Managing Midstream Costs

Strategies for Increasing Hydrocarbon Profits

April 29, 2019 | Denver, CO ::

0419-midstream-costs

The E&P industry has responded to the challenge of volatile oil and gas prices with amazing advances in drilling and completion technology to reduce costs and grow production.      With another oil price decline and basis pressure on regional prices due to infrastructure constraints comes another round of requests for long term logistics contract commitments.  Managing costs beyond the wellhead is key to producing sustainable above average returns – “making every molecule matter in the market”. 

In the commodity world, basis is key. Even when the products on offer are standardized, making informed decisions about when (time basis) and where (location basis) production can be sold makes a big difference in the ultimate value of reserves.  This course begins at the surface and takes you through the process of optimizing the ‘netback value’ of hydrocarbon production – the actual revenue that the producer keeps after the cost of cleaning up and transporting molecules to markets. It includes a workshop session to allow participants to build and practice their skills at bringing their leases to market. 

Learning Outcomes

• Define the ‘size of the value prize’ – forecasting the volume and estimated value of hydrocarbon streams, with examples from 4 major basins
• Discuss the characteristics of each stream – terminology, measurement and conversion factors
• Analyze the Great Ethane Debate – to recover, or not
• Examine pricing – know what you’re selling and where you want to sell it – location and quality issues come before contracts
• Discuss treating and transformation – processes for transforming molecules into commodities
• Describe transportation – how each stream moves from the field to the market
• Analyze distribution – assets provide access and drive the cost of optionality for time and place
• Define options – building a marketing strategy table
• Choose a path in an uncertain price environment – the value of knowledge
• Illustrate ways to execute a marketing plan
• Identify contract considerations

Credits

EUCI is accredited by the International Accreditors for Continuing Education and Training (IACET) and offers IACET CEUs for its learning events that comply with the ANSI/IACET Continuing Education and Training Standard. IACET is recognized internationally as a standard development organization and accrediting body that promotes quality of continuing education and training.

EUCI is authorized by IACET to offer 1.5 CEUs for this event.

 

Instructional Methods

PowerPoint presentations and classroom discussion will be used

Requirements for Successful Completion of Program:

Participants must sign in/out each day and be in attendance for the entirety of the course to be eligible for continuing education credit.

Monday, April 29, 2019

8:00 – 8:30 a.m. :: Registration and Continental Breakfast

8:30 – 9:15 a.m. :: Introductions, Course Overview, Case Handout

9:15 – 10:00 a.m. :: Definitions

• Overview of the hydrocarbon value chain
• Differences in how oil, gas, and NGLs are handled on the way to market
• What is “midstream”?
• Key information you need to optimize midstream spending

10:00 – 10:15 a.m. :: Morning Break

10:15 – 11:00 a.m. :: “First Mile” Costs – Separation, Water Removal (Dehydration), Vapor Recovery

11:00 – 11:30 a.m. :: Sweet and Sour – Oil and Gas

, That is – treating costs and issues

11:30 a.m. – 12:45 p.m. :: Group Luncheon

12:45 – 1:15 p.m. :: Review and Q&A – Morning Discussion

1:15 – 1:45 p.m. :: All Cleaned Up and Ready to Go?

Equipment configuration for storage and transport for oil and condensate

1:45 – 2:15 p.m. :: The Second Stream – Field Gas Gathering and Compression

2:15 – 2:45 p.m. :: Afternoon Break

2:45 – 3:15 p.m. :: This “Little Piggy” Has No Toes

Costs of pipeline clearing (pigging) and maintenance

3:15 – 3:45 p.m. :: The Great Gas Divide

– Moving ‘dry’ gas to market, ‘boost’ compression

3:45 – 4:15 p.m. :: The Third Stream – Moving Wet Gas (Gas with Natural Gas Liquids) to the Gas Plant

4:15 – 4:30 p.m. Review and Q&A

4:30 – 5:00 p.m. Case Study Work

Build the ‘midstream services menu’ from the well to the gas plant

Tuesday, April 30, 2019

8:00 – 8:30 a.m. :: Continental Breakfast

8:30 – 9:00 a.m. :: Discussion, idea exchange from previous day

9:00 – 10:00 a.m. :: The Last Stream – Getting Through the Gas Plant

• Overview of types of gas processing plants
• Ethane recovery and rejection options – what are they, are they worth it, how do you know?

10:00 – 10:20 a.m. :: Morning Break

10:20 – 11:00 a.m. :: The Last Miles – Crude and Condensate Transportation

11:00 – 11:30 a.m. :: The Last Miles – Gas Transmission

11:30 a.m. – 12:45 p.m. :: Group Luncheon

12:45 – 1:30 p.m. :: The Last Miles – NGL Transportation and Fractionation

1:30 – 2:15 p.m. :: Tariffs – How Differences in Business Practices Impact Your Options

• Intrastate pipelines vs interstate
• Business practices: gas, oil, NGLs
• How tariffs translate into investments
• Can you join a party that’s already under way – after the line is built?

2:15 – 2:30 p.m. :: Afternoon Break

2:30 – 3:15 p.m. :: Case Study Work

Building your wish list

3:15 – 4:00 p.m. :: Strategies for Making it Happen

• Build vs “buy”
• Outsourcing
• The value of knowledge – getting good advice

4:00 – 4:30 p.m. :: Case Study Wrap Up, Final Q&A

4:30 – 5:00 p.m. :: Course Evaluation Survey and Feedback

Anne Keller,  NGL Product Director, Genscape

Anne Keller is a midstream industry expert, with deep expertise in forecasting and strategic planning, project development, and markets analysis, particularly in the natural gas liquids (NGL) sector. She was the course developer and lead instructor for an NGL Fundamentals course sponsored by the Oil Price Information Service (OPIS) for many years, and was the author and presenter of a popular “NGL 101” webinar sponsored by the US Energy Information Administration (EIA). 

Anne’s industry experience includes E&P accounting, internal and joint venture audit on the financial side of the business. Her commercial roles have included management of mid office services for natural gas sales, industrial gas supply, and NGL marketing and trading teams as well as project development, strategic planning, and asset management for midstream, downstream, and chemicals operations.   As a consultant, she has been a Group Manager in the Natural Gas and Utilities practice of the Jacobs Engineering Group’s Consultancy division, and developed and launched an integrated US/Canada supply/demand model for Wood Mackenzie’s NGL service. She founded Midstream Energy Group in 1999 to provide strategic planning support, market entry advice, asset valuations, and training services. 

Anne is currently the NGL Product Director for Genscape. Her team produces a number of subscription reports covering NGL supply, demand, and trade as well as capacity utilization information in the midstream space.

Ms. Keller is originally from Oklahoma, where many people really do have oil wells in their backyards.  She is a CPA, licensed to practice in Texas, and serves on the Board of Directors of the Gas Midstream Suppliers Association.   She holds a BS in Accounting and Business Administration from Oklahoma State University and an MBA with a Finance concentration from the University of Oklahoma.

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Managing Midstream Costs

April 29, 2019 | Denver, CO