Energy Lender Price Survey

Transcription

1 Energy Lender Price Survey Q4 Q4/16 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 37 Participating Banks during the time period from October 15th-31st. Entering the final stretch of, volatility has eased but the much hoped-for recovery has yet to materialize. As crude prices moved back above $50 and the market saw some stability, banks cautiously inched their price decks upward in response. The downturn that s occurred over the past few weeks has validated lenders approach to the recovery, one that favors skepticism and discipline in the face of questionable oil price rallies. This price discipline is evident in the price deck submissions from our participants in this quarter s lender survey. Please see the results of our Quarterly Energy Lender Price Survey for Q4 below. Base Case Results For, the Q4/16 Survey indicates a mean Base Case West Texas Intermediate ( WTI ) oil price forecast of $42.10/BBL and a mean Base Case Henry Hub ( HH ) gas price forecast of $2.53/MMBtu. Our survey of Brent-based oil price forecasts shows a mean Base Case Brent of $43.17/BBL for. The five-year trend shows a continued flattening forward price deck for oil and gas, with average price forecasts of $52.62/BBL (WTI), $53.54/BBL (Brent) and $2.87/MMBtu (HH). Forty percent of respondents do not escalate prices past and prices are capped at means of $60.28/BBL (WTI), $57.83/BBL (Brent) and $3.70/MMBtu (HH). The average discount rate used by Participating Banks is 9% for Base Case WTI and HH and 8% for Brent, similar to last quarter s average. Operating costs on average are escalated 0.2% per year for WTI and HH and not escalated for Brent. Participating Banks consider proved reserve categories to different extents, but lenders that only consider proved developed producing reserves average an advance rate of 60%. Macquarie Capital PAGE 1

2 4th Quarter Price Survey: Mean of 37 Participating Banks Base Case Oil ($/BBL) - WTI Oil ($/BBL) - Brent¹ Gas ($/MMBtu) - Henry Hub % 1.8% 2.5% Cap LOE Esc. 0.2% 0.0% 0.2% Discount Rate 9% 8% 9% 1 Mean of 6 Participating Banks Current WTI Oil Pricing Base Case ($/BBL) $20 $40 $60 $80 $32.50 $42.10 $49.96 $39.00 $45.10 $50.30 $42.00 $48.13 $44.00 $50.68 $46.00 $52.62 $55.00 $58.00 $63.00 Current Brent Oil Pricing Base Case ($/BBL) 1 $20 $40 $60 $80 $40.00 $43.17 $47.00 $44.00 $46.04 $49.50 $46.00 $49.17 $52.00 $48.00 $51.58 $55.00 $53.54 $ Mean of 6 Participating Banks PAGE 2 Macquarie Capital

3 Current HH Pricing Base Case ($/MMBtu) $1.50 $2.00 $2.50 $3.00 $3.50 $4.00 $2.05 $2.53 $2.30 $2.40 $2.50 $3.10 $2.69 $3.10 $2.75 $3.00 $2.81 $3.06 $2.87 $3.25 Base Case to NYMEX Trends Base Case Q4/16 vs. NYMEX as of November 11, We compared the average Base Case against NYMEX futures pricing as of November 11,, as shown below. Base Case results for WTI average 90% of NYMEX WTI futures in, and Base Case results for Brent average 92% of NYMEX WTI futures in. Base Case results for WTI average 93% of NYMEX WTI futures over the five-year strip from -, and Base Case results for Brent average 95% of NYMEX WTI futures over the five-year strip from -. $70.00 $60.00 $/BBL $40.00 $30.00 Base Case WTI 4Q/16 Base Case Brent 4Q/16 NYMEX WTI Futures as of November 11, When compared with NYMEX futures pricing, the average Base Case results for gas were 91% of NYMEX HH futures in and 93% of NYMEX HH over the five-year strip from -. $4.00 $3.50 $/MMBtu $3.00 $2.50 $2.00 Base Case HH 4Q/16 NYMEX HH Futures as of November 11, Macquarie Capital PAGE 3

4 Quarter-to-Quarter Trends Quarter-over-Quarter Pricing Trends Base Case Compared to last quarter s Survey, front-year pricing increased by 5.1% for WTI and 3.9% for Brent, and increased 5.9% for HH. The average change in pricing for the five-year strip is up 2.8% for WTI, up 1.6% for Brent and up 1.1%for HH. 1 Mean of 6 Participating Banks in Q4/16 Oil ($/BBL) - WTI Q3/16 Q4/16 Oil ($/BBL) - Brent¹ Gas ($/MMBtu) - Henry Hub % Increase/ % Increase/ (Decrease) Q3/16 Q4/16 (Decrease) Q3/16 Q4/16 % Increase/ (Decrease) Front-Year % % % Second-Year % % % Third-Year % % % Fourth-Year % % (0.6%) Fifth-Year % % (1.8%) Sixth-Year and Beyond 3.7% 2.1% N/A 2.2% 1.8% N/A 2.7% 2.5% N/A Cap % % (0.5%) Quarter-to-Quarter Base Case Oil (WTI) and Gas (HH) Pricing Trends $70.00 $60.00 $/BBL $40.00 $30.00 Q1/16 Q2/16 Q3/16 Q4/16 $4.00 $3.50 $/MMBtu $3.00 $2.50 $2.00 Q1/16 Q2/16 Q3/16 Q4/16 PAGE 4 Macquarie Capital

5 Sensitivity Case Results The Q4/16 Survey also includes a Sensitivity Case, which represents the lenders low or conservative price decks. Of the 37 Participating Banks, 34 banks provided a Sensitivity Case for WTI and 34 banks provided a sensitivity case for HH. The sensitivity cases averaged a 19% discount to Base Case lending policies for WTI and 18% discount to Base Case lending policies for HH over the five-year strip. Five banks provided a Sensitivity Case for Brent, which averaged a 14% 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 ($/MMBtu) - Henry Hub % 1.2% 2.5% Cap LOE Esc. 0.2% 0.0% 0.1% Discount Rate 9% 8% 9% 1 Mean of 5 Participating Banks Current Oil (WTI) Pricing Sensitivity Case ($/BBL) $20 $40 $60 $25.00 $34.35 $41.50 $30.00 $36.58 $43.50 $33.00 $38.92 $46.00 $35.00 $40.88 $35.00 $42.39 $54.00 Macquarie Capital PAGE 5

6 Current Oil (Brent) Pricing Sensitivity Case ($/BBL) 1 $20 $40 $60 $33.60 $36.73 $39.95 $35.20 $39.21 $42.08 $36.80 $42.36 $47.00 $38.40 $44.48 $40.00 $46.03 $ Mean of 5 Participating Banks Current Gas Pricing Sensitivity Case ($/MMBtu) $1.50 $2.00 $2.50 $3.00 $1.69 $2.06 $2.51 $1.88 $2.20 $2.55 $2.26 $2.55 $2.32 $2.66 $2.38 $2.90 PAGE 6 Macquarie Capital

7 Participating Banks Macquarie Capital thanks the following banks for their participation in this quarter s survey. Amegy Bank Citi IBERIABANK SunTrust BancFirst Citizens Bank Independent Bank TD Securities Bank of Oklahoma Financial Comerica Bank ING Capital Texas Capital Bank Bank SNB Community National Bank Mizuho Bank US Bank BB&T Credit Agricole Natixis Wells Fargo BBVA Compass DNB Bank NBH Bank West Texas National Bank BDC First Interstate Bank RBC Capital Markets Whitney Bank BMO Capital Markets First Tennessee Bank Regions Bank Cadence Bank FirstCapital Bank of Texas Santander Bank Capital One Frost Bank Societe Generale 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 Vice President Michael.Verhagen@macquarie.com Disclaimer "Macquarie Capital" refers to Macquarie Corporate Holdings Pty Limited, its worldwide subsidiaries and the funds or other investment vehicles that they manage. Macquarie Corporate Holdings Pty 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. 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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