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Names of group members omitted on purpose

Names of group members omitted on purpose. Oil Services Industry. Agenda. Industry Analysis Macro Impacts Hubbert’s Peak Schlumberger Analysis Forecast Analysis Recommendations Q&A - Graduate…S research team. Oil Service Sector.

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Names of group members omitted on purpose

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  1. Names of group members omitted on purpose Oil Services Industry

  2. Agenda • Industry Analysis • Macro Impacts • Hubbert’s Peak • Schlumberger Analysis • Forecast Analysis • Recommendations • Q&A - Graduate…S research team

  3. Oil Service Sector Producers, refiners and marketers of oil, and associated carriers and service contractors. There are two major sectors within the oil industry Upstream The exploration and production of oil and gas Oil and gas operations after the production phase and through to the point of sale, whether it be the gas pump or the home heating oil truck Downstream We are within the Upstream Oil Services sector OS is broken into two major areas: Drilling and Oilfield Services

  4. Oil Service - Services Assist the drilling companies in setting up oil and gas wells. Seismic Testing Transportation Services Directional Services

  5. Oil Service - Drilling Companies that physically drill and pump the oil out of the ground Types of Rigs Land Rigs 5,000 feet to upwards of 30,000 feet

  6. Oil Service Industry Submersible Rigs used for ocean, lake, swamp drilling

  7. Oil Service Industry Jack-ups 'jacked-up' allows it to be above the highest anticipated waves.

  8. Industry facts “Petroleum is the single largest source of energy used in the United States.“ - Department of Energy “About 90% of these products are fuels “ Total Industry revenue amounts to $ 231 Billion “Oil accounts for 40 % of the United States' energy supply and a comparable percentage of the world’s energy supply” “Oil is a scarce commodity but is it still cheap?”

  9. … and a little fiction “There is no such thing as global warming“ “There is plenty of oil to last us for centuries to come“

  10. Real GDP in Major Oil Consumers 11,135 5,062 1,979 1,888 630

  11. Real GDP Growth Rate in Major Consumers 10.10% 8.43% 3.52% 2.62% 1.16%

  12. Oil Consumption in Major Consumers 20,656 7,058 5,360 2,672 India 2,586 Germany

  13. Oil Consumption Growth Rate Largest Growth Rates China = 4.22% India = 3.85%

  14. Shift Caused by Increase in Demand

  15. Average Change in Crude Oil Price

  16. Cheap Oil is it real? http://www.rsoftconsulting.com/hubbert.htm

  17. Hubbert’s Peak Theory • Marion King Hubbert presented paper in 1956 to American Petroleum Institute • “.. fundamental observation that the amount of oil under the ground is finite” • “Peak oil is peaking of production of a particular area” • Early in the curve (pre-peak), the production rate increases due to the discovery rate and the addition of infrastructure. Late in the curve (post-peak), production declines due to resource depletion

  18. Schlumberger: Who are we? Schlumberger is considered the leading oilfield services provider. Founded in 1926 We are trusted to deliver superior results and improved E&P (Exploration and Production), and performance for oil and gas companies around the world

  19. Oil Services Industry Breakdown 9% 13% 32%

  20. Products and services Exploration/Development Drilling Efficiency Seismic Testing Coil tubing - efficient remediation Reservoir evaluation Well Stimulation Production Artificial/Directional Lifts Cementing/Zonal Isolation

  21. Production and cost issues • $619 Million dollars was invested in Research and Development in 2005. (3% operating revenue) • Specialized Training for highly skilled employees (new and existing), equipment (trucks, rigs, etc) • Environmental regulatory adherence

  22. Schlumberger Forecasting Approach • Auto regression to forecast ‘Total revenue’ • Used Research & Development • Researched through Bloomberg since 2000 • Relevant predictors were R&D (qtr-0) – (qtr-6) • R&D (qtr-1) • R&D (qtr-2) • R&D (qtr-3)

  23. R&D Expenditures $ 169,482 M

  24. Revenue Forecast 10% MAPE 35% Increase in R&D TSTATS 1.1 – 3.3 2007 Total Revenue Over 18B

  25. Recommendations • Increase from R&D 3% to 5% of operating revenue • Focus R&D on efficiency drilling and exploration components • Strategizing on alternative energy such as hydro and ethanol

  26. Ultimate Task Goal Desired By Oil Services Industry

  27. Q&A with Graduate…s We are truly a partner to the GLOBE

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