Energy Lender Price Survey

Transcription

1 Energy Lender Price Survey Q4 Q4/15 Overview We are pleased to present Macquarie Capital s Quarterly Energy Lender Price Survey, a commodity pricing poll of energy reserve-based lenders. Our survey of energy lenders price forecasts covers a broad spectrum of regional, U.S. national and international banks that engage in energy reserve-based lending ( Participating Banks ). This quarter s survey represents a collection of data from 32 Participating Banks during the time period from October 15th-30th. Base Case Results For, the Q4/15 Survey indicates a mean Base Case West Texas Intermediate ( WTI ) oil price forecast of $42.84/BBL and a mean Base Case Henry Hub ( HH ) gas price forecast of $2.61/MMBtu. Our survey of Brent-based oil price forecasts shows a mean Base Case Brent of $45.35/BBL for. The five-year trend shows a decreasing forward price deck for oil and gas, with average price forecasts of $58.17/BBL (WTI), $61.08/BBL (Brent) and $3.25/MMBtu (HH). Thirty-eight percent of respondents do not escalate prices past and prices are capped at means of $66.86/BBL (WTI), $65.04/BBL (Brent) and $4.07/MMBtu (HH). The average discount rate used by Participating Banks is 9% for Base Case WTI, Brent and HH, unchanged from last quarter s average. Operating costs on average are escalated 0.2% per year for WTI and Brent and 0.2% for HH. Participating Banks consider proved reserve categories to different extents, but lenders which only consider proved developed producing reserves average an advance rate of 61%. 4th Quarter Price Survey: Mean of 32 Participating Banks Base Case Oil ($/BBL) - WTI Oil ($/BBL) - Brent¹ Gas ($/MMBtu) - Henry Hub Esc. 2.2% 1.0% 2.8% Cap LOE Esc. 0.2% 0.2% 0.2% Discount Rate 9% 9% 9% Macquarie Capital PAGE 1

2 Current WTI Oil Pricing Base Case ($/BBL) $35.00 $42.84 $40.00 $47.50 $47.36 $51.00 $45.00 $52.05 $59.00 $47.41 $55.42 $48.83 $58.17 $65.00 $70.00 Current Brent Oil Pricing Base Case ($/BBL) 1 $41.00 $45.35 $49.40 $46.00 $50.45 $53.80 $52.00 $55.91 $58.65 $56.00 $59.00 $61.50 $58.00 $61.08 $63.00 Current HH Pricing Base Case ($/MMBtu) $1.50 $2.50 $3.50 $4.50 $2.20 $2.61 $2.33 $2.53 $2.50 $2.58 $2.79 $3.02 $3.01 $3.15 $3.25 $3.50 $3.75 $4.00 $4.00 PAGE 2 Macquarie Capital

3 $/MMBtu $/BBL Base Case to NYMEX Trends Base Case Q4/15 vs. NYMEX as of October 15, We compared the average Base Case against NYMEX futures pricing as of October 15,, as shown below. Base Case results for WTI average 92% of NYMEX WTI futures in, and Base Case results for Brent average 97% of NYMEX WTI futures in. Base Case results for WTI average 97% of NYMEX WTI futures over the five-year strip from -, and Base Case results for Brent average 103% of NYMEX WTI futures over the five-year strip from -. $70.00 $60.00 $50.00 $40.00 Base Case WTI 4Q/15 Base Case Brent 4Q/15 NYMEX WTI Futures as of October 15, When compared with NYMEX futures pricing, the average Base Case results for gas were 101% of NYMEX HH futures in and 102% of NYMEX HH over the five-year strip from -. $3.50 $3.00 $2.50 Base Case HH 4Q/15 NYMEX HH Futures as of October 15, Macquarie Capital PAGE 3

4 $/MMBtu $/BBL Quarter-to-Quarter Trends Quarter-over-Quarter Pricing Trends Base Case Compared to last quarter s Survey, front-year pricing for WTI decreased by 11.1%, for Brent 11.8%, and for HH 7.5%. The average change in pricing for the five-year strip is down 10.7% for WTI, down 11.1% for Brent and down 7.4% for HH. in Q4/15 Oil ($/BBL) - WTI Q3/15 Q4/15 Oil ($/BBL) - Brent¹ Gas ($/MMBtu) - Henry Hub % Increase/ % Increase/ (Decrease) Q3/15 Q4/15 (Decrease) Q3/15 Q4/15 % Increase/ (Decrease) Front-Year % % % Second-Year % % % Third-Year % % % Fourth-Year % % % Fifth-Year % % % Sixth-Year and Beyond 1.3% 2.2% N/A 1.3% 1.0% N/A 1.7% 2.8% N/A Cap % % % Quarter-to-Quarter Base Case Oil (WTI) and Gas (HH) Pricing Trends $85.00 $75.00 $65.00 $55.00 $45.00 Q1/15 Q2/15 Q3/15 Q4/15 $4.50 $4.00 $3.50 $3.00 $2.50 Q1/15 Q2/15 Q3/15 Q4/15 PAGE 4 Macquarie Capital

5 Sensitivity Case Results The Q4/15 Survey also includes a Sensitivity Case, which represents the lenders low or conservative price decks. Of the 32 Participating Banks, 31 banks provided a Sensitivity Case for WTI and 30 banks provided a sensitivity case for HH. The sensitivity cases averaged a 19% discount to Base Case lending policies for WTI and 19% discount to Base Case lending policies for HH over the five-year strip. Four banks provided a Sensitivity Case for Brent, which averages a 16% discount to the Base Case pricing over the five-year strip. 4th Quarter Price Survey: Mean of Participating Banks Sensitivity Case Oil ($/BBL) - WTI Oil ($/BBL) - Brent¹ Gas ($/MMBtu) - Henry Hub Esc. 2.3% 0.0% 3.3% Cap LOE Esc. 0.0% 0.0% 0.0% Discount Rate 9% 9% 9% Macquarie Capital PAGE 5

6 Current Oil (WTI) Pricing Sensitivity Case ($/BBL) $34.82 $40.00 $38.32 $45.00 $41.83 $50.00 $44.47 $55.00 $46.41 $55.00 Current Oil (Brent) Pricing Sensitivity Case ($/MMBtu) 1 $36.00 $38.95 $42.00 $37.00 $41.95 $45.75 $43.00 $46.79 $49.85 $45.00 $49.06 $52.30 $47.00 $51.06 $53.70 Current Gas Pricing Sensitivity Case ($/MMBtu) $1.50 $2.50 $3.50 $4.50 $1.70 $2.14 $1.87 $2.00 $2.00 $2.00 $2.27 $2.55 $2.57 $2.45 $2.76 $2.56 $2.64 $3.00 $3.25 PAGE 6 Macquarie Capital

7 Participating Banks Macquarie Capital thanks the following banks for their participation in this quarter s survey. BancFirst Capital One, N.A. FirstCapital Bank of Texas, N.A. Regions Bank Bank of Texas Comerica Bank Frost Bank SunTrust Bank BB&T Community National Bank IBERIABANK Texas Capital Bank BBVA Compass Crédit Agricole Independent Bank US Bank BMO Capital Markets DNB Bank ASA Natixis Whitney Bank Cadence Bank First Tennessee Bank RBC Capital Markets About Macquarie Capital Macquarie Capital s A&D group has completed more than 300 energy asset packages valued at over US$28 billion since As a leading A&D team, we provide advisory services in energy asset transactions worldwide to a range of clients in the oil and gas energy industry. With a sophisticated suite of asset divestiture processes, coupled with superior senior-level industry relationships, Macquarie Capital brings together an unparalleled combination of disciplines in engineering, geoscience and economics. Macquarie Capital s expertise extends across all phases of the divestiture process, including, deal strategy, financial and value analysis, technical evaluations, buyer identification and qualification, and other dealrelated logistics. Combined with Macquarie's global resources activities, the result is a seamless, integrated offering, providing top-tier financial and execution experience with superior, specialized technical expertise. Contact Information Grant Butkus Sr. Vice President, Head of A&D Grant.Butkus@macquarie.com Michael Verhagen Associate Michael.Verhagen@macquarie.com Disclaimer "Macquarie Capital" refers to Macquarie Corporate Holdings Limited, its worldwide subsidiaries and the funds or other investment vehicles that they manage. Macquarie Corporate Holdings Limited is an indirect, wholly-owned subsidiary of Macquarie Group Limited. This document and its contents are confidential to the person(s) to whom it is delivered and should not be copied or distributed, in whole or in part, or its contents disclosed by such person(s) to any other person. Notwithstanding the foregoing, the recipient (which includes each employee, representative, or other agent of the recipient) is hereby expressly authorized to disclose to any and all persons, without limitation of any kind, the tax structure and US federal income tax treatment of the proposed transaction and all materials of any kind (including opinions and other tax analysis) if any, that are provided to the recipient related to the tax structure and US federal income tax treatment. This document does not constitute an offer to sell or a solicitation of an offer to buy any securities. You may not rely upon this document in evaluating the merits of investing in any securities. This document does not constitute and should not be interpreted as either an investment recommendation or advice, including legal, tax or accounting advice. Future results are impossible to predict. Opinions and estimates offered in this presentation constitute our judgement and are subject to change without notice, as are statements about market trends, which are based on current market conditions. This presentation may include forward-looking statements that represent opinions, estimates and forecasts, which may not be realized, and such statements may be based on information not generated or sourced by Macquarie Capital. To the extent that such statements are based on information generated or sourced by Macquarie Capital, we believe the information provided herein is reliable, as of the date hereof, but do not warrant its accuracy or completeness. In preparing these materials, we have relied upon and assumed, without independent verification, the accuracy and completeness of all information available from public sources. Nothing in this document contains a commitment from any member of Macquarie Capital to subscribe for securities, to provide debt, to arrange any facility, to invest in any way in any transaction described herein or otherwise imposes any obligation on Macquarie Capital. Macquarie Capital does not guarantee the performance or return of capital from investments. None of the entities noted in this document are authorized deposit-taking institutions for the purposes of the Banking Act 1959 (Commonwealth of Australia). The obligations of these entities do not represent deposits or other liabilities of Macquarie Bank Limited ABN (MBL). MBL does not guarantee or otherwise provide assurance in respect of the obligations of these entities. Macquarie Capital does not provide any tax advice. Any tax statement herein regarding any US federal income tax is not intended or written to be used, and cannot be used, by any taxpayer for the purpose of avoiding any penalties. Any such statement herein was written to support the marketing or promotion of the transaction(s) or matter(s) to which the statement relates. Each taxpayer should seek advice based on the taxpayer's particular circumstances from an independent tax advisor. Macquarie Capital (USA) Inc. Macquarie Capital PAGE 7