Oil. Gas. Market Notes Activities. Contents

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1 Oil Gas Market Notes Contents 1 A Look Back at 215 and a Glimpse into Natural Gas Market Charts 1 Oil Market Charts 14 Legislative and Regulatory Highlights 16 About Navigant A Look Back at 215 and a Glimpse into 216 If, like a number of us here at Navigant, you have spent over 4 years in the oil & gas industry, you might be inclined to say: I ve seen it all! But that phrase flies in the face of the fact that every year brings something new. The year 215 was no exception. In fact, it may have been the grandest example thus far of how new and unexpected events can have a profound impact. In this month s Oil & Gas Market Notes, we look at what made 215 stand out as the year everything changed and then we discuss what the forecasts for 216 and beyond look like as a result of everything changing. First, some will say that most of the changes can be drawn back to a singular occurrence less than a decade ago the remarkable emergence of shale development in the United States. While it is commonly taken for granted these days, the shale revolution is not yet ready for 6 th grade. And 215 may well be pointed to as the year that it all came together (or, to some, the year that it all at least prices came crashing down). Below, we take a brief look at some of the major occurrences in 215 and what they may mean for the future. 215 Activities Production increases: Both oil and gas saw new production adds over much of the year (see Figure 1 and Figure 2). Factors such as weak demand based on more normal weather patterns seemed to signal a justifiable slowdown in production. Yet, well inventory, a delay in significant rig reductions (owing to the hope that the price decrease would be short-lived), and the return to production of international producers such as Libya and Iraq combined to add to record U.S. and world production totals in 215. (Note, though, that the global market is not the focus of this article.) FIGURE 1 U.S. DRY GAS PRODUCTION Source: U.S. Energy Information Administration

2 Demand and storage stagnation: Demand, while growing modestly in the electric generation space both domestically and abroad, is being offset by growth in renewables and efficiency gains on a variety of fronts, including residential and vehicle consumption. Most recently, demand is also being offset by an El Nino weather pattern providing a much warmer than usual start to the winter heating season in North America (see Figure 3). Natural gas storage exceeded 4 TCF at the end of the injection season near the maximum effective storage capacity in the United States while withdrawals have been minimal so far. Storage levels are over 5 BCF higher than last year at this time. If that overage continues through the remainder of the withdrawal season (implying a normal winter from here forward), we would given a similar injection in 216 as that in 215 exceed the storage capacity of all facilities based on the previous effective maximum storage readings for each facility. FIGURE 2: U.S. OIL PRODUCTION Source: U.S. Energy Information Administration FIGURE 3: U.S. ELECTRIC GENERATION BY FUEL SOURCE Source: U.S. Energy Information Administration 2

3 Price collapse: Few foresaw the extent of 16 the pricing collapse, 14 particularly in oil, that has had some if indirect 12 impact on gas pricing, 1 even without direct 8 competition (at least 6 within North America). 4 The combination of 2 increased production, squishy demand, Organization of the Petroleum Exporting Countries (OPEC) actions (or later in the year, inaction), improved efficiencies and renewables growth, fuller than average storage, and several other factors overcame the volume gains that natural gas achieved versus coal and oil, particularly in the electric generation space. This was an excellent example of the perhaps overused term, a perfect storm. At the time of this writing, natural gas at Henry Hub traded in December 215 priced lower than any time in almost 2 decades (see Figure 4 and Figure 5) and 2-year futures strips were down about one-third year-over-year (see Figure 6). US $ / MMBtu FIGURE 4: NYMEX MONTHLY HENRY HUB NATURAL GAS PRICES Source: Navigant, Ventyx FIGURE 5: HENRY HUB NATURAL GAS PRICE Source: Navigant, Ventyx FIGURE 6: TWO YEAR DEC. NYMEX STRIPS, 214 AND 215 Source: Navigant, Ventyx 3

4 No surprise here given recent activity, but the actual magnitude of the changes is attention grabbing. Even prices of delivered liquefied natural gas (LNG) to Asia in the global market are down to their lowest level in 5 years (see Figure 7) just when exports from the United States are expected to ramp up. Looking Forward: Navigant s Late 215 Reference Case The year 216 is as likely to produce newsworthy happenings as any year in recent history. Setting aside politics (domestic and foreign) for now, we start by looking at Navigant s most recent U.S. production, market, and price forecasts for natural gas. The next series of figures shows some of the results from Navigant s Mid-Year 215 Pricing Outlook. The New York Mercantile Exchange (NYMEX) futures forecast for Henry Hub pricing shows a steady climb from current levels (Figure 8), though it is noteworthy that near-term prices have continued to slip in the couple of months since the forecast was completed. While the futures market has not always been helpful in its market projections, Navigant s most recent Pricing Outlook prepared last fall indicates that we will not see pricing above $5/MMBtu again for 15 years. This view indicates a structural market shift, with gas prices softer due to abundant supply and strong balances of supply to demand. $/MMBtu FIGURE 7: JAPAN LNG SPOT PRICES $2 $18 $16 $14 $12 $1 $8 $6 1/1/21 1/1/211 4/1/211 7/1/211 1/1/211 1/1/212 4/1/212 7/1/212 1/1/212 1/1/213 4/1/213 7/1/213 1/1/213 1/1/214 4/1/214 7/1/214 1/1/214 1/1/215 4/1/215 7/1/215 1/1/215 Source: Navigant, Ministry of Economy, Trade and Industry FIGURE 8: HENRY HUB PRICE FORECAST MID-YEAR 215 Source: Navigant Mid-Year 215 Natural Gas Market Outlook 4

5 In great part, current soft gas prices are symptomatic of the slow growth in gas demand across North America for the various gas market segments, as shown in Figure 9. While electric power from natural gas continues its steady rise, the growth in the other segments is almost negligible. As mentioned earlier, energy conservation, growth in renewables, and energy efficiency gains all contribute to Navigant s overall moderate growth projections for natural gas going forward. But even with U.S. demand growing conservatively, Figure 1 shows substantial continued growth in natural gas supply in the United States. The incremental supply will be relied upon by our neighbors to both the north and south. It will also increasingly be used for the export of LNG into the world market from North American export facilities with exports beginning at about the time you are reading this. The extent of gas supply growth in the United States even factoring in the growth in nontraditional export markets is large enough to keep a lid on U.S. gas prices in the near future. Beyond this, we can look to the continued conversion of coalgenerated electricity to that from gas, a resurgence of industry and manufacturing, increased natural gas exports to Mexico, the introduction of crude oil exports from the United States, and the longawaited inaugural cargos from the first U.S.-based LNG export facility (as early as January 216) to bolster demand. But even while we look to these positive growth signs, we must temper expectations by recognizing that other factors, such as forecast FIGURE 9: U.S. DOMESTIC NATURAL GAS DEMAND (EXCLUDES EXPORTS) Source: Navigant Mid-Year 215 Natural Gas Market Outlook FIGURE 1: U.S. NATURAL GAS SUPPLY (exports to be netted from production) Source: Navigant Mid-Year 215 Natural Gas Market Outlook record gas storage retained inventory volumes at the end of this withdrawal season, are likely to prevent any significant price growth so noted in Navigant s forecasts. Oil is experiencing similar challenges, notably the high continuing U.S. and OPEC production numbers, a lack of storage capacity, and output increases. 215 can be described as a challenging year for the North American natural gas industry. Despite the challenges, a threshold event occurred in April 215, when the U.S. Energy Information Administration (EIA) reported that U.S. net generation by natural gas exceeded net generation by coal with gas at a 31% market share and coal at 3%. While the annual numbers are not yet in, this phenomena occurred over much of the summer peak period and may yet show 5

6 where gas displaced coal for top slot in the electric generation market for all of 215. A direct result of the comparative economics of gas and coal prices is that gas prices now compare favorably to coal prices in important market regions in the country to the degree that new coal generation capacity being built in the country is very unlikely. This development is not a consequence of new government energy policy that has proven difficult to enact. Rather, it is a consequence of market conditions wherein gas now competes favorably on price with coal for electric generation. Setting the Stage The stage has been set in the future for new environmental regulations in the Clean Power Plan (CPP) that was announced by President Barack Obama on August 3, 215 as an initiative by the U.S. Environmental Protection Agency (EPA) to cut carbon pollution from existing power plants in the United States. The rule was finalized on October 23, 215. As a clear and long overdue policy of the U.S. government, much hope is being placed on the CPP to reduce carbon emissions, as the plan calls for individual states to create their own plans for emission reductions. While the CPP sets up a framework for implementation, fundamental aspects of the plan do not come into effect for 5 years (221) or more. As it stands, the CPP is expected to have a major continuing impact upon the renewables industry, where growth has already been impressive. It is also expected to be positive for the natural gas sector, where the natural gas electric generation market share is projected to rise to 41% by 23 while coal declines to 22% by Navigant s estimates. Key uncertainties of the CPP relate to how individual states will seek to implement the plan to incorporate energy efficiency and renewables into their portfolios. The crucial positive for the natural gas industry is that as the CPP is enacted, it confirms what the market has been indicating for some time that natural gas is set to play a much larger role in reducing emissions in the United States. With the recent end of the Paris Climate Change Conference in mid-december 215, it also appears that natural gas needs to play a much larger role toward reducing emissions in the global market. As the importance of the global community for North America becomes more important with its increasing connection with the global market by pipeline and via LNG shipments by water, global developments came increasingly to the forefront in 215. Navigant expects this development to only increase in the coming years. We are in for a challenging business environment for the foreseeable future, with 216 perhaps bearing the brunt of the effects. A year-over-year comparison in 12 months time will no doubt show new challenges and Navigant will continue to work with our clients to reach the best understanding of the still developing natural gas future. How Can Navigant Help? Using its in-depth industry knowledge and experience, Navigant s Oil and Gas consulting practice specializes in helping clients understand the issues, develop solutions, and execute on their strategy. Our team has deep experience in helping to drive value in highly volatile times, through upstream, midstream, and downstream operations. Gordon Pickering and Bob Gibb About the Author» Gordon Pickering is a Director and Bob Gibb is an Assistant Director in Navigant s Energy Practice. The opinions expressed in these article are those of the authors and do not necessarily represent the views of Navigant Consulting, Inc. 6

7 Natural Gas Market Charts MONTHLY GAS INDEX PRICE DAILY GAS PRICE $/MMBtu $2 $18 $16 $14 $12 $1 $8 $6 $4 $2 $ Dec-13 Apr-14 Aug-14 Dec-14 Apr-15 Aug-15 Dec-15 $/MMBtu $22 $2 $18 $16 $14 $12 $1 $8 $6 $4 $2 $ Nov-13 Mar-14 Jul-14 Nov-14 Mar-15 Jul-15 Nov-15 Chicago Opal New York AECO-C SoCal Gas Henry Hub Sources: Navigant / ICE New York So Cal Gas Henry Hub Chicago Opal Sources: Navigant / ICE Monthly index gas prices increased 9%, with Henry Hub at $2.21/ MMBtu for December versus $2.3/MMBtu for November. The December 215 price was below the December 214 price of $4.29/MMBtu by $2.8/MMBtu. The daily spot prices ended November down 2% versus the end of October, with Henry Hub at $2.6/MMBtu versus $2.1/MMBtu. MONTHLY PRICES: OIL AND NATURAL GAS GULF COAST NYMEX FUTURES SETTLEMENT PRICES AT CLOSE $18 $16 $14 $3. $/MMBtu $12 $1 $8 $6 $4 $/MMBtu $2.5 Oct Nov Dec $2 $ Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 $2. Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 WTI (Cushing, OK), Crude Oil Henry Hub - Natural Gas Sources: Navigant / NYMEX Sources: Navigant/NYMEX The most recent gas/oil price ratio decreased to 2.9 times, with Henry Hub natural gas price at $2.21 versus WTI crude oil price at $6.42. The ratio one year prior was 2.8 times. The average 12-month strip price was essentially unchanged (down 1%) at $2.44/MMbtu for the strip starting December 215, versus $2.46/MMbtu for the November strip. 7

8 Natural Gas Market Charts U.S. POPULATION-WEIGHTED HDD MONTHLY U.S. STORAGE ACTIVITY CDD 2 15 Bcf Degree days for the current month are projected from weekly degree days to date. Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 NOAA Normal Actual Sources: Navigant / NWS CPC -1, -1,25 Values above zero represent months with net injections. Values below zero represent months with net withdrawals. Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct 215/216 28/29 29/21 21/ / / / /215 Sources: Navigant / EIA The heating season began with heating degree days at 15% below normal. The withdrawal season began with net total injections in November at 79 Bcf, versus 48 Bcf of withdrawals normally. U.S. GAS STORAGE 4,5 4, 3,5 3, CANADA GAS STORAGE Bcf 2,5 2, 1,5 1, Bcf Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Range (25-214) Sources: Navigant / EIA Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Range (25-214) Sources: Navigant / Enerdata U.S. storage inventories were at an all-time high for the end of November at 3,956 Bcf, 11% above the average of the prior ten years at this time. The delayed start of the Canadian withdrawal season put Canadian storage inventories at 683 Bcf, equal to or higher than nine of the last ten years at this time. 8

9 Natural Gas Market Charts U.S. DRY GAS PRODUCTION U.S. MONTHLY NATURAL GAS DEMAND Bcf/day Bcf/d Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 4 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Sources: Navigant / EIA Sources: Navigant / EIA U.S. dry gas production remained steady at 75.6 Bcf. U.S. gas demand continued strong, with demand for the month of November at 76.8 Bcf, higher than nine of the ten prior years at this time. U.S. WELLHEAD SHALE GAS PRODUCTION U.S. TEMPERATURE OUTLOOK Bcf/day Nov-14 Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15 Utica Marcellus Eagle Ford Bakken Woodford Fayetteville Barnett Shale Haynesville Other Sources: Navigant / LCI U.S. shale gas production reached an all-time high at 42.7 Bcfd in November. The temperature outlook is for above-normal temperatures west of the Rockies, and across the northern and central U.S. through the Midwest to the Northeast and Mid-Atlantic. Below normal temperatures are favored for most of New Mexico, Texas and Louisiana. 9

10 Oil Market Charts SPOT CRUDE PRICES ICE BRENT FUTURES CURVE $ / bbl 6 4 $ / bbl Jan-1 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15-2 Brent WTI Brent-WTI spread Sources: Navigant / U.S. EIA 42 4 Nov-15 Feb-16 May-16 Aug-16 Nov-16 Oct 1 Nov 2 Dec 1 Sources: Navigant / Bloomberg Crude prices have plunged 6% from June 214 levels to reach 6-year lows. Prices averaged $44/bbl (Brent) and $42/bbl (WTI) in November 215. The average 12-month strip price at the beginning of December was $48/bbl, a 1% fall from a month ago. 12 OPEC & NON-OPEC OIL PRODUCTION +5. YEAR-ON-YEAR CHANGE IN OIL PRODUCTION Million barrels per day Jan-1 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 OPEC Non-OPEC Sources: Navigant / U.S. EIA / IEA Million barrels per day Jan-11 Jan-12 Jan-13 Jan-14 Jan Non-OPEC OPEC World Sources: Navigant / U.S. EIA / IEA Global oil production increased from 95.1 million barrels per day a year ago to an estimated 96.9 million barrels per day in October 215, of which 39% was supplied by OPEC. Oil production growth in recent years has been led by non-opec countries, particularly the U.S. 1

11 Oil Market Charts U.S. OIL PRODUCTION OIL PRODUCTION IN KEY U.S. REGIONS 14 2,2 12 2, 1,8 Million barrels per day Thousand barrels per day 1,6 1,4 1,2 1, Jan-1 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Federal GoM Alaska California Texas Other Lower 48 NGLs Other Sources: Navigant / IEA In the United States, oil production climbed by 3% over the year to an estimated 12.7 million barrels per day in October 215. However, production has fallen 4% since April. Jan-1 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Bakken Eagle Ford Marcellus Niobrara Permian Utica Sources: Navigant / U.S. EIA In November 215, oil production reached an estimated 2 million barrels per day in the Permian but continued to dip in other regions. Eagle Ford and Niobrara are both down 2% from their peaks earlier in 215. OIL-DIRECTED RIG COUNT BY REGION U.S. RIG COUNT 1,8 1,6 1,4 2,5 2, 1% 8% Oil-directed rigs 1,2 1, Rigs 1,5 1, 6% 4% Oil-directed % of rigs 2 5 2% Jan-1 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Latin America Europe Africa Middle East Asia Pacific Canada U.S. Sources: Navigant / Baker Hughes % Jan-1 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Oil Gas Misc % Oil (right) Sources: Navigant / Baker Hughes Rig counts have continued to follow oil prices downwards. The U.S. hit a fresh low of 524 oil rigs in December, a level last seen in May % of U.S. rigs were oil-directed at the start of December. 11

12 Oil Market Charts OECD & NON-OECD OIL CONSUMPTION YEAR-ON-YEAR CHANGE IN OIL CONSUMPTION Million barrels per day Million barrels per day Q11 1Q12 1Q13 1Q14 1Q Q1 1Q11 1Q12 1Q13 1Q14 1Q15 OECD Non-OECD Sources: Navigant / IEA -1.5 OECD Asia Middle East Americas FSU Africa Europe World Sources: Navigant / IEA Global oil consumption increased from 93.2 million barrels per day in Q3 214 to an estimated 95.3 million barrels per day in Q3 215, of which 49% was consumed by OECD countries. Oil demand growth in recent years has been led by non-oecd countries, particularly in Asia (e.g. China). Million barrels OECD COMMERCIAL STOCKS OF CRUDE & PRODUCTS 3, 2,95 2,9 2,85 2,8 2,75 2,7 2,65 2,6 2,55 2,5 Jan Mar May Jul Sep Nov range average Sources: Navigant / U.S. EIA / IEA Million barrels CRUDE STOCKS AT CUSHING, OKLAHOMA Jan Mar May Jul Sep Nov range average Sources: Navigant / U.S. EIA OECD commercial inventories reached an estimated 2,97 million barrels of crude and products in September 215, remaining 9% above the five-year average. Crude inventories at the Cushing hub (the delivery point of the WTI contract) totalled 59.4 million barrels in early December, remaining 66% above the five-year average. 12

13 Oil Market Charts INDICATIVE REFINING MARGINS EU CARBON ALLOWANCE PRICES $ / bbl Jan-1-2 Jan-11 Jan-12 Jan-13 Jan-14 Jan NW Europe Light Sweet Cracking Sources: Navigant / IEA / KBC US Gulf Coast Heavy Sour Coking Singapore Medium Sour Hydrocracking EUR per tonne Jan-1 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Sources: Navigant / Bloomberg At the start of November 215, indicative refining margins were $6.26/bbl for NWE light sweet cracking, $1.71/bbl for USGC heavy sour coking and $6.14/bbl for Singapore medium sour hydrocracking. EU carbon allowances have recovered to above 8/tonne since the lows of April U.S. ETHANOL RIN PRICES 1.2 U.S. BIODIESEL RIN PRICES.8 1. $ per gallon.6.4 $ per gallon Oct-14 Dec-14 Feb-15 Apr-15 Jun-15 Aug-15 Oct-15 Dec RIN Sources: Navigant / Bloomberg. Oct-14 Dec-14 Feb-15 Apr-15 Jun-15 Aug-15 Oct-15 Dec RIN Sources: Navigant / Bloomberg The value of ethanol RINs rebounded dramatically with the EPA s announcement of final volume requirements under the Renewable Fuel Standard programme. Biodiesel RINs also rebounded in value thanks to the EPA s announcement. 13

14 Legislative and Regulatory Highlights Appalachia / Northeast FERC Approves Dominion Transmission Lebanon West II Project On November 19, the Federal Energy Regulatory Commission granted authorization to Dominion Transmission, Inc. to construct and operate its proposed Lebanon West II Project in Ohio and Pennsylvania. The project will add 13 MMcfd of additional firm transport from Dominion s existing interconnection with Mark West Liberty Bluestone in Butler County, Pennsylvania to the interconnection with Texas Gas Transmission in Warren County, Ohio. All of the project capacity is subject to a binding precedent agreement with R.E. Gas Development, Ltd for a term of 2 years. FERC Approves Tennessee Pipeline s Northeast Upgrade Again on Remand On November 19, the Federal Energy Regulatory Commission issued an Order on Remand affirming its positive environmental review and project approval of Tennessee Gas Pipeline s Northeast Upgrade and three other gas transport projects. The Court of Appeals for the D.C. Circuit remanded the case to FERC for consideration of the cumulative environmental impacts of the four projects on the eastern portion of the Tennessee 3 Line. FERC s initial review had segmented the four projects into separate analyses. NEXUS Pipeline Files Application with FERC for Project Construction and Operation On November 2, Spectra Energy Corp. and DTE Energy Co. filed an application with FERC for approval to construct and operate the proposed NEXUS pipeline project linking Appalachian Basin gas resources with Midwest and Canadian markets. The project, consisting of over 25 miles of new 36-inch pipeline to Ypsilanti, Michigan plus leased capacity on Texas Eastern, DTE, and Vector pipelines, would add 1.5 Bcfd of additional firm capacity to Ohio, Michigan and Dawn, Ontario from Marcellus and Utica Shale production. The target in-service date is November, 217. Tennessee Pipeline Files with FERC for Northeast Energy Direct Project Approval On November 2, Kinder Morgan s Tennessee Pipeline filed an application with FERC for approval to construct and operate its proposed Northeast Energy Direct (NED) project linking New England demand centers with Marcellus and Utica Shale production in Pennsylvania. The Supply Path component of the project would add 1.2 Bcfd of capacity from Tennessee s 3 Line in Pennsylvania to Tennessee s 2 Line and an Iroquois Gas Transmission interconnect at Wright, New York. The Market Path would add 1.3 Bcfd of capacity between Wright and Dracut, Massachusetts, along with laterals in Massachusetts and New Hampshire, and a loop in Connecticut. Precedent agreements to date total 75 MMcfd on the Supply Path, and 55 MMcfd on the Market Path. The targeted inservice date is November,

15 British Columbia Alberta Province of Alberta Ushers in Climate Change Plan to Phase Out Coal-Fired Generation On November 22, Alberta Premier Rachel Notley announced the government s climate change program, the Climate Leadership Plan, targeting the phase out coal-fired generation by 23. In addition, the Plan will institute a cap on oil sands industry emissions, and increase the proportion of the province s GHG emissions subject to carbon pricing. The government expects coal-fired generation, which currently produces 17 percent of Alberta s GHG emissions, to be replaced one-third by natural gas and two-thirds by renewables. Oil sands plants will be subject to a limit of 1 million tons of CO2 emissions per year (allowing some growth versus current emissions of 7 million tons), and will be subject to the carbon tax that will reach $3 per ton of GHG emissions in 218, then be escalated. NEB Approves Exports by Cedar 1 LNG Project On November 26, the National Energy Board issued a Letter Decision approving the application of Cedar 1 LNG Export Ltd. to export natural gas in the form of LNG totaling 7,558 Bcf over the course of a 25-year term. The approved export point will be the proposed project in the Northern Douglas Channel near Kitimat, British Columbia. The NEB determined that the quantity of gas to be exported is surplus to Canadian needs. Two other applications by Cedar entities are still outstanding. Ontario Province of Ontario Bans Coal-Fired Electric Generation On November 23, the Ontario Ministry of the Environment and Climate Change announced passage of legislation to permanently ban the remaining coal-fired electricity generation in the province. Following legislation in 27, all coal-fired generation has ceased from the government-owned Ontario Power Generation. Under the new Ending Coal for Cleaner Air Act, all coal-fired electric generation in the province will be prohibited upon the effective date of the legislation. 15

16 Contacts Lee Laviolette, Managing Director Fannin St. Suite 245 Houston, TX 771 Gordon Pickering, Director Iron Point Circle Suite 225 Folsom, CA 9563 Bob Gibb, Associate Director San Jacinto Suite 9 Austin, TX 7871 Nick Allen, Director +44 () nick.allen@navigant.com 5th Floor, Woolgate Exchange 25 Basinghall Street London EC2V 5HA United Kingdom navigant.com is a publication of Navigant s Global Oil & Gas Group. Navigant s newsletter focuses on the North American oil and natural gas market serving utilities and public entities, independent power producers, natural gas producers, pipelines, LNG developers, large industrial end-users, and financial services companies. Navigant s oil and gas experts provide market intelligence, strategic insight, strategy development and implementation, and operational excellence services for our clients. About Navigant s Global Energy Practice Navigant s Global Energy Practice includes more than 4 experts focused on issues across the entire energy value chain, including renewables, climate change, energy efficiency, demand response, emerging technologies, global oil and gas, generation, resource procurement, transmission, markets, performance improvement, fuel sourcing, rates, and regulation. The Practice also provides energy market research reports in the areas of clean technologies, smart grid, and emerging energy-related markets. More information about Navigant s Energy Practice can be found at navigant.com/energy. About Navigant Navigant Consulting, Inc. (NYSE: NCI) is a specialized, global professional services firm dedicated to assisting clients in creating and protecting value in the face of critical business risks and opportunities. Through senior level engagement with clients, Navigant professionals deliver expert and advisory work through implementation and business process management services. The firm combines deep technical expertise in Disputes and Investigations, Economics, Financial Advisory and Management Consulting, with business pragmatism to address clients needs in highly regulated industries, including Construction, Energy, Financial Services and Healthcare. More information about Navigant can be found at navigant.com. 216 Navigant Consulting, Inc. All rights reserved. Navigant Consulting is not a certified public accounting firm and does not provide audit, attest, or public accounting services. See navigant.com/licensing for a complete listing of private investigator licenses. 16