PLATTS ROCKIES OIL & GAS CONFERENCE - UINTA BASIN UPDATE STUART E. NANCE – VP - MARKETING
Denver, Colorado – April 15, 2013
What I will attempt to cover during this presentation………
From the Program
• Production, expansion, prospects
• Drilling programs/reports, lessons learned
• Local differential with WTI
• Logistics, infrastructure
• New markets beyond Utah
• Potential for gas pipelines to be converted to oil service
• New plays in Nevada
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What you’d really like to know - Uinta Basin Wax Crude
• What is it?
• Where is it found?
• Who produces it?
• Where are markets?
UNITA BASIN WAX CRUDE – UNIQUE PHYSICAL PROPERTIES
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Black Wax Crude
• 29 - 35 o API gravity.
• +/- 100 o F Pour Point.
• .01 mass % Sulfur content.
• Highly Paraffinic crude.
• Very Low Acid content (TAN < .1)
• Low metals & Nitrogen content.
• Carbon Residue – very low.
Yellow Wax Crude
• 40 - 45 o API gravity.
• +/- 100 o F Pour Point.
• .01 mass % Sulfur content.
• Highly Paraffinic crude.
• Very Low Acid content (TAN <.1)
• Very Low metals & Nitrogen content.
• Carbon Residue – very low.
Yellow and Black Wax Crude
• Excellent Feed for certain Lubes plants – due to High Paraffin content.
• Possible Cracker Feed – might be able to bypass Crude Unit in certain refineries.
• Excellent Anode Grade Coke Feedstock – due to extremely low metals content (For refineries with cokers) – Anodes are used in metals smelting.
UINTA BASIN – Northeastern UT – Uinta/Duchesne Co.
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• Altamont Bluebell
• Monument Butte
• Central Basin
UNITA BASIN WAX CRUDE – TOP OPERATORS
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Newfield Exploration (NYSE: NFX)
Bill Barrett Corporation (NYSE: BBG)
EP Energy Corporation - (Apollo Capital Management)
Berry Petroleum (NYSE: BRY) – to be acquired - Linn Energy
Crescent Point Energy – (TSX:CPG) – acquired Ute Energy
Estimated Gross Wax Production ~ 60,000+ b/d
WAX CRUDE OIL POSTED PRICES – SLC MARKETS
Chevron Crude Oil Posted Prices – Bulletin 13-E70 - Effective April 12, 2013
East of the Rockies Price Change
Altamont Yellow Wax $75.79 (2.22)
Uinta Basin Black Wax $74.79 (2.22)
http://crudemarketing.chevron.com/posted_pricing_daily.asp
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Big West Oil, LLC Posted Prices – Bulletin 12-438 – Effective April 12, 2013
Utah Yellow Wax $74.79
Utah Brown Wax $74.04
Utah Black Wax $74.04
http://www.bigwestoil.com/files/bwo_4_2013.pdf
NYMEX WTI settlement on April 12, 2013 - $91.29 (down $2.22) SLC Wax Crude Postings are ~ 82% of WTI Futures on this date.
REFINING CAPACITY - SALT LAKE CITY, UT. AREA
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Total SLC area refining capacity ~ 175,000 b/d
Estimated Wax crude refining capacity ~ 65,000 b/d – varies seasonally
SLC, UT AREA REFINERIES – PRIMARY MARKET
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HOLLY FRONTIER – Woods Cross, UT
• NYSE – HFC, HEP
• Market Cap = $ 9.5 B / $2.3 B
• 10 yr supply agreement with NFX
20,000 b/d wax crude supplied
SLC, UT AREA REFINERIES – PRIMARY MARKET
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TESORO – SLC, UT • NYSE – TSO, TLLP • Market Cap = $ 7.1 B / $2.4 B • Largest refiner in SLC, UT • 18,000 B/d Contract with NFX
• 7 year term for wax supplies.
SLC, UT AREA REFINERIES – PRIMARY MARKET
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CHEVRON – SLC, UT
• NYSE – CVX
• Market Cap = $ 233 B
BIG WEST REFINING – SLC, UT
• Privately Owned – CH. 11 reorg 2010.
• Market Cap = N/A – Private Company
SLC, UT AREA REFINERIES – PRIMARY MARKET
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SILVER EAGLE – Woods Cross, UT
• Wholly-Owned Sub of IGI The International Group, Inc., - Toronto
• Market Cap = Private Company
• Total Capacity – 15,000 BOPD
• Runs Yellow Wax exclusively
UINTAH GATEWAY UPGRADER PROJECT
• http://vernalutah.org/powerpoints/VinceMametToddDanaUBEnergySummit.pdf
Uinta Oil – Local (SLC) Markets – Near Term Expansions
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• Minor Expansion at Holly Frontier’s Woods Cross Refinery – 2,500 BOPD additional wax crude capacity – completed in Nov, 2012 following turnaround in October, 2012.
• Holly Frontier Woods Cross Air Permit is pending in Utah for Major Expansion. • Tesoro SLC expansion – refinery in turnaround now – back up end of April, 2013.
Additional wax capacity being added in 2 phases (2Q13 and 2014).
• Chevron possible SLC expansion – no details available - not quantified at present. • Silver Eagle expansion completed in 1Q13.
Uinta Oil Play – Markets – Rail Loading Options
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Utah Railway @ Helper, UT
Union Pacific @ Wellington, UT
Uinta Oil Play
WAX CRUDE MARKETS – BEYOND SLC – RAIL OPTIONS
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RAIL MARKETS
• Trans-loading Options currently under evaluation
• Focus on Logistics - Pour Point challenges and downstream handling required.
• Targets - W. Coast, Gulf Coast, East Coast Markets
• Coiled & Insultated rail cars required – used fo Candian Bitumen, asphalt, VGO.
• Rail directly to Refinery w/ facilities to receive coiled rail cars = Optimal Solution.
• Rail to “Other” terminals, etc. = Most Likely Initial Solution.
• “Other” could = barges, trucks, heated pipelines.
Questar Southern Trails Pipeline - Gas to Oil Conversion
• Questar Southern Trails Pipeline - Extends from Blanco, NM to Cal border
• Southern Trails Pipeline is a 488-mile line extending from the Blanco hub in the San Juan Basin of northern New Mexico to delivery interconnects with California utilities. Southern Trails has a total daily transportation capacity of 80 MMcf and interconnects with several major pipelines serving the region.
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Presentation from Midwest Analyst Meetings April 9-11, 2013
Questar Southern Trails Pipeline – Gas to Oil Conversion
29 Presentation from Midwest Analyst Meetings April 9-11, 2013
EXPLORATION ACTIVITY – NEVADA – NOBLE ENERGY
31 http://www.nobleenergyinc.com/Exploration/Our-Value-125.html
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