1. U.S. ENERGY TODAY For the U.S. Mexico Chamber of Commerce Tuesday, August 26, 2014 1 EMIL PEÑA

2. Industry Overview 2

3. Industry Overview- Quick Facts  Oil and gas extraction is a mature, stable market in the United States  Trends include rising global demand from emerging economies, increased crude oil output from offshore drilling, increased natural gas production from new fields, and pressures from regulations and alternative energy growth- GLOBAL EVENTS LIKE ARAB SPRING AND RUSSIAN AGRESSION  New technologies have allowed increased exploration of previously unattainable resources  Developing LNG and GTL Technologies for MAX VALUE 3 Industry Trends The oil and gas extraction industry benefits from rising oil and gas prices and strong global demand Sources: 1. Deutsche Bank Markets Research. “Oil & Gas for Beginners.” 25 January 2013. 2. Credit Suisse. Oil & Gas Primer. September 2011. 3. IBISWorld Industry Reports. Oil Demand Correlation with Real GDP Growth (1969 – 2008) Industry Composition  The oil and gas drilling and extraction industry is worth $319.5 billion in the United States  Crude oil makes up 58.4% of the market while natural gas represents 41.6%  The United States sends 59% of its oil and gas exports to Canada and 19% to Mexico  Texas, Oklahoma, and Louisiana contain the largest amount of industry output and revenue in the continental United States U.S. Oil & Gas Drilling and Extraction Market Segmentation

4. We Are Booming 4 Biggest Innovation in the 21 st Century- Shale Gas and Associated Tight Oil U.S. has abundance, legal structures (private mineral ownership) and the political will to continue Impacting Global Events- Impacting Europe’s and China’s Manufacturing Competitiveness and Middle Eastern Energy Dominance

5. The Unconventional O&G Revolution Major U.S. Fields 5 Source: EIA, Drilling Productivity Report

6. The Unconventional O&G Revolution Hydraulic Fracking 1947-2014 6 Around Since 1947 and in Texas Since 1980s George Mitchell, Jack Stanley and others in Tight Sands and Horizontal Drilling The Current Boom Started in 2008 and Shale Gas now 44% of Domestic Production and Tight Oil is Up 56% Surpassing 8 of the OPEC 12 Countries George Mitchell- Father of Fracking

7. Shale’s Global Impact- There’s a New Sherriff in Town Europe to China; Russia and Norway 7 Cheap U.S. Domestic Gas and Lack of Demand has Sent Nat Gas to Global Markets (Europe; Japan; India others) But U.S. Utilities and Manufacturing Converting and Operators Continuing to Drill- Prices Predicted NOT TO RISE and JOBS RETURNING ONSHORE

8. Shale’s Future Impact- North South Axis Canada, U.S., Mexico and Beyond 8 Arab Capitals Quake that East-West Tie is Broken Reducing U.S. and Hemispheric Dependency through Increased Production, Transportation- Keystone and More Fuel Efficiency Next Revolution is in the Politics of Energy- North and South

9. The Gretzky Effect Skate to Where the Puck is Going to Be 9 Liquefied Natural Gas (LNG)- Domestic and Global Export Gas To Liquids (GTL)- Increasing the Value of Nat Gas by Rescuing Stranded Resource and Helping the Environment Thirsty for oil, energy companies wasting less valuable byproduct: natural gas- 8/23/14 Amid pipeline shortage in rural South Texas, wells flaring natural gas directly into the air

10. The Shameless Plug Energy Safety 10 Better Knowledge Better Discipline in Energy Safety Both On and Offshore Predict, Avoid and Better Manage Risk Providing World-Class Support for Mishap Prevention (based around NASA Safety Systems) VS