Enterprise Products Partners L.p. · NYSE:EPD
Enterprise Products Partners L.p — Merger or Acquisition (May 2004)
26 slides from Enterprise Products Partners L.p's merger presentation, May 26, 2004
Slide 1: Enterprise's Operating and Business Environment: U.S. Ethylene Industry
Enterprise’s Operating and Business Environment Special Emphasis on the U.S. Ethylene Industry Peter Fasullo En*Vantage, Inc May 26, 2004
Slide 2: EPD asset base concentrated on Gulf Coast
EPD asset base concentrated on Gulf Coast with linkage to the Western and Mid-Cont. producing regions via MAPL/Seminole.
Slide 3: Over 90% of EPD's Business from NGL and Petrochemical Midstream Services
Over 90% of EPD’s Business is expected to be generated from NGL and Petrochemical Midstream Services during 2004.
Slide 4: GTM asset base concentrated in Texas and San Juan Basin
GTM asset base highly concentrated in Texas and San Juan Basin with positions in the GOM.
Slide 5: GulfTerra Business Breakdown
During 2004, over 70% of GTM’s Business is expected to be Oil & Gas Midstream Services - only 28% generated from NGL Midstream Services. * Includes GulfTerra and 9 Gas Processing Plants to be Acquired from El Paso Corp. GulfTerra Business Breakdown*
Slide 6: The Merger will diversify EPD's business
The Merger will diversify EPD’s business and provide more balance in Midstream Services for Both Companies. Expected Enterprise + GulfTerra Business Breakdown For 2004 Combination provides: Better balance between NGLs, Oil, and Gas Services Integration of Facilities Business Risk Mitigation *Does No
Slide 7: Sensitivity Cases
Sensitivity Cases Baseline Case - assumes “Project Miramar” price deck based on 2004 PIRA forecast and represents the recovery phase of the Ethylene Industry’s business cycle. Trough Case - annualizes mid-2003 market conditions reflecting ethylene cycle bottom, high relative price of natural gas, an
Slide 8: Combination Reduces EPD's Sensitivity to Higher Natural Gas Prices in Trough Case
Combination Reduces EPD’s Sensitivity to Higher Natural Gas Prices in Trough Case. Trough conditions for an entire year, negatively impacts EPD’s operating income approx. $53MM from its Baseline operating income. EPD’s Louisiana NGL assets and the MAPL/Seminole Pipeline, show the greatest sensitivit
Slide 9: Combination Slightly Increases Sensitivity to Lower Natural Gas Prices
Combination Slightly Increases EPD’s Sensitivity to Lower Natural Gas Prices. The Low Price Case actually benefits EPD’s operating income marginally, due to the following factors: Lower energy prices benefit economic growth and ethane demand specifically. Higher volumes through EPD’s NGL systems and
Slide 10: Enterprise & GulfTerra Combination
Enterprise & GulfTerra Combination
Slide 11: Combined EPD and GTM System Map
Combined EPD and GTM System Map
Slide 12: Organic Growth from Serving Major Producing Basins
Organic Growth from Serving Major Producing Basins Provides integrated services to the largest producing basins in the Lower 48 Strong Rocky Mountain and deepwater Gulf of Mexico franchise Diversifies EPD into crude oil and platform services GOM currently accounts for 32% of U.S. crude and condensat
Slide 13: Complementary Assets: MAPL and San Juan Basin
Complementary Assets MAPL - San Juan Basin Gathering/Processing Mid-America Pipeline - Rocky Mountain System 2,548 miles of pipe 120 MBPD capacity from Rock Springs, WY to 4-Corners; 225 MBPD capacity 4-Corners to Hobbs San Juan System Volumes 1.2 MMDth/d gathered 44 MBPD NGLs produced Gathering con
Slide 14: GTM Contract Structure: San Juan
GTM Contract Structure San Juan Natural Gas Gathering Gather ~ 1,200 MMDth/d 83% of volume have fees that are a % of natural gas index price 17% of volume have fixed fees Chaco Gas Processing Process 665 MMBtu/d Recover 44 MBPD NGLs 24% of gas processed under fixed fees (per MMBtu) 76% NGL retainage
Slide 15: Complementary Assets: Texas Intrastate Natural Gas Pipeline
Complementary Assets Texas Intrastate Natural Gas Pipeline 9,300 miles of pipeline 3.35 Bcf/d 2002 volume 7 Bcf storage capacity 1,260 receipt and delivery meters 137 Intrastate, interstate and municipal connections Firm contracts account for 50% of pipeline capacity 97% of storage capacity Fee base
Slide 16: GTM Contract Structure: South Texas
GTM Contract Structure South Texas Process ~ 1,450 MMDth/d Recover 70 MBPD NGLs in full recovery 34% fixed fees (per MMBtu) 16% keepwhole (primarily wellhead purchases) 51% POP 59% NGL retainage with “conditioning election” for producer 33% NGL retainage with floor fee for GTM 8% NGL retainage at al
Slide 17: GTM Contract Structure: South Texas Conditioning Election
GTM Contract Structure South Texas “Conditioning election” Producers can elect reduced ethane recoveries and convert to a fixed fee for processing GTM can elect to recover incremental ethane on a keepwhole basis or reduce plant recoveries GTM share of NGLs ~ 3.1 MBPD if producers elect recovery, or
Slide 18: Gross Spread Assumptions
Gross Spread Assumptions Price/Spread Assumptions
Slide 19: Gross Operating Margin Sensitivities
Gross Operating Margin Sensitivities
Slide 20: Complementary Assets: TX NGL Transportation and Fractionation
Complementary Assets TX NGL Transportation and Fractionation GTM South Texas integrated NGL pipeline and fractionation assets 1,000 miles of NGL pipelines Capacity 96 MBPD 2002 throughput 70 MBPD 9 South Texas natural gas processing/treating plants to be purchased from EP in Step 2 are an important
Slide 21: EPD & GTM's Gulf of Mexico Position
Complementary Assets EPD & GTM’s Gulf of Mexico Position
Slide 22: Natural Gas Storage: Highlights
Natural Gas Storage: Highlights Strategically located in Southeast 13.5 Bcf high deliverability salt dome storage facility 2003 revenues of $3.5MM from interruptible contracts All available capacity is subscribed 52% subscribed beyond 2021 FERC authority for 8 Bcf expansion Convert 1.8 Bcf - Commitm
Slide 23: Ranking Along the Value Chain After Merger
Ranking Along the Value Chain After Merger
Slide 24: Financial Overview
Financial Overview ©All rights reserved. Enterprise Products Partners LP.
Slide 25: Capitalization Pro Forma for Merger
Capitalization Pro Forma for Merger As Adjusted capitalization pro forma for the acquisition of GulfTerra and purchase of S. Texas gas plants. Historical adjusted for May equity offering and proceeds from monetization of interest rate hedging program. %Net Debt to Net Capitalization % Debt to Total
Slide 26: Ownership Pro Forma for Merger
Ownership Pro Forma for Merger Historical as of December 31, 2003 adjusted for April 2004 equity offering and pro forma for acquisition of GulfTerra. Enterprise Products Partners L.P. Use of Non-GAAP Financial Measures Certain information contained within this filing under Rule 425 include non-gener
Enterprise Products Partners — Merger or Acquisition (May 2004) on 6ix