Kinder Morgan, Inc. · NYSE:KMI
Kinder Morgan — Kinder Morgan Energy Partners — 2007 KMP Analyst Conference
34 slides from Kinder Morgan's conference presentation, Jan 23, 2007
Slide 1: CO2 – Tim Bradley, President CO2 Group
ENERGY PARTNERS, L.P. CO2 Tim Bradley President CO2 Group
Slide 2: CO2 Business – View from the top
ENERGY PARTNERS, L.P. CO2 Business – View from the top Overview We operate and own significant interests in oil fields with over 5 Billion barrels remaining in place We operate the premier CO2 Source and Transportation assets in the industry Opportunities We have the capability and resources to deve
Slide 3: Distributable Cash Track Record
ENERGY PARTNERS, L.P. Distributable Cash Track Record CO2 Sales and Transportation - steady historical growth CO2 Flood Development Opportunities - growing faster CO2 S&T CO2 Flood Properties $700 $600 $500 DCF - MM$ $400 $300 Plan for each Year $200 $100 $0 t ge 01 02 03 04 05 07 06 ud 20 20 20 20
Slide 4: 2006 Performance Recap
ENERGY PARTNERS, L.P. 2006 Performance Recap Overall, disappointing results CO2 Source and Transportation Outperformed $184 MM vs $160 MM Yates Outperformed $134 MM vs $117 MM 26,076 B/d vs 24,496 B/d SACROC* Underperformed $167 MM vs $260 MM 30,795 B/d vs 34,706 B/d Future growth in cash flow even
Slide 5: SACROC and Yates Oil Production and DCF
ENERGY PARTNERS, L.P. SACROC and Yates Oil Production DCF Oil Production 80000 Historical Summary SACROC Yates 60000 Acquisitions: SACROC June 2000 40000 MKM January 2001 Yates November 2003 20000 Significant Development Events 0 SACROC: 2002 2003 2004 2005 2006 2007 CLPL April 2002 CL V, BE, CR I,
Slide 6: SACROC Margins Net of Hedging Practices
ENERGY PARTNERS, L.P. SACROC Margins Net of Hedging Practices 35 30 Net Realized Price 25 Toti 20 Other $/BOE CO2 Capex Volume 15 CO2 Expense volume Gas Handling 10 Labor 5 0 2004 2005 2006 2007 Actual Actual Actual Budget 6
Slide 7: SACROC Production Deterioration
ENERGY PARTNERS, L.P. SACROC Production Deterioration 2006 – Recap Challenge 1: Deteriorating Sweep Efficiency Oil Production 2002-2007 Dramatic decline at Bullseye 40,000 Poor conformance, high GOR, inefficient injection 35,000 Actual Possible effects of prior CO2 injection 30,000 Budget 25,000 Cha
Slide 8: Oil Recovery Efficiency
ENERGY PARTNERS, L.P. Oil Recovery Efficiency Effects of Heterogeneity and Injecting High Mobility Fluids Representative Oil Recovery vs Injection Relatively Homogeneous 16% Homogeneous 12% 8% Heterogeneous 4% 0% 0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 Cumulative Injection, % HCPV Relatively Heterogeneous H
Slide 9: SACROC Waterflood Recovery Efficiency
ENERGY PARTNERS, L.P. SACROC Waterflood Recovery Efficiency Clear Visualization of Centerline Waterflood >50% Significant movement of oil >100% indicating good reservoir continuity >140% 9
Slide 10: SACROC Tertiary Oil Recovery Efficiency
ENERGY PARTNERS, L.P. SACROC Tertiary Oil Recovery Efficiency Low Recovery in Bullseye Project Possible Causes: Poor Areal Sweep Efficiency - Discontinuous Zones - Small Pattern Size - Exceed Rock Parting Pressure Poor Vertical Sweep Efficiency - High Permeability Streak - Erosion of Middle Canyon Z
Slide 11: SACROC Tertiary Oil Recovery Efficiency
ENERGY PARTNERS, L.P. SACROC Tertiary Oil Recovery Efficiency Possible Effects of Prior CO2 Injection Prior Operator CO2 Injection may have more effect than observed in analysis of well performance. - Small volume, dilute, and immiscible over nearly 30 years - Notwithstanding poor injection practice
Slide 12: Southwest Center Line Expansion Economics
ENERGY PARTNERS, L.P. Southwest Center Line Expansion Economics Projects are still profitable at lower recoveries IRR-% Economic Sensitivity 100 80 60 40 20 0 4.0 5.0 6.0 7.0 8.0 9.0 10.0 Oil Recovery (% OOIP) $70 for 3 Yrs, then $40 flat $60 for 3 Yrs, then $30 flat $50 for 3 Yrs, then $30 flat $40
Slide 13: SACROC Development Plan
ENERGY PARTNERS, L.P. SACROC Development Plan CR-II (Curr) SWCL (Mid 2007) 13
Slide 14: SACROC Development Plan
ENERGY PARTNERS, L.P. SACROC Development Plan CR-II (Curr) So. Platform (Late 2007) SWCL (Mid 2007) 14
Slide 15: SACROC Development Plan
ENERGY PARTNERS, L.P. SACROC Development Plan CR-II (Curr) So. Platform (Late 2007) Chiquita ? (Mid 2008) SWCL (Mid 2007) 15
Slide 16: SACROC Development Plan
ENERGY PARTNERS, L.P. SACROC Development Plan CR-II (Curr) So. Platform (Late 2007) GI (2009) Chiquita ? (Mid 2008) SWCL (Mid 2007) 16
Slide 17: SACROC Development Plan
ENERGY PARTNERS, L.P. SACROC Development Plan Platform Middle (2011) CR-II (Curr) So. Platform (Late 2007) GI (2009) Chiquita ? (Mid 2008) SWCL (Mid 2007) 17
Slide 18: SACROC Development Plan
ENERGY PARTNERS, L.P. SACROC Development Plan Platform Green (2013) Platform Middle (2011) CR-II (Curr) So. Platform (Late 2007) GI (2009) Chiquita ? (Mid 2008) SWCL (Mid 2007) 18
Slide 19: SACROC Development Plan
ENERGY PARTNERS, L.P. SACROC Development Plan Platform Cisco Platform Green (2015) (2013) Platform Middle (2011) CR-II (Curr) So. Platform (Late 2007) GI Expected Range of Recoveries (2009) SWCL 7.7% Other Developments 6.0 to 9.5% Chiquita ? (Mid 2008) SWCL (Mid 2007) 19
Slide 20: SACROC Oil Production Historical Forecasts
ENERGY PARTNERS, L.P. SACROC Oil Production Historical Forecasts 2003 a 2003 b 2006 2007 Base 2007 (go forw ard = Bullseye) 60 50 40 30 20 10 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 20
Slide 21: Yates Production Forecast by Program
ENERGY PARTNERS, L.P. Yates Production Forecast by Program 30,000 25,000 20,000 BOEPD 15,000 10,000 5,000 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Base Base Pre 05 HDH Pre 05 HDH 05 Phs 05 Phs 06 Phs 06 Phs 2007 Ph 2008 Ph 1 Misc BOE Misc BOE Qn/GB 08 Qn/GB 09 Qn/
Slide 22: Yates Oil Production Forecasts
ENERGY PARTNERS, L.P. Yates Oil Production Forecasts Production continues to exceed expectations MBOEPD Response to CO2 injection 30 earlier than prior simulation Simulation Model model suggested 25 Sum of the Parts Vertical well production is flattening 20 More horizontal drain holes 15 drilled tha
Slide 23: HDH Production Performance by Year
ENERGY PARTNERS, L.P. HDH Production Performance by Year 275 ms: 250 g ra Pro 3 225 200 200 04 BOPD 20 175 150 005 06 2 2 0 125 100 75 50 25 0 10 20 30 40 50 60 70 80 90 100 Days 23
Slide 24: Yates Field – CO2 Injection Results
ENERGY PARTNERS, L.P. Yates Field – CO2 Injection Results Areas of •CO2 Injection started March 2004 Response •Incremental CO2 Injection (N2 venting) began March 2005 •Responding well count continues to Increase CO2 Inj. Well • Oil production is becoming Gas Inj. Well more efficient with time Respon
Slide 25: Eastern Shelf: Katz & Claytonville
ENERGY PARTNERS, L.P. Eastern Shelf: Katz & Claytonville Katz Field: Sheep Bra Co Katz vo Avg WI 86%, NRI 73% rte sh Mtn z Pi pe n-Iri lin to OOIP 156MM e An Lubbock r ghte SACROC Current Production: 475 boepd te Wellman Es Slau Llano Claytonville: ir Centra Ada Means Hobbs Snyder l WI 66%, NRI 55%
Slide 26: CO2 Source and Transportation
ENERGY PARTNERS, L.P. CO2 Source and Transportation Growing Business Opportunities (MMcf/d) Permian Basin CO2 Deliveries 1500 Other Permian Basin 1000 Sheep Mtn 2006 was record year, supplies pro-rated on occasion KM Demand Permian Basin Demand expected to continue to increase given Bravo Dome exist
Slide 27: Southwest Colorado Expansion
ENERGY PARTNERS, L.P. Southwest Colorado Expansion Doe Canyon Doe Canyon Cortez Station Doe Canyon 12” Pipeline Proposed Blanco Station Placitas Station Hovenweep Yellowjacket McElmo Dome Proposed Caprock Station Moqui Cortez Station Sand Canyon Goodman Point Allred Station Source Field Expansion Co
Slide 28: CO2 EOR and Sequestration in Alberta
ENERGY PARTNERS, L.P. CO2 EOR and Sequestration in Alberta Setting: Swan Hills: Redwater: Multiphase pipeline development based on sound Vol:100–150 mmcf/d Vol:100–150 mmcf/d commercial EOR supply/ demand. Expansions to accommodate Federal / Provincial policy and GHG Mitigation needs. Scope: EOR pot
Slide 29: 2007 Expansion Capital Budget - $445 Million
ENERGY PARTNERS, L.P. 2007 Expansion Capital Budget - $445 Million Other Staff OVHD SACROC Wells Source/Trans. SACROC Field Fac. Gas Plants Yates CO2 Injection Yates Gas Handling Yates Field Facilities SACROC Gas Handling Yates HDH SACROC CO2 Inj Note: 2006 budget was $357 MM, actual was $273 MM 29
Slide 30: Impact of Oil Price/Volume Variance on 2007 DCF
ENERGY PARTNERS, L.P. Impact of Oil Price/Volume Variance on 2007 DCF 2007 Budget: 590 MM$ +/- 1000 BOPD SACROC 19.4 MM$ Yates 9.6 MM$ +/- 1 $/B WTI 5.4 MM$ 3rd Party CO2 Deliveries + 50 MMCF/D 5MM$ Unhedged WTI price presumed to average $66.29/b, WTI-WTS spread = $5.19 30
Slide 31: CO2 Crude Production Hedge Profile
ENERGY PARTNERS, L.P. CO2 Crude Production Hedge Profile SACROC & Yates Crude Oil Production (a) Avg Hedge Px WTI & WTS $35.12 $44.09 $49.48 $55.72 $62.54 ($/Bbl) (b) 50 Net equity Production 40 (MBboe/d) 30 20 85% 83% 71% 72% 76% 10 0 2007 2008 2009 2010 2011 Swaps Puts Unhedged % Hedged __________
Slide 32: KM CO2 Long-term Potential
ENERGY PARTNERS, L.P. KM CO2 Long-term Potential Development Plans 2007-2015 1. SACROC Base Case Forecast DCF, MM$/Yr - 165 MMBOE Gross*, 1.5 B$ Gross capital required includes 300 MM$ cap. CO2 Sacroc Complex Yates S&T 2. Yates Sum of the Parts Forecast $900 - 75 MMBOE Gross*, 308 MM$ Gross Capex $8
Slide 33: 2006 Achievements, 2007 Goals
ENERGY PARTNERS, L.P. 2006 Achievements, 2007 Goals 2006 Missed plan CO2 and Yates Volumes up, SACROC Oil and NGL production lower Continued aggressive development plans S&T Business is growing both domestically and abroad SACROC project is large and complex, recovery efficiency and well failures ne
Slide 34: Kinder Morgan Energy Partners, L.P.
KINDER’ “MORGAN ENERGY PARTNERS, L.P.
Kinder Morgan Energy Partners — 2007 KMP Analyst Conference on 6ix