CALIFORNIA

CONSERVATION

Analysis of Produced and Imported Crude Oil in California

California Department of Conservation,

Division of Oil, Gas, and Geothermal Resources

Jason Marshall , Chief Deputy Director, Department of Conservation

Bill Bartling , Chief Deputy Director, Division of Oil , Gas, And Geothermal Resources

August 2018

1

CONCALIFORNIA

SERVATION

8

(IJ -

Fo

C.rude Oil :su1pply Sources lo Californi·a Refineries 00 -~------------------------------------~

BOO

~ re gn

500

~ ftl

1CO 1111-. 0 400 Alaska 0 C 0 ..... --:E 300

200

100

0 1982 1984 1986 988 1990 1992 1994 1998 1998 2000 2002 2004 2006 200,8 2010 20112 2014 2016

·983 1985 1987 1989 1991 1993 1995 1991 ·1999 2001 2003 2005 2007 2009 20U 2013 2Cl1S 2017 Year

2

Production and Price

CALIFORNIA

CONSERVATION 3

% Change

CALIFORNIA

CONSERVATION 4

5

US Performance

Measures

PRAC = Proved Reserve

Acquisition Cost

FDC = Finding and Development

Costs

RRC = Reserve Replacement Cost

Revisions= restating of booked

reserves due to low oil prices

CONSCALIFORNIA

ERVATION

-

9.19

.74

4 .

29..62

�M iJffi 19.

.l. 18

9.29

roe

i1 IJJ_,_&_lim_-r1-_ , _ , , ____ 0.64_,.1 ....... 1.~~·.1.9. .......... ~~: ~~' .............. 5."1:-.?.~ .. . f;r~MeM!e!RBl'I !Iii

7

PresenterPresentation Notes10 year history of production from California fields – nearly all fields are in decline with only a few with increasing production – Cymric, San Ardo and Coalinga.

Notably, the fields with the largest production are the ones with the the most apparent rates of decline. 6 of the 7 largest producing fields are in obvious decline with only Cymric showing relatively flat production history over the last 10 years and even that is starting to trend downward.

CALIFORNIA

CONSERVATION

Permitting Trends

8

Permitting and Price

CALIFORNIA

CONSERVATION

Relationship of: • Permits Requested

Permits Issued • Wells Drilled• Price of Oil

b 60

5000

140 4500

4000 120

"O 3500� ·;:: 100 -

"'"O"' 3000 co QJ

"O

80 � 2500

·;:: 0..

6 -o' QJQJ "O

2000

CALIFORNIA

CONSERVATION

Well Stimulation and Price

Well Stimulation = • Hydraulic

Fracturing • Acid Matrix

Stimulation • Acid Fracturing

900 $120849

800 $100

745

700 623

c 600 $80 (])

E 6

IB soo '-::i(])

'- u

u� 400 '+-

'+-

(])

$60

E (])

·.:::::i 300 $40

200 160147 $20

92 100

41

0 $0 2011* 2012* 2013* 2014** 2015** 2016 2017 2018 (1st Qtr.)

Year

- Well Stirn. Treatments �Price of Oil

* Statistics from FracFocus.

** Statistics from interim reporting period.

N

b T

t

s

P

C

O

A

d I

10

CALIFORNIA

CONSERVATION

Permitting And Oil Operations Locations

, S.n

Over 23,000 Permits requested in total since 2011 175 Permits requested outside of Oil & Gas Fields 81 of these were Cancelled 29 are currently Active Total Active Oil & Gas wells in California:71,999

t.btoo

1'1)'0

San Be1n.ird,rio

Active Oil & Gas Well

• Permitted Since 2011

Outside an Oil & Gas Field

Stem11

I._____ _____JI Ventr:ffit 11

CALIFORNIA

CONSERVATION

Notices Received 2008 - 2018

Notice,s of Intent (INOII)

(Re) Abandon 58,633

Drill

71,514

Rework 67,832

District (Re) Abandon Drill Rework Total

1 6,778 2,879 7,472 17.129

2 1,273 658 2,767 4.698

3 682 562 1,408 2.652

4 44,257 62,214 47,765 154.236

4,124 3,246 3,958 11.328

1,519 1,955 4,462 7.936

Total 58.633 71.514 1 67.832 197,979

I

NO lls by Type I I • Drill Rework • (Re) Abandon

- 72K

68K _J

NIO I1s lby Year

•(Re) Abandon • Drill Rework

10K

SK

OK

2008 2010 2012 2014 2016 2018

r•J( .; b 1 1 p .

. . ' 59K ,

I I I

- '

I • r • It · ) :·.f.. . o I r I·· - o l . •"'°" ....

I\ 1 • I :, . ... t I I i I i ii

. ' ~ ,, ,. ~ I I • I'

5 1 J ~1: ,:: ;

6 I ' , J-f I ~ ..

~ I 0 J '. t i ,;11 t,, .. ✓• . . I• < t "'Ir, I"

r·. r J : by Y :. r

• I e 1

12

��

CALIFORNIA

CONSERVATION

Permits Issued 2008 - 2018

Permits

(Re) Abandon

53,966

Drill

64,735

Rework

61, 193

District

1

(Re) Abandon

6,505

2

3

332

6 34

4 41,806

5, 4,108

6

Totall

581

53,< 96,6

Permits lby Type

• Dril I Rework • (Re) Abandon

61 K _J

Permits by Year

e(Re) Abandon • Drill • Rework

10K

SK

OK

2008 2010 2012 2014 2016 2018

Drill Rework Total

2719 7 ,110 16,334

247 1, 337 1,916

5 35 1, 309 2,478 57 413 45,155 144,374

3,202 3,909 11,219

619 2, 373 3,573

64,735 61.193 179,8941

• r • I t '. • ) /'.f,: _ , -. , I) II 1: • ... c d , w . ""41 ....

·. l ' J • : ·• I ...

• I -~. i ' l

' 1 ...

l I;, I . u .. .. .. . . I ' '

•,I : .. , ~ r, ti :, ,,; ! ,4. fie .. . :.t' .. 1

. .' l • I · " . 54K ,

13

CALIFORNIA

CONSERVATION

Recent Regulatory Actions

14

CALIFORNIA

CONSERVATION

• Well Stimulation

• Gas Storage Facility

• Underground Injection Control (in progress)

• Idle Well Regulations (in progress)

• Safe Drinking Water Act/Aquifer Exemptions (in progress)

15

Summary

CALIFORNIA

CONSERVATION

o Declining production in-state

o Historically price increases have not driven CA

production up

o Permits to maintain declining production likely to

continue in existing fields

o Regulatory modernization is ongoing

16

Analysis of Produced and �Imported Crude Oil in CaliforniaSlide Number 2Production and Price% ChangeSlide Number 5US Performance MeasuresSlide Number 7Permitting TrendsSlide Number 9Slide Number 10Slide Number 11Notices Received�2008 - 2018Permits Issued�2008 - 2018Recent Regulatory ActionsSlide Number 15Summary