~14 years
114
Tamar Domestic Sales Outlook
Assumes sales at 70% of peak 1.5 Bcf/d capacity
0
300
600
900
1,200
2013 2015 2017 2019 2021
MMcf/d
* Life of field
Note: Assumes sales at 70% of peak 1.5 Bcf/d capacity
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Leviathan DevelopmentIncreasing security and reliability of supply
Resource Estimated at 17 TcfGross, 6 Tcf Net
Flow Back Test Confirms High
Quality Reservoir Single well capable of 250 MMcf/d
Condensate yield 1.8 2.0 Bbl/MMcf
Appraisal Well #4 Drilling
Screening Multiple DevelopmentConcepts
Targeting Initial Production toSupply Domestic Market in 2016
115
#5 Planning
#3 Drilledand Evaluated
GOM OCSBlock Outline,
24 Blocks
#1 Drilledand Evaluated
#4 Drilling
#2Plugged
+
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Leviathan Phase 1 Development ConceptOffshore processing with northern entry point
116
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Leviathan Full Field DevelopmentField scale requires multiple development phases
Phased Development Accelerates Value Delivery
Phase 1 to Include Pre-Investment in Upstream Facilitiesfor LNG Export Project
1.6 Bcf/d facility: 750 MMcf/d domestic, 850 MMcf/d export
Multiple Downstream Export Options 2018 2020 Range
Onshore LNG
FLNG
Pipeline export
Second Phase Includes a Second Deepwater HubSupplying Additional Domestic and Export Markets
Potentially serves other fields
117
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Woodside Strategic Partner for LeviathanLNG expertise, financial capacity and access to markets
Australias Largest Producer of LNGwith Over 25 Years of Experience
Designed, constructed and commissioned 5 LNG trains
Pluto worlds fastest at 7 years discovery to production
Deliver 3,200 LNG cargos
$28 Billion Market Cap
$2.2 B in annual operating cash flow
Baa1 / BBB+ credit rating
Strong Working Relations with Many Potential Customers
Including China, Japan, Korea and other Asian markets
Best Practice Focus on Safety, Integrity and Reliability
Good relationships with its host regulators and governments
118
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Leviathan Sell Down ProposalIncreasing market value recognition
NBL Selling 9.66% Interest
Continue as upstream operator with 30% working interest
Cash Payments Totaling $464 Million
$287 MM at closing
$64 MM when Israel gas export regulations enacted
$113 MM when FID made on export project
LNG Revenue Sharing Up to $322 Million
Proportionate share of 11.5% of Woodsides annual LNG revenues aboveprice parameters
Drilling Carry of $16 Million on Mesozoic Oil Test
$802 Million Total Implied Price Including Revenue Sharing
Finalize Definitive Agreements During 1Q 2013
119
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Cyprus-A DiscoveryTransforming Cyprus to an energy export ing country
Resource Estimated at5 8 Tcf Gross
Targeting Appraisal Well
and Test in 2013Working with Government
on LNG Project Agreement
Paves the way for LNGdevelopment
Progressing DevelopmentConcept Evaluation
Domestic market supply
LNG export
120
A-1 DiscoveryDST Pending
Proposed Appraisal
Locations
GOM OCSBlock Outline,24 Blocks
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Global LNG Demand and Cost StructureEastern Med projects well positioned to supply a growing market
121
Global LNG Supply and Demand (MMtpa)
0
100
200
300
400
2012 YEDemand
Plants UnderConstruction
2022Demand
Newprojectsramp-up
partly
offset bydecline inexistingplants
Source: Poten and Partners
LNG Cost of Supply ($/MMBtu)
1 US Gulf Coast assumes projects purchase feed gasat Henry Hub prices ($5.50/MMbtu assumed)2 Shipping to Far East
1
2
0
2
4
6
8
10
12
14
Israel Cyprus Mozambique US Gulf Coast Australia
Upstream Liquefaction Shipping
SupplyGap
Israel Cyprus Mozambique U.S.Gulf Coast* Australia
Shipping**
* U.S.Gulf Coast assumes projects feed gasat Henry Hub prices ($5.50/MMBtu assumed)
** Shipping to Far East
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Eastern Mediterranean ExportsProgressing multiple options
Onshore LNG
Sites in 3 different countries have been evaluated (Israel, Cyprus and Jordan)
Plan to complete Pre-FEED by 2Q 2013 and competitively bid FEED and EPC stages
Floating LNG Tamar FLNG being evaluated 3.4 MMtpa capacity, target start-up ~2018
Leviathan FLNG preparations underway to commence pre-FEED; providesalternative to onshore LNG
Pipeline Export Options
Strategic Partner to Provide Additional Resources andExperience in Developing Export Project(s)
122
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31% CAGR Over Next Decade
Significant Exploration Potential Remains
0
400
800
1,200
1,600
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
MMcf/d
Mari-B/Noa/Pinnacles Domestic Tamar Domestic
Leviathan Domestic Cyprus A Domestic
Leviathan Export Cyprus A Export
Eastern Mediterranean Production OutlookSignificant growth underpinned by Tamar, Leviathan and Cyprus A
123
10-Year CAGR of31%
Net Production
5-YearCAGR of 40%
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Eastern MediterraneanDomestic demand driving near-term value
Tamar Online in April 2013 withCapacity of 1 Bcf/d Gross
Sales average 700 MMcf/d after start-up
With Expansion Average GrossSales Reach 1 Bcf/d for 2015
Israel Domestic Natural Gas Demand Growsat 15% CAGR 2012 2017
Leviathan Phased Development AcceleratesValue Delivery
Targeting capacity of 750 MMcf/d for domestic market in 2016
Cyprus Discovery Supports Long-Term Growth Profile
Strategic Partner Adds Substantial Value to Leviathan
10-Year Production CAGR of 31% Underpinnedby Tamar, Leviathan and Cyprus A
124
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Appendix
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164
Period WTI ($/Bbl) Brent ($/Bbl) Henry Hub ($/Mcf)
2012 $90.00 $100.00 $3.00
2013 $90.00 $100.00 $3.50
2014 $90.00 $100.00 $4.00
2015 $90.00 $100.00 $4.25
2016 $90.00 $100.00 $4.50
2017 +
$90 through2019 then
+ 2% / yr
$100 through2019 then
+ 2% / yr
+ $0.25 / yrthrough 2022 then
+ 2% / yr
Price Assumptions
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165
Defined Terms
Term Definition
All-in Reserve Replacement Reserve changes from all sources divided by total production for a given time period
Cash Flow at Risk (CFAR) The difference between NBL's base plan Cash Flow from Operations and NBL's Cash Flowfrom Operations at the 95% worst case scenario based on a simulation of commodity pricesusing a mean reversion model
Debt Adjusted per ShareCalculations Normalizes growth funded through debt by converting the change in debt into an equivalentamount of equity shares using an average stock price. The equivalent shares are netted withtotal shares outstanding which impacts the per share calculations of reserves, production andcash flow.
Discretionary Cash Flow Cash Flow from Operations excluding working capital changes plus cash exploration expense
Free Cash Flow Operating Cash Flow less Organic Cash Capital
Funds from Operations (FFO) Cash Flow from Operations excluding working capital changes
Liquidity Cash and unused revolver capacity
Net Risked Resources Estimated gross resources multiplied by the probability of geologic success and NBLs netrevenue interest
Operating Cash Flow Revenue less lease operating expenses, production taxes, transportation, and income taxes
Organic Capital Capital less acquisitions
Organic Cash Capital Capital less capitalized interest, capital lease payments, and acquisitions
Peers Investment Grade Non-Investment Grade
APA, APC, DVN, EOG, MRO, MUR, PXD, SWNCHK, CLR, COG, NFX, PXP, RRC
Return on Average CapitalEmployed (ROACE)
Earnings before interest and tax (EBIT) plus asset impairments and unrealized mark tomarket derivatives divided by average total assets plus impairments less current liabilities
Total Debt Long term debt including current maturities, FPSO lease and JV installment payments