ENERGY CONFERENCE RECAP - Simmons & Co. · PDF fileENERGY CONFERENCE RECAP February 29 -...

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Transcript of ENERGY CONFERENCE RECAP - Simmons & Co. · PDF fileENERGY CONFERENCE RECAP February 29 -...

  • Twelfth Annual

    ENERGY

    CONFERENCE

    RECAP

    February 29 - March 2, 2012

  • Exploration & Production

    Lee Boothby Chairman, President & Chief Executive Officer Newfield Exploration Company

    Stephen Chazen President & Chief Executive Officer Occidental Petroleum

    Dan Dinges Chairman, President & Chief Executive Officer Cabot Oil & Gas

    Tim Dove President & Chief Operating Officer Pioneer Natural Resources

    Kevin Fitzgerald Executive Vice President & Chief Financial Officer Murphy Oil

    Jim Flores Chairman, President & Chief Executive Officer Plains Exploration & Production

    Jeff Hume President & Chief Operating Officer Continental Resources

    Tim Leach Chairman, President & Chief Executive Officer Concho Resources

    Steve Mueller President & Chief Executive Officer Southwestern Energy

    John Pinkerton Chairman Range Resources

    Taylor Reid Executive Vice President & Chief Operating Officer Oasis Petroleum

    John Richels President & Chief Executive Officer Devon Energy

    Dave Roberts Executive Vice President & Chief Operating Officer Marathon Oil

    Irene Rummelhoff Senior Vice President, Strategy & Business Development Statoil ASA

    Dave Stover President & Chief Operating Officer Noble Energy

    Scott Woodall Chief Operating Officer Bill Barrett

    Offshore Drillers

    Christian Beckett Chief Executive Officer Pacific Drilling

    Lawrence Dickerson President & Chief Executive Officer Diamond Offshore Drilling

    Mark Keller Executive Vice President Business Development Rowan Companies

    Rob Saltiel President & Chief Executive Officer Atwood Oceanics

    Capital Equipment

    John Gremp Chairman, President & Chief Executive Officer FMC Technologies

    Loren Singletary Vice President Investor & Industry Relations National Oilwell Varco

    Large Cap Service

    Bernard Duroc-Danner Chairman, President & Chief Executive Officer Weatherford International

    Tim Probert President, Strategy & Corporate Development Halliburton Company

    Peter Ragauss Senior Vice President & Chief Financial Officer Baker Hughes Incorporated

    Land Drilling & Well Intervention Services

    Hans Helmerich Chairman & Chief Executive Officer Helmerich & Payne

    Kenneth Huseman Chief Executive Officer & President Basic Energy Services

    Kevin Neveu Chief Executive Officer Precision Drilling Corporation

    Trey Whichard Vice President & Chief Financial Officer Key Energy Services

    Small Cap service

    David Demshur Chief Executive Officer Core Laboratories

    David Dunlap President & Chief Executive Officer Superior Energy Services

    Gary Kolstad President & Chief Executive Officer CARBO Ceramics

    Cindy Taylor President & Chief Executive Officer Oil States International

    Refining

    Mike Jennings Chief Executive Officer HollyFrontier

    Bill Klesse Chairman, President & Chief Executive Officer Valero Energy Corporation

    Mike Palmer Senior Vice President, Supply, Distribution & Planning Marathon Petroleum Company

    Dan Romasko Executive Vice President, Operations Tesoro Corporation

    Coal

    Brett Harvey, Chief Executive Officer & Chairman of the Board CONSOL Energy

    Jim Thompson President Energy Publishing

    Richard Whiting President, Chief Executive Officer & Director Patriot Coal

    Simmons & Company International

    Twelfth Annual Energy Conference Panel Participants

  • Industry Executives Discuss Changes,

    Challenges and Opportunities

    Now in its 12th year, Simmons annual Energy Conference brings together CEOs and other top executives from multiple segments of the energy industry. Executives meet one-on-one with investors, and engage in lively panel discussions about issues facing the industry today, as well as challenges and opportunities that lie ahead.

    This year, 41 energy executives from the exploration & production, energy service and equipment, refining and coal segments participated in 11 panel discussions on topics that ranged from natural gas pricing, to international offshore plays, to North American supply bottlenecks. Among the most significant takeaways were:

    The transformation of the North American energy industry, and the profound economic implications of these structural changes, in the U.S. and abroad.

    Widespread enthusiasm for oil exploration and production, and the oil price outlook.

    Near-universal pessimism about natural gas pricespossibly extending for several years.

    A strong outlook for the service and equipment industries, both onshore and offshore, both domestic and international.

    Optimism in the resumption of activity in the Gulf of Mexico, and future growth and profitability there, at least among the largest producers.

    Improving global competitiveness of the US refining industry driven by low costs domestic oil and natural gas supplies.

    Participants in the Simmons Conference offered frank observations of the industry and its prospects ahead. Below are some of the answers, in executives own words, to many of the questions now facing the industry.

    SIMMONS & COMPANY INTERNATIONALT WELFTH ANNUAL ENERGY CONFERENCE REPORT 1

  • The technology-driven transformation of

    the North American energy industry may

    now be decades old, but many panelists

    were still shaking their heads in disbelief

    at the changes they have witnessed. I

    was a peak oil believer until five years

    ago, said Irene Rummelhoff, Senior

    Vice president of Statoil ASA. What is

    happening now is amazing.

    Valero Energy Corp.s CEO Bill Klesse

    was even more emphatic about the

    historic nature of the industrys

    transformation. In my 40-year

    career, this unconventional oil &

    gas boom is probably the biggest

    thing that has ever happened, for

    the U.S. and ultimately for the

    world, he said. It is going to be

    very remarkable, watching where

    this goes in five to seven years.

    Industry executives tip their hats

    to engineers, who seem to have

    replaced wildcatters as the heroes

    of the todays North American energy

    renaissance. What has changed is the

    shale plays and the repeatability of these

    plays, said John Pinkerton, Chairman

    of Range Resources. All these brilliant

    engineers have created this. The

    domestic industrys transformation is

    already having a substantial positive

    impact on the U.S. economyand its

    ability to create high-paying jobs. Fifteen

    years ago we were looking at shutting

    the lights off for the North American

    oil & gas industry, said Continental

    Resources President and COO Jeff

    Hume. Now we are recruiting at colleges

    and seeing those colleges reinvest in

    their petroleum engineering

    and geology programs. This

    is a huge opportunity for

    American workers.

    On the oil side, at least,

    most panelists think the

    production upturn is still

    young. We are in the

    very early stages of this

    whole shale and tight rock

    revolution in oil, said John Richels,

    CEO Devon Energy. Look what we

    have done in natural gas shale plays.

    The smart technical folks are not only

    figuring out how to locate fracks better;

    they are learning to take advantage of

    natural fracks and improving efficiencies.

    A well took 33 days to drill ten years ago;

    now we do it in seven days. We are now

    applying that technology to oil plays and

    constantly developing efficiencies and

    gaining better technical knowledge which

    will continue to help us figure out how to

    get oil out of the ground.

    Unconventional activity is spreading

    outward from North America, presenting

    enticing long-term growth opportunities

    for industry players who are positioned

    to provide equipment and expertise

    to promote international development

    of unconventional resources. Hans

    Helmerich, CEO of Helmerich & Payne,

    sees exciting opportunities in many

    countries. The North American energy

    revolution will have positive international

    implications for service companies

    that have leading positions here. We

    anticipate being part of the demand pull

    from operators and their JV partners

    as they apply their new expertise into

    international markets.

    Is Shock and Awe replacing Boom and Bust

    as the best way to describe the oil and gas industry?

    We are in the very early stages of this whole shale

    and tight rock revolution in oil

    John Richels, CEO, Devon Energy

    2 SIMMONS & COMPANY INTERNATIONALT WELFTH ANNUAL ENERGY CONFERENCE REPORT

  • The overwhelming majority of

    Simmons conference participants

    believe the answer to that question

    is no. North American producers

    and service companies are placing

    their bets on continued strength

    in the oil market. You have the oil

    market moving from strength to

    strength, and gas absurdly priced,

    said Bernard Duroc-Danner, CEO

    of Weatherford International.

    This year, the more oil you have,

    the more flexible you are and the

    better you do. North American

    oil and liquids producers sunny

    outlook might be influenced by

    the relentlessly positive E&P news

    coming from their unconventional