Kinder Morgan, Inc. · NYSE:KMI

Kinder Morgan — Kinder Morgan 2011 Analyst Conference

26 slides from Kinder Morgan's conference presentation, Mar 24, 2011

  1. Slide 1: CO2 – Tim Bradley, President CO2 Group

    CO2 Tim Bradley President CO2 Group

  2. Slide 2: History of CO2 Group and Looking Forward

    History of CO2 Group and Looking Forward  Shell CO2 formed in 1998, KM share 20% DCF ($MM) (a)  Acquired remaining 80% in April 2000 $1,200  Acquired SACROC interests June 2000  Acquired Yates interests in 2001 and 2003 $1,000  Ramped up developments at SACROC 2003+ $800 — Constructed Centerlin

  3. Slide 3: 2010 Performance Recap – Missed Plan

    2010 Performance Recap – Missed Plan Within 98% of plan operationally, price hurt 2010 DCF of $951MM vs. $989MM plan (a) SACROC (b) Outperformed  $478MM vs. $471MM plan  Oil: 29,222 Bbl/d vs. 29,800 Bbl/d  NGLs: 15,921 Bbl/d vs. 16,673 Bbl/d  Volume and price hurt, offset by cost reductions CO2

  4. Slide 4: 2010 and 2011 DCF by Asset Group

    2010 and 2011 DCF by Asset Group (a) 2010: $951MM 2011: $1,078MM ES ES Group Group 2% 0% S&T S&T 27% 28% Sacroc Complex Sacroc 50% Complex Yates 51% Yates 23% 19% __________________________ (a) Segments shown without elimination 4

  5. Slide 5: Oil and Gas Segment: Production and DCF

    Oil and Gas Segment: Production and DCF Net HC Production (MBoe/d) 50 Original Oil in Place (billion Bbls) SACROC Yates  SACROC 2.8 40 Gas Processing  Yates 5.0 30  Katz 0.23 20 10 Gross Production (Bbl/d) 2010 2011 0  SACROC oil 29,222 29,374 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 

  6. Slide 6: All-in Cost Structure – Oil & Gas

    All-in Cost Structure – Oil & Gas Including Gas Processing Operations Oil & Gas All-in Cost Structure ($/Net Boe) (a) $70 DD&A $60 TOTI $50 CO2 Expense $40 Workover Exp Other $30 Labor $20 Power $10 Wt Avg Hedged Revenue/Boe $0 2006 2007 2008 2009 2010 2011 __________________________ (a) Costs and R

  7. Slide 7: Basis for Hedging Policy

    Basis for Hedging Policy Oil & Gas All-in Cost Structure (a) O&G cost structure has strong correlation to energy $/Net Boe prices $100 DD&A  Power is tied to gas prices TOTI $80  High activity levels have increased staffing and other CO2 Expense $60 service costs Workover Exp  Wellwork and rig co

  8. Slide 8: Oil and Gas Segment Production Forecasts

    Oil and Gas Segment Production Forecasts Production expectations tend to grow over time Evolution of Forecasted 2010 Production (a) over Time MBbl/d 8/8 60 Despite oil price volatility, we have replaced 40 our production with new proved reserves for the past 3 years 20 0 We expect production to exce

  9. Slide 9: P2’s, Development Costs

    Oil & Gas, and Business Unit IRR 35% All-in O&G IRR (2000-2020) ~23% 30%  Required disclosures in 10-K plus proved reserves cash flows: 13% 10-K + Reserve Report — With unhedged prices, IRR would Gas Processing 25% have been 40% S&T  Adding in Katz and Gas Processing excluded 20% from disclosures

  10. Slide 10: SACROC Production & Operations Highlights

    SACROC Production & Operations Highlights 2010 – Review Oil Production 2001-2010 Bbl/d Oil production 2% below plan 40,000 Actual  Platform conformance issues 35,000 Budget 30,000  Injection rates higher than expected – curtailed 25,000 pattern activations from 42 to 34 20,000  Field gas producti

  11. Slide 11: SACROC Expansion Projects

    SACROC Expansion Projects Platform-P2 Platform-P1 A & B 2011, 2012 2009, 2010 South Platform 2008 Gilligan’s Island Southwest 2008 Center Line 2007 Chiquita 2010, 2011 Southwest Center Line (Stage 3) 2008 South Shore 2011 11

  12. Slide 12: SACROC Development Activities and Plans

    SACROC Development Activities and Plans  2010 Budget – 42 Patterns — Complete 3 patterns in GI — Activate 29 P1 patterns — Activate 10 of 14 Chiquita patterns  2010 Actual – 34 patterns — Activated 2 GI patterns — Activated 24 P1 patterns — Activated 8 Chiquita patterns  2011 Plan – 35 patterns —

  13. Slide 13: SACROC Recent Expansion Projects Look-back

    SACROC Recent Expansion Projects Look-back Platform-P2 Platform-P1 A & B 2011, 2012 2009, 2010 South Platform 2008 Gilligan’s Island Southwest 2008 Center Line 2007 Chiquita 2010, 2011 Southwest Center Line (Stage 3) 2008 South Shore 2011 13

  14. Slide 14: SACROC Unit Look-back: Southwest Centerline Project

    SACROC Unit Look-back: Southwest Centerline Project Bbl/d 10000 AFE Actual 8000 Forecast 6000 4000 2000 0 Capex Reserves Wt. Avg Price ($MM) (MMBoe) ($/Bbl) IRR % AFE 101 5.2 $63.24 106.8 Actual / Forecast 89 7.8 $77.92 >107 Actual / Fcst Hedged 89 7.8 $53.45 29.0 14

  15. Slide 15: SACROC Unit Look-back: South Platform Project

    SACROC Unit Look-back: South Platform Project Bbl/d 7,000 AFE 6,000 Actual Forecast 5,000 4,000 3,000 2,000 1,000 - Capex Reserves Wt. Avg Price ($MM) (MMBoe) ($/Bbl) IRR % AFE 91.0 7.0 $68.93 64 Actual / Forecast 83.2 8.6 $75.59 84 Actual / Fcst Hedged 83.2 8.6 $66.41 57 15

  16. Slide 16: SACROC Unit Look-back: Gilligan’s Island Project

    SACROC Unit Look-back: Gilligan’s Island Project Bbl/d 6000 AFE Actual 5000 Forecast 4000 3000 2000 1000 0 Capex Reserves Wt. Avg Price ($MM) (MMBoe) ($/Bbl) IRR % AFE 86.6 3.6 $78.77 29 Actual / Forecast 77.7 4.9 $76.81 73 Actual / Fcst Hedged 77.7 4.9 $62.38 44 16

  17. Slide 17: Yates Production

    Yates Production Behind plan in 2010, but well ahead of 2003 acquisition model Oil Production 2004-2011 MBbl/d Yates oil production missed plan in 2010 30 25  Oil column thinned to <20’ in February; from 20 2004-2010 we have harvested oil column by 15 thinning it ~10 feet 10  Returned to more stab

  18. Slide 18: Katz CO2 Project

    Katz CO2 Project Costs have exceeded Original Plan, but so have prices Current 5 AFE View Project Element ($MM) ($MM) 1 5 Pipeline $36.5 $39.2 2 Field Facilities 41.8 58.1 4 Wellwork / Drilling 103.1 129.0 Misc AFEs 1.1 $2.3 3 5 Project Total $182.6 $228.6 8000 Economic Recap AFE $80 WTI 7000 Capex

  19. Slide 19: Prospective Eastern Shelf Floods

    Prospective Eastern Shelf Floods Offer S&T Opportunities Katz Cluster: 135 MMcf/d Size of circles proportionate to maximum CO2 demand in MMcf/d 10 60 205 MMCFD 265 MMCFD SACROC Claytonville: 45 MMcf/d 19

  20. Slide 20: CO2 Source & Transportation

    CO2 Source & Transportation Growing Business Opportunities Permian Basin CO2 Deliveries MMcf/d Permian Basin 2,000  2011 supplies are being pro-rated 1,500  Permian Basin demand is growing via new Other projects and extensions of existing projects 1,000 Sheep Mtn Bravo Dome 500 McElmo Dome & Doe C

  21. Slide 21: Demand Growth and Regeneration

    Demand Growth and Regeneration 5-year Contracted Volumes High oil prices have increased long-term Daily Contract Quantities demand for CO2 MMcf/d 1,200 2006 2011 Contracts typically provide for deliveries at 1,000 800 customer EOR project, however 600  Some customers have only transportation 400 ag

  22. Slide 22: CO2 Volumes

    CO2 Volumes Produced and Sold to our Customers KM Share MMcf/d Significant growth since 2005: 800 700  CAGR: volumes +7.2%, price +15% 600  2011 vs 2010: volumes flat, price +31% 500 400 300 200 100 0 2005 2006 2007 2008 2009 2010 2011 % KM Share Under Contract And, just to be clear: 150%  Althou

  23. Slide 23: 2011 Expansion Capital Budget - $464 Million

    2011 Expansion Capital Budget - $464 Million Other Staff OVHD 1.6% 6.9% SACROC Wells 25.4% Eastern Shelf 14.6% Source/Trans. SACROC Field 8.4% Fac. 5.9% Yates Wells and SACROC Gas Facilities Handling 8.1% 9.7% Sacroc CO2 Injection 19.3% 23

  24. Slide 24: Impact of Oil Price / Volume Variance on 2011 DCF

    Impact of Oil Price / Volume Variance on 2011 DCF 2011 Budget: $1,078MM +/- 1,000 Bbl/d SACROC $26.3MM Yates $13.7MM +/- 1 $/Bbl WTI $5.0MM CO2 $1.7MM NGL $2.5MM Crude $0.8MM 3rd Party CO2 Deliveries +/- 50 MMcf/d $7.3MM __________________________ Note: Unhedged WTI price presumed to average $89.30/

  25. Slide 25: KM CO2 Current Outlook

    KM CO2 Current Outlook Development Plans 2011-2020 1. SACROC Base Case Forecast DCF ($MM/Yr)  65 MMBoe net (a), $866MM KM-share capex ($255MM CO2) 1,400  Continue platform development plan; production forecast is based on existing recovery expectations 1,200 S&T (b) 2. Yates Base Case 1,000 Easter

  26. Slide 26: Historical Long-term Outlook

    Historical Long-term Outlook The best is yet to come Historical DCF Projections ($MM) CO2 segment outlook has continued to grow over past 5 years $1,600  Oil prices have increased from $50 to $90/Bbl $1,400 — Increased costs but also opportunities 2011 $1,200  Higher ultimate recoveries being achi

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