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Home , EOG Resources, Greater Houston

April 2016

Houston economic outlook Presented by: Patrick Jankowski Senior Vice President, Research Greater Partnership

HoustonHouston AreaArea ProfileProfile

• 9 Counties • 125+ Cities and towns • Most Populous • Harris • City of Houston Fourth Most Populous City

Population Estimates, U.S. Cities Residents added Residents 7/1/13 to Rank Metro Area July 1, 2014 7/1/14 1 New York, NY 8,491,079 52,700 2 Los Angeles, CA 3,928,864 30,924 3 Chicago, IL 2,722,389 82 4 Houston, TX 2,239,558 35,752 5 , PA 1,560,297 4,245 6 Phoenix, AZ 1,537,058 24,616 7 , TX 1,436,697 24,931 8 San Diego, CA 1,381,069 21,225 9 , TX 1,281,047 20,322 10 San Jose, CA 1,015,785 11,964 Source: U.S. Census Bureau Fifth Most Populous Metro

Population Estimates, U.S. Metros Population Change Since Rank Metro Area As of 7/1/15 4/1/10

1 New York 20,182,305 614,895 2 Los Angeles 13,340,068 511,231 3 Chicago 9,551,031 89,926 4 Dallas-Fort Worth 7,102,796 676,582 5 Houston 6,656,947 736,531 6 Washington 6,097,684 461,452 7 Philadelphia 6,069,875 104,532 8 6,012,331 447,696 9 5,710,795 424,067 10 Boston 4,774,321 221,919 Source: U.S. Census Bureau Fourth Largest Economy

Gross Domestic Product- 2014 Rank Metro Area $ Billions 1 New York 1,558.5 2 Los Angeles 866.7 3 Chicago 610.6 4 Houston 525.4 5 Dallas-Fort Worth 504.4 6 Washington D.C. 471.6 7 412.0 8 Philadelphia 391.1 9 Boston 382.5 10 Atlanta 324.9

Source: U.S. Bureau of Economic Analysis Third in Fortune 500 HQs

Fortune 500 Companies Headquartered In Houston Revenues Revenues Company (Rank) Company (Rank) ($ billions) ($ billions) Phillips 66 (7) 149.4 Apache (218) 13.9 ConocoPhillips (51) 55.9 Marathon Oil (227) 13.3 Enterprise Products Partners (59) 47.9 Cameron International (275) 10.8 Sysco (61) 46.5 Group 1 Automotive (291) 9.9 Plains GP Holdings (67) 43.5 CenterPoint Energy (313) 9.2 Halliburton (96) 32.9 Targa Resources (329) 8.6 Occidental (115) 25.9 Calpine (353) 8.0 Baker Hughes (119) 24.6 FMC Technologies (357) 7.9 National Oilwell Varco (127) 23.1 Quanta Services (361) 7.8 Anadarko Petroleum (162) 18.5 Buckeye Partners, LP (406) 6.6 EOG Resources (167) 18.0 KBR (424) 6.4 Kinder Morgan (193) 16.2 MRC Global (448) 5.9 Waste Management (217) 14.0 Spectra Energy (449) 5.9 Source: Fortune, June 2015 Recent Economic History Strong GDP Growth

Metro Houston GDP – $ Billions (Nominal)

515.2 525.4 475 441.7 414.8 391.9 400.1 373.5 352 316.5 286.2 240.9 238.4 254.5

'01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 Source: U.S. Bureau of Economic Analysis Jobs created Jan ’00 – Dec ’15

Jobs (000s)

New York 1,300.9

Houston 821.6

Dallas-Fort Worth 776.7

Washington D.C. 640.7

Los Angeles 587.8

Miami 434.2

Atlanta 402.9

Boston 203.8

Philadelphia 179.6 Source: U.S. Bureau of Labor Statistics Not seasonally adjusted Chicago 145.3 Population Growth 4/10 – 7/15

10 Largest U.S. Metros (000s) 569.7 528.1 526.4

433.3 397.3 363.5 327.6

179.7

93.1 85.8

Houston Dallas-Fort New York Los Angeles Washington Miami Atlanta Boston Philadelphia Chicago Worth Source: U.S. Census Bureau A Few Words About Population A Diverse Population

Race and Ethnicity White 2,406,315 38.3%

Hispanic 2,228,634 35.5%

Other 12,720 0.2% Mixed Race Black Asian 180,434 1,037,595 418,237 2.9% 16.5% 6.7%

Source: U.S. Census Bureau Houston is the nation’s future

Race/Ethnicity: Houston Now and the U.S. in 2060 % Distribution of populations

Houston MSA 35.5% 38.3% 16.5% 6.7%

U.S. 2060 Projected 30.6% 42.6% 13.2% 13.6%

Hispanic White Black Asian & Other

Source: U.S. Census Bureau Houston’s Current Situation Crude down $70 from its peak Spot Price, West Intermediate 120

100

80

$ Per Barrel Per $ 60

40

20

Source: U.S. Energy Information Administration Nearly 1,500 rigs have been idled U.S. Rotary Rig Count 2,200

2,000

1,800

1,600

1,400

1,200

1,000

800

600

400

Source: Baker Hughes Directional drilling and fracking Production Growth

U.S. Crude Production, Million Barrels Per Day 9.2 9.5. 9.0 8.6 8.7

7.4 7.5

6.6 6.5

5.8 5.6 5.4 5.5 5.2 5.1 5.1 5.0

'80 '85 '90 '95 '00 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16*

Source: U.S. Energy Information Administration * Projected We’ve been been here here before before

Oil Prices Losses

Recession Peak Trough Rigs Energy Jobs

Mid-1980s $30.75 $12.05 -3,766 (-83.3%) -53,600 (-46.3%)

Early-1990s $35.89 $14.57 -526 (-46.3%) -6,800 (-10.8%)

9-11/ $34.55 $19.53 -528 (-41.3%) -4,700 (-7.3%)

Great Recession $136.96 $39.51 -1,119 (-44.4%) -11,900 (-13.6%)

Current $106.31 $30.32 -1,488 (-77.0%) -22,700 (20.2%)

Note: All losses calculated from the monthly average Sources: U.S. Energy Information Administration, Baker Hughes, U.S. Bureau of Labor Statistics We’ve been here before

Oil Prices and Houston Employment 140 3.1 Monthly Oil Prices Employment 120 2.9

2.7

100 )

bbl 2.5 80

2.3 WTI ($/ WTI 60 Millions Jobs, 2.1 40 1.9

20 1.7

0 1.5 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16

Source: Texas Workforce Commission, U.S. Energy Information Administration We’ve been here before

Oil Prices and Houston Employment 140 3.1 Monthly Oil Prices Employment 120 2.9

2.7

100 )

bbl 2.5 80

2.3 WTI ($/ WTI 60 Millions Jobs, 2.1 40 1.9

20 1.7

0 1.5 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16

Source: Texas Workforce Commission, U.S. Energy Information Administration We’ve been here before

Crude Population Oil Price* Population $/Barrel Millions 120 8 ’15 Population 6.6 million 100 7

’00 Population 80 4.7 Million 6 ’90 Population 3.7 Million 60 5

40 4 ’10 Population 5.9 Million 20 3

0 2 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16

Source: U.S. Census Bureau * Intermediate, Average Annual Spot Price Historic Employment Change December to December Job Growth (000s) 118.5 98.4 107.0 104.7 92.8 91.1 90.7 89.9 82.9

59.7 54.4 53.4 53.0 49.7 44.3 39.3

18.7 17.8 21.9* 10.6 15.2 1.3

-8.1 -11.6 -1.7

-110.6

Source: Texas Workforce Commission *Partnership 2016 Forecast Other Drivers of Houston’s economy Other Drivers of Houston’s economy 27 Magnet for Foreign Investment Other Drivers of Houston’s economy The World’s Largest Medical Center

. 106,000 employees . 56 institutions . 7.2 million patient visits Other Drivers of Houston’s economy A Major Trade Gateway

$196.4 Billion = Value of Exports + Imports in ’15 New metro export plan

Metro Houston Population Forecast

Millions of Residents in 2025

6.656

2014 - U.S. Census TX State Data Houston Galveston Ray Perryman Woods & Poole TX State Data Bureau Center-Slow Growth Area Council Center-Fast Growth Metro Houston Population Forecast

Millions of Residents in 2025

8.334 7.765 7.869 7.464 7.712 6.656

2014 - U.S. Census TX State Data Houston Galveston Ray Perryman Woods & Poole TX State Data Bureau Center-Slow Growth Area Council Center-Fast Growth Gross Regional Product

Houston-Sugar Land-Baytown MSA 2010-2040 ($ Billions*) $1,154.1 $1,002.1

$887.2

$753.9

$627.4 $504.1

$380.9

'10 '15 '20 '25 '30 '35 '40

* '09 Constant Dollars Source: The Perryman Group, 2015 April 2016

Houston economic outlook Presented by: Patrick Jankowski Senior Vice President, Research Greater Houston Partnership