Keyera Corp. · TSX:KEY
Keyera — Investor Presentation (September 2012)
34 slides from Keyera's investor presentation, September 2012
Slide 1: Corporate Presentation September 2012
Corporate Presentation SEPTEMBER 2012
Slide 2: Forward-Looking Information
Forward-Looking Information In the interests of providing Keyera Corp. (“Keyera” or the “Company”) shareholders and potential investors with information regarding Keyera, including Management’s assessment of future plans and operations relating to the Company, this document contains certain statemen
Slide 3: Why Invest in Keyera
Why Invest in Keyera » Track record of steady value creation » Stable cash flows from largely fee-for-service activities » Strategically positioned assets: • Multi-zone producing regions • Key North American NGL hub » Inventory of opportunities tied to: • Liquids-rich gas production • Growth in oil
Slide 4: Strong Track Record – Income and Growth
Strong Track Record – Income and Growth compound annual 21% total return1 to shareholders Acquired Alberta EnviroFuels. Current monthly Converted to dividend: corporate Changed name structure 17¢ per to Keyera share Acquired Chevron Canada’s 9 dividend midstream assets Completed $170 million IPO. in
Slide 5: Trading Metrics
Trading Metrics KEY; KEY.DB.A Trading Symbols (TSX) $44.77 Common Share Price1 $37.50 – $51.60 Trading Range2 $3.5 B Market Capitalization1 $3.9 B Enterprise Value1 77.1 M Common Shares Outstanding3 256,221 Daily Trading Volume4 $2.04 Annualized Dividend per Share (17¢/month) 4.6% Current Dividend Y
Slide 6: Integrated Business Lines Integral to Success
Integrated Business Lines Integral to Success * Non-GAAP measure. Includes intersegment transactions. See Keyera’s Second Quarter 2012 MD&A for a definition of Operating Margin. Delivering Midstream Energy Solutions Along the Value Chain 6
Slide 7: A Strategic Geographic Footprint
A Strategic Geographic Footprint » Strategically located facilities – West Central, Foothills, Deep Basin producing regions – Edmonton/Fort Saskatchewan NGL Hub » Diversified assets and customers Location, Location, Location 7
Slide 8: Gathering and Processing – The Core of our Business
Gathering and Processing – The Core of our Business »Well maintained, long life assets – 2.6 Bcf/d licensed capacity – 15 of 17 plants Keyera operated – Sweet/sour gas processing expertise – NGL extraction capability »Extensive gathering systems – Over 3400 km of 4”-12” diameter pipelines – Capture
Slide 9: Liquids-Rich Natural Gas Development (W5M)
Liquids-Rich Natural Gas Development (W5M) » Renewed focus on liquids-rich gas resource development – Multiple geological horizons, MONTNEY well-understood – High liquids content enhances producer economics – Improved Alberta royalty regime – Application of technologies DUVERNAY – Access to availabl
Slide 10: Liquids (NGL) Content in Gas Stream Supports Drilling Activity
Liquids (NGL) Content in Gas Stream Supports Drilling Activity C$/Mcf Equivalent Natural Gas Price Including Value of NGLs $8.00 $7.00 $6.00 Liquids $5.00 Natural Gas $4.00 $3.00 $2.00 $1.00 $- Dry Gas Notikewin Wilrich Hz. Montney at Montney at Deep Basin Wilrich at Montney at Montney at Cardium Hz
Slide 11: North American Natural Gas Plays Breakeven Price and Liquids Content
North American Natural Gas Plays Breakeven Price and Liquids Content Breakeven Gas Price (US$/Mcf) Natural Gas Liquids (Bbl/MMcf) $6.50 200 $6.00 180 $5.50 U.S. Shale Plays WCSB Plays 160 $5.00 $4.50 Liquids Content (Bbl/MMcf) 140 $4.00 120 $3.50 100 $3.00 $2.50 80 $2.00 60 $1.50 40 $1.00 20 $0.50 $
Slide 12: Stable Plant Throughput Despite Natural Gas Price Volatility
Stable Plant Throughput Despite Natural Gas Price Volatility Gross Plant Throughput Average AECO Price (MMcf/d) (C$/gJ) 1,500 $12.00 1,200 $9.00 900 $6.00 600 $3.00 300 - $- Jan-03 Jul-03 Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11
Slide 13: Rimbey Gas Plant – West Central Alberta
Rimbey Gas Plant – West Central Alberta » Glauconite zone – High liquids content driving activity – Numerous producers active in area » Duvernay shale – Producers have acquired a significant Duvernay land position west of Rimbey – Some producers have expressed interest in a new pipeline to the area
Slide 14: Simonette Gas Plant – Deep Basin
Simonette Gas Plant – Deep Basin » Producers targeting liquids-rich natural gas plays – Historically have targeted Montney and Wilrich zones – More recently drilling into Duvernay shale » Incremental gas volumes expected in late 2012 from two new producer- built pipelines » Seeking support from prod
Slide 15: Caribou Gas Plant – Northeast British Columbia
Caribou Gas Plant – Northeast British Columbia » Keyera’s 105 MMcf/d Caribou gas plant adjacent to Progress Energy lands – Petronas recently acquired Progress Energy with the intention of exporting gas from west coast of B.C. » Petronas expects to develop gas in 50 MMcf/d pods » Third-party pipeline
Slide 16: NGL Infrastructure in Key Energy Hub
NGL Infrastructure in Key Energy Hub Providing essential Imperial Oil services to producers at Canada’s NGL hub Imperial Oil Imperial Oil Strathcona Refinery Plains Midstream Gibson Inter Pipeline Pembina Enbridge Kinder Gibson Keyera Morgan Suncor Enviro Keyera Fuels Edmonton Terminal Pipeline Alle
Slide 17: NGL Infrastructure Supports Western Canadian Producers
NGL Infrastructure Supports Western Canadian Producers » Services to NGL producers at Canada’s energy hub – NGL Fractionation • propane, butane and condensate – NGL Logistics Services • Storage • Pipelines • Rail and Truck Terminals Fractionation Storage Rail & Truck Racks Pipelines Rail Cars Sales
Slide 18: Fractionation
Fractionation » 80,000 barrels per day of fractionation capacity currently » Location of fractionators key to increasing NGL netback » Keyera making significant capital investment to grow fractionation capacity New Fractionation Capacity Needs To Be Developed 18
Slide 19: Broadening our Service Offering – Adding De-ethanization at KFS
Broadening our Service Offering – Adding De-ethanization at KFS » Adding a 30,000 barrel per day de-ethanizer at Keyera’s Fort Saskatchewan Fractionation and Storage Facility (KFS) » Project will enable fractionation of an ethane-rich stream of NGLS (C2+ mix) » Creates specification ethane for consu
Slide 20: Oil Sands Growth Driving Need for Diluent Logistics Services
Oil Sands Growth Driving Need for Diluent Logistics Services » Majority of future bitumen Viscosity at Room Temperature (cP) production will be 1,000,000 Peanut Athabasca Bitumen transported by pipeline Cold Lake Butter Bitumen to upgraders 100,000 Ketchup – Bitumen must be thinned Honey 10,000 Panc
Slide 21: Bitumen Production Growth Driving Diluent Demand
Bitumen Production Growth Driving Diluent Demand Bitumen Production Condensate Demand Forecast – Risked Forecast – Risked (Mbbls/d) (Mbbls/d) 5000 1200 Bitumen Production 4000 Condensate Demand 900 3000 600 2000 300 1000 0 0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Slide 22: Oil Sands Logistics Services
Oil Sands Logistics Services » Keyera providing diluent transportation, storage and terminalling services in Edmonton/Fort Saskatchewan hub » Kearl (Imperial Oil) – Solvent services – December 2011 – Diluent services – July 2012 » Sunrise (Husky Oil) – Services to begin in 2014 » Long-term fee-for-s
Slide 23: Storage (Caverns and Above Ground)
Storage (Caverns and Above Ground) » Storage a key strategic infrastructure advantage » Over 10 million barrels in cavern storage at Fort Saskatchewan » Keyera continues to invest to meet increasing NGL production and oil sands diluent requirements – Two new caverns being developed A Large NGL Stora
Slide 24: NGL Pipelines
NGL Pipelines » Pipelines critical to the movement of NGLs » Four pipelines between Edmonton and Fort Saskatchewan provide bi- directional flows and access to markets » Pipeline connectivity in Edmonton and Fort Saskatchewan creates optionality for our customers » Connectivity allows Keyera to be a
Slide 25: Rail and Truck Terminals
Rail and Truck Terminals » Fort Saskatchewan truck loading/offloading compliments fractionation and storage options » Keyera continues to evaluate new terminals to expand NGL optionality – Edmonton Terminal being modified to ship iso-octane as well as propane and butane – Operational changes at ADT
Slide 26: South Cheecham Terminal – Extending Logistics Footprint
South Cheecham Terminal – Extending Logistics Footprint » Proceeding with construction of South Cheecham Rail and Truck Terminal » Ownership Keyera 50%, Enbridge 50%; Keyera will construct and operate facility » Terminal will be capable of receiving diluent or solvents and loading dilbit onto railca
Slide 27: Acquiring NGL Terminal in Hull, Texas
Enhancing our Logistics Capabilities – Acquiring NGL Terminal in Hull, Texas » Acquiring1 Hull rail & truck terminal from ExxonMobil – Pipeline-connected to other facilities in Mont Belvieu hub “the pitch-and-catch” potential for bi-directional – Terminal complements existing movement of NGLs and cr
Slide 28: Alberta EnviroFuels (AEF) – A World Class Iso-Octane Facility
Alberta EnviroFuels (AEF) – A World Class Iso-Octane Facility » Iso-octane is a low emission, high octane gasoline blending additive » Butane is the primary feedstock in the production of iso-octane » Existing Keyera NGL pipelines, storage and rail beneficial to AEF feedstock supply » Adding new iso
Slide 29: NGL Marketing
NGL Marketing » Liquids-rich drilling across North Natural Gas Liquids America creating oversupply, resulting in price weakness for some NGLs (particularly propane) Ethane » Margin based revenues means less focus on absolute price of commodity Propane » Weaker butane prices support Keyera’s feedstoc
Slide 30: Stable, Diversified Cash Flow
Stable, Diversified Cash Flow $ Millions Operating Margin1,2 $300 NGL Margin-based Marketing $250 25% in 2011 (15% in H1/12) $200 NGL Infrastructure $150 Fee-for-service3 $100 75% in 2011 Gathering & (85% in H1/12) Processing $50 $0 2006 2007 2008 2009 2010 2011 Gathering & Processing NGL Infrastruc
Slide 31: Conservative Capital Structure
Conservative Capital Structure Key Debt Metrics (as at June 30, 2012) 2.2 x Net debt and convertible debentures / LTM EBITDA1 14% Net debt and convertible debentures / Enterprise value2 1 Net debt and conv. debs. $549 million. LTM EBITDA $249 million (adjusted for IFRS and non-GAAP measure. See Keye
Slide 32: Keyera’s Growth Strategy
Keyera’s Growth Strategy » Near term organic growth opportunities – Gas plant expansion/enhancement and pipeline construction projects driven by liquids-rich gas development – Fractionation and storage expansions to handle increasing NGL production – Storage, terminalling and pipeline opportunities
Slide 33: Summary
Summary » Solid track record » Stable, diversified cash flow » Strategic assets » Inventory of opportunities » Strong balance sheet » Focused strategy » Disciplined approach One of Canada’s Largest Midstream Operators 33
Slide 34: For Further Information Contact
For Further Information Contact: John Cobb Vice-President, Investor Relations 888-699-4853 ir@keyera.com KEYERA CORP. 600, 144 – 4 AVENUE SW CALGARY, ALBERTA T2P 3N4 WWW.KEYERA.COM