Ben Broussard, LOGA - State of the Industry
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Breakdown of the state of the oil & gas industry in Louisiana, recent events in Louisiana's political scene and how industry will be affected
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Ben Broussard, LOGA - State of the Industry
- 1. State of the IndustryBen Broussard Director of Marketing Louisiana Oil & Gas Association
- 2. Global Market Industry in Louisiana State Government
- 3. 1.1 1.1 3.3 9.3 0 3 5 8 10 Million Barrels What Makes Up U.S. Supply?
- 4. 19 11 15 7 42 0 12.5 25 37.5 50 MillionBarrels/DayWorld Demand 94 Million Barrels Per Day
- 5. Breakeven Price for OPEC & Russia $60 $70 $95 $98 $98 $120 $112 $116 $124 $124 $121 $140 $104 $0 $35 $70 $105 $140 $175
- 6. OPEC Production 38 Million bpd $31 barrel $1.2 Billion/d OPEC Production 36 Million bpd $70 barrel $2.5 Billion/d Cut 2 Million bpd Saudis Economics Doesn’t Make Sense
- 7. $0 $40 $80 $120 $160 We Have Been Here Before Crude Oil Annual Average Price 1970-2015 (Adjusted for Inflation) Oil Embargo Iranian Revolution Crash of 86 Iraq Invaded Kuwait Southeast Asia Economic Downturn Invasion of Iraq Peak Oil Mania Saudis War for Market Share
- 8. 27 23 23 28 38 50 58 64 147 54 70 98 99 96 82 35 38 4 4 3 5 6 9 7 6 13 4 4 3 3 3 4 1.91.71 2000 2002 2004 2006 2008 2010 2012 2014 Current Oil & Gas Prices No Longer Dependent on Each Other Oil Natural Gas
- 9. 1949 1953 1957 1961 1965 1969 1973 1977 1981 1985 1989 1993 1997 2001 2005 2009 2013 489 1862 1980 964 Annual U.S. Average Rig Count 1949 - 2015
- 12. Louisiana Average Rigs 1968 - 2016 0 125 250 375 500 625 68 72 76 80 84 88 92 96 00 04 08 12 Feb 487 126 88 192 46 Lowest month ever recorded 9/1992 76 rigs
- 13. Louisiana Rig Count Sept 1992 (Lowest Recorded Week) Current North La 10 17 South La Land 22 5 Inland Water 9 2 Offshore 35 22 TOTAL 76 46 Baker Hughes
- 14. Monthly Louisiana Permits 2007 - 2014 High 402 Record Low 30 Jan 2016 Average 142
- 15. Job Losses are REAL • 2500 jobs lost in Acadiana alone in 2015 •Estimated that another 4,000 will be lost in 2016 • 10,000 jobs lost in Louisiana • 60,000 jobs lost in Texas • 250,000 jobs lost in U.S.
- 18. Richard Ieyoub Commissioner of Conservation Thomas Harris Sec. Department of Natural Resources
- 19. Taylor Barras House Speaker John Alario Senate President
- 20. State Budget in Turmoil FY 2016 July 1, 2015 - June 30, 2016 FY 2017 July 1, 2016 - June 30, 2017 $940 Million $2.0 Billion*
- 21. SPECIAL SESSION: FINAL RESULTS HB 62: Adds one clean penny to the existing 4 cent state sales tax -No exemptions apply to that new penny -Lasts until 2018; LOGA fought for sunset *Cant be renewed; Legis would require new legislation HB 61: Cleans exemptions from the four existing pennies •Until June 30th, 2016: Exemptions gone. •After June 30th: .02 exemptions apply until 2018
- 22. Legal Climate Continues to Plague Industry • Cameron Parish Files 11 Suites against 113 Companies and 195 defendants • Jefferson Parish suits remain • Nearly 400 plus Legacy Lawsuits
- 23. It hasn't been all bad Plaquemines Parish Coastal lawsuits tossed out Supreme Court victory in the Hayes Fund Case Ban of oil exports lifted by Congress
- 24. Don Briggs The Price of Oil Will Go UP
- 25. www.loga.la facebook.com/LouisianaOilGasAssoc @LaOilGasAssoc Oil & Gas News and Events on your iOS device videos.loga.la
Editor's Notes
- Intro LOGA: -Create incentives -Ward of burdensome regulation -Block excessive taxation -Educate public & government
- April 2015 was a big month - America peaked out at 9.6Mb/d Not the whole story in US supply Total US Supply: 15Mb/d
- US Demand is roughly 19Mb/d Worldwide crude demand: 95Mb/d Worldwide crude production: 97Mb/d 2Mb/d oversupply for over a year. Add Iran 1Mb/d. Storage concerns. Tankers, rail cars, strategic reserves, swimming pools, etc. Q: If & when OPEC stabilizes & cuts production, how long will it take?
- Breakeven to run an economy (Not finding cost) OPEC bottom line: Saudia Arabia fighting to hold their market share in a changing world. Russia is a threat as a producer to supply emerging nations Saudi: 1/4 Trillion barrels in proven crude reserves
- 1973 - Punish US for support of Israel against the Arab states. - Prices Quadrupled 1986 - Crash of 86 1998 - Prices went to $12 - Russia defaulted on its debt Used Cartel to create wealth for themselves -
- TRANSITION: The processes have changed..
- Perfect Storm Low oil prices as well as low natural gas prices 2014 vs Now PetroQuest $6 $ $.41 Stone Energy $30 $1.26 Freeport $30 $7.00 Superior Energy $36 $10 Analyst of top 500 public traded companies——-1/3 will file Bankruptcy
- Not only commodities crunch Legal environment as well.
- Stripper producers at current prices are losing $10 per barrel for every barrel produced. 1Mb/d US production = Stripper producers Oil City, LA: $1 changes hands 7 times.
- Mostly land based
- MM&E, Agriculture & Farming WILL BE TAXED until June 30th -Will roll off after that. Manufacturing, Machinery & Equipment (Pure business assets). Between now & July 1st - folks probably just wont buy machinery. As long as you aren’t planning on buying anything or spending any money on electricity, you should be fine. Regular Session MONDAY
- ATTITUDE & EFFORT - The two farmers
- Perfect Storm Low oil prices as well as low natural gas prices Record low permitting and record record PetroQuest $6 $ .41 Stone Energy $30 $1.26 Freeport $30 $7.00 Superior Energy $36 $10 Analyst of top 500 public traded companies——-1/3 or 175 will file Bankruptcy Stripper producers at current prices are loosing $10 per barrel for every barrel produced. IMPACT on State Government - Local Economies Coastal Lawsuits are also playing a major role in companies doing business in Louisiana - a clear single we are not open for business.