Vegas Energy Conference Recap v2 Web

CONFERENCE RECAP
THIRTEENTH ANNUAL
Spring 2013
SIMMONS & COMPANY INTERNATIONAL
THIRTEENTH ANNUAL ENERGY CONFERENCE PANEL PARTICIPANTS
E&P PERSPECTIVES:
LARGE CAP
Ernie Leyendecker
Vice President, Exploraton
Anadarko Petroleum Corporaton
John Christmann
Region Vice President
Apache Corporaton
William Thomas
President
EOG Resources
Tim Dove
President & CEO
Pioneer Natural Resources
CAPITAL EQUIPMENT
Chuck Sledge
Senior Vice President,
Finance & CFO
Cameron Internatonal
Corporaton
John Gremp
Chairman & CEO
FMC Technologies
Jeremy Thigpen
CFO
Natonal Oilwell Varco
E&P PERSPECTIVES:
NATURAL GAS
Dan Dinges
Chairman, President & CEO
Cabot Oil & Gas Corporaton
Ray Walker
COO & Senior Vice President
Range Resources
Steve Mueller
President & CEO
Southwestern Energy
MIDSTREAM/MLP
Randy Fowler
Executve Vice President & CFO
Enterprise Products Partners
Park Shaper
President
Kinder Morgan, Inc.
Terry Spencer
President
ONEOK Partners
LARGE CAP SERVICE
Andy ODonnell
Vice President,
Ofce Of The CEO
Baker Hughes Incorporated
Tim Probert
President, Strategy &
Corporate Developement
Halliburton Company
Bernard Duroc-Danner
Weatherford Internatonal
MID CAP SERVICE
Ernesto Bautsta III
CFO
CARBO Ceramics
David Demshur
Core Laboratories
Cindy Taylor
President & CEO
Oil States Internatonal
Dale Dusterhof
CEO
Trican Well Service
SMALL CAP SERVICE
Josh Comstock
CEO
C&J Energy Services
Wm. Stacy Locke
President & CEO
Pioneer Energy Services
Bryan Shinn
President & CEO
U.S. Silica Holdings
MID CAP MAJORS: NAM
UNCONVENTIONAL/
GLOBAL EXPLORATION
Howard Thill
Vice President, Investor Relatons
& Public Afairs
Marathon Oil Corporaton
Kevin Fitzgerald
Executve Vice President & CFO
Murphy Oil Corporaton
Helge Haldorsen
Vice President, Strategy &
Business Development North
America
Statoil ASA
OFFSHORE DRILLERS
Mark Mey
Senior Vice President, CFO
Atwood Oceanics
Larry Dickerson
President & CFO
Diamond Ofshore Drilling
John Rynd
President & CEO
Hercules Ofshore
Simon Johnson
Vice President, Marketng &
Contracts
Noble Corporaton
Mark Keller
Executve Vice President,
Business Development
Rowan Companies
REFINING
Donald Templin
Senior Vice President, CFO
Marathon Petroleum
Tim Taylor
Commercial, Marketng,
Transporaton & Business
Development
Phillips 66
Dan Romasko
Operatons
Tesoro Corporaton
Bill Klesse
CEO, Chairman Of The Board
Valero Energy Coroporaton
E&P PERSPECTIVES:
MID CAP
Joe Wright
Senior Vice President, COO
Concho Resources
Lee Boothby
Newfeld Exploraton Company
Taylor Reid
Executve Vice President, COO
Oasis Petroleum
Jim Flores
Plains Exploraton & Producton

SIMMONS & COMPANY INTERNATIONAL
THIRTEENTH ANNUAL ENERGY CONFERENCE OVERVIEW
At Simmons 13th annual Energy Conference in Las Vegas in February,
39 CEOs and other top executves across the energy industry met with
investors, and tackled some of the most pressing issues facing the industry
today in panel discussions. Among the most signifcant takeaways were:
While some companies in the service and midstream segments see
potental for consolidaton actvity, most panelistspartcularly in
exploraton and productonare put of by what they consider to be
high asset valuatons.
The big queston of the conference was about North American
onshore oil producton and whether or when the astounding growth
of the past few years will start to decelerate.
Another big queston was about when the decline in natural gas-
directed rig count will ofset associated gas producton from oil plays,
catalyzing natural gas pricing improvement.
The renaissance in North American oil & gas producton is spreading
the wealth across industry segments as rising domestc supplies bring
new vitality into the midstream and downstream markets.
The outlook for oil service companies appears to be mixed, with some
panelists reportng pockets of strength while othersand many of
their E&P clientssaw pricing in selected areas remaining sof.
Excitement over new fnds and producton prospects has shifed
decidedly from North American onshore sites to the Gulf of Mexico
and beyond. Ofshore actvity has picked up in many places around
the globe, although actvity in Brazil remains somewhat uncertain.
Comments from panel partcipants were frank, and the discussions
revealed diferences in opinion and outlook. The following are some of
the insights from executves, in their own words.
SI MMONS & COMPANY I NTERNATI ONAL S
THI RTEENTH ANNUAL ENERGY CONFERENCE RECAP 1
Panelists, with a few exceptons, were unenthusiastc about current M&A
opportunites, citng high valuatons. Most companies will focus this year on
growing their businesses and increasing producton from core assets--whether
those assets are new drillships or Permian acreage or pipelines. Buying
earnings right now is a heck of a lot more expensive than building them, said
Terry Spencer, President of ONEOK Partners in the midstream space. At 12-
13x market multples, we like the grassroots investments; those prices make it
easy for us to decide where to deploy our capital.
Helge Haldorsen, Vice President of North American Strategy and Business
Development for Statoil ASA, would like to be a buyer in the U.S. but is held
back by the high prices. Our strategy is to get bigger so we can be doing this
for 40 years, he said. We have our smallest presence in the Eagle Ford, and
if the price is right will increase our presence, but prices in the market are very
high. Howard Thill, Marathon Oil Corporatons Vice President of Investor
Relatons, agrees. We do contnue to look at opportunites to do bolt-on
acquisitons, but the market is very expensive today, and theres not a lot for
sale, quite frankly, he said. The Eagle Ford has just a few large companies
operatng there, while the Bakken is more splintered with a lot of smaller
players. We expected more consolidaton there by this point, but over the years
as we got comfortable with the price level, it would run away from us again.
On the North American service side, lower rig counts and some low pricing
might suggest there are opportunites for consolidaton, but asset prices are
holding buyers back. We are out of the M&A market, said Dale Dusterhof,
CEO of Trican Well Service. If we were to do any M&A in the U.S., we
would want to do it under asset value, and we dont see any opportunites
out there right now. Others see selected opportunites. We are looking at
diversifcaton of our existng service lines, said Josh Comstock, CEO of C&J
Energy Services. We want to create higher diversifcaton of our oferings and
see some opportunites. Taylor Reid, EVP and COO of Oasis Petroleum, thinks
consolidaton would beneft the North American E&P segment as well. When
you look at the shale plays, as people transiton to pad and to drilling multple
wells, the complexity of those operatons increases signifcantly, he explained.
To gain the scale and ability to take advantage of those opportunitesit
makes sense to consolidate, its just a queston of whether you can make the
numbers work.
PRICEY ASSETS SUBDUE M&A INTEREST
2
THI RTEENTH ANNUAL ENERGY CONFERENCE RECAP
Companies are going to the markets
to sell partal interests in selected
projects in an efort to boost market
valuatons of what they feel are
under-recognized assets in their
portolios. Marathon announced in
October that it was considering selling
an interest in its Canadian oil sands
project. If we do sell, we would keep
an exposure of 10% or more, said
Howard Thill. That property has
great potental over the next 20-40
years for development, so it is not like
we are exitng the business. Selling
an interest would put a marker out
there. The full value of our oil sands
project is not refected in our share
price. Marathon is doing the same
thing with its Gulf of Mexico interests,
lowering its interest in prospects such
as Madagascar from 100% to 30-
50%. We are doing that to manage
fnancial and politcal risk, explained
Thill. Those propertes are all part
of our larger portolio, and it is part of
whats diferent now about Marathon:
Our Gulf interests are more balanced.
Kevin Fitzgerald, CFO of Murphy
Oil Corp., has moved his company
forward with divesttures to create
value for shareholders, with a spinof
of U.S. retail operatons set for the
second half of 2013, and plans to move
capital from Canadian assets to the
Eagle Ford basin. We will be lef with
a pure play E&P company that has
exploraton, primarily internatonal, as
its frst focus, he said.
A few companies who have been
aggressive buyers in the past contnue
to look for acquisitons, stll seeing
opportunites to earn a reasonable
return. Park Shaper, President of
Kinder Morgan, Inc., is stll a buyer.
We are happy to invest capital in
transactons where we earn in excess
of our cost of capital, he said. We
found lots of opportunites to do that
with our El Paso acquisiton. We invest
in both acquisitons and expansions,
so we are trying to fnd transactons
where we have confdence that we will
earn in excess of our cost of capital.
Other executves whose companies
are in niche markets see potental
M&A opportunites among weaker-
performing compettors. We are
looking all along our value chain,
startng in the mining and process
areas where lots of capacity has been
added, said Bryan Shinn, President
and CEO of U.S. Silica Holdings. Lots
of people have goten themselves in
over their heads, so we are in the M&A
market right now. Some ofshore
companies would also welcome
consolidaton actvity. We would like
to see a bit more M&A actvity, said
Simon Johnson, Vice President of
Marketng & Contracts at Noble Corp.
There have been new names coming
into the drilling space, and it would be
good to see headcount reduced a bit.

We invest in both acquisitons and expansions,
so we are trying to fnd transactons where we
have confdence that we will earn in excess of
our cost of capital.
Park Shaper, President of Kinder Morgan, Inc.
This year, discussion of North American unconventional oil
E&P moved away from last years tales of new discoveries and
climbing reserve estimates toward spirited debates about how
high U.S. onshore oil production will actually goand when the
peak will come. While most participants that are active in the
unconventional space believe there are still further production
gain surprises to come on the upside, particularly in the Permian
basin, a few voiced skepticism that the current trajectory of
production growth will continue much longer or reach 10 million
barrels per day by 2015. When it comes to U.S. oil production,
we think estimates of 10 million barrels are too optimistic, said
David Demshur, CEO of Core Laboratories. In the oil plays,
all the good wells get drilled first. Over the last three years,
they have drilled a lot of pretty good wells, and efficiencies
can only take us so far. The days of the best wells being drilled
are probably behind us. Demshur is skeptical of the economic
viability of some of the onshore oil development. Outside of the
sweet spots in the Bakken, Eagle Ford and Wolfcamp plays, youll
need WTI upwards of $90 to get a decent return on capital.
Others are more optimistic. With the right fundamentals we
can get significant volume out of all these incredible plays, said
Ernie Leyendecker, Vice President of Exploration for Anadarko
Petroleum. We are optimistic that the Eagle Ford and the
Bakken plays really have the resource potential for us to unlock
and grow capacity. Jim Flores, CEO of Plains Exploration &
Production pointed out that responsibility for reaching 10 million
barrels of production is shared across other segments of the
industry. To get to those production levels you have to have
infrastructure, he said. Think of all those pipelines that caused
increased gas production; we havent built any crude pipelines.
NORTH AMERICAN OIL: WHEN DOES THE FLOW START TO SLOW?
To get to those producton levels,
you have to have infrastructure.
Think of all those pipelines that
caused increased gas producton;
we havent built any crude
pipelines. Youve got a long way
to go to get to those 10 million
barrel producton levels with
infrastructure for crude.
Jim Flores, CEO of Plains
Exploraton & Producton
4
Youve got a long way to go to get to those 10 million barrel
production levels with infrastructure for crude.
Most panelists expressed excitement over the production
prospects in the Permian Basin and believe in the potential
for more positive surprises as horizontal drilling ramps up.
We are very early in the Permian plays with horizontal
drilling, said John Christmann, Region Vice President of
Apache Corp. The Permian basin has historically been
developed using vertical spacing. It is now starting to be
turned on its side, which takes a lot of legwork up front. But
that is what you have to do to develop those vast resources,
and the results will surprise people. Tim Dove, CEO of
Pioneer Natural Resources, agrees. The big surprise in the
U.S. will be the Permian, he said. When it is turned on its
side, it is going to be shocking to see the kind of resources
that will come out of those horizontal plays.
The big surprise in the U.S. will be
the Permian. When it is turned on
its side, it is going to be shocking
to see the kind of resources that
will come out of those horizontal
plays.
Tim Dove, CEO of Pioneer
Natural Resources
Panelists at the Simmons Conference voiced near-universal consensus on
one topic: that U.S. natural gas price weakness will extend at least into 2014.
Executves were much more sanguine about a quick rebound in natural gas
liquids (NGL) prices, but panelists made clear that the best thing for dry gas
at the moment is to have it stay in the ground. I think that natural gas prices
will contnue to be impaired, said Jim Flores of Plains. We are in $3.00 land
for some tme untl we get industrial demand. We are planning on good gas
prices in 2016-2020. It is good to make plans now, but it will be hard to get
superior returns in the gas business.
Associated gas from oil plays is not staying in the ground and appears to
be part of the supply problem. About 40% of current producton of gas is
associated gas, explained Tim Dove, President & CEO of Pioneer Natural
Resources. With all the oil drilling that went on last year, we grew gas
producton by 10%, even though we drilled no gas wells. Joe Wright, COO
of Concho Resources, is in the same positon. 100% of our gas producton
is associated gas, so we are growing both oil and gas domestcally, he said.
Those producers with the luxury of choosing between oil and gas producton
would need to see a substantal upswing in prices to lure them back to
the dry gas felds. We would like to see prices north of $5.00 to push the
accelerators on with gas producton, said Ernie Leyendecker of Anadarko.
However, we will certainly see some people go back to gas when it is
between $4.00 and $5.00. Dan Dinges, CEO of Cabot Oil & Gas, also
identfed $4.50 as the price point for natural gas. I think gas has to be up in
that area before you see a large infux of rigs, and prices have to be there for
a long period of tme.
Producers who had switched over to liquids were hit with a sudden
downturn in those prices during 2012, but most panelists expect NGL prices
to recover much more quickly than dry gas. We see a sof market for NGLs
in the short term, but over the long term, when petrochemical demand
catches up, we will see price recovery, said Ernie Leyendecker. In the
midstream area, panelists also were optmistc about the liquids market.
Inventories have reached historically high levels, said Terry Spencer,
President of ONEOK Partners. We see the propane situaton resolving with
a more normal winter this year and ethane inventories coming down as well.
So we think we will see pricing strength in liquids in 2014 and 2015.

LOW U.S. GAS PRICES ARE NO FUN FOR PRODUCERS BUT BOOST DEMAND
Inventories have reached
historically high levels. We
see the propane situaton
resolving with a more
normal winter this year and
ethane inventories coming
down as well. So we think
we will see pricing strength
in liquids in 2014 and 2015.
Terry Spencer, President of
ONEOK Partners
6
One issue of contenton is the level and impact of any
future LNG exports on the natural gas sector. Park
Shaper of Kinder Morgan believes exports will play
a part in the natural gas future. Clearly more gas
will be exported, he said. Steve Mueller, CEO of
Southwestern Energy, does not believe exports will be a
signifcant source of demand long-term given the limited
size of the market, the cost, and the expectaton that
only a limited number of plants will be approved in the
U.S. I am very comfortable that plants approved will be
more than one, but it is a long process and we will not
see anywhere near the 12-13 approved that equals the
number that have been requested, he said.
Looking ahead, the good newsand a glimpse of that
bright future for domestc natural gascame from
panelists in the midstream and downstream areas. Low
gas prices are benefcial to the extent that they drive up
demand, said Park Shaper of Kinder Morgan. Those
prices are driving demand in gas-fred generaton, in
petrochemicals, and other industrial sources.
More positve news was evident in natural gas panelists
descriptons of eforts by the gas industry itself to bring
a bright future closer. The good news is that today,
youve got the Marcellus Coaliton and other groups
focused on raising demand for natural gas, said Ray
Walker, COO of Range Resources. If we all believe
that gas is a superior fuel, then we need to work on
demand, and thats the real secret. Transportaton
is the big potental market, but all agreed it would be
slow to develop. We see a 10-year tme frame to get to
something that will signifcantly impact the demand side
for natural gas, said Steve Mueller, CEO of Southwestern
Energy. It is coming, however, because it is economically
viable.
That bright future for domestc natural gas is compelling
enough for executves to look beyond the more cloudy
present. We are in the right business, asserts Walker.
It might be two years, it might be fve before prices
improve, but at some point we are going to be really
glad that we are doing what were doing. That gets me
excited.
We are in the right business. It might be
two years, it might be fve before prices
improve, but at some point we are going
to be really glad that we are doing what
were doing. That gets me excited.
Ray Walker, COO of Range Resources
Operators of pipelines and refneries in the U.S. are
reaping the benefts of burgeoning U.S. oil & gas
producton, which has breathed new life into once-
sleepy industry segments. Keep telling the E&P guys
to drill, said Bill Klesse, CEO of Valero Energy Corp.
We announced last quarter that we ran all domestc
for light sweet crude in our Gulf Coast and Memphis
plants, and that used to be foreign oil. Where once
executves focused on how quickly capacity could
be eliminated, now the focus is on how to grow
light crude handling ability on the Gulf Coast fast
enough, and in the right directons. What investors
under-appreciate about us is that we refners have
growth prospects with the resource advantages
of crude and natural gas, and at the same tme we
are generatng lots of free cash fow, said Klesse.
Proft forecasts will be upgraded for all of us. With
our free cash fow and the amount of oil coming in,
that is changing everything.
While E&P executves are already debatng how
high onshore oil producton will go and how long it
will last, executves downstream are just beginning
to prepare for the infux of light, sweet crude that
is coming their way. Producers and refners alike
believe the Gulf Coast will be the recipient of most
of this producton increase. We are focusing on
a large infux of light sweet crude coming into the
Gulf and that could afect pricing over the next
2-3 years, said Tim Dove of Pioneer Natural
Resources. Bill Klesse of Valero agrees. By the
tme you get to 2015, a lot of light sweet oil will be
moving to a lot of places, and that is when it is going
to be more signifcant to see everyones ability to
process it, he said. The Gulf Coast will be very
long light, sweet crude.
Midstream executves tell an equally positve story.
It is a phenomenal tme to be in the midstream
area, thanks to the work of our upstream colleagues,
said Park Shaper of Kinder Morgan. Theres
tremendous incremental demand for transportng
liquids right now, we have an abundant domestc
supply of fuel, low prices that will drive domestc
demand, and export potental. Randy Fowler, CFO
of Enterprise Products Partners drew partcular
atenton to NGLs, where low prices may have

U.S. PRODUCTION BREATHES LIFE INTO THE MIDSTREAM
AND DOWNSTREAM SEGMENTS
Keep telling the E&P guys to drill. We
announced last quarter that we ran all
domestc for light sweet crude in our Gulf
Coast and Memphis plants, and that used to
be foreign oil.
Bill Klesse, CEO of Valero Energy Corporaton
8
negatvely afected producers but have spurred demand
for pipeline capacity. The NGL side has been prety
amazing, he said. It is amazing what NGLs have done
for the U.S. petrochemical industry, which was given up
for dead. Weve taken that industry from one of the most
expensive producers in the world in 2003, to producton
that is now the cheapest in the world.
E&P sector panelists spoke of their dependence on
midstream commitments to provide takeaway capacity
and how that will afect producton over the long term.
In the Eagle Ford, we cant say enough how important
the takeaway capacity has been, said Howard Thill,
of Marathon. Weve spent $350 million on pipelines
and facilites. People dont think about the additonal
work past the wells you have to do to make certain
you have takeaway capacity. Long-term prospects
depend on capital outlays to expand takeaway capacity
as well. Some of the midstream projects that are
designed out there are not just trying to create gas-on-
gas competton in existng markets, but also to access
new markets on the Atlantc Seaboard, said Dan Dinges
of Cabot Oil & Gas. In the long term that will lead to
enhanced demand for us.
Refners are engaged in transport issues as well.
For example, they have to grapple with the high potental
but difcult logistcs of transportng Canadian crude into
California. Midstream operators see years of opportunity
for expansion ahead, transportng natural gas to Mexico
and new markets in the eastern U.S. and eastern Canada.
Overall, panelists in the midstream and downstream
segments are gearing up for growth, and their comments
refect the positve outlook for once-dormant industry
segments that North American producton now promises
to deliver.
In the Eagle Ford, we cant say enough how important the takeaway capacity has
been. Weve spent $350 million on pipelines and facilites. People dont think about the
additonal work past the wells you have to do to make certain you have takeaway capacity.

Howard Thill, Vice President, Investor Relatons & Public Afairs
Marathon Oil Corporaton
Actvity in the Gulf of Mexico has fully recovered to pre-Macondo
levels, and at the Simmons conference, the Gulf was the focus of much
enthusiasm. In the Gulf, we saw super-strong results in the fourth
quarter, and the outlook contnues to be strongboth in actvity and
mix, and even some pricing, said Andy ODonnell, Vice President at
Baker Hughes, Inc. Helge Haldorsen of Statoil is equally bullish on the
Gulf. This year, we have a number of excitng wells coming up on the
producton side, he said. We have enormous investments in the Gulf.
We are ramping up producton, and with our exploraton eforts, we
hope to fnd something big soon. Last year, we found Logan with 1.2
billion barrels in place, so the botom line is that we are in the Gulf for
the long haul and believe the Mpd return per barrel is twice as high as
you get onshore.
Outside of the Gulf, E&P companies express enthusiasm about the
potental of deepwater plays around the world and the ofshore
drilling and subsea capital equipment panelists echo that enthusiasm.
We are seeing a strong internatonal market in all sectors, said Mark
Keller, Executve Vice President of Business Development at Rowan
Companies.
John Gremp, CEO of FMC Technologies, was, like other makers of
subsea equipment, happy to see a strong pickup in tree orders during
2012 and sees strength contnuing into this year. The increase comes
from a number of West Africa projects, he said. Weve got a number
of Angola projects queued up to be awarded, another in Ghana, one in
Equatorial Guinea, and in other places. It looks like West Africa is fnally
startng to break out. A large tree order for Cameron Internatonal
Corp. in Nigeria pointed to higher prices ahead, but Chuck Sledge,
CFO of the company, warned that the pricing on that order refected
the partcular risks Cameron assumes while operatng in Nigeria and
may not refect pricing in other parts of the world. Helge Haldorsen
of Statoil expects lots of good news to come from Africa in the near
future. For us, exploraton is a major growth engine, he said. We
are working on rigs now in Angola presalt, and you should see that
come on in 2013. On the other side of Africa, we have Tanzania where
we are drilling a new well, and one in Mozambique that might be oilier.
To have wells in that acreage this year is very excitng.
E&P FOCUS SHIFTS FROM U.S. ONSHORE PLAYS TO THE GULF OF MEXICO
AND INTERNATIONAL WATERS
This year, we have a number
of excitng wells coming up
on the producton side. We
have enormous investments
in the Gulf. We are ramping
up producton, and with our
exploraton eforts, we hope to
fnd something big soon.
Helge Haldorsen, Vice President
of North American Strategy for
Statoil
10
Panelists also mentoned Mexico, Southeast Asia, and
even the U.K. as areas of increased actvity. The U.K.
sector in the North Sea has blossomed with a new,
sensible tax policy, noted Andy ODonnell of Baker-
Hughes. Brazil, however, remains a queston mark,
although subsea equipment makers expect to see new
orders this year. Brazil is a difcult market, said Chuck
Sledge of Cameron. This year, however, we do expect
to see incremental orders out of Brazil. John Gremp of
FMC Technologies, agrees. Its very hard to predict what
Petrobras will do, but I am more optmistc and think we
will defnitely see not only presalt manifold awards but
additonal tree awards this year, maybe in the frst half.
Drillers are less optmistc but believe that Petrobras will
have to respond to todays ofshore market conditons.
The big change is that Petrobras is facing capital
discipline challenges from the government, said Larry
Dickerson, CEO of Diamond Ofshore Drilling. Theres
a downside for them to cut back in midwater because of
existng producton there. Youve also got renewals in
deepwater coming, and all operatons have been facing
regulatory challenges. I suspect that Petrobras is going
to get stcker shock when they see the rebids. Simon
Johnson of Noble Corp. believes that Petrobras will also
have to adjust its expectatons in order to atract the sort
of drilling partners it needs to move forward. One of the
things people are watching is the terms and conditons
Petrobras puts in the contracts going forward, he said.
They have not changed, and I would argue that they are
out of step with the rest of the world.
Executves across a number of panels at the conference
complained that investors do not appreciate the value of
their internatonal holdings and operatons. For example,
Apache Corp.s Egyptan projects generate generous cash
fows used to fund other operatons, and Anadarko sold
a percentage interest in its Mozambique actvites to
partally monetze their investment and highlight its value.
We dont get the value in our share price for a lot of our
internatonal assets, said Ernie Leyendecker of Anadarko.
This is true partcularly for our deepwater assets. We
are spending 20% of our capital looking for new and large
opportunites around the world in deepwater basins, and
it is partcularly frustratng that the value recogniton
is not there. Howard Thill of Marathon agrees that
investors underestmate the value of internatonal
assetsand their importance to the balance sheet. We
have such a strong balance sheet and are able to fund
resource play growth as well as exploraton because we
have an internatonal portolio that spins of a lot of cash,
he said. The idea that we should spin of our internatonal
operatons because of their low return, that is simply a
misunderstood piece of our business.
Brazil is a difcult market. This year, however, we do
expect to see incremental orders out of Brazil.
Chuck Sledge, Senior Vice President, Finance & CFO
Cameron Internatonal Corporaton
Onshore rig counts have fatened in 2013, but Simmons conference
partcipants were lukewarm on the outlook for onshore service
companies. Panelists described a 2013 outlook for the onshore North
American service segment that was good but not great, with pockets of
pricing pressure in certain areas and business lines. Afer a year where
several E&P panelists reported that they were seeing 10-12% overall
reductons in onshore service costs, larger service companies were
eager to change the subject away from the U.S. unconventonal market
to stronger Gulf and internatonal operatons.
Onshore, as producton matures in some places
and is just getng started in others, pockets of
strength and weakness are occurring throughout
the service segment. The areas of interest are
shifing, said Cindy Taylor, CEO of Oil States
Internatonal. The outlook is cloudy for vertcal
rigs and lower horsepower rigs. Theres nothing
negatve going on in any play; the issue right now is
getng the right equipment to customers in those
plays.
Several players mentoned seeing partcular
pricing sofness in fracking services. Completon
intensity has increased, and that is good for us,
said Josh Comstock, CEO of C&J Energy Services. But there is pressure on pricing in the frack market. The spot markets are
extremely compettve, and we have seen lots of degradaton there in pricing. We think we have seen the botom, though.
Producers back this up, reportng easing service costs in the fracking sector. We have seen a 10-15% drop in frack costs this
quarter in the Eagle Ford, and that speaks to capacity, said Jim Flores, CEO of Plains Exploraton & Producton. What helps
some botom lines puts pressure on others. Most people underestmate the size of our stmulaton equipment business
and that business has fallen of the face of the earth, said Jeremy Thigpen, CFO of Natonal Oilwell Varco. In the second
quarter of 2012, we had our highest backlog ever for stmulaton equipment, but by the end of the year it had dropped of
65%. We are defnitely right-sizing that business.
Stacy Locke, CEO of Pioneer Energy Service, sees a wide variaton in the service outlook among his business segments. On
the producton services side, wireline services, well and coil tubing, the outlook compared to November and December is
improving as rig counts pick up and should be even beter in the second half, he said. On the drilling side, the one change
is in the Permian vertcal market for oilthat changed rather abruptly as some of our major clients have decided to allocate
more to horizontal than to vertcal drilling.
OIL SERVICE: POCKETS OF STRENGTH, POCKETS OF WEAKNESS
The areas of interest are shifing. The outlook is
cloudy for vertcal rigs and lower horsepower rigs.
Theres nothing negatve going on in any play; the
issue right now is getng the right equipment to
customers in those plays.
Cindy Taylor, CEO of Oil States Internatonal
12
Oil & gas and the producton of these two commodites have usually gone hand in
hand in North America. One of the most notable trends on display at this years energy
conference was how divergent the pathways have becomenot only for current prices, but
for future domestc supply growth prospects as well. The worldwide outlook for oil prices is
bright according to the overwhelming majority of panelists, but questons are being raised
about how long the onshore oil boom will last in the U.S.
Meanwhile, natural gas producers chase a bright future that to some is beginning to seem
forever out of reach, given contnued depressed domestc prices. However, midstream and
downstream companies are already prospering from the growing demand for natural gas
that these low prices are encouraging. All conference partcipants agreed a brighter future
is just a mater of tme and patencequalites some companies may possess in more
abundance than others.
Excitement in the energy industry has always revolved around new discoveries. For
the past several years, that enthusiasm has been focused on North America as new
technologies opened up new basins for development and reserve estmates climbed. At the
Simmons conference this year, however, a notceable change in E&P emphasis took place as
panelists worked to shif atenton to discoveries ofshore and overseas.
For the industry as a whole, in North America and around the globe, the outlook is bright,
and well-positoned partcipants in most industry segments are looking forward to healthy
oil prices and growth opportunites in many areas.
NORTH AMERICAN OIL AND NATURAL GAS E&P ON DIVERGING PATHS
Other panelists noted the big switch to horizontal drilling in
the Permian as well. For C&J Energy Services, this is good
news. In the Permian as a whole, a relatvely large porton
of the rig count is stll vertcal, but it is shifing to horizontal,
and doing more stages as well, with multwall pads and
multlaterals per well. All that intensity will drive higher
demand, Comstock said.
Executves with service operatons outside of North
America spoke of improving business and major
opportunites popping up in other parts of the world. For
us, the most notable improvement has come in Australia,
said Cindy Taylor of Oil States Intl. The outlook has been
clouded there by slowing demand growth in China, but
GDP forecasts are up, and we have seen a re-acceleraton
of growth in Australia. Dale Dusterhof, CEO of Trican
Well Service, agreed. I was pleasantly surprised by things
moving ahead more quickly in Australia, he said. In
Russia, we also saw a beter than expected increase in the
growth of horizontal fracturing. We are now doing quite a
few horizontal wells there.

SIMMONS & COMPANY EXECUTIVES
SENIOR EXECUTIVES
Michael E. Frazier
Chairman, President &
Chief Executve Ofcer
mfrazier@simmonsco-intl.com
Anthony P. Banham
Advisory Director
abanham@simmonsco-intl.com
Nicholas L. Swyka
Advisory Director
nswyka@simmonsco-intl.com
CORPORATE FINANCE
HOUSTON
James P. Baker
Managing Director,
Midstream & Downstream
jbaker@simmonsco-intl.com
Jay B. Boudreaux
Managing Director,
jboudreaux@simmonsco-intl.com
Frederick W. Charlton
Managing Director,
Energy Services & Equipment
fcharlton@simmonsco-intl.com
Ira H. Green, Jr.
Managing Director,
Capital Markets,
E&P and Alt. Energy
igreen@simmonsco-intl.com
Mathew G. Pilon
Managing Director,
mpilon@simmonsco-intl.com
Spencer W. Rippstein
Managing Director,
Midstream & Downstream
srippstein@simmonsco-intl.com
Andrew C. Schroeder
Managing Director,
aschroeder@simmonsco-intl.com
Paul R. Steier
Managing Director,
psteier@simmonsco-intl.com
Damon Box
Director, Exploraton & Producton
dbox@simmonsco-intl.com
David C. Newman
Director of Engineering
dnewman@simmonsco-intl.com
Todd A. Parsapour
Director, Energy Services &
Equipment
tparsapour@simmonsco-intl.com
Michael S. Sulton
Director, Midstream &
Downstream
msulton@simmonsco-intl.com
J. Kris Terrill
Director, Energy Services &
Equipment
kterrill@simmonsco-intl.com
SIMMONS & COMPANY
INTERNATIONAL LIMITED
Aberdeen, London, Dubai
Colin I. Welsh
Chief Executve Ofcer (SCIL)
cwelsh@simmonsco-intl.co.uk
Mike Beveridge
Managing Director (SCIL)
mbeveridge@simmonsco-intl.co.uk
Nick Dalgarno
ndalgarno@simmonsco-intl.co.uk
Eddie Leigh
eleigh@simmonsco-intl.co.uk
Craig Lyon
clyon@simmonsco-intl.co.uk
Dan Barnosky
Managing Driector (SCIL)
dbarnosky@simmonsco-intl.co.uk
SECURITIES
HOUSTON
William F. Brit
Managing Director,
Co-Head of Securites
wbrit@simmonsco-intl.com
A. Denney Cancelmo
Managing Director,
Head of Trading
dcancelmo@simmonsco-intl.com
Jef A. Dietert
Managing Director,
Head of Research
jdietert@simmonsco-intl.com
Pearce W. Hammond
Managing Director,
Co-Head of E&P Research
phammond@simmonsco-intl.com
William A. Herbert
Managing Director,
Co-Head of Securites
bherbert@simmonsco-intl.com
David W. Kistler
Managing Director,
Co-Head of E&P Research
dkistler@simmonsco-intl.com
John M. Daniel
Director, Co-Head of Oil Service
Research
jdaniel@simmonsco-intl.com
Brian Gamble
Director, Research
bgamble@simmonsco-intl.com
Ian Macpherson
Director, Co-Head of Oil Service
Research
imacpherson@simmonsco-intl.com
Sean W. Mitchell
Director, Co-Head of
Insttutonal Sales
smitchell@simmonsco-intl.com
David P. Orr
Director, Insttutonal Sales
dorr@simmonsco-intl.com
Mark L. Reichman
Director, Research
mreichman@simmonsco-intl.com
SIMMONS & COMPANY
INTERNATIONAL CAPITAL
MARKETS LIMITED
London
Robert C. Muse
Director, Head of European
Insttutonal Sales (SCICML)
rmuse@simmonsco-intl.com
14
SELECT ACTIVITIES
UPSTREAM OIL & gAS

SELECT ACTIVITIES
ENERgy SERVICES & EqUIPMENT
*Denotes a transacton completed by Simmons & Company Advisory Limited.
16

SELECT ACTIVITIES
MIDSTREAM & DOwNSTREAM
*Simmons & Company International is a member of FINRA/SIPC. Simmons & Company International Limited (SCIL) (Reg. No. SC190220) is authorised and regulated
by the Financial Conduct Authority in the United Kingdom and by the Dubai Financial Services Authority as a Representative Office in Dubai. Simmons & Company
International Capital Markets Limited (SCICML) (Reg. No. 05925082) is authorised and regulated by the Financial Conduct Authority in the United Kingdom.
Simmons & Company Internatonal
700 Louisiana
Suite 1900
Houston, Texas 77002
Simmons & Company Internatonal Limited
Al Fatan Currency House, Tower 2, Level 7
Dubai Internatonal Financial Centre (DIFC)
Dubai
United Arab Emirates
Simmons & Company Internatonal Limited
Simmons House
22 Waverley Place
Aberdeen AB10
1XP Scotland
Simmons & Company Internatonal Capital Markets Limited
6 Arlington Street
London SW1A 1RE
United Kingdom
www.simmonsco-intl.com

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