1. Swan City Rotary Club October 19, 2016

2. Canadian Association of Petroleum Producers
Represents large and small producer member companies
Members explore for, develop and produce natural gas, natural gas liquids, crude oil, and oil sands throughout Canada
Produce about 85 per cent of Canada’s natural gas and crude oil
Associate members provide a wide range of services that support the upstream crude oil and natural gas industry

3. Crude Oil and Natural Gas prices
Crude Oil Prices (WTI NYMEX)
$US per barrel
Natural Gas Prices (AECO Daily Spot Price)
$Cdn/mcf

4. Capital Investment in Canada’s Oil and Natural Gas Industry
Source: Statistics Canada

5. Industry Capital Spending Cdn $billions
Oil & Gas Investment Spending:
2014: $81 billion
2015F: $48 billion
2016F: $31 billion
Northern Canada
F F
$ $ $0.2
Oil Sands
F F
$ $ $17
Western Canada
F F
$ $ $11
East Coast Offshore
F F
$ $ $2.5
’ ’15E ’16F
AB $ $ $8.1
BC $ $ $1.5
SK $ $ $1.7
MN $ $ $0.3

6. Total Wells Drilled in Western Canada
Yr/yr Reduction in Drilling:
2015 – 49% %
2014
2015
2016F
Alberta
5,961
2,891
1,960
British Columbia
616
515
210
Saskatchewan
3,356
1,617
1,150
Manitoba
455
208
180
2015
= 5,230
2016F
= 3,500
Source – CAPP. Based on Rig Release

7. Total Gas Wells Drilled in Western Canada & AECO
2009 gas connected: 4,180
2010 gas connected: 4,850
2011 gas connected: 6,092
Consistent with CAPP production forecast.
Source – CAPP.ca Based on Rig Release

8. Area Wells Drilled First 9 Months 2014 (Source: boereport.com)

9. Area Wells Drilled First 9 Months 2015 (Source: boereport.com)

10. Area Wells Drilled First 9 Months 2016 (Source: boereport.com)

11. Local Employment: Athabasca-Grande-Prairie-Peace River Region
2016 Average YTD
2014 Average YTD
Change
% Change
Unemployment
Rate
7.2%
3.9%
3.2%
Employment
181,467
197,433
-15,967
-8.1%
Labour Force
195,433
205,500
-10,067
-4.9%

12. What is needed for a turnaround?
Higher prices
Lower cost structure
Policies that aid competitiveness
New infrastructure to move energy products

13. Economic Context: Our biggest client is our biggest competitor

14. New Market Opportunities for W. Canadian Gas
Liard
Horn River
Cordova Embayment
Montney
Duverney
Area of Oil Sands Deposit
NGTL
Growing Oil Sands Demand
Westcoast
PNG (Capacity approx: 110 MMcfd)
Pacific Trail: Proposed (Kitimat LNG)
Coastal GasLink: Proposed (LNG Canada)
Prince Rupert Gas Trans: Proposed (Pacific Northwest LNG)
Westcoast Connector:
Proposed (Prince Rupert LNG)
Potential LNG Export Demand
Declining Traditional Market Demand

15. Canada’s future energy infrastructure needs

16. Global Primary Energy Demand
Ongoing reliance on fossil fuels (share of energy consumption):
2013: 81%
2040: 75%
Source: International Energy Agency – New Policies Scenario
World Energy Outlook 2011

17. Gas Trade Balance by Region
Source: ExxonMobil – 2015 Outlook for Energy

18. Canada Marketable Natural Gas Resources – Trillion cubic feet
Canada has almost 1,100 tcf remaining natural gas resources

19. Join Canada’s Energy Citizens! energycitizens.ca