prompt oil price ($/bbl) $51.49 $0.04 0.1% prompt gas price … · 2018-12-10 · 3 december 10,...

1

December 10, 2018

IndicatorCurrent

Value

Week's

Change

%

Change Direction

Prompt Oil Price ($/bbl) $51.49 $0.04 0.1%

Prompt Gas Price ($/mmbtu) $4.33 ($0.32) (6.9%)

Wkly Trans. Value ($mm) $14 $14 nmf

Wkly Trans. Count 5 4 nmf

US Rig Count 1,075 (1) (0.1%)

US Oil Prod'n (mmbbl/d) 11.7 -- --

US Gas Prod'n (bcf/d)(1) 104.5 1.9 1.9%

US Oil Storage (mmbbl) 443.2 (7.3) (1.6%)

US Gas Storage (tcf) 3.0 (0.1) (2.1%)

$2.2

$8.0

$9.9 $10.7

$4.9

$15.8

$21.2 $21.9 $24.1

$17.0

$9.1 $9.2

$20.8

$8.0

$31.6

$21.5

--

50

100

150

200

250

300

350

400

450

500

--

$5

$10

$15

$20

$25

$30

$35

$40

1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18

61% 83% 74% 79% 39% 52% 62% 71% 93% 24% 68% 82% 91% 64% 46% 94%

Nu

mb

er

of

Tra

nsacti

on

s

Tra

nsacti

on

Valu

e (

$b

n)

Asset Corporate Number of Transactions

% Oil

Debt

Markets

No issuers priced this week

U.S. high yield funds reported an outflow of $829 million

ETFs reported an outflow of $218 million, while mutual funds reported an outflow of $611 million

High yield index yield was 7.38%; high yield energy index yield was 8.63%

OPEC+ reached a modest deal to cut production, stabilizing

oil prices

Berry Petroleum divested non-core East Texas natural gas

assets

Eagle Resources Corporation entered into a joint venture

agreement with Freedom Energy Resources to explore and

develop conventional oil drilling prospects in the Lodgepole

Reef Formation in North Dakota

The December issue of BMO Calgary’s A&D (Canadian)

Market Monitor went live last week – read more here

Top 10 Toys for the Season – from BMO toy analyst Gerrick

Johnson – watch here

Source: BMO Transaction Database, Baker Hughes, BMO Commodity Products Group, Bloomberg, EIA, PLS

Note: Current quarter’s data is through the week covered by this issue.

1. EIA U.S. natural gas gross withdrawals and production reported monthly as of September 2018.

2. S&P E&P = S&P Oil & Gas E&P Select Industry, SPX = S&P 500 Index.

Key Industry Indicators

Quarterly Deal Activity

S&P E&P(2) underperformed last week (4.7)% vs. SPX(2) (1.5)%

The major U.S. equity indexes finished lower last week. Sector performance was mixed with consumer

discretionary, consumer staples, financials, health care, industrials, materials, and tech all finishing lower.

Real estate finished up 2.8%

Equity

Markets

Oil ended last week up as uncertainty surrounded the level of OPEC production cuts. Russian and Saudi

energy ministers met at the G20 summit, and the OPEC Economic Commission Board stated that output

needed to be trimmed. Alberta announced that it will cut oil production next year, which caused WCS

pricing to rally. A tariff truce was announced between China and the United States. Enbridge had to shut

down pipelines after a power outage in Saskatchewan. U.S. crude oil inventories were significantly lower.

The near-term contract closed up $0.04, or 0.1%, at $51.49

Natural gas ended last week down despite a colder weather forecast. The near-term contract closed

down $0.32, or 6.9%, at $4.33

Commodities

Week in Review

In Commodities, ECM and DCM, let’s go to journalism standards, even

though that’s not how we get the text from those groups. Main change is

that any number below 10 is spelled out (one instead of 1). This does not

apply to statistical analyses, percentages, or money, of course.

Let’s follow these guidelines when sorting articles:

• First priority: Domestic A&D, ranked by size

• Next: Domestic M&A

• Then: US companies doing international deals (like

Noble’s Tamar)

• Then: Others (Cabot’s Lackawanna)

• Then: Prices, rig count, completions, etc.

To paste the arrows with colors,

• FactSet

• Settings

• Presentation Linking and Formatting

• Import

• Colors

• Change Color Font

For the primary Commodities bullet points on oil and gas

prices, please start with “The near-term contract opened the

week at $___” and end that same bullet point with “The

near-term contract closed the week at $____, down(up)

$___, or ___%.” You don’t have to use exactly those words

as long as the opening and closing prices are included . For

example, you could write, “Opening the week at $45.21, the

near-term oil contract declined steadily based on …” – you

know, think like a journalist, be creative.

Covering the Week of November 30 to December 6, 2018

The October issue of BMO Calgary’s A&D (Canadian)

Market Monitor went live last week – read more here

[TBU]

[TBU]

[TBU]

[TBU]

[TBU] [TBU]

http://click.bmocapitalmarkets.bmo.com/?qs=6b31e1442ce72e8a4a4da81a0c9cd86a8f7f8866d2fec9f4d2a3c491bc93d3b7e13eecbd88df65ac95de5ea64f87d52c3840d6bf29a2be71

http://click.bmocapitalmarkets.bmo.com/?qs=9337c40927de4be0795b6ab05bdbc7bc8ee6259f14fb58cd941979104dfe73805e9b0e20c272ccaab9f958c5eb0db9d78e123bce587e39a3

http://click.bmocapitalmarkets.bmo.com/?qs=06431ffcb9e46ff9ceb552c71599979cce1497589a985c6f6db2bcdad857fec824bec1ef9245eef7759c94d656a26e446b38de2e8b6d3a20

2

December 10, 2018

Permian41%

Rockies (ex. Bakken)

8%

Bakken3%

Appalachia3%

Mid-Con17%

Eagle Ford5%

Ark-La-Tex4%

Gulf of Mexico3%

Other16%

LTM By Region

y = 31.242e-0.064x

R² = 0.3156

--

$10.00

$20.00

$30.00

$40.00

$50.00

$60.00

-- 5.0x 10.0x 15.0x 20.0x 25.0x 30.0x

Sale

s P

rice /

Pro

ved

R

eserv

es (

$/b

oe @

15:1

)

R / P

R / P

Sales Value /

Proved Reserves

(15:1)

(ratio) ($ / boe) ($ / mcfe)

8x $18.68 $1.25

10x $16.42 $1.09

15x $11.91 $0.79

20x $8.63 $0.58

Oil67%

Gas33%

LTM By Commodity

Public Company

33%

PE / PE-Backed

30%

Private23%

Other14%

LTM By Buyer Type

Ann'd

Date Buyer Seller Area Asset Description Value (1)

Proved

Multiple

Prod.

Multiple Net Acres

($mm) ($/boe) ($/boe/d) ($/acre)

21-Nov-18 Kimbell Royalty Partners Undisclosed Seller Multi-Region 16,700 net royalty acres $108 n.a. $90,588 nmf

19-Nov-18 Lonestar Resources Inc Sabine Oil & Gas Corp Eagle Ford 2,706 net acres in Eagle Ford $39 $2.98 $48,375 $14,302

19-Nov-18 Aethon III QEP Resources Inc Ark-La-Tex 49,700 net acres in Haynesville $735 $4.60 $14,848 $14,789

07-Nov-18 Vantage Energy Acq. Corp QEP Resources Inc Bakken 102,800 net acres in Williston Basin $1,725 n.a. $37,500 $16,780

07-Nov-18 Undisclosed Buyer Devon Energy Barnett 100,000 net acres in Barnett Shale $50 n.a. $12,500 $500

06-Nov-18 Diamondback Energy ExL Pet.; EnergyQuest Permian 3,646 net acres in Midland Basin $313 n.a. $89,286 $85,710

05-Nov-18 Centennial Resource Dev. Undisclosed Seller Permian 820 net acres in Delaw are Basin $26 n.a. n.a. $31,707

02-Nov-18 SandRidge Energy Undisclosed Seller Mid-Continent Mississippi Lime and NW STACK assets $25 n.a. $6,649 n.a.

01-Nov-18 Undisclosed Buyer Parsley Energy LP Permian 11,850 net acres in Midland Basin $170 n.a. $141,667 $14,346

31-Oct-18 Undisclosed Buyer New pek Other 725 net acres in Live Oak Co., TX $33 n.a. $42,581 $45,517

Blue = BM O provided transaction advisory services Green = BM O provided acquisit ion f inancing or related services

Purple = BM O provided both transaction advisory services and acquisit ion f inancing or related services

The 10 Most Recent Asset Transactions Over $20 Million

A&D Valuation Trends(3)

Source: BMO Transaction Database, Baker Hughes, BMO Commodity Products Group, Bloomberg, PLS

1. Represents total enterprise value.

2. Calculated as percentage of total LTM transaction count (number of transactions, not dollar value).

3. 62 transactions from January 2015 to 2018YTD with transaction value >$20mm. Adjusted for changes in price outlooks. Recalculated boe reserves are on a 15:1

(gas:oil) basis. Acreage transactions excluded by using deals with PDP of >= 40% of total proved.

Asset descriptions are all hard-coded and need to be

adjusted if new deals are added

(2) (2) (2)

Confirm number of transactions weekly --->

[TBU]

[TBU]

[TBU]

3

December 10, 2018

12/4/2018

Appalachia 3

Ark-La-Tex 6

Bakken 6

Eagle Ford 5

Mid-Con 7

Other 20

Permian 20

Rockies 10

77

Select Significant Deals on the Market

Disclaimer: The foregoing links are for convenience only and relate to materials that were not prepared or reviewed by BMO Capital Markets. BMO Capital Markets takes

no responsibility for and makes no representations with respect to the contents thereof. These materials may be inconsistent with the views of BMO Capital Markets.

Source of Select Significant Deals on the Market: BMO Transaction Database

Industry Headlines

Appalachia

3 Deals

Mid-Con

7 Deals

Eagle Ford

5 Deals

Permian

20 Deals

Other

20 Deals

Rockies

10 Deals

(Click headline to link to the full article)

A&D Headlines

Bakken

6 Deals

Ark-La-Tex

6 Deals

Oil's Price Slide Threatens U.S. Shale Production

The U.S. Pipeline Industry Is Booming

Permian Basin Gas Flaring Has Nearly Doubled in a

Year

Meet the New Permian, It's Double the Size of the Old

One

U.S. Becomes Net Oil Exporter for First Time in 75

Years

OPEC+ Reaches Modest Deal to Cut Production,

Stabalize Oil Prices

Mexico's New President Throws Down Gauntlet to Oil

Majors

Berry Petroleum Sells Non-Core East Texas Natural

Gas Assets

Eagle Resources, Freedom Energy Have Entered into

North Dakota Drilling JV

BMO Deals (Status)

Wishbone CBP (In Market) – Pg. 4

[TBU]

[TBU] [TBU]

BMO Deals (Status)

Wishbone CBP (In Market) – Pg. 4

https://www.foxbusiness.com/energy/oils-price-slide-threatens-us-shale-production-marathon-oil-ceo

https://oilprice.com/Energy/Crude-Oil/The-US-Pipeline-Industry-Is-Booming.html

https://oilprice.com/Energy/Crude-Oil/The-US-Pipeline-Industry-Is-Booming.html

https://www.chron.com/business/energy/article/Record-Permian-gas-flaring-has-nearly-doubled-in-13443024.php

https://www.chron.com/business/energy/article/Record-Permian-gas-flaring-has-nearly-doubled-in-13443024.php

https://www.worldoil.com/news/2018/12/6/meet-the-new-permian-its-double-the-size-of-the-old-one

https://www.worldoil.com/news/2018/12/6/meet-the-new-permian-its-double-the-size-of-the-old-one

https://www.worldoil.com/news/2018/12/6/us-becomes-net-oil-exporter-for-first-time-in-75-years

https://www.worldoil.com/news/2018/12/6/us-becomes-net-oil-exporter-for-first-time-in-75-years

https://www.chron.com/business/energy/article/OPEC-reaches-modest-deal-to-cut-production-13449545.php




https://www.reuters.com/article/us-mexico-politics/mexicos-new-president-throws-down-gauntlet-to-oil-majors-idUSKBN1O41VH

https://www.reuters.com/article/us-mexico-politics/mexicos-new-president-throws-down-gauntlet-to-oil-majors-idUSKBN1O41VH

https://www.worldoil.com/news/2018/12/3/berry-petroleum-sells-non-core-east-texas-natural-gas-assets




https://www.worldoil.com/news/2018/12/4/eagle-resources-freedom-energy-have-entered-into-north-dakota-drilling-jv

https://www.worldoil.com/news/2018/12/4/eagle-resources-freedom-energy-have-entered-into-north-dakota-drilling-jv

4

December 10, 2018

Opportunity to acquire ~37,206 net contiguous acres in the core of

the San Andres horizontal play in Northern Central Basin Platform

Operated average WI/NRI of 77%/58%

Approaching 50% HBP with minimal annual drilling

commitments

96% operated by production

Net production of ~8,100 boe/d (November 2018E)

80% oil, 13% NGL

100%+ ROR oil play in the highly coveted Permian Basin

Future drilling opportunities have reserve models of 385 to

700 Mboe (80% oil)

Position has largely been de-risked through active development by

Wishbone and offset operators

Extensive inventory of high return drilling remains with over 344

San Andres horizontal drilling locations

5,000’ laterals – 323 locations

7,500’ laterals – 21 locations

Controlled surface lands/water infrastructure creates high margins

and empowers the buyer to be a play consolidator

WTS barrels and crude pipeline infrastructure in place with no

takeaway issues

VDR available now

Source: Wishbone CBP Divestiture announcement

Integrated

Water

Infrastructure

Owned and operated SWD system and fresh water source wells keep operating expenses low and enhance well

economics

Water infrastructure generates additional income

Infrastructure provides flow assurance for disposal and source water

1,385 acres of owned surface acreage allows buyer to expand system

Ample existing disposal capacity of 178,000 bw/d with excess available for third-party or commercialization

Improved

Horizontal

San Andres

Performance

Highly oil-saturated, oil-wet, dolomite reservoir located in the core area of very active development in the horizontal San

Andres play

Over the last four years, operators have developed a significant understanding of the reservoir and operational

characteristics defining the play

Recent drilling activity has yielded improved well performance

Time to peak production is less than 60 days

Initial peak 30-day rates of 400-700 bo/d

Operators continue to commit significant capital to the play with multiple active drilling rigs and 54 horizontal San Andres

permits

Wishbone’s

Premier

Position

Contiguous leasehold, adjacent to the prolific Wasson and Brahaney fields offering the best combination of reservoir

quality, quantity, and oil saturations in the core of the horizontal San Andres play

Position has largely been de-risked through active development by Wishbone and offset operators

Most recent quarter (2Q18) annualized cash flow of $60 MM can easily support a one rig drilling program

Acreage is approaching 50% HBP with minimal annual drilling commitments

High

Return

Inventory

Extensive inventory of high return drilling remains with over 344 San Andres horizontal drilling locations

Well economics of greater than 100% ROR compete with other top Permian plays

Future drilling opportunities have reserve models of 385 to 700 Mboe (80% oil)

Spacing of 4 to 8 wells per section supported by volumetrics with a recovery factor of 12-15% of OOIP; further supported

by an independent Von Gonten report

Stacked potential in San Andres could add additional drilling locations

Successful step-out completion helps prove play continuity in northern area

Currently on the Market from CIBC and BMO: Wishbone CBP Divestiture

ASSET HIGHLIGHTS

ASSET OVERVIEW PROCESS OVERVIEW

5

December 10, 2018

NYMEX Gas Futures as of 06-Dec-18 Close ($/mmbtu)

Period(1) Current Last Wk. 6 Mo. Ago 1 Yr. Ago

12 Mo. Strip $3.22 $3.24 $2.89 $2.91

2019 $3.22 $3.22 $2.78 $2.84

2020 $2.69 $2.66 $2.69 $2.81

2021 $2.64 $2.64 $2.66 $2.83

2022 $2.81 $2.81 $2.81 $2.98

2023 $2.81 $2.81 $2.81 $2.98

NYMEX WTI Futures as of 06-Dec-18 Close ($/bbl) NYMEX Gas Futures as of 06-Dec-18 Close ($/mmbtu)

Period(1) Current Last Wk. 6 Mo. Ago 1 Yr. Ago

12 Mo. Strip $52.68 $52.20 $63.71 $55.20

2019 $52.68 $52.20 $62.18 $53.20

2020 $53.50 $53.15 $59.22 $51.79

2021 $53.35 $53.49 $56.89 $50.94

2022 $53.12 $53.67 $55.20 $50.54

2023 $53.14 $53.97 $53.97 $50.53

25%

35%

45%

55%

65%

Jan-15 Jun-15 Nov-15 Apr-16 Sep-16Feb-17 Jul-17 Dec-17May-18 Oct-18

% o

f W

TI

NGL as % of WTI

$1

$2

$3

$4

$5

Dec-17 Jun-18 Dec-18 Jun-19 Dec-19

($/m

mb

tu)

$20

$30

$40

$50

$60

$70

$80

Dec-17 Jun-18 Dec-18 Jun-19 Dec-19

($/b

bl)

Historical Prices as of 06-Dec-18 Close ($/gal)

NGLs Current Last Wk. 6 Mo. Ago 1 Yr. Ago

Ethane $0.31 $0.34 $0.32 $0.22

Propane $0.72 $0.69 $0.87 $0.98

Butane $0.70 $0.68 $0.91 $1.00

Iso-butane $0.90 $0.87 $1.35 $1.03

Pentane+ $1.03 $0.98 $1.49 $1.31

NGL PRICING(2)

HENRY HUB NATURAL GAS (HISTORICAL / FORECAST)

Commodity Prices

Source: BMO Commodity Products Group, Bloomberg, FactSet

1. Future prices are calendar year average unless stated otherwise.

2. Assumes typical Gulf Coast barrel composition.

WTI OIL (HISTORICAL / FORECAST)

Links:

http://www.nasdaq.com/markets/crude-oil.aspx

http://www.bloomberg.com/quote/CL1:COM

http://www.nasdaq.com/markets/natural-gas.aspx

http://www.bloomberg.com/quote/NG1:COM

Link to Detailed

Futures Data

Link to Detailed

Historical Graph

Link to Detailed

Futures Data

Link to Detailed

Historical Graph

[TBU]

[TBU]

[TBU]














http://www.cmegroup.com/trading/energy/crude-oil/light-sweet-crude.html

http://www.cmegroup.com/trading/energy/crude-oil/light-sweet-crude.html



http://www.cmegroup.com/trading/energy/natural-gas/natural-gas.html

http://www.cmegroup.com/trading/energy/natural-gas/natural-gas.html



6

December 10, 2018

AECO

Northern

California

Sumas

Southern

California

El Paso - SJ

Waha

HSC

Henry Hub

Panhandle

CIG Chicago

Dominion

Transco

Clearbrook

Midland

Cushing

St. James

(LLS)

East Coast

U.S. (Brent)

Midland Sweet-

Sour Spread

EMS

NATURAL GAS PRICING & DIFFERENTIALS TO HENRY HUB ($ / MMBTU) – AS OF 06-DEC-18

Commodity Prices (cont’d)

OIL PRICING & DIFFERENTIALS TO CUSHING WTI ($ / BBL) – AS OF 06-DEC-18

Legend

Price

Diff.

Legend

Price

Diff.

Source: BMO Commodity Products Group, Bloomberg

Note: Prices and differentials are for prompt month futures except for Clearbrook which is based on spot prices.

MAPS IN

MASTER VIEW

TBU

[TBU]

[TBU]

$60.06

$8.57

$39.42

($12.07)

$43.38

($8.11)

$51.49

($0.19)

$49.49

($2.00)

$57.83

$6.34

$3.93

($0.40)

$4.41

$0.08

$4.33

$4.08

($0.25)

$4.39

$0.06

$1.35

($2.98)

$3.95

($0.38)$3.86

($0.47)$5.63

$1.30

$5.11

$0.78

$7.33

$3.00

$1.17

($3.16)

$3.85

($0.48)

7

December 10, 2018

0%

10%

20%

30%

40%

50%

--

100

200

300

400

500

Jan-14 Jan-15 Jan-16 Jan-17 Jan-18

H V+D % of Total Rigs

Item Value Wkly Change Last Week Item Value Wkly Change Last Week

Rig Count 489 (4) 493 Oil Differential ($8.10) ($0.50) ($7.60)

Permitting Activity 305 82 223 Gas Differential ($2.93) $1.64 ($4.56)

805

1,053990

1,1781,156

1,297

1,0921,154

1,225

993

1,233

1,071

192

Dec-17 Feb-18 Apr-18 Jun-18 Aug-18 Oct-18 Dec-18

H V+D

-$4.80

-$3.20

-$1.60

$0.00

$1.60

Jan-15 Nov-15 Sep-16 Jul-17 May-18

-$18.00

-$12.00

-$6.00

$0.00

$6.00

$ /

mm

btu

$ /

bb

l

Midland Waha

5,000

6,000

7,000

8,000

9,000

10,000

1,000

1,500

2,000

2,500

3,000

Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17

mm

cf/

d

mb

bl/

d

Oil Gas2,874

9,328

--

$50,000

$100,000

$150,000

$200,000

1Q

14

2Q

14

3Q

14

4Q

14

1Q

15

2Q

15

3Q

15

4Q

15

1Q

16

2Q

16

3Q

16

4Q

16

1Q

17

2Q

17

3Q

17

4Q

17

1Q

18

2Q

18

3Q

18

4Q

18

3 7 9 5 1 2 6 9 5 7 11 9 9 6 1 0 7 1 5 4

$ /

bo

e/d

# Deals

$119,953

--$10,000$20,000$30,000$40,000$50,000$60,000

1Q

14

2Q

14

3Q

14

4Q

14

1Q

15

2Q

15

3Q

15

4Q

15

1Q

16

2Q

16

3Q

16

4Q

16

1Q

17

2Q

17

3Q

17

4Q

17

1Q

18

2Q

18

3Q

18

4Q

18

3 6 8 5 1 2 8 8 6 6 12 13 15 7 3 2 7 1 5 4

$ /

acre

# Deals

$21,133

Ann'd

Date Buyer Seller Asset Description Value(1)

Proved

Multiple

Prod.

Multiple Net Acres

($mm) ($/boe) ($/boe/d) ($/acre)(2)

06-Nov-18 Diamondback Energy ExL Pet.; EnergyQuest 3,646 net acres in Midland Basin $313 n.a. $89,286 $85,710

05-Nov-18 Centennial Resource Dev. Undisclosed Seller 820 net acres in Delaware Basin $26 n.a. n.a. $31,707

01-Nov-18 Undisclosed Buyer Parsley Energy LP 11,850 net acres in Midland Basin $170 n.a. $141,667 $14,346

17-Oct-18 Earthstone Energy Inc Sabalo Energy 20,800 net acres in Midland Basin $976 $10.73 $87,143 $46,923

25-Sep-18 Undisclosed Buyer W&T Offshore Royalty interests in 25,493 net acres $57 n.a. n.a. nmf

Mean $308 $10.73 $106,032 $44,672

Median $170 $10.73 $89,286 $39,315

Blue = BMO provided transaction advisory services Green = BMO provided acquisition financing or related services

Purple = BMO provided both transaction advisory services and acquisition financing or related services

GROSS PRODUCTION

TRANSACTION ACTIVITY (EXCLUDES CORPORATE DEALS)

TRANSACTION PRODUCTION MULTIPLES(3) TRANSACTION ADJUSTED NET ACRE MULTIPLES(3,4)

PERMITTING ACTIVITY BY MONTH

DIFFERENTIALS

Permian Snapshot

RIG COUNT

Source: BMO Transaction Database, Baker Hughes, BMO Commodity Products Group, Bloomberg, Drilling Info, PLS


1. Represents total enterprise value. Excludes transactions with deal value <$20 million. 2. $/acre multiple not adjusted for value associated with production.

3. Red line denotes average since 10-Jan-15. Calculated as the weighted average of each quarter’s transactions.

4. Production valued at $45,000/boepd in 2014, $30,000/boepd in 2015, $35,000/boepd in 2016 & 2017, and $40,000/boepd in 2018.

[TBU]

[TBU]

[TBU] [TBU]

[TBU] [TBU]

[TBU]

8

December 10, 2018

0%

5%

10%

15%

20%

--

100

200

300




Rig Count 96 2 94 Oil Differential $6.80 $0.15 $6.65

Permitting Activity 63 (16) 79 Gas Differential $0.08 $0.08 $0.00

-$0.30

-$0.20

-$0.10

$0.00

$0.10

$0.20

$0.30

$0.40

$0.50


-$6.00

-$4.00

-$2.00

$0.00

$2.00

$4.00

$6.00

$8.00

$10.00

$ /

mm

btu

$ /

bb

l

LLS HSC

6,000

6,500

7,000

7,500

8,000

8,500

9,000

9,500

10,000

10,500

1,000

1,200

1,400

1,600

1,800

2,000

2,200


mm

cf/

d

mb

bl/

d

Oil Gas

1,500

8,440

386419

449377

425472

436

376

453

321

396338

57


H V+D

--

$50,000

$100,000

$150,000

1Q

14

2Q

14

3Q

14

4Q

14

1Q

15

2Q

15

3Q

15

4Q

15

1Q

16

2Q

16

3Q

16

4Q

16

1Q

17

2Q

17

3Q

17

4Q

17

1Q

18

2Q

18

3Q

18

4Q

18

3 6 3 2 1 1 3 1 2 2 2 4 4 3 1 2 7 2 0 3

$ /

bo

e/d

# Deals

$64,749

--$10,000$20,000$30,000$40,000$50,000$60,000

1Q

14

2Q

14

3Q

14

4Q

14

1Q

15

2Q

15

3Q

15

4Q

15

1Q

16

2Q

16

3Q

16

4Q

16

1Q

17

2Q

17

3Q

17

4Q

17

1Q

18

2Q

18

3Q

18

4Q

18

2 4 3 2 0 1 2 1 2 2 0 4 2 3 1 2 4 2 1 3

$ /

acre

# Deals

$10,076

Ann'd


Proved

Multiple

Prod.

Multiple Net Acres

($mm) ($/boe) ($/boe/d) ($/acre)(2)

19-Nov-18 Lonestar Resources Inc Sabine Oil & Gas Corp 2,706 net acres in Eagle Ford $39 $2.98 $48,375 $14,302

20-Sep-18 WildHorse Undisclosed Seller 20,305 net Eagle Ford/Austin Chalk acres $35 n.a. n.a. $1,743

07-Sep-18 Undisclosed Buyer Viking Minerals LLC 1,191 net royalty acres in Eagle Ford $28 n.a. n.a. nmf

31-Jul-18 EP Energy Corp Undisclosed Seller Additional working interests in Eagle Ford $31 n.a. n.a. n.a.

26-Jul-18 BP BHP Billiton Permian, Eagle Ford, and Haynesville $10,500 n.a. n.a. n.a.

Mean $2,127 $2.98 $48,375 $8,022

Median $35 $2.98 $48,375 $8,022



Eagle Ford Snapshot



DIFFERENTIALS RIG COUNT







GROSS PRODUCTION

9

December 10, 2018


Rig Count 62 1 61 Oil Differential $6.80 $0.15 $6.65

Permitting Activity 18 9 9 Gas Differential -- -- --

0%

5%

10%

15%

20%

--

20

40

60

80



--

$2.00

$4.00

$6.00

$8.00

$10.00


--

$2.00

$4.00

$6.00

$8.00

$10.00

$ /

mm

btu

$ /

bb

l

LLS Henry Hub

5,000

6,000

7,000

8,000

9,000

10,000

11,000

80

90

100

110

120

130

140


mm

cf/

d

mb

bl/

d

Oil Gas

103

9,850

120

164180

240

153162

149155 149

126143

103

17


H V+D

--

$5,000

$10,000

$15,000

$20,000

1Q

14

2Q

14

3Q

14

4Q

14

1Q

15

2Q

15

3Q

15

4Q

15

1Q

16

2Q

16

3Q

16

4Q

16

1Q

17

2Q

17

3Q

17

4Q

17

1Q

18

2Q

18

3Q

18

4Q

18

0 1 2 2 0 0 3 1 1 2 1 3 0 1 2 0 1 1 1 1

$ /

acre

# Deals

$4,772

--

$5,000

$10,000

$15,000

1Q

14

2Q

14

3Q

14

4Q

14

1Q

15

2Q

15

3Q

15

4Q

15

1Q

16

2Q

16

3Q

16

4Q

16

1Q

17

2Q

17

3Q

17

4Q

17

1Q

18

2Q

18

3Q

18

4Q

18

1 3 2 3 0 0 5 1 1 3 2 3 0 2 2 0 1 1 2 1

$ /

mcfe

/d

# Deals

$5,758

Ann'd


Proved

Multiple

Prod.

Multiple Net Acres

($mm) ($/mcfe) ($/mcfe/d) ($/acre)(2)

19-Nov-18 Aethon III QEP Resources Inc 49,700 net acres in Haynesville $735 $0.77 $2,475 $14,789

05-Sep-18 Viking Energy Group Multiple Sellers Texas and Louisiana assets $100 n.a. n.a. n.a.

05-Sep-18 Equinor Texegy LLC 60,000 net acres in Austin Chalk $75 n.a. n.a. $1,250

06-Aug-18 Mission Creek Resources Bonanza Creek Energy Inc 11,132 net acres in the Cotton Valley $117 $1.69 $6,500 $10,510

26-Jul-18 BP BHP Billiton Permian, Eagle Ford, and Haynesville $10,500 n.a. n.a. n.a.

Mean $2,305 $1.23 $4,487 $8,850

Median $117 $1.23 $4,487 $10,510



Ark-La-Tex Snapshot








4. Production valued at $3,000/mcfepd in 2014, and $2,000/mcfepd in 2015, 2016, 2017, and 2018.


GROSS PRODUCTION

10

December 10, 2018


Rig Count 73 -- 73 Oil Differential $8.57 $0.51 $8.06

Permitting Activity 23 (67) 90 Gas Differential ($0.15) $0.33 ($0.48)

0%

5%

10%

15%

20%

--

50

100

150



-$3.00

-$2.00

-$1.00

$0.00

$1.00

$2.00

$3.00


-$15.00

-$10.00

-$5.00

$0.00

$5.00

$10.00

$15.00

$ /

mm

btu

$ /

bb

l

Brent Dominion

12,000

14,000

16,000

18,000

20,000

22,000

24,000

26,000

28,000

30,000

50

70

90

110

130

150


mm

cf/

d

mb

bl/

d

Oil Gas

115

27,304

347390 367

454

282328 299 269

493

373 373318

11


H V+D

--

$10,000

$20,000

$30,000

$40,000

1Q

14

2Q

14

3Q

14

4Q

14

1Q

15

2Q

15

3Q

15

4Q

15

1Q

16

2Q

16

3Q

16

4Q

16

1Q

17

2Q

17

3Q

17

4Q

17

1Q

18

2Q

18

3Q

18

4Q

18

1 2 4 3 0 1 0 0 1 2 2 3 2 5 1 4 3 4 3 1

$ /

mcfe

/d

# Deals

$5,999

--

$5,000

$10,000

$15,000

$20,000

$25,000

1Q

14

2Q

14

3Q

14

4Q

14

1Q

15

2Q

15

3Q

15

4Q

15

1Q

16

2Q

16

3Q

16

4Q

16

1Q

17

2Q

17

3Q

17

4Q

17

1Q

18

2Q

18

3Q

18

4Q

18

1 2 4 3 0 1 0 0 1 2 2 4 2 4 1 3 1 3 2 0

$ /

acre

# Deals

$3,707

Ann'd


Proved

Multiple

Prod.

Multiple Net Acres

($mm) ($/mcfe) ($/mcfe/d) ($/acre)(2)

15-Oct-18 Undisclosed Buyer Range Resources Corp Overriding royalty interests in Appalachia $300 n.a. $17,649 nmf

27-Aug-18 PennEnergy Resources Rex Energy Corp 141,026 net acres in PA and OH $601 $0.58 $2,781 $4,258

26-Jul-18 Encino Acquisition Partners Chesapeake 938,000 net acres in the Utica $1,900 $0.66 $2,960 $2,026

29-Jun-18 Ascent Resources LLC Utica Minerals; Undisclosed 35,400 acres in the Utica $700 n.a. $15,217 $19,774

29-Jun-18 Ascent Resources LLC CNX Resources; Hess 78,000 acres in the Utica $800 n.a. $4,762 $10,256

Mean $860 $0.62 $8,674 $9,079

Median $700 $0.62 $4,762 $7,257



Appalachia Snapshot








4. Production valued at $3,000/mcfepd in 2014, and $2,000/mcfepd in 2015, 2016, 2017, and 2018.


GROSS PRODUCTION

11

December 10, 2018

0%

5%

10%

15%

20%

--

50

100

150

200




Rig Count 56 -- 56 Oil Differential ($2.00) $9.50 ($11.50)

Permitting Activity 7 (21) 28 Gas Differential ($0.47) $0.05 ($0.52)

-$1.00

-$0.50

$0.00

$0.50


-$20.00

-$10.00

$0.00

$10.00

$ /

mm

btu

$ /

bb

l

Clearbrook CIG

1,100

1,300

1,500

1,700

1,900

2,100

2,300

800

900

1,000

1,100

1,200

1,300

1,400


mm

cf/

d

mb

bl/

d

Oil Gas

1,212

2,175

92111 104

125108

138 126

171 164

127

201

125

5


H V+D

--

$5,000

$10,000

$15,000

$20,000

$25,000

1Q

14

2Q

14

3Q

14

4Q

14

1Q

15

2Q

15

3Q

15

4Q

15

1Q

16

2Q

16

3Q

16

4Q

16

1Q

17

2Q

17

3Q

17

4Q

17

1Q

18

2Q

18

3Q

18

4Q

18

4 2 6 2 0 0 1 2 0 0 2 3 1 0 3 2 0 5 2 0

$ /

acre

# Deals

$3,992

--

$50,000

$100,000

$150,000

$200,000

1Q

14

2Q

14

3Q

14

4Q

14

1Q

15

2Q

15

3Q

15

4Q

15

1Q

16

2Q

16

3Q

16

4Q

16

1Q

17

2Q

17

3Q

17

4Q

17

1Q

18

2Q

18

3Q

18

4Q

18

4 2 5 2 0 1 1 4 0 2 3 3 0 1 3 3 0 6 3 1

$ /

bo

e/d

# Deals

$44,336

Ann'd


Proved

Multiple

Prod.

Multiple Net Acres

($mm) ($/boe) ($/boe/d) ($/acre)(2)

07-Nov-18 Vantage Energy Acq. Corp QEP Resources Inc 102,800 net acres in Williston Basin $1,725 n.a. $37,500 $16,780

31-Jul-18 Northern Oil and Gas W Energy Partners 10,600 net acres in Williston Basin $288 n.a. $42,708 $27,196

18-Jul-18 Northern Oil and Gas Pivotal Petroleum Partners LP Producing assets in Williston Basin $152 n.a. $37,032 n.a.

12-Jul-18 PetroShale Inc Slawson Exploration Co 1,981 net acres in Williston Basin $55 $6.04 $100,000 $27,764

06-Jul-18 Energy Resources 12 LP Bruin E&P Partners LLC 2.8% non-operated WI in Bakken assets $83 n.a. n.a. n.a.

Mean $461 $6.04 $54,310 $23,913

Median $152 $6.04 $40,104 $27,196



Bakken Snapshot










GROSS PRODUCTION

12

December 10, 2018

0%

5%

10%

15%

20%

--

50

100

150




Rig Count 72 1 71 Oil Differential ($2.00) $9.50 ($11.50)

Permitting Activity 172 17 155 Gas Differential ($0.47) $0.05 ($0.52)

-$1.00

-$0.50

$0.00

$0.50


-$20.00

-$10.00

$0.00

$10.00

$ /

mm

btu

$ /

bb

l

Clearbrook CIG

11,500

12,000

12,500

13,000

13,500

14,000

400

450

500

550

600

650

700

750

800


mm

cf/

d

mb

bl/

d

Oil Gas749

13,133

653

435 460

650

327456

551665

523 510

681

824

96


H V+D

--$20,000$40,000$60,000$80,000

$100,000$120,000

1Q

14

2Q

14

3Q

14

4Q

14

1Q

15

2Q

15

3Q

15

4Q

15

1Q

16

2Q

16

3Q

16

4Q

16

1Q

17

2Q

17

3Q

17

4Q

17

1Q

18

2Q

18

3Q

18

4Q

18

4 7 3 4 2 0 4 4 1 6 2 0 1 6 3 9 3 1 3 1

$ /

bo

e/d

# Deals

$40,251

--

$5,000

$10,000

$15,000

$20,000

1Q

14

2Q

14

3Q

14

4Q

14

1Q

15

2Q

15

3Q

15

4Q

15

1Q

16

2Q

16

3Q

16

4Q

16

1Q

17

2Q

17

3Q

17

4Q

17

1Q

18

2Q

18

3Q

18

4Q

18

3 7 2 2 0 0 3 3 0 1 1 0 1 0 1 5 2 0 2 1

$ /

acre

# Deals

$4,226

Ann'd


Proved

Multiple

Prod.

Multiple Net Acres

($mm) ($/boe) ($/boe/d) ($/acre)(2)

01-Oct-18 DJR Energy LLC EnCana 182,000 net acres in San Juan Basin $480 n.a. $88,889 $2,637

28-Aug-18 Vermilion Energy Inc Massif Oil & Gas LLC 55,000 acres in Powder River Basin $150 n.a. $56,604 $2,727

28-Aug-18 Rebellion Energy II LLC Liberty Resources II LLC 19,000 net acres in Powder River Basin $100 n.a. n.a. $5,263

09-Aug-18 Undisclosed Buyer Ultra Petroleum ~8,000 net acres in the Uinta $75 n.a. $37,500 $9,375

10-Jul-18 Middle Fork Energy Part. QEP Resources Inc ~230,000 net acres in the Uinta $155 $1.54 $17,222 $674

Mean $192 $1.54 $50,054 $4,135

Median $150 $1.54 $47,052 $2,727





DIFFERENTIALS

Rockies (excl. Bakken) Snapshot

RIG COUNT







GROSS PRODUCTION

13

December 10, 2018

0%

5%

10%

15%

20%

--

100

200

300

400




Rig Count 152 (3) 155 Oil Differential -- -- --

Permitting Activity 68 12 56 Gas Differential ($0.38) ($0.06) ($0.33)

-$1.00

-$0.75

-$0.50

-$0.25

$0.00

$0.25


-$1.00

-$0.75

-$0.50

-$0.25

$0.00

$0.25

$ /

mm

btu

$ /

bb

l

Cushing Panhandle

6,000

7,000

8,000

9,000

10,000

11,000

12,000

13,000

400

450

500

550

600

650

700


mm

cf/

d

mb

bl/

d

Oil Gas

580

9,867

347392

351 355 365 353

427

370

416377

321 314

52


H V+D

--

$5,000

$10,000

$15,000

$20,000

1Q

14

2Q

14

3Q

14

4Q

14

1Q

15

2Q

15

3Q

15

4Q

15

1Q

16

2Q

16

3Q

16

4Q

16

1Q

17

2Q

17

3Q

17

4Q

17

1Q

18

2Q

18

3Q

18

4Q

18

0 1 3 3 1 3 1 2 0 3 3 2 4 1 2 1 0 0 0 1

$ /

acre

# Deals

$6,734

--

$50,000

$100,000

$150,000

$200,000

1Q

14

2Q

14

3Q

14

4Q

14

1Q

15

2Q

15

3Q

15

4Q

15

1Q

16

2Q

16

3Q

16

4Q

16

1Q

17

2Q

17

3Q

17

4Q

17

1Q

18

2Q

18

3Q

18

4Q

18

3 2 6 4 1 4 1 3 1 6 3 1 4 2 4 5 2 1 5 3

$ /

bo

e/d

# Deals

$52,842

Ann'd


Proved

Multiple

Prod.

Multiple Net Acres

($mm) ($/boe) ($/boe/d) ($/acre)(2)

02-Nov-18 SandRidge Energy Undisclosed Seller Mississippi Lime and NW STACK assets $25 n.a. $6,649 n.a.

31-Oct-18 Casillas Petroleum Corp Sheridan Production Partners 29,600 net acres in SCOOP assets $260 n.a. $78,078 $8,784

04-Sep-18 Flywheel Energy LLC Southwestern Energy 915,000 net acres in Fayetteville Shale $1,865 $3.04 $15,629 $2,038

06-Aug-18 Franco Nevada Corp Continental Resources Inc Mineral rights JV in the SCOOP/STACK $220 n.a. n.a. nmf

02-Aug-18 Sanguine Gas Exploration Vanguard Natural Res. 9,530 net acres in the Arkoma Basin $23 $4.79 $24,981 $2,403

Mean $479 $3.91 $31,334 $4,408

Median $220 $3.91 $20,305 $2,403



Mid-Continent Snapshot










GROSS PRODUCTION

14

December 10, 2018


Rig Count 23 -- 23 Oil Differential $6.80 $0.15 $6.65

Permitting Activity 0 -- 0 Gas Differential -- -- --

0%

5%

10%

15%

20%

--

10

20

30

40


Deep Water Shelf % of Total Rigs

2124

13

19

27

3329 29

32 33

24

0 0


--

$2.00

$4.00

$6.00

$8.00

$10.00


--

$2.00

$4.00

$6.00

$8.00

$10.00

$ /

mm

btu

$ /

bb

l

LLS Henry Hub

2,000

2,500

3,000

3,500

4,000

4,500

1,000

1,100

1,200

1,300

1,400

1,500

1,600

1,700

1,800

1,900


mm

cf/

d

mb

bl/

d

Oil Gas1,567

2,467

--

$20,000

$40,000

$60,000

$80,000

1Q

14

2Q

14

3Q

14

4Q

14

1Q

15

2Q

15

3Q

15

4Q

15

1Q

16

2Q

16

3Q

16

4Q

16

1Q

17

2Q

17

3Q

17

4Q

17

1Q

18

2Q

18

3Q

18

4Q

18

5 2 0 0 0 0 1 1 0 0 2 0 0 0 0 1 2 2 2 1

$ /

bo

e/d

# Deals

$29,039

--

$10

$20

$30

$40

1Q

14

2Q

14

3Q

14

4Q

14

1Q

15

2Q

15

3Q

15

4Q

15

1Q

16

2Q

16

3Q

16

4Q

16

1Q

17

2Q

17

3Q

17

4Q

17

1Q

18

2Q

18

3Q

18

3Q

18

5 2 0 0 0 0 1 0 0 0 2 1 0 0 0 1 2 1 0 1

$ /

bo

e

# Deals

$15.40

Ann'd


Proved

Multiple

Prod.

Multiple Net Acres

($mm) ($/boe) ($/boe/d) ($/acre)(3)

10-Oct-18 Murphy Petrobras Gulf of Mexico joint venture $900 $15.00 $21,951 n.a.

04-Sep-18 Talos Energy Inc Whistler Energy II LLC Leases in Green Canyon federal waters $91 n.a. $60,667 n.a.

27-Apr-18 Stone Energy Shell; ExxonMobil; Anadarko GOM Ram Powell assets $234 n.a. $38,361 n.a.

28-Mar-18 W&T Offshore Cobalt International Energy 9.375% non-op WI in the Heidelberg unit $31 $23.92 $9,345 n.a.

12-Mar-18 Total Cobalt International Energy Non-op interest in 13 blocks $25 n.a. n.a. n.a.

Mean $256 $19.46 $32,581 n.a.

Median $91 $19.46 $30,156 n.a.



Gulf of Mexico Snapshot

PERMITTING ACTIVITY BY MONTH(1)




1. Permits include directional and unidentified drilling permits. 2. Represents total enterprise value. Excludes transactions with deal value <$20 million.

3. $/acre multiple not adjusted for value associated with production.


GROSS PRODUCTION


TRANSACTION PRODUCTION MULTIPLES(4) TRANSACTION PROVED RESERVE MULTIPLES(4)

15

December 10, 2018

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https://www.ipaa.org/events/midyear-meeting-2019/











https://www.ipaa.org/events/oil-gas-overview-course-august-2019/








http://napeexpo.com/summer





https://www.hartenergyconferences.com/dug-eagle-ford















https://www.spe.org/events/calendar/















http://www.ipaa.org/events/private-capital-conference-2019/



http://www.spegcs.org/events/4214/

http://www.spe.org/events/en/2019/conference/19hftc/hydraulic-fracturing-conference-woodlands-texas




















https://www.hartenergyconferences.com/dug-haynesville

https://www.ipaa.org/events/











https://www.hartenergyconferences.com/future-events












http://www.enercominc.com/conferences/












https://www.ipaa.org/events/oil-gas-orientation-november-2019/







https://www.hartenergyconferences.com/dug-midcontinent

















16

December 10, 2018

SCOOP/STACK/Merge

DJ-Niobrara

Eagle Ford

Haynesville

Granite Wash

GOM

Permian

Marcellus

Utica

Williston

Gulf Coast Onshore

Piceance

Powder River Green River

Legend

Current

Change

This material is prepared by the BMO Capital Markets’ Investment and Corporate Banking Department, for distribution to BMO Capital Markets’ clientele. It is not a product of

BMO Capital Markets’ Research Department. The views of the Investment and Corporate Banking Department may differ from those of the Research Department.

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trademark of Bank of Montreal in the United States, Canada and elsewhere. ™ Trademark of Bank of Montreal in the United States and Canada.

Bank of Montreal or its subsidiaries (“BMO Financial Group”) has lending arrangements with, or provide other remunerated services to, many issuers covered by BMO Capital Markets.

The opinions, estimates and projections contained in this report are those of BMO Capital Markets as of the date of this report and are subject to change without notice. BMO Capital

Markets endeavors to ensure that the contents have been compiled or derived from sources that we believe are reliable and contain information and opinions that are accurate and

complete. However, BMO Capital Markets makes no representation or warranty, express or implied, in respect thereof, takes no responsibility for any errors and omissions contained

herein and accepts no liability whatsoever for any loss arising from any use of, or reliance on, this report or its contents. Information may be available to BMO Capital Markets or its

affiliates that is not reflected in this report. The information in this report is not intended to be used as the primary basis of investment decisions, and because of individual client

objectives, should not be construed as advice designed to meet the particular investment needs of any investor. This material is for information purposes only and is not an offer to sell or

the solicitation of an offer to buy any security. BMO Capital Markets or its affiliates will buy from or sell to customers the securities of issuers mentioned in this report on a principal basis.

BMO Capital Markets or its affiliates, officers, directors or employees have a long or short position in many of the securities discussed herein, related securities or in options, futures or

other derivative instruments based thereon. BMO Capital Markets may act as financial advisor and/or underwriter for the issuers mentioned herein and may receive remuneration for

same. The reader should assume that BMO Capital Markets or its affiliates may have a conflict of interest and should not rely solely on this report in evaluating whether or not to buy or

sell securities of issuers discussed herein.

All values in this document are in US$ unless otherwise specified.

Source of rig count stats: Baker Hughes

Rig Count Summary

MAPS IN

MASTER VIEW

Contacts

Disclaimer

Geoff Roberts

MD & Co-Head of U.S. A&D

713-518-1268

[email protected]

Jason Martinez

MD & Co-Head of U.S. A&D

713-546-9771

[email protected]

Howard Barnwell

MD & Transactions Mgr.

713-546-9767

[email protected]

Rob Priske

Director & Transactions Mgr.

713-546-9727

[email protected]

Elliott Finch

Analyst

Aaron Moeller

Analyst

Jennifer Boudreaux

Analyst

BMO uses updated basin outlines, and the resulting rig counts, to more accurately represent current basin knowledge. The data below reflect these changes

and is different than those shown by Baker Hughes. The totals are the same.

489

(4)

56

--

16

(1)

57

128

(1)

23

--

22

(3)112

--

62

1

96

2

27

1

7

1

15

--19

1

[TBU]

Chelsea Neville

Transactions Coordinator

This

Week Change

Last

Week

Last

Year

Total Rigs 1,075 (1) 1,076 931

Oil 877 (10) 887 751

Gas 198 9 189 180

Miscellaneous -- -- -- --

Directional 72 4 68 71

Horizontal 933 (1) 934 796

Vertical 70 (4) 74 64

Basin

Permian 489 (4) 493 400

SCOOP/STACK/Merge 112 -- 112 100

Granite Wash 22 (3) 25 17

Eagle Ford 96 2 94 84

Haynesville 62 1 61 58

Marcellus 57 1 56 45

Utica 16 (1) 17 27

Williston 56 -- 56 47

DJ-Niobrara 28 (1) 29 23

Green River 19 1 18 23

Powder River 15 -- 15 13

Piceance 7 1 6 8

Gulf Coast Onshore 27 1 26 18

GOM 23 -- 23 20

Alaska 7 1 6 5

Other 39 -- 39 43

Mid-Con 18 -- 18 21

Rockies 3 -- 3 5

Western 15 -- 15 14

Eastern 3 -- 3 3

[TBU]

prompt oil price ($/bbl) $51.49 $0.04 0.1% prompt gas price … · 2018-12-10 · 3 december 10,...

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