Kinder Morgan, Inc. · NYSE:KMI
Kinder Morgan — Kinder Morgan Energy Partners — 2010 KMP Analyst Conference
20 slides from Kinder Morgan's conference presentation, Jan 28, 2010
Slide 1: CO2 – Tim Bradley, President CO2 Group
ENERGY PARTNERS, L.P. CO2 Tim Bradley President CO2 Group
Slide 2: History of CO2 Group and Looking Forward
ENERGY PARTNERS, L.P. History of CO2 Group and Looking Forward Shell CO2 formed in 1998, KM share 20% $1,000 Acquired remaining 80% in April 2000 Acquired SACROC interests June 2000 $800 Acquired Yates interests in 2001 and 2003 DCF - MM$ Ramped up developments at SACROC 2003+ $600 Const
Slide 3: 2009 Performance Recap – Made Plan
ENERGY PARTNERS, L.P. 2009 Performance Recap – Made Plan Despite extremely difficult conditions 2009 DCF of $790.1MM vs. $790MMPlan CO2 Source and Transportation Underperformed $218 MM vs. $254 MM Plan Price hurt, volumes close Yates Outperformed $212 MM vs. $209 MM Plan 26,511 B/d vs. 26,50
Slide 4: 2009 Cost Reduction Efforts
ENERGY PARTNERS, L.P. 2009 Cost Reduction Efforts Opex, Sus. Capex Reductions, $MM OPEX/Sustaining Capex 400 Achieved $52.8 MM reduction (15%) Achieved $48 MM reduction in TOTI 300 Sus. Capex Expansion CAPEX CO2 200 Labor Power Achieved ~$120 MM reduction (27%) Surface 100 Wellwork – 135 vendo
Slide 5: 2009 and 2010 DCF by Asset Group
ENERGY PARTNERS, L.P. 2009 and 2010 DCF by Asset Group 2010: $989 MM 2009: $790 MM Other O&G 1% Other O&G S&T 28% SACROC SACROC S&T 28% Complex Complex 45% 46% Yates 27% Yates 25% 5
Slide 6: SACROC and Yates Oil Production DCF
ENERGY PARTNERS, L.P. SACROC and Yates Oil Production DCF Oil Production 80,000 SACROC Yates 60,000 Original Oil in Place, Billion Bbls 40,000 SACROC 2.8 Yates 5.0 20,000 0 2010 Production SACROC oil 29,800 B/d 02 03 04 05 06 07 08 09 10 SGP NGLs 16,673 B/d 20 20 20 20 20 20 20 20 20 Yates
Slide 7: Oil and Gas Margins Remain Strong
ENERGY PARTNERS, L.P. Oil and Gas Margins Remain Strong Net of Hedged Prices SACROC Cost Structure Yates Cost Structure 80 80 Net Realized Price 60 60 Net Realized Price $/BOE40 $/BOE 40 20 20 0 0 2004 2005 2006 2007 2008 2009 2010 2004 2005 2006 2007 2008 2009 2010 Actual Actual Actual Actual Actua
Slide 8: SACROC Production & Operations Highlights
ENERGY PARTNERS, L.P. SACROC Production & Operations Highlights Oil Production 2001-2010 2009 – Review BOPD 40,000 Oil production exceeded plan 35,000 Actual Sub-Pump performance continued to improve 30,000 Budget Compressor run-time improved from 91.5% to 25,000 94.7% 20,000 High graded patte
Slide 9: SACROC Recent & Future Development Plans
ENERGY PARTNERS, L.P. SACROC Recent & Future Development Plans Platform-P1 A & B Platform-P2 2011 2009, 2010 South Platform 2008 Gilligan’s Island 2008 Chiquita 2010 Southwest Center Line 2007, 2008 9
Slide 10: SACROC Development Activities and Plans
ENERGY PARTNERS, L.P. SACROC Development Activities and Plans REEF_OWC_CHEVRON - HCFT [RMR] - Hydrocarbon Ft = based on Porosity (PHIH) x 0.80 0 30.0 29.0 2009 Budget – 46 Patterns 28.0 27.0 26.0 0.439 25.0 0.71 24.0 23.0 0 22.0 21.0 20.0 P6??? 0.121 0 0 0 19.0 18.0 17.0 16.0 15.0 14.0 13.0 0.582
Slide 11: Yates Field Production and Development
ENERGY PARTNERS, L.P. Yates Field Production and Development HDH Production Results Oil column has thinned relative to 2008 275 Expect slightly lower oil production in 2010 250 2009 Effectively capturing drained oil 225 2008 200 175 2006 Continue Horizontal drilling program to capture 150 draini
Slide 12: Eastern Shelf Pipeline & Katz CO2 Project
ENERGY PARTNERS, L.P. Eastern Shelf Pipeline & Katz CO2 Project Acquired Katz Field April, 2006 Completed Detailed Geological & Engineering Review of Katz Katz Cluster: 135 OOIP 206 MMB MMCFD Analog field results are encouraging: Expect 25 MMB, 15.8% Recovery KATZ Strategic Opportunity with Upsi
Slide 13: Eastern Shelf Pipeline & Katz CO2 Project
ENERGY PARTNERS, L.P. Eastern Shelf Pipeline & Katz CO2 Project Profitability vs. Oil Price 30 Katz Project Details KM Price Deck = 22.6% IRR 57 Patterns, First injection 1st qtr 2011 25 Pipeline 20 20% IRR Threshold 10” 10” 91 miles, $36.3 MM IRR (%) 15 Wellwork $56.75 Flat = 20% IRR 10 CAPEX =
Slide 14: CO2 Source and Transportation Growing Business Opportunities
ENERGY PARTNERS, L.P. CO2 Source and Transportation Growing Business Opportunities Permian Basin CO2 Deliveries Permian Basin 2000 Supplies pro- pro-rated on occasion, but oil price dip in early 2009 paused many new EOR 1500 project developments Other (MMcf/d) Permian Basin Demand expected to co
Slide 15: CO2 Delivered Volumes
ENERGY PARTNERS, L.P. CO2 Delivered Volumes KM Share MMCFD 800 700 600 Significant growth since 2005 500 400 300 CAGR: Volumes + 8.3%, Price + 14% 200 100 0 2010 vs. 2009: Volumes Flat, Price + 30% 2005 2006 2007 2008 2009 2010 % KM Share Under Contract KM share of EOR demand consumes 40% of 150% ou
Slide 16: Strong Long Term Demand for CO2
ENERGY PARTNERS, L.P. Strong Long Term Demand for CO2 Purchased CO2 Demand vs. Oil Price (a) Clean Coal and Sequestration may create new 120 opportunities 100 Sales and Transport 80 Oklahoma EOR TCF 60 Other TX Permian Basin However, economic and regulatory gaps are very large 40 The cost of c
Slide 17: 2010 Expansion Capital Budget - $415 Million
ENERGY PARTNERS, L.P. 2010 Expansion Capital Budget - $415 Million Staff OVHD Other 7% 0% SACROC Wells 18% Eastern Shelf 13% SACROC Field Fac. 8% Source/Trans. 9% SACROC Gas Handling Yates Wells, Facilities, 13% Seismic and CO2 8% SACROC CO2 Inj 24% __________________________ Note: Cost Metrics base
Slide 18: Impact of Oil Price/Volume Variance on 2010 DCF
ENERGY PARTNERS, L.P. Impact of Oil Price/Volume Variance on 2010 DCF 2010 Budget: $989 MM +/- 1000 BOPD SACROC $23.7 MM Yates $12.5 MM +/- 1 $/B WTI $6 MM CO2 $1 MM NGL $3 MM Crude $2 MM 3rd Party CO2 Deliveries +/- 50 MMCF/D $6.5 MM __________________________ Note: Unhedged WTI price presumed to a
Slide 19: KM CO2 Current Outlook
ENERGY PARTNERS, L.P. KM CO2 Current Outlook Development Plans 2010- 2010-2019 1. SACROC Base Case Forecast 81 MMBOE Net (a), $1.2B KM Share Capex ($366MM CO2) DCF, $MM/Yr Continue Platform development plan; Production forecast is based on existing recovery $1,200 expectations 2. Yates Base Case
Slide 20: Upside Opportunities Down the Road…
ENERGY PARTNERS, L.P. Upside Opportunities Down the Road… EOR Projects will make up a larger amount of domestic oil production going forward We have the footprint and management expertise to take advantage of that CO2 EOR forecast to be ~25% of domestic production by 2030 (a) SACROC and Yates have
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