Looking Ahead on Oil & Gas

Looking Ahead on Oil & Gas Art Berman NACE Investor Speaker Luncheon Palm Beach Gardens, Florida March 16, 217 Slide 1

Oil Prices Fell Below $5 Floor Last Week: Deflation of the OPEC Expectation Premium Oil Prices Fell Below the $5 Floor Last Week $7 12 $61 Per Barrel Ceiling NYMEX WTI Futures Prices ($/Barrel) $5 $3 Daily Futures Price (LHS) $26 OPEC "Freeze" Proposed $55 Per Barrel Ceiling $5 Floor $43 OPEC Cut Sept 28 Agreed Nov 3 OPEC Doha Freeze Meeting Failed 1 8 6 4 $1 2 Feb-15 Apr-15 Jun-15 Aug-15 Oct-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Oil-Price Volatility Index Mar-17 Daily Oil-Price Volatility Index (RHS) High Volatility Source: EIA, CBOE, Bloomberg & WTI futures fell from $53.14 on March 7 to $47.72 on March 14 (-1%) after trading between $5 and $55 since late November when OPEC finalized a production cut (it was below $49 this morning). The official narrative was that it was because of a larger-than-expected inventory build. That explanation is inconsistent with larger recent additions that had little effect on prices. Also at odds with recent positive news about improving market balance and demand. Something more fundamental is happening. Growing realization that OPEC cannot quickly remedy outsized global inventories. Major downward shift in term structure of futures contracts suggests headwinds from a weak global economy a deflation of the OPEC expectation premium at the very least. Slide 2

Oil Markets In Early Recovery From The Second of Two Major Production Bubbles Current $49 Oil Price Is 44% Higher Than Jan 1986 - Jan 24 Average in December 216 Dollars 66 U.S. Incremental Ouput: The Major Cause For Low Oil Prices Canada, Iraq, Iran Saudi Arabia and Russia Also Important Contributors CPI Adjusted WTI Prices (July 216 Dollars Per Barrel) $16 $15 $14 $13 $11 $9 $7 $5 $3 Avg 195-1973 $1 $23/barrel Avg 1974-1985 $7/barrel Avg 1986-24 $34/barrel Source: EIA,U.S. Bureau of Labor Statistics & Jan-7 Feb-71 All Prices in Constant December 216 Dollars Mar-72 Apr-73 May-74 1st Bubble: 1974-198 Oil Shocks --> Massive E&P Investment (North Sea, Mexico, Siberia) Jun-75 Jul-76 Aug-77 Sep-78 Oct-79 Nov-8 Dec-81 Jan-83 Feb-84 Mar-85 Apr-86 May-87 Jun-88 Jul-89 Aug-9 Sep-91 Oct-92 Nov-93 Dec-94 Jan-96 Debt-Fueled Economic Expansion & Rapid Growth in China & East Asia Over-Supply, Demand Destruction & Price Deflation $5/barrel Feb-97 Mar-98 Apr-99 May- 2nd Bubble: 1999-214 Jun-1 Jul-2 Aug-3 Sep-4 Oct-5 Nov-6 Dec-7 Jan-9 Feb-1 Massive E&P Investment (Shale, Deep Water, Heavy Oil) Over-Supply, Demand Destruction & Price Deflation Avg 25-215 $86/barrel Mar-11 Apr-12 May-13 Jun-14 Aug-16 Millions of Incremental Barrels of Crude Oil & Condensate Per Day 65 64 63 62 61 6 59 58 57 56 55 54 53 Source: EIA & 52 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 May-13 Jul-13 Sep-13 Nov-13 Libya Angola Venezuela Mexico Algeria Nigeria Base Indonesia-Ecuador-Qatar-Gabon Jan-16 Mar-16 May-16 Canada Jul-16 U.S. Iraq Iran Russia Brazil Saudi Arabia Kuwait UAE Sep-16 Nov-16 The 1st Bubble 1974-198: oil shocks and price increase from $23 to $117/barrel led to massive E&P investments, over-production, demand destruction & oil-price deflation until 1998. Second Bubble: 1999-214: flat global output & growing Asian demand led to increasing oil prices from $17 to $148/barrel by 28. After the 28 Financial Collapse, OPEC cut production then, declining OPEC spare capacity, falling OECD inventories, & near-zero interest rates led to the longest period of high oil prices in history from 211-214. Over-investment resulted in a massive over-supply, much of it from the United States. The bubble burst in 214 and prices collapsed. Slide 3

The OPEC Production Cut Incremental Liquids Production (mmb/d) 54 53.5 53 52.5 52 51.5 51 OPEC, Russia & Mexico Have Cut 1.6 mmb/d Since November 216 49% From Saudi Arabia & 77% From GCC States Russia Nigeria Iran Angola Mexico Venezuela UAE Algeria, Ecuador & Gabon Source: EIA& 5.5 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Libya Saudi Arabia Base Qatar Kuwait Iraq Market Balance (Supply minus Consumption Millions of Barrels Per Day) 4. 3. 2. 1.. -1. -2. -3. The World Production Surplus Peaked in January 216 & Has Since Moved Unevenly Toward Market Balance: Feb. 217-1 mmb/d Brent Price (RHS) Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Feb-14 Apr-14 Jun-14 Aug-14 Oct-14 Dec-14 Feb-15 Apr-15 Jun-15 Aug-15 Oct-15 Dec-15 Jan-16 Feb-16.12 Mar-16 Apr-16 May-16 Jun-16 -.24 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Source: EIA STEO March 217 & Increasing Surplus 2.86 1.87 Market Balance (LHS).81 1.82 2.82 1.76 3.3.84.49.91 Decreasing Surplus.57-1.51 -.67 1.1 1.2.61.71 -.99 Feb. Market Balance -1 mmb/d $14 Brent Price ( October 216 Dollars Per Barrel) OPEC, Russia & Mexico have cut 1.6 mmb/d since November 216. 49% is from Saudi Arabia & 77% from the Gulf Cooperation Council. -1 mmb/d market balance (production minus consumption) in February. One month is not a trend. -1.5 mmb/d in August, -.7 in September but +1 mmb/d October thru January. Nigeria, Libya, U.S. and Russia are wild cards. Slide 4

There Never Was An OPEC Strategy or Price War OPEC Cut Production 14 mmb/d from 1979-1985 With No Effect on World Supply Surplus or Oil Price 3 $14 Millions of Barrels of Liquids Per Day Compared to 1979 2 1-1 -2-3 World production decreased 9.5 mmbpd OPEC production decreased 14 mmbpd Oil Price (RHS) World Prod (LHS) OPEC Prod (LHS) World Oil Price in 215 Dollars -4 1965 1966 1967 1968 1969 197 1971 1972 1973 1974 1975 1976 1977 1978 1979 198 1981 1982 1983 1984 1985 1986 1987 1988 1989 199 1991 1992 1993 1994 1995 1996 1997 1998 1999 2 21 22 23 24 25 26 27 28 29 21 211 212 213 214 215 Source: BP and Labyrinth Consulting Services, inc. Analysts created a narrative that OPEC s strategy was to hurt U.S. tight oil producers. This story line is unfounded but widely accepted because of American hubris. Cartel s inaction since the 214 price collapse reflected unwillingness to repeat the mistake of 1979-85 when OPEC cut 14 mmb/d with no affect on over-supply, demand or oil prices. Saudi Arabia cut 7 mmb/d 198-1985. Cuts lowered OPEC market share and greatly reduced revenue. We met with non-opec producers, we asked what are you going to do? They said nothing. We said the meeting is over. Ali Al-Naimi, February 216. The 216 OPEC cut happened because Russia participated along with rest of OPEC. Slide 5

Tight Oil Is Not A Threat To OPEC 35 Oil Sands Are Saudi Arabia's Chief Reserve Competition, Not U.S. Tight Oil Billions of Barrels of Crude Oil & Lease Condensate 3 25 2 15 1 5 Oil Sands 3 Venezuela 269 Saudi Arabia Oil Sands 171 Canada 158 Iran 143 Iraq 14 Kuwait 98 UAE 8 Russia Deep Water 6 Deep Water 48 Libya 37 37 Nigeria USA 3 Kazakhstan 25 25 Qatar China Tight Oil 16 12 11.6 9 8.4 8.3 Brazil Algeria U.S. Tight Oil Mexico Angola Ecuador Source: EIA, Hyperdynamics and Tight oil has never been a long-term threat to OPEC because the reserves are relatively small. EIA year-end 215 data indicates that U.S. tight oil proven reserves are less than 12 billion barrels. Deep water reserves are more substantial than tight oil but are still small compared with OPEC reserves. Canada s and Venezuela s combined oil sands reserves exceed 35 billion barrels. Oil sands are Saudi Arabia s and OPEC s chief reserve competition, not U.S. tight oil. Slide 6

Comparative Inventory (C.I.) Is The Most Important Indicator of Oil & Gas Price Trends Millions of Barrels of Oil 5 45 4 35 3 25 Feb-14 Apr-14 Jun-14 Aug-14 Source: EIA & Inventory & 5-Year Average Inventory Oct-14 Dec-14 Months Feb-15 Inventory Apr-15 Increasing Comparative Inventory 5-Yr Avg Inventory Jun-15 Aug-15 Oct-15 Dec-15 5 45 4 35 3 25 Millions of Barrels of Oil C.I. is determined by subtracting current storage from the 5-year average for the same date. That normalizes seasonal variations in inventories. Negative correlation between C.I. & price. Cross-plot of C.I. & price results in a yield curve. It reflects the market s expectation of the lowest price needed to maintain supply based on historical performance. Price & Comparative Inventory Correlate Negatively Millions of Barrels of C.I. 12 1 8 6 4 Oil Price Comparative Inventory Increasing Comparative Inventory $16 $14 2 Feb-14 Apr-14 Jun-14 Aug-14 Oct-14 Dec-14 Feb-15 Apr-15 Jun-15 Aug-15 Oct-15 Dec-15 Oil Price ($/Barrel) Source: EIA & Months Slide 7

Comparative Inventory Provides Context For Market Balance & Oil Prices 3.2 3.2 OECD Inventories Must Fall by ~275 mmb to Support $7 Oil Prices $16 $16 Billions of of Barrels of of Incremental Liquids 3.1 3.1 3 2.9 2.9 2.8 2.8 2.7 2.7 Brent Price (RHS) ~55 ~55 mmb mmb Incremental Inventory Since Since December 213 213 ~275 ~275 mmb mmb Decreased to to $7 $7 Oil Oil Price Price Levels U.S. Inventories (LHS) $14 $14 Brent Price Price (Jan (Jan 217 217 $/Barrel) 2.6 2.6 2.5 2.5 Source: EIA EIA & Inc. Jan-12 Jan-12 Mar-12 May-12 Jul-12 Jul-12 Sep-12 Nov-12 Jan-13 Jan-13 Mar-13 May-13 Jul-13 Jul-13 Sep-13 Nov-13 Base OECD Minus U.S. Inventories (LHS) Jan-16 Jan-16 Mar-16 May-16 Jul-16 Jul-16 Sep-16 Nov-16 Jan-17 Jan-17 OECD comparative inventories (C.I.) are near an all-time high level of 3 million barrels (absolute inventories > 3 billion barrels). Cross-plot of C.I. vs Brent price suggests that $55/barrel prices were about $1 over-valued. Inventories must fall ~275 mmb to support $7 prices (down to the 5-year average). OPEC cuts will accelerate movement toward market balance but massive stock reductions will take 6 months or more. Also assumes that non-opec production falls or remains static. Slide 8

U.S. Production Will Not Remain Static EIA U.S. Crude Oil Forecast is 1.1 mmb/d & $59 WTI by December 218 144 Tight Oil Rigs Added Since Mid-Sept 216: 67% Are In The Permian Basin 12. 1 12 Millions of Barrels of Crude Oil Per Day 1. 8. 6. 4. 2. 9.63 April 215-1.6 mmb/d +.42 mmb/d 8.57 Sept 216 8.98 Feb 217 +1.1 mmb/d Feb 217-Dec 218 9.53 Dec 217 WTI Price (RHS) Oil Production (LHS) 1.8 Dec 218 WTI Price ($/Barrel) Weekly Rig Count Change 8 6 4 2-2 -4-6 Bakken (LHS) Eagle Ford (LHS) NYMEX Price (RHS) Apr-June 215 Price Rally Oil-Price Volatility Index (RHS) -8 Source: Baker Hughes, EIA, Bloomberg & Permian (LHS) 1 8 6 4 2 NYMEX WTI Price ($/Barrel) & Oil Price Volatility Index. Source: EIA STEO March 217 & Feb-14 Apr-14 Jun-14 Aug-14 Oct-14 Dec-14 Feb-15 Apr-15 Jun-15 Aug-15 Oct-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18-1 Jan-16 Mar-16 May-16 Jul-16 Sep-16 Nov-16 Jan-17 Output fell 1 mmb/d from April 215-September 216 but is now increasing. EIA forecast is for 1.1 mmb/d by December 218. WTI does not reach /barrel by December 218 and is flat for 217. The tight oil horizontal rig count has increased by 144 (57%) since the OPEC production cut was first announced in September 216. 69% of the increase has been in the Permian basin where the rig count has increased 95. Eagle Ford has made a come-back in recent weeks. This suggests that U.S. production will increase. Increased production from Nigeria and Libya plus U.S. tight oil may cancel OPEC/NOPEC production cuts. Lack of frack crews & poor condition of frack equipment are a concern for near-term production growth. Slide 9

Record U.S. Crude Oil Inventories Reflect Over-Valued Oil Prices U.S. Crude Oil Inventory 5 Year Comparison Flat Inventory Change Abnormal For Re-Stocking Season: + 5 mmb in 216, +3.9 mmb 5-Yr Avg. 55 5 217 Inventory +37 mmbo above 216 level; +141 mmbo above the 5-year average 216 Comparative Crude Oil + Products Inventory Decreased -8 mmb -.2 Crude Oil/-8 mmb Crude + Products Withdrawal $11 $9 Oil Prices Are ~$3 Over-Valued 26-27 Millions of Barrels of Crude Oil 45 4 35 3 Source: EIA & 25 Jan Jan Jan Jan Jan Feb Feb Feb Feb Mar Mar Mar Mar Apr Apr Apr Apr May May May May May Jun Jun Jun Jun Jul Jul Jul Jul Jul Aug Aug Aug Aug Sep Sep Sep Sep Oct Oct Oct Oct Oct Nov Nov Nov Nov Dec Dec Dec Dec Dec -.2 mmb inventory withdrawal during re-stocking season normally a 4-5 mmb addition. Oil prices recovered to $49 per barrel. Still, U.S. crude oil inventories are at all-time high levels 528 million barrels but that has not concerned the market until recently. That is 37 million barrels above 216 and 141 million barrels above the 5-year average. Comparative inventories have moved down from record high levels. The trend line shows that oil prices should be ~$47 per barrel & remain ~$4 over-valued at $5.5 per barrel. Comparative inventories must fall ~16 mmb to support $7 oil prices. It is reasonable that the price drop was an overdue adjustment from too much expectation about the OPEC cut. 212 215 214 213 211 Source: EIA & WTI Price ($/barrel) Comparative Inventory (Millions of Barrels) -4-2 2 4 6 8 1 12 14 16 18 2 $7 $5 $3 $1 214-217 Mar-June 215 Price Rally C.I. Must Fall ~16 Million Barrels To Support $7 Oil Prices Latest Data Last Week $54 Slide 1

A Major Change in The Term Structure of Oil Futures Contracts The Term Structure of WTI Futures Contracts Has Changed Maximum Forward Prices Fell $2.81 in Last Week on The Future Curve The Term Structure of Brent Futures Contracts Has Changed Maximum Forward Prices Fell $3.39 in The Last Week on The Future Curve $59 $59 $58 $57 $56 $55 $54.14 March 2, 217 Contracts November 3, 216 Contracts $58 $57 $56 56.54 March 3, 217 Contracts NYMEX WTI Price ($/Barrel) $54 $53 $52 $51 $5 $49 $48 January 218 $51.36 March 9, 217 Contracts $52 Per Barrel Prices do not reach $52 until July 221 ICE Futures Price ($/Barrel) $55 $54 $53 $52 $51 March 218 53.15 March 9, 217 Contracts $53 Per Barrel Prices do not reach $53 again until September 22 $47 $5 $46 $45 Source: CME & $44 Jan-17 Mar-17 May-17 Jul-17 Sep-17 Nov-17 Jan-18 Mar-18 May-18 Jul-18 Sep-18 Nov-18 Jan-19 Mar-19 May-19 Jul-19 Sep-19 Nov-19 Jan-2 Mar-2 May-2 Jul-2 Sep-2 Nov-2 Jan-21 Mar-21 May-21 Jul-21 Sep-21 Nov-21 Jan-22 Mar-22 May-22 Jul-22 Sep-22 Nov-22 Jan-23 Mar-23 May-23 $49 $48 Source: CME & May-17 Jul-17 Sep-17 Nov-17 Jan-18 Mar-18 May-18 Jul-18 Sep-18 Nov-18 Jan-19 Mar-19 May-19 Jul-19 Sep-19 Nov-19 Jan-2 Mar-2 May-2 Jul-2 Sep-2 Nov-2 Jan-21 Mar-21 May-21 Jul-21 Sep-21 Nov-21 Jan-22 Mar-22 May-22 Jul-22 Sep-22 Nov-22 Jan-23 Mar-23 May-23 Jul-23 Sep-23 Nov-23 Jan-24 Mar-24 May-24 Jul-24 Sep-24 Nov-24 The term structure of oil futures contracts has changed since the OPEC production cut in late November. It first moved from contango to backwardation between late November and early March. In 1 week, WTI shifted downward almost $3 per barrel and will not reach $52 until mid-221. Brent moved from stronger backwardation downward more than $3 per barrel. Brent won t reach $53 again until late 22. Forward curves should never be used as price predictors but this shift reflects something more fundamental than a bad storage report. Slide 11

Natural Gas Remains The More Interesting Investment Henry Hub Price ($/mmbtu) and Supply Surplus or Deficit (Bcf per Day) 14 13 12 11 1 9 8 7 6 5 4 3 2 1-1 -2-3 -4 Supply Surplus (LHS) Apr 212 $1.95 $1.73 Avg. $8.58 Avg. $4.11 Avg. $4.6 Mar 216 Jan-8 Jul-8 Jan-9 Analysts are bearish on natural gas prices because of pipeline certifications in Marcellus & Utica Shale plays. They believe that pent-up supply is there if take-away capacity is built. None of these pipelines will be built in 217. Falling production, increased exports & consumption for power generation have resulted in tight supplies. Prices doubled in 216 and have only fallen back to $3./mmBtu after one of the warmest winters in history. Prices are on a $3 trend which means that prices could increase to $4 or more next winter. Nothing has changed to increase supply for 217. Jul-9 EIA 217 Forecast +3.6 Bcf/d With Rising Prices Flat Production Apr 29-Jan 21 Jan-1 Jul-1 Jan-11 Jul-11 Jan-12 Jul-12 Source: EIA March 217 STEO & Dry Gas Production (RHS) Flat Production Oct 211-Jul 213 Henry Hub Price (LHS) Jan-13 Jul-13 Declining Production Feb - Jan 217 Jan-16 Jul-16 +3.6 Bcf/d Forecast in 217 Jan-17 71.89 Prices rise to $3.35 in 217 $2.85 Supply Deficit (LHS) Jul-17 8 7 6 5 4 3 2 1 Dry Gas Production (Bcf per Day) Henry Hub Spot Gas Price (Dollars Per MMBTU) Source: EIA & $1. -11-1 -9-8 -7-6 -5-4 -3-2 -1 1 2 3 4 5 6 7 8 9 1 Gas Mid-Cycle Price Has Shifted Downward To ~$3/mmBtu or Lower & C.I. Has Turned Positive March 213 - March 214 Trend Jan 217 Price Drop $7. $6.5 $6. $5.5 $5. $4.5 $4. $3.5 $3. $2.5 $2. $1.5 Previous Trend (May 216 -Oct 216) Last Week This Week Comparative Inventory (Billions of Cubic Feet of Gas) Aug 211- March 213 Trend Slide 12

Looking Ahead On Energy Prices: A Shift in The Oil Market 4 35 Record Long Positions on Crude Oil Futures in Late January & Late February 217 5% (2,5 contracts) Sell-Down In The Last Week Record Highs 1/31/17 & Financial Collapse Oil-Price Collapse 2/28/17 $16 $14 3 NYMEX Price (RHS) 215 Price Rally 25 2 15 1 5 Jun-6 Oct-6 Feb-7 Jun-7 Oct-7 Feb-8 Jun-8 Oct-8 Feb-9 Jun-9 Oct-9 Feb-1 Jun-1 Oct-1 Feb-11 Jun-11 Oct-11 Feb-12 Jun-12 Oct-12 Feb-13 Jun-13 Oct-13 Feb-14 Jun-14 Oct-14 Feb-15 Jun-15 Oct-15 Feb-16 Jun-16 Oct-16 Feb-17 Millions of Barrels of Crude Oil NYMEX Futures Price ($/Barrel) Net Long Positions (LHS) Source: CFTC, EIA & Record net long positions on crude oil futures in the 1 st two months of 217 reflected expectations about the OPEC production cut. Now, growing doubts that cuts will result in higher prices. The OPEC cuts may be more about establishing a floor under prices. For more than two years, the industry believed that higher prices were possible without extreme reductions in inventories. Growing awareness that global oil markets are incredibly complex with many moving parts a single, simple solution is unlikely. Slide 13

Looking Ahead On Oil Current $49 Oil Price Is 44% Higher Than Jan 1986 - Jan 24 Average in December 216 Dollars 66 U.S. Incremental Ouput: The Major Cause For Low Oil Prices Canada, Iraq, Iran Saudi Arabia and Russia Also Important Contributors CPI Adjusted WTI Prices (July 216 Dollars Per Barrel) $16 $15 $14 $13 $11 $9 $7 $5 $3 Avg 195-1973 $1 $23/barrel Avg 1974-1985 $7/barrel Avg 1986-24 $34/barrel Source: EIA,U.S. Bureau of Labor Statistics & Jan-7 Feb-71 All Prices in Constant December 216 Dollars Mar-72 Apr-73 Oil prices have been $6 to $1 over-valued during the last few months based on comparative inventory analysis. U.S. inventories must fall ~14 mmb and OECD inventories must fall ~275 mmb to support $7 prices. At 1 mmb/d, that will take at least 6 months but the history of market balance is that it will fluctuate unevenly and will probably take much longer. Great expectations were placed in an OPEC production cut to rescue the industry from a weak oil market. The fallacy lies in thinking that the problem stems from a simple imbalance between production and consumption and is unrelated to a fragile and debt-dependent global economy. That hope was a dream. It appears that oil markets have woken up from that dream. May-74 1st Bubble: 1974-198 Oil Shocks --> Massive E&P Investment (North Sea, Mexico, Siberia) Jun-75 Jul-76 Aug-77 Sep-78 Oct-79 Nov-8 Dec-81 Jan-83 Feb-84 Mar-85 Apr-86 May-87 Jun-88 Jul-89 Aug-9 Sep-91 Oct-92 Nov-93 Dec-94 Jan-96 Debt-Fueled Economic Expansion & Rapid Growth in China & East Asia Over-Supply, Demand Destruction & Price Deflation $5/barrel Feb-97 Mar-98 Apr-99 May- 2nd Bubble: 1999-214 Jun-1 Jul-2 Aug-3 Sep-4 Oct-5 Nov-6 Dec-7 Jan-9 Feb-1 Massive E&P Investment (Shale, Deep Water, Heavy Oil) Over-Supply, Demand Destruction & Price Deflation Avg 25-215 $86/barrel Mar-11 Apr-12 May-13 Jun-14 Aug-16 Millions of Incremental Barrels of Crude Oil & Condensate Per Day 65 64 63 62 61 6 59 58 57 56 55 54 53 52 Jan-12 Mar-12 May-12 Jul-12 Source: EIA & Sep-12 Nov-12 Jan-13 Mar-13 May-13 Jul-13 Sep-13 Nov-13 Libya Angola Venezuela Mexico Algeria Nigeria Base Indonesia-Ecuador-Qatar-Gabon Jan-16 Mar-16 May-16 Canada Jul-16 U.S. Iraq Iran Russia Brazil Saudi Arabia Kuwait UAE Sep-16 Nov-16 Slide 14