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8/8/2019 Wade Locke
1/17
OutlookforEastCoastOil
PresentationtotheNationalEnergyBoards
2010Energy
Futures
Conference
WadeLocke
epar men
o
conom csMemorialUniversity
March
12,
2010
8/8/2019 Wade Locke
2/17
PresentationOutline Basins
Investment
LandSa es
Exploration
OffshoreProduction
Hibernia&
Hibernia
South
Extension
WhiteRoseExpansion
Hebron
rp an
as n
EyestotheFuture
Conclusion
8/8/2019 Wade Locke
3/17
NLBasins
SaglekBasin
HopedaleBasin
AnticostiBasinOrphan Basin
JeannedArc
FlemishPass
Basin
ar mes as n
SydneyBasin
LaurentianSubbasinBasin
Source:CNLOPB
8/8/2019 Wade Locke
4/17
OffshoreExpendituresNL
AlreadylargeinvestmentinNLsoffshore($24.6Bto2008),withmore
tofollowshortlyfromWhiteRoseExtension,Hebron&HiberniaSouth.
$8.2B
$5.0B11.4B
Source:CNLOPB
8/8/2019 Wade Locke
5/17
BidsforNLOffshoreParcels:19882009
$2,500Inexcess of $2BinworkbidinNLoffshore,nearly$700M
$1,500
,
Dollars
total).Second
well
being
drilled
in
Spring
2010
in
Orphan.
$1,000
illi
onsof
Orphan
Basin
$500
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
CumulativeBids AnnualBids
DataSource:CNLOPBwebsite
8/8/2019 Wade Locke
6/17
ExplorationWellsDrilledOffshoreNL
1720
Forthelast20years,anaverageof1.3
15
Drilles
wellsper
year
have
been
drilled.
9
7
1010
rofWell
34
5 5
34 45
Numbe
1 1 1
0
1966
1968
1970
1972
197
1976
1978
1980
1982
198
1986
1988
1990
1992
199
1996
1998
2000
2002
200
2006
2008
8/8/2019 Wade Locke
7/17
RecoverableOilReserves/Resources
1200
1600
rels
s ore
ro ec
Doesnotinclude170Mbbls(oilinplace)forWhite
1,244
574800nsofBa
Itdoes
not
include
479
MM
bbls
of
NGLs.
could
add
60MbblstoWhiteRose749
670
289 139
749 130234 36 23 14
13 10 8 7 6 40
400Milli
ibernia
enNevis
raNova
&North
yst
nneBay
Mara
ringdale
Nautilus
g'sCove
empest
Rankin
Fortune
thMara
ebron/B Te
iteRose
Amet
WestB Sp Kin
South Ea
sSo
W Production Remaining
CNLOPBwebsite ProductionasofJan31,2010
8/8/2019 Wade Locke
8/17
ProductionProfileNLOffshore
150
ActualandExpected
11198 94
100perye
ar
1.1Bbblsproduced &1.8Bbblsleft,peak135Mbblsin2008
53
69
47ofBarrel
580M
420M
370M
2111
Millions
1.2B
1997
1999
2001
2003
2005
2007
2009
2011
2013
2015
2017
2019
2021
2023
2025
2027
2029
2031
2033
2035
Hibernia TerraNova WhiteRose Hebron CombinedDataSource:Actualproduction CNLOPB,estimatedprodcution Locke
8/8/2019 Wade Locke
9/17
HiberniaProduction
80
r
IncludingHiberniaSouthExtensionNGLs
60
lsperye
HiberniaAA
Block
50Mbbls
45Mbbls
40
sofBarr HiberniaSouthUnit
170Mbbls
20
Million
1,000Mbbls
0
1997
1999
2001
2003
2005
2007
2009
2011
2013
2015
2017
2019
2021
2023
2025
2027
2029
2031
2033
2035
HiberniaField HiberniaAABlock HiberniaSouthUnit NGLs
DerivedfromCNLOPBStaffAnalysis20090807,TableA.2.2HDPAmendment Application
8/8/2019 Wade Locke
10/17
Hebron
GBSdevelopment
46Binvestment
. .
approx600Mbbls
firstoil2017
heavyoil BenNevispool(80%ofproduction)has20o API
90metres waterdepth
8/8/2019 Wade Locke
11/17
White
Rose
Extension TiebacktoFPSO(mainfield) $3.5Binvestment
Doubleproduction(200Mbbls
Source:PetroleumDevelopment,2008AnnualReport,GovNL
8/8/2019 Wade Locke
12/17
OrphanBasin
Source:ChevronCanada
evron ana a m e an s rp an as ncoven urers xxon o
CanadaLtd.,ImperialOilResourcesVenturesLimitedandShellCanada
Energy)todrillanexplorationwell(LonaO55)intheSpringof2010.
Thewater
depth,
at
2,600
metres,
will
set
anew
record
for
offshore
wells
drilledinCanada.
ChevronplanstousetheStenaCarrondrillship.TheOrphanBasin
explorationwell
will
take
several
months
to
drill
and
evaluate.
8/8/2019 Wade Locke
13/17
EyestotheFuture
Mizzen(SDL1047)
FollowonfromMizzenL11in2003
e , g ven s a us a o us y
1,100m
water
depth
Outsideof200milelimit butoncontinentalshelf
Standalonedevelopmentneeded
Ballicatters SinglewelldrilledtoevaluatetargetswithtwoadjacentELsunderrig
sharingagreement
EL1113validatedbutEL1092cons icuousl absentPeriodIIextension
Rumorsthatbaritesenttorigisconsistentwithapressureeventbeingencountered
2wells
drilled
in
2008
and
3onshore
wells
to
be
drilled
in
2010
by
NALCOR
8/8/2019 Wade Locke
14/17
R&D TheKeytotheArctic Given NLsproximitytotheArctic;
GivenhowNLhasmetthechallengesforice,icebergsandars oceanenv ronmentsont e ran an s;
GiventheharshclimatechallengesthatNLwillfacein
GiventheresearchexpertisecurrentlyresidentatCCOREand
GivenR&DandE&TcommitmentsexpectedwithinNLasaresultofitsoilresources($0.5to$1Bfromexiting&planned
projects)
NListhenaturalgatewayfortheexploitationofresourcesine rc c. cana soac asacon u or e nee e o
overcome
the
Arctic
challenges
8/8/2019 Wade Locke
15/17
R&DRequirementsfromExistingandPlannedOil
$1,000
50
$60
ar
Theannualaveragetodatehasbeen$30$35M
$600$40
fDollar
sPer
Y
$400
$20
30
illionso
fDolla
$200
$10 M
illions Cumulative R&DExpenditures
willbebetween $0.7Band$1.0
2004
2006
2008
2010
2012
2014
2016
2018
2020
2022
2024
2026
2028
2030
2032
2034
CumR&D
Requirements Annual
R&D
Requirements
Source:LockePresentationtoNOIA2009
8/8/2019 Wade Locke
16/17
Conclusion Activityfirststartedinmid1960s,withfirstoilin1997and1Bthbarrelproducedin2009
$25Binvestedinoffshoretodate
Threeoperatingprojects
Hebronabouttostartdevelopmentwithproductionexpect2017
WhiteRose
Extension
and
Hibernia
South
Extension
commenced
Orphanbasinhashugh potential
Naturalgaspotentialhigh(10.8TCF)
8/8/2019 Wade Locke
17/17
Thankyou
for
letting
me
share
my
ideas