A New Dawn? Mike Beveridge - Managing Director

Transcription

1 A New Dawn? Mike Beveridge - Managing Director

2 January 2017 Fit at 50? 2

3 January 2018 Life Begins At 70? 3

4 What A Difference A Year Makes: From $55/bbl to $70/bbl $US 75 LTM Max: $ LTM Avg: $ LTM Min: $ Source: Capital IQ as at 22/01/2018 4

5 Example Oil Price Macro Influences Demand growth (EVs)? Saudi Arabia Record L48 production OPEC cuts Non-OPEC production growth Global inventories Are we heading towards a more balanced oil market in 2018? Non-OPEC accord Political tensions in Iran Oil Price 5

6 From Peak Oil Supply.. To Peak Oil Demand

7 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 7

8 Global Oil Demand mb/d CAGR: 1.88% Global Oil Demand: 85.4 mb/d in 2009 Expected to grow to 99.1 mb/d by Source: IEA Report as at 19/01/2018 8

9 A Tale Of Two Cities Y/Y Demand Change (mb/d) (0.3) (0.6) (0.9) (1.2) (1.5) (1.8) (2.1) OECD Demand E 2018E 2019E 2020E United States North America ex US Europe Pacific Average Brent Price $120 $100 $80 $60 $40 $20 $0 Brent Price ($/bbl) Y/Y Demand Change (mb/d) Non-OECD Demand (0.50) Africa Middle East Latin America Other Asia Europe China FSU Source: IEA, SCI 9

10 Demand Drivers Are Shifting Change In Demand By Sector, Power Generation Buildings Passenger Cars Maritime Freight Aviation Petrochemicals Million bbl/day Source: IEA 10

11 Electric Vehicles: Impact On Oil Demand? Electric car stocks (000s) China USA Rest of World Source: IEA, SCI 11

12 Fuel Demand From Cars Continues To Rise Mb/d 45 Decomposing Changes In Liquids Demand From Cars: (17) (0.2) (1.2) Growth in demand for travel Gains in fuel efficiency Switching to natural gas vehicles Switching to electric vehicles 2035 Source: BP 2017 Energy Outlook 12

13 Lower 48 Crude Oil Production¹ Lower 48 Crude Production kb/d 8,800 8,400 8,000 7,600 7,200 6,800 6,400 L48 Production Forecasts (Black Oil) BHI US Oil Rig Count / SCI Forecast 1,900 1,700 1,500 1,300 1, ,000 Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15 Jan-16 Mar-16 May-16 Jul-16 Sep-16 Nov-16 Jan-17 Mar-17 May-17 Jul-17 Sep-17 Nov-18E Jan-18E Mar-18E May-18E Jul-18E Sep-18E Nov-18E 300 Actual SCI IEA EIA Rig Count Actual Rig Count Forecast 1 Source: Simmons, IEA, EIA, BHI 13

14 International Non-OPEC Supply 800 International Non-OPEC Y/Y Change 600 Y/Y Change (KBD) (200) (400) Robust growth Stagnation (600) Secular Decline E 2018E 2019E 2020E 2021E 2022E International Non-Opec Y/Y Change Average Average Average Source: SCI 14

15 OPEC Resolve. And Non-OPEC Accord OPEC agrees to extend oil supply cuts into 2018 Russia And Saudi Arabia: A New Oil Bromance? 15

16 OPEC Compliance: 9/10 Ain t Bad (million barrels per day) Saudi Arabia Iraq UAE Kuwait Venezuela Angola Algeria Qatar Ecuador Gabon OPEC Crude Production Cuts 2017 Average Compliance 1 120% 44% 54% 100% 63% 119% 82% 133% 62% 27% ~ 90% Source: IEA, SCI 1 As at Nov 2017 Actual Cut in Nov 17 Agreed Cut 16

17 Heightened Geopolitical Risk 17

18 Global Rig Count International Rig Count US Rig Count Baker Hughes 2 Note: Excludes Russia and China 18

19 Offshore Rig Count E 2018E 1 Spears and Associates 19

20 Subsea Construction Backlog $ 50.0 $ $ McDermott TechnipFMC Saipem Subsea 7 Brent Crude Oil $/bbl Source: Company Documents 20

21 Recent Major Project Sanctions Project Peak Oil Production (kb/d) Peak Total Production (kboe/d) Reoverable Year of Expected Sanction Start Up Country Oil/Gas Project Type Operator Development Resources Capex ($B) (bboe) Implied Development Costs ($/boe) Johan Sverdup Phase Norway Oil Deepwater STO $ $6.1 $26.2 Tengiz Future Growth/ WPMP Kazakhstan Oil EOR CVX $ $23.0 $73.6 Johan Castberg Norway Oil Deepwater STO $ $10.7 $32.8 Appomattox USA Oil Deepwater RDS N/A 0.65 N/A N/A Mad Dog USA Oil Deepwater BP $ $18.0 $64.3 Liza Phase Guyana Oil Deepwater XOM $ $9.8 $36.7 Kg-DWN-98/ India Oil/Gas Deepwater OTHER $ $4.9 $29.1 West White Rose Expansion Canada Oil Deepwater HSE.TO $ $24.3 $69.3 Thunder Horse South Expansion USA Oil Deepwater BP $0.9 N/A N/A $17.0 Offshore Cape Three Points Ghana Oil/Gas Deepwater E $ $16.0 $70.6 Peregrino South Brazil Oil Deepwater CAELUS $ $14.0 $77.8 Kaikias Phase USA Oil Deepwater RDS N/A 0.1 N/A N/A Trestakk Norway Oil/Gas Deepwater STO $ $8.7 $11.0 Greater Enfield Australia Oil Shallow Water WINTERSHALL $ $27.5 $47.5 Snorre E 2020 Norway Oil Deepwater STO $ $14.5 $47.4 Njord Future Norway Oil/Gas Deepwater STO $ $10.3 $36.0 GMT USA Oil Conventional COP $0.9 N/A N/A $30.0 Maria Norway Oil/Gas Deepwater OTHER $ $8.4 $47.5 Red Emperor Vietnam Oil/Gas Deepwater REPSOL $ $1.6 $29.3 Culzean UK Oil/Gas Conventional MAERSK $ $14.7 $40.0 Tyra Future Denmark Oil/Gas Deepwater TOT $ $13.5 $45.0 Oseberg Vestflanken Norway Oil Shallow Water STO $ $7.5 $41.0 $k/boed of Flowing Barrel Source: SCI, Company Documents 21

22 Average Breakeven Oil Prices Current $50/bbl Source: Rystad Energy UCube 22

23 Public Company Trading Performance $bn FY14 EV/EBITDA FY17 4.3x FY18 6.3x FY15 FY16 FY17E FY18E $ $bn EV/EBITDA FY17 6.6x FY18 8.9x FY14 FY15 FY16 FY17E FY18E $ $bn FY14 FY15 EV/EBITDA 11.1 FY17 x 14.4 FY18 x FY16 FY17E FY18E $ $bn FY14 FY15 EV/EBITDA 13.4 FY17 x FY18 9.2x FY16 FY17E FY18E $ Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Source: Capital IQ as at 22/01/

24 M&A Activity This Time Last Year! 24

25 Deal Activity In 2017 Consolidations Logos for example only, not exhaustive 25

26 Deal Activity In 2017 (Continued) Mergers & Acquisitions * * * * * * * * * Logos for example only, not exhaustive * Denotes transactions where PJL advised * 26

27 Deal Activity In 2017 (Continued) New Entrants Balance Sheet Restructurings Logos for example only, not exhaustive 27

28 Evolution Of The OFS Landscape Market Cap - Select OFS Companies (Dec 2014 Vs. Dec 2017) USDbn 150 Combined Market Cap (Dec 2014): $232 billion Combined Market Cap (Dec 2017): $178 billion BHI Dec 14 $27bn BHGE Dec 17 $15bn 1 GE / BHI SLB / CAM HAL NOV FMC / TEC WFT COSL SPN OIS 1 1 Including Minority Interests 2 Excludes Baker Hughes / GE 28

29 Changing Face Of The UKCS Operators UK offshore licensing round attracts offers from 68 oil & gas companies OGA Industry Bodies Shell s redevelopment of Penguins will deliver a significant boost to northeast communities Scottish Government Logos for example only, not exhaustive 29

30 Plenty To Look Forward To New Project Investments Decommissioning Offshore Wind Role Of Technology Tax Reforms Global Centre Of Excellence 30

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