The oil and gas sector is constantly changing. Increasingly uncertain energy policies, geopolitical complexities, cost management and climate change all present significant challenges. EY’s Global Oil & Gas Sector supports a global network of more than 10,000 oil and gas professionals with extensive experience in providing assurance, tax, transaction and advisory services across the upstream, midstream, downstream and oil field sub-sectors.

1. EY Price Point
Global oil and gas
market outlook
Q3 | July 2018

2. Page 2 Q3 | July 2018 EY Price Point: global oil and gas market outlookPage 2
Gary Donald Andy Brogan
EY Global Oil & Gas EY Global Oil & Gas
Assurance Leader Transaction Advisory Services Leader
gdonald@uk.ey.com abrogan@uk.ey.com
Q3 overview
In the second quarter, the three drivers of the recent oil market story (OPEC supply,
North American shale production and demand growth) continued to dominate. OPEC
reached an agreement that provided relative assurance over future production rates
(at somewhat higher levels). There are few signs of structural or economic
disruption; however, the risk of geopolitical disruption is, as always, ever-present. US
President Donald Trump’s withdrawal from the Iran nuclear deal raises questions
over the short- and long-term impact on supply.

3. Page 3 Q3 | July 2018 EY Price Point: global oil and gas market outlookPage 3
?
Q3 theme
► How will pressure from the US Government impact demand for Iranian oil,
supply of Saudi crude and the global supply-demand balance?
► Will continued high oil prices deliver the cash North American operators
require to deliver on expected production growth?
► Can demand growth be sustained despite economic headwinds (tariffs), and
high prices caused by tighter supplies and a strengthening dollar?
The theme for this quarter is clarity. The impact of uncertainties has been
predictable and muted. Multiple upside forces (OPEC production restraint, demand
growth and Venezuelan chaos) have led to higher oil prices, but they remain in a
range where they aren’t disruptive to the world economy, yet support investment.
Of course, questions remain.

4. Page 4 Q3 | July 2018 EY Price Point: global oil and gas market outlookPage 4
Only three LNG projects have been
sanctioned since 2015. There are, however,
signs of renewed interest with developers of
10 projects (total capacity of 92mtpa)
indicating that they are targeting FID by the
end of 2019.
North
American
production
growth
accelerating
Operators have mostly delivered on capital
discipline promises and are able to spend
more because of increasing oil prices.
North American shale production continues
to grow, but logistics bottlenecks are now a
limiting factor.
Trends
OPEC and Russia agreed to increase output
by 1mbpd. Continued decline in Venezuelan
output, and renewed turmoil in Libya mean
that Saudi Arabia and Russia will have to call
on the significant portion of their idle
capacity to meet the target.
OPEC and
Russia agree
to increase
production
Customers of Iranian exports have been
given until November to wind down imports.
The impact on global supply will largely
depend on the actions taken by India and
China who did not cut imports during the
previous sanction regime.
US imposes
sanctions
on Iran
A second
wave of
LNG?
Source: Middle East Institute

5. Page 5 Q3 | July 2018 EY Price Point: global oil and gas market outlookPage 5
Market fundamentals
► Brent and WTI averaged $74.72 and $67.97 per bbl, respectively
throughout the second quarter. Average prices in the second quarter
represent growth of 12% and 8%, respectively, from Q1.
► Brent topped $80/bbl during the quarter amid supply concerns following
President Trump’s withdrawal from the Iran nuclear deal. Prices were
further supported by OPEC production cut compliance, continued decline
in Venezuelan output and conflict in Libya.
► News of increased OPEC production brought price increases toward the
end of the quarter. Production uncertainty may have weighed on markets
prior to the agreement.
Brent hits US$80/bbl Oil markets remain balanced (in the aggregate)
► Markets remain marginally undersupplied. The puts and the takes have been
large, but have almost completely offset each other suggesting successful
market management by the swing supplier.
► Demand growth has been impressive. Notwithstanding electrification of the
energy system, and an increasing share of renewables, oil and gas continue
to fuel the world economy.
► OPEC production declined while North American growth accelerated. The
increased oil price has provided the cash North American operators required
to sustain growth.
► Oil production in other regions continues to be starved of capital. The positive
impact of the oil price increase is offset by long lead times and competition
from other shorter-cycle projects.
55
60
65
70
75
80
85
4/1/2018 5/1/2018 6/1/2018 7/1/2018
US$/bbl
Brent WTISource: EIA
(3.00)
(2.50)
(2.00)
(1.50)
(1.00)
(0.50)
-
Starting
balance
Demand
growth
OPEC North
America
Other End
balance
mbpd
Movement to Oversupply Movement to UndersupplySource: IEA

6. Page 6 Q3 | July 2018 EY Price Point: global oil and gas market outlookPage 6
Market fundamentals
► XXX ► XXX
XXXXXX
► OPEC and Russia have agreed to increase production by around 1mbpd
from 1 July 2018.
► Production increases are likely to come from Saudi Arabia (spare capacity
of 2mbpd), Russia and Iraq.
► In the last year, steep declines in Venezuelan output, as well as reductions
from Mexico and Angola have resulted in OPEC surpassing its production
cut targets (actual reduction of 2.8mbpd vs. a target of 1.8mbpd). It is not
clear what to expect from those countries going forward.
► Despite OPEC’s announcement, oil markets were bullish. The risk of no
deal at all (and less production discipline) is thought to have been priced
into the markets before the meeting.
► In May, President Trump announced his decision to withdraw from the
nuclear agreement with Iran, effectively re-imposing sanctions. Sanction
relief and access to the US banking system had been key to the rise in
Iranian exports.
► Customers of Iran have until 4 November to wind down contracts. Market
participants expect a corresponding decline in supply of between 0.3
and 1mbpd.
► During 2014 (when sanctions were previously imposed), China and India
continued to import Iranian crude, while settling transactions in local
currency. Source: FT and The Hindu
► 70% of Iranian production is currently exported to the EU, China and
India. How they react to US sanctions will determine the impact on global
oil supply.
US sanctions on Iran to impact global supplyOPEC and Russia agree to increase production
0 500 1,000 1,500 2,000 2,500 3,000
Cut in output per agreement
Actual drop in production
Output reductions by OPEC nations (kbpd)
Venezuela Saudi Arabia Russia Mexico Angola Others
Source: EY Analysis of OPEC data
3,000
3,500
4,000
4,500
5,000
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
(‘000sbblperday)
Iran oil production
?
Source: OPEC

7. Page 7 Q3 | July 2018 EY Price Point: global oil and gas market outlookPage 7
0
2
4
6
8
10
12
14
16
18
20
US$/MMBTU
International gas prices
UK NBP Henry Hub Natural Gas Europe Japan LNG
Market fundamentals
North American shale production drives the
global market
Gas market expansion ̶ rising supply and demand
► US-associated gas output hits record levels as oil production from shale
plays continues to rise. Demand from the power sector, and escalating
LNG exports set a floor for US gas prices and support market stability.
► High temperatures led to strong demand for gas from the Asian power
sector. LNG cargoes were sourced from the well-supplied European
market to Asia, where prices were higher.
► The differential between Asian LNG and European prices is expected to
narrow as demand for air conditioning wanes and storage capacity fills.
► Supply will be boosted by the start of commercial deliveries from new LNG
plants that recently came on-stream.
Sources: Thomson Reuters Datastream, Japan's Ministry of Economy, Trade and Industry, World Bank
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
Apr-17 Jul-17 Oct-17 Jan-18 Apr-18
Yearonyearchange(kbpd)
Source: EIA
► US shale oil production continues to surge at an accelerating rate. Year-over
year (“YOY”), output has increased by over 1.5mbpd as at the end of the
second quarter. As recently as six months ago, the YOY production increases
were less than 1mbpd. A year before that, it was less than 500,000bpd.
► All of this has happened despite increasing calls for capital discipline. Thanks
to increasing oil prices, those calls have largely been answered, while capital
spending has increased.
► North American capital spending in Q1 2018 was over 60% higher than Q1
2017. As a percentage of operating cash, spending fell from 258% to 115%.

8. Page 8 Q3 | July 2018 EY Price Point: global oil and gas market outlookPage 8
Futures
Oil markets remain in backwardation.
When compared with the prior quarter, the
futures curve has benefited from near-term
supply concerns predominantly caused by
Donald Trump’s decision to withdraw from
the Iran nuclear deal, OPEC production cut
compliance (supported by continued decline
in Venezuelan output) and conflict in Libya.
Oil market volatility remained steady
throughout the quarter at approximately
30%.
This data is effective as of 22 June 2018.
0
20
40
60
80
100
01/03/2012 01/09/2013 01/14/2014 01/20/2015 01/25/2016 01/27/2017 02/01/2018
CboecrudeoilETF
volatilityindex
Oil market volatility
20
40
60
80
100
120
Nov/12 Feb/14 May/15 Aug/16 Nov/17 Mar/19 Jun/20 Sep/21 Dec/22 Mar/24
$/bbl
Brent futures
Historical Brent Futures curve June 2018

9. Page 9 Q3 | July 2018 EY Price Point: global oil and gas market outlookPage 9
Oil price outlook
Brent:
Brokers’ and consultants’ price estimates ranges and
averages
WTI:
Brokers’ and consultants’ price estimates ranges and
averages
For both crude benchmarks, the
broader sample of banks and
brokers predict, on average,
marginally higher oil prices in 2018
and 2019. The trend is reversed in
the midterm with the outlook of
consultants exceeding that of
banks/brokers.
Consultants focus primarily on the
analysis of a long-term sustainable oil
price, while the banks/brokers balance
their views on the basis of current
market conditions.
Banks and brokers forecast an almost
flat outlook for Brent and WTI at around
US$70/bbl and US$65/bbl,
respectively.
Consultants’ forecasts result in
averages of US$76.4/bbl and
US$73.1/bbl vs. banks’/brokers’
averages of US$66.7/bbl and
US$62.2/bbl in 2022 for Brent and WTI,
respectively.
This data is effective as of 22 June 2018.
US$66.7 US$76.4 US$62.2 US$73.1Brent:
Average price
forecast in 2022
WTI:
Average price
forecast in 2022
Banks/brokers Consultants Banks/brokers Consultants
Source: Bloomberg, banks’/brokers’ reports, consensus economics, consultants’ website
30
40
50
60
70
80
90
100
2018 2019 2020 2021 2022
$perbarrel
Bank/Broker range Consultants range
Bank/Broker average Consultants average
30
40
50
60
70
80
90
100
2018 2019 2020 2021 2022
$perbarrel
Bank/Broker range Consultants range
Bank/Broker average Consultants average

10. Page 10 Q3 | July 2018 EY Price Point: global oil and gas market outlookPage 10
Gas price outlook
Henry Hub:
Brokers’ and consultants’ price estimates ranges and
averages
UK NBP:
Brokers’ and consultants’ price estimates ranges and
averages
With regards to Henry Hub,
consultants forecast (on average)
higher prices than banks/brokers.
The NBP forecasts of banks and
brokers exceed that of consultants.
Banks’ and brokers’ view of the outlook
for Henry Hub is essentially flat with the
increase throughout the forecast period,
representing little more than inflation.
In contrast, consultants’ estimates
reflect a steady upward trend, reflecting
a view on demand growth and
production economics.
NBP estimates for UK NBP are scarce
with only 6 and 4 data points available
from banks/brokers and consultants,
respectively.
Both parties NBP estimates are almost
flat and largely aligned.
This data is effective as of 22 June 2018.
US$3.7 GBP51.9 GBP47.2UK NBP:
Average price
forecast in 2022
Banks/brokers Consultants
Source: Bloomberg, banks’/brokers’ reports, consensus economics, consultants’ website
Banks/brokers Consultants
US$3.2Henry Hub:
Average price
forecast in 2022
2.0
2.5
3.0
3.5
4.0
4.5
5.0
2018 2019 2020 2021 2022
$permmbtu
Bank/Broker range Consultants range
Bank/Broker average Consultants average
25
30
35
40
45
50
55
60
65
70
2018 2019 2020 2021 2022
GBppertherm
Bank/Broker range Consultants range
Bank/Broker average Consultants average

11. Page 11Page 11
Brent oil price estimates
Appendix
Bank/broker 2018 (US$/bbl) 2019 (US$/bbl) 2020 (US$/bbl) 2021 (US$/bbl) 2022 (US$/bbl)
High 84.0 86.0 90.0 85.0 85.0
Average 71.0 69.9 69.3 67.8 66.7
Median 70.3 70.0 70.0 66.1 67.0
Low 64.0 55.0 51.8 52.0 50.0
Source: Bloomberg, Banks’/Brokers’ reports, consensus economics.
Source: Consultants’ websites, Oxford Economics, Wood Mackenzie.
Consultant 2018 (US$/bbl) 2019 (US$/bbl) 2020 (US$/bbl) 2021 (US$/bbl) 2022 (US$/bbl)
High 77.7 82.0 75.8 85.1 90.7
Average 67.6 67.2 68.9 72.7 76.4
Median 68.0 66.3 70.0 71.7 74.7
Low 54.1 58.8 59.0 63.0 70.4
This data is effective as of 22 June 2018.
Q3 | July 2018 EY Price Point: global oil and gas market outlook

12. Page 12Page 12
WTI oil price estimates
Appendix
Bank/broker 2018 (US$/bbl) 2019 (US$/bbl) 2020 (US$/bbl) 2021 (US$/bbl) 2022 (US$/bbl)
High 76.0 80.5 83.0 82.5 81.0
Average 66.1 64.9 65.0 62.5 62.2
Median 66.0 64.0 64.8 61.1 63.0
Low 58.0 53.0 50.0 50.0 48.0
Source: Bloomberg, Banks’/Brokers’ reports, consensus economics.
Source: Consultants’ websites, Oxford Economics, Wood Mackenzie.
Consultant 2018 (US$/bbl) 2019 (US$/bbl) 2020 (US$/bbl) 2021 (US$/bbl) 2022 (US$/bbl)
High 73.1 77.2 71.9 81.1 86.7
Average 63.3 63.4 65.8 69.4 73.1
Median 63.5 63.0 67.5 69.0 72.0
Low 50.6 55.3 54.0 58.0 64.7
This data is effective as of 22 June 2018.
Q3 | July 2018 EY Price Point: global oil and gas market outlook

13. Page 13Page 13
Henry Hub gas price estimates
Appendix
Bank/broker 2018 (US$/MMBtu) 2019 (US$/MMBtu) 2020 (US$/MMBtu) 2021 (US$/MMBtu) 2022 (US$/MMBtu)
High 3.1 3.5 3.6 3.7 3.8
Average 2.9 3.0 3.0 3.1 3.2
Median 2.9 2.9 3.0 3.0 3.2
Low 2.7 2.6 2.7 2.8 2.9
Source: Bloomberg, Banks’/Brokers’ reports, consensus economics.
* Brokers have reported figures in $/mcf. We have used a conversion ratio of 1.037 for mcf conversion to MMBtu.
Source: Consultants’ websites, Oxford Economics, Wood Mackenzie.
* Wood Mackenzie has reported figures in US$/mcf. We have used a conversion ratio of 1.037 for mcf conversion to MMBtu.
Consultant 2018 (US$/mmbtu) 2019 (US$/mmbtu) 2020 (US$/mmbtu) 2021 (US$/mmbtu) 2022 (US$/MMBtu)
High 3.1 3.6 4.0 4.0 4.2
Average 2.9 3.1 3.4 3.5 3.7
Median 2.9 3.0 3.2 3.5 3.8
Low 2.8 2.8 2.9 3.2 3.2
This data is effective as of 22 June 2018.
Q3 | July 2018 EY Price Point: global oil and gas market outlook

14. Page 14Page 14
NBP gas price estimates
Appendix
Bank/broker 2018 (GBP/therm) 2019 (GBP/therm) 2020 (GBP/therm) 2021 (GBP/therm) 2022 (GBP/therm)
High 56.3 61.6 57.1 56.0 58.0
Average 49.5 49.8 49.4 48.7 51.9
Median 51.5 50.4 54.0 53.4 53.7
Low 34.3 35.4 37.3 38.3 42.0
Source: Bloomberg, Banks’/Brokers’ reports, consensus economics
Source: Consultants’ websites, Oxford Economics, Wood Mackenzie.
*Oxford Economics has reported figures in US$/MMBtu. We have used exchange rate forecast by Oxford Economics from USD to GBP.
** Wood Mackenzie has reported figures in US$/mcf. We have used exchange rate forecast by Wood Mackenzie from USD to GBP and mcf to MMBtu conversion ratio of 1.037.
*** GLJ has reported figures in US$/MMBtu. We have used exchange rate forecast by GLJ from USD to GBP.
Consultant 2018 (GBP/therm) 2019 (GBP/therm) 2020 (GBP/therm) 2021 (GBP/therm) 2022 (GBP/therm)
High 55.0 50.0 51.9 53.8 55.0
Average 46.6 44.5 43.2 45.3 47.2
Median 45.1 45.2 44.7 45.7 46.9
Low 41.4 37.3 31.5 36.2 40.1
This data is effective as of 22 June 2018.
Q3 | July 2018 EY Price Point: global oil and gas market outlook

15. Page 15Page 15
Key contacts
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About EY
The oil and gas sector is constantly changing. Increasingly uncertain
energy policies, geopolitical complexities, cost management and
climate change all present significant challenges. EY’s Global Oil & Gas
Sector supports a global network of more than 10,000 oil and gas
professionals with extensive experience in providing assurance, tax,
transaction and advisory services across the upstream, midstream,
downstream and oil field subsectors. The Sector team works to
anticipate market trends, execute the mobility of our global resources
and articulate points of view on relevant sector issues. With our deep
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© 2018 Ernst & Young LLP.
All Rights Reserved.
EYG no. 010347-18Gbl
1803-2623867
ED None
This material has been prepared for general informational purposes
only and is not intended to be relied upon as accounting, tax or other
professional advice. Please refer to your advisors for specific advice.
ey.com/oilandgas
Important notice
Price outlook data incorporated within this publication is effective as of 22 June 2018. Given the rapidly evolving nature of the market and views of market
participants, analysis can become quickly outdated. It should be noted that EY analysis is not for the purpose of providing an independent view of the outlook
for oil and gas prices. Instead, we are collating the views of market participants.
Price outlook data should not be applied mechanistically. Instead, careful consideration should be given to the purpose of any value assessment with price
forecasts assessed in the context of the other key assumptions, such as, resources/reserves classification, production rates, discount rates and cost
escalation rates together with an appreciation of the key sensitivities in any such analysis.
Adi Karev
EY Global Oil & Gas Leader
+852 2629 1738
Derek Leith
EY Global Oil & Gas Tax
Leader
+44 12 2465 3246
Andy Brogan
EY Global Oil & Gas
Transactions Advisory
Services Leader
+44 20 7951 7009
Jeff Williams
EY Global Oil & Gas
Advisory Leader
+1 713 750 5916
• Gary Donald
EY Global Oil & Gas
Assurance Leader
+44 20 7951 7518
•