Energy: The Next Great Opportunity for Maryland

Transcription

1 Energy: The Next Great Opportunity for Maryland Steve Moore Vice President, Strategy & Business Development 12 March 2015

2 The Harvesting of the Marcellus Shale

3 Economic Impact of Gas Production in Pennsylvania Considine, T. J. (2010, July 14). The economic impacts of the Marcellus Shale: Implications for New York, Pennsylvania, and West Virginia. Retrieved from

4 Economic Impact of Gas Production in Pennsylvania

5 Dr. Mileah Kromer on Fracking in PA, NY, & MD Our northern friends have two very different perspectives on fracking. Pennsylvania has embraced the practice, while New York currently imposes a moratorium. To simplify the perspectives: Pennsylvania debates how they should tax and collect economic benefits from fracking; New York debates whether they should permit, and if so, regulate it. The relationship between New York and Pennsylvania in regard to perceptions of hydraulic fracturing is of obvious interest to Maryland. To date, Maryland has taken policy path on fracking similar to that of New York one where concerns about environmental degradation are currently outweighing arguments for economic development. ATK briefed the Marcellus Drilling Commission at the MD Department of Environment in Feb 2014

6 Alternatives to Fracking Moratorium in Maryland Are there alternatives to HVHF (High Volume Hydraulic Fracking)? YES! ATK is looking to bring Aerospace & Defense technology to Oil & Gas

7 Who is the New Orbital ATK?

8 Introducing the New Orbital ATK Innovation Delivered Aerospace Systems Defense Systems The Partner You Can Count On $4.4 Billion Global Aerospace and Defense Systems Company Innovative, Affordable Products for Government and Commercial Customers Launch Vehicles, Propulsion Systems and Aerospace Structures Missile Products, Defense Electronics, Armament Systems and Ammunition Satellites, Space Components and Technical Services 12,500 Employees, Including 4,300 Engineers and Scientists R&D, Production and Test Facilities in 17 States 8

9 Core Values and Guiding Principles Safety, reliability and integrity are our highest priorities, the three absolutes in all our activities. We are also intensely focused on affordability, achieved through continuing investment in innovation and sustained commitment to execution excellence. For our customers, we will always act with integrity and responsiveness, working to earn and maintain their loyalty every day. For our investors, we will manage our business with discipline and deploy its capital to enhance long-term returns to shareholders. For our employees, we will encourage the highest levels of engagement, diligence and creativity, and reward their dedication and teamwork. For our suppliers, we will be honest and fair, seeking opportunities for beneficial collaboration in long-term alliances. For our country, we are proudly patriotic and deeply grateful to those who defend our freedom. In addition, we are an involved and responsible corporate citizen of the communities where we live and work. 9

10 Major Customers and Market Segments Commercial/ International NASA/Civil Government $1.1 Billion (24%) $0.8 Billion (18%) $2.6 Billion (58%) National Security Pro-Forma 2014 Revenue ~$4.4 Billion 10

11 Three Operating Groups and 12 Product Lines Flight Systems Group Space Launch Vehicles Rocket Propulsion Systems Missile Defense Systems Aerospace Structures Defense Systems Group Tactical Missile Products Defense Electronic Systems Armament Systems Ammunition and Energetics Space Systems Group Commercial Satellites Government Satellites Spacecraft Components Space Technical Services 42% 31% 27% Pro Forma 2014 Revenue ~$4.4 Billion 11

12 Extensive Human and Physical Resources Over 12,500 Employees Dedicated to Aerospace and Defense Customers 4,300 Engineers and Scientists 7,250 Manufacturing and Operations Specialists 1,100 Management and Administration Personnel Facilities in 17 States With Over 19 Million Sq. Ft. of R&D, Manufacturing, Test, Operations and Office Space 6.1 Million Sq. Ft. Owned 5.3 Million Sq. Ft. Leased 8.1 Million Sq. Ft. Government Owned 12

13 Flight Systems Group Overview Small-Class Launch Vehicles Medium-Class Launch Vehicles Large-Class Launch Vehicle Propulsion Systems Strategic Missile Propulsion Systems Missile Defense Interceptors Suborbital Targets Commercial Aerostructures Military Aerostructures Annual Sales of About $1.4 Billion Workforce of Approximately 4,500 People Major Operations in Arizona, Utah, Virginia, Ohio, Alabama, and Mississippi 13

14 Space Systems Group Overview Commercial Satellites Scientific Spacecraft Human Space Systems National Security Satellites Advanced Space Systems Space Components Space Engineering Services Research Rocket and Balloon Operations Annual Sales of About $1.2 Billion Workforce of Approximately 2,700 People Major Operations in Virginia, Maryland, California, Arizona, Texas, and Utah 14

15 Defense Systems Group Overview Advanced Tactical Missiles Missile Propulsion Systems Precision-Guided Munitions Aircraft Protection Systems Light Gunships Advanced Gun Systems Medium-Caliber Systems Small-Caliber Ammunition Annual Sales of About $1.9 Billion Workforce of Approximately 4,900 People Major Operations in Maryland, West Virginia, Virginia, Missouri, Minnesota, Arizona, Texas, Florida, and California 15

16 Orbital ATK Elkton Aerial View ORDNANCE MANUFACTURING T200 PROPELLANT MANUFACTURING SAFETY, MAINTENANCE, PROCUREMENT, QUALITY MOTOR MANUFACTURING TESTING SHOP, RECEIVING, INSPECTION Aerial View 2008 [614] MANAGEMENT / ENGINEERING LABORATORY Founded in 1948 rocket motor research, design, development, and production 550 acres, 150 buildings, and 380,000 ft2 of enclosed floor space wholly-owned facility ISO 9001:2000 certified and AS9100 Rev C certified

17 ATK Experience with and Advances in Propellant Well Stimulation

18 Down-hole Fracturing Application ATK and our partner, PPS, have developed a solid rocket motor, propellant-based alternative/augmentation to the current hydraulic fracturing process Solid propellant is ignited generating specified volume of gas creating pressure that fractures the rock Propellant type, amount, and burning rate can be adjusted depending on geological conditions Propellant solution is adaptive and can be readily modified, fabricated, and demonstrated with new formulations based on fracturing requirements Applicable for use in oil, gas, and geothermal wells Re-stimulation of existing wells In concert with hydro-fracking (e.g., reduce breakdown pressures) Substitution for hydro-fracking operations

19 Current Hydraulic Fracturing Process Water usage nominally 3 to 5 million gallons per well

20 ATK s Fracking Procedure ATK s propellant-based procedure requires: No change in current well drilling, casing, and perforation No specialized or modified tools Minimal equipment Short set-up and operations time

21 1 st Generation Solid Propellant Stimulation Tool Environmentally sealed ignition designed tool Pre-machined fracturing segments that ideally provides equal flame spreading and controllably burns the propellant grain completely Flouroelastomer coating provides both well-bore fluid isolation and burn surface control Configuration design is critical to the success of the tool Successfully demonstrated in many applications and down-hole conditions

22 Corollary Benefits Beyond time and production advantages, ATK s propellant-based stimulation technology has the following attributes: Eases competing community demands for (often scarce) water resources Reduces traffic congestion/usage and the need for associated road repairs Smaller operating footprint is more acceptable to environmentally conscious communities Reduction/elimination of chemicals viewed more favorably by communities with concerns regarding impact to their land Reduced infrastructure required in remote or foreign locations Orbital ATK s record of handling, transporting, and operating safety provides additional assurance to hosting communities

23 Ukrainian Experience (1 May 2013) Subject well in Western Ukraine was abandoned for more than 10 years Vertical well depth was >10,000 feet No infrastructure available Demonstration of concept Long-term production data unavailable Partnered with local company and received a purchase order for stimulation of 100 wells in Ukraine >3000 existing wells available In negotiation with one independent Other Ukrainian independents lining up Formation Type: Paleaogen shale Stimulated 3 Intervals m m m Video was shot during retrieval of tool after second zone was stimulated

24 ATK s 2 nd Generation Propellant Stimulation Solution Variable, Longer Action Time Pressure Pulses Features Cartridge-loaded or cast grain Monolithic or multiple formulations Inhibited on all exposed surfaces Opposing grains eliminates propulsive forces Excess throat area to prevent choked flow (subsonic) Imbedded, simultaneous ignition End-burner provides long action time Gen 1 Propellant Gen 2

25 Maryland has Choices to Make Regarding Its Energy Use Maryland s resources to benefit the State and her people or Make excuses about harming the environment Marylanders need the benefits of Maryland s natural resources Maryland has technology available that can provide choices instead of HVHF Orbital ATK is ready to help, but we need support in order to allow us to use and perfect our technology Orbital ATK is seeking a development partner to help Maryland exploit its Marcellus resources and optimize propellant-based fracing