Kinder Morgan, Inc. · NYSE:KMI

Kinder Morgan — Kinder Morgan 2013 Analyst Conference

28 slides from Kinder Morgan's conference presentation, Jan 30, 2013

  1. Slide 1: CO2

    CO2 Tim Bradley & Jim Wuerth President CO2 Group

  2. Slide 2: Kinder Morgan CO2 Asset Map

    KINDER/MORGAN Kinder Morgan CO, Asset Map ——— CO2 PIPELINE ——— CRUDE PIPELINE © C02 SOURCE FIELD © OIL PRODUCTION FIELD 4 P

  3. Slide 3: History of CO2 Group and Looking Forward

    History of CO2 Group and Looking Forward Track Record – Consistently very close to budget despite inherent volatility  Shell CO2 formed in 1998, KM share 20% DCF ($MM) (a)  Acquired remaining 80% in April 2000  Acquired SACROC interests June 2000  Acquired Yates interests in 2001 and 2003  Ramp

  4. Slide 4: 2012 Performance Recap

    2012 Performance Recap Beat plan operationally; NGL prices hurt SACROC (a)  DCF $706MM vs. $747MM plan  Oil: 28,968 Bbl/d vs. 27,868 Bbl/d  NGLs: 18,825 Bbl/d vs. 17,361 Bbl/d  NGL Price 22% below plan: $59 MM impact 2012 DCF: CO2 Source and Transportation  DCF $358MM vs. $350MM plan $1,365MM p

  5. Slide 5: 2012 and 2013 DCF by Asset Group

    2012 and 2013 DCF by Asset Group (a) 2012 DCF 2013 DCF = $1,315 MM = $1,380 MM Katz 1% S&T 27% SACROC Complex 54% Yates 18% __________________________ (a) Segments shown without elimination 5

  6. Slide 6: 2013 Expansion Capital Budget - $632 Million

    2013 Expansion Capital Budget - $632 Million Staff overhead and CO2 CO2 purchases and staff purchases – aggregated overhead allocated to assets __________________________ Note: ES refers to Eastern Shelf properties including Katz field development and Residual Oil Zone (ROZ) development. 6

  7. Slide 7: 2013 Executive Summary

    2013 Executive Summary Capex Program $632 MM (a) CO2 S&T – $241 MM $379MM DCF  Drill 6 new wells, 6 Re-Completion and Seismic  Order Additional Compression (70,000 horsepower)  Produce 1,275 MMcf/d  St Johns Unit and Lobos PL Pre-Development  Increase Oil Transportation Capacity to 145 BOPD SAC

  8. Slide 8: Impact of Oil Price / Volume Variance on 2013 DCF

    Impact of Oil Price / Volume Variance on 2013 DCF 2013 Budget: $1,380MM Volume +/– 1,000 Bbl/d SACROC / Katz $26.4MM Yates $13.8MM CO2 Volume +/– 50 MMCF/d $9.8MM Oil Price +/– $1/Bbl WTI $5.9MM NGL $2.1MM CO2 $2.0MM Crude $1.8MM NGL Price +/- $1/Bbl $3.9 MM __________________________ Notes: Unhedge

  9. Slide 9: CO2 S&T Growth Opportunities

    CO2 S&T Growth Opportunities Demand is strong and continues to increase Domestic EOR Projected CO2 Demand (a) We have a simple plan: 1. Sign Contracts securing the demand 2. Develop the supply to meet those contracts — Options: 400-600 MMcf/d for $1-2 Billion __________________________ (a) Source: A

  10. Slide 10: CO2 Source & Transportation

    CO2 Source & Transportation Growing Business Opportunities Permian Basin CO2 Deliveries Permian Basin  2012 supplies were at capacity, customers were being pro-rated  Permian Basin demand is growing via new projects, extensions of existing projects, and ROZ projects Domestic CO2 Deliveries Domesti

  11. Slide 11: CO2 Entitlement Volumes

    CO2 Entitlement Volumes Produced and Sold to our Customers Significant growth since 2005:  CAGR: volumes +5.2%, price +13.1% CO2 KM-share  2013 vs 2012: volumes +5.2%, price +3.1% And, just to be clear:  Although our customer deliveries often have and will exceed our entitlement, sales revenues a

  12. Slide 12: Demand Growth and Regeneration

    Demand Growth and Regeneration 5-year Contracted CO2 Volumes CO2 Daily Contract Quantities MMcf /d 2006 2012 High oil prices have increased long-term demand 1,000 for CO2 800 600 Total contract quantities signed in 2006-2012 400 represents 3.4 times our entitled production during that period 200  W

  13. Slide 13: Doe Canyon Field Expansion

    Doe Canyon Field Expansion $255 MM, 65 MMcf/d CO2 increase Projected Production Forecast, MMcf/d 180  170 MMcf/d (from 105 MMcf/d) 160 — Adds 750 Bcf reserves 140 120  Timing : 2nd Quarter 2014 100 80 — Drilling underway 60 — Parallel Compression Q4 2013 40 — 170 MMCFD YE 2013 20 — Booster Compres

  14. Slide 14: McElmo Dome Field Expansion

    McElmo Dome Field Expansion Yellow Jacket Area – 1.23Bcf/d CO2 Targeted McElmo Production Project Incremental Production,  Target Rate of 1.23 Bcf/d MMcf/d Extended for ~2 yrs 250 — Add 1.7 TCF reserves 200  Timing : 4th Quarter 2014 150 100  Project Costs $243 MM — Compression $141 MM 50 — Facil

  15. Slide 15: St. John's CO2 Source Opportunity

    St. John’s CO2 Source Opportunity Assessment drilling and testing ongoing  Evaluating pipeline & field McElmo Dome Sheep development options Mountain — 200 MMCFD ~$0.6 B — 450 MMCFD ~$1.3 B  Drilled/Recompleted 14 wells Cortez PL Bravo Dome  Established good deliverability in Granite Wash St John

  16. Slide 16: Oil and Gas Segment

    Oil and Gas Segment Production and DCF Net Hydrocarbon Production (Mboe/d) Original oil in place (billion Bbls)  SACROC 2.8  Yates 5.0  ES 0.23 Gross production (Bbl/d) (b) 2012 2013  SACROC oil 28,998 30,726  SGP NGLs 18,825 19,233 DCF ($MM)  Yates 20,839 20,212  ES 1,722 2,846 DCF (b) ($MM,

  17. Slide 17: Oil & Gas: Margins and Cost Structure

    Oil & Gas Margins and Cost Structure Oil & Gas All-in Cost Structure (a) ($/Net Boe) O&G cost structure has strong correlation to energy prices  Power is tied to gas prices  High activity levels have increased staffing and other service costs  Well-work and rig contracts now being tied to oil pri

  18. Slide 18: Oil and Gas Segment

    Oil and Gas Segment Over past 5 years, capex 6% below plan, oil production 0.5% below plan Capex ($MM) Net Oil Production (MBbl/d) 40 35 30 25 20 15 10 5 - 2008 2009 2010 2011 2012 Budget Actual __________________________ Note: Capex includes CO2 purchases and capitalized overhead 18

  19. Slide 19: SACROC Production & Operations Highlights

    SACROC Production & Operations Highlights Oil Production 2002-2013 (MBbl/d) 2012 – Review  Oil production 3.9% above plan — Harvest better than expected — Good results from infill program — Platform 2 meeting oil expectations — GOR under control — Sub Pump and Compressor performance on target  Cos

  20. Slide 20: SACROC Unit Harvest Project

    SACROC Unit Harvest Project: 3,000 b/d of incremental oil and ~40MMCF of additional recycled CO2 to inject 2-6 2-2 2-1 2-4 3-5 3-6 3-7 3-8 4-3 4-1 3-3 3-2 3-1 3-4 Harvest Production – older projects 8-8 8-6 8-2 8-4 10-7 10-8 12-5 10-6 10-3 12-12 8-9 10-14 10-15 10-12 10-13 10-16 12-13 8-7 8-5 12-20

  21. Slide 21: SACROC Unit -- Emerging Opportunities

    SACROC Unit -- Emerging Opportunities Big Fields get Bigger  Canyon Reef (SACROC Unit) — Horizontal producing and injection wells — West end development — Middle Canyon re-development — Infill Drilling – pinchouts and mounds  Other Horizons – (20,000+ acres of base leases) — Currently testing Cisc

  22. Slide 22: Yates Production

    Yates Production Steady 2012 Production (MBbl/d) 25,000 Yates oil slightly below plan in 2012 (0.7%) 20,000  Oil column thinned at half rate (0.8’) of previous 15,000 year.  Stable production 10,000  Renewed East Side drilling 5,000 — Deeper/polymer gel to control gas 0 Jan Feb Mar Apr May Jun Ju

  23. Slide 23: Katz CO2 Project

    Katz CO2 Project The Second Year Investment  $202MM project total, $158MM thru 2012 Bbl/d 7000 Oil Response 6000  Oil Rate up from 1104 to 1806 Bbl/d (Dec to Dec) 5000  2012 plan 2,267 vs. Actual 1,722 Bbl/d 4000  Phase 1 Underperforming  Effect was 417 Bbl/d (77% of short fall) 3000 Recent Ope

  24. Slide 24: Katz CO2 Project

    Katz CO2 Project Solid oil response but Phase 1 Stalled 19 Oil production by Development Phase -18 -81 Phase 1 -43 1,500 -137 76 -66 -95 -50 1,000 -10 6 -110 -6 500 -8 77 Oil rate Curr View BOPD -92 0 1/1/11 7/4/11 1/4/12 7/6/12 1/6/13 7/9/13 -2 45 -18 1,000 Phase 2 500 Phase 1 Poor Performance in 6

  25. Slide 25: Oil and Gas Segment Production Forecasts

    Oil and Gas Segment Production Forecasts Production expectations tend to grow over time Evolution of Forecasted 2013 Production (a) over Time (MBbl/d, 8/8ths) We have replaced 105% of our Hydrocarbon production (net Boe) with new proved reserves for the past 3 years We expect production to exceed ou

  26. Slide 26: Oil & Gas, and Business Unit IRR

    Oil & Gas, and Business Unit IRR 35% All-in O&G IRR (2000-2022) ~22.7%  Required disclosures in 10-K plus proved 10-K + Reserve Report reserves cash flows: 15.6% Gas Processing 30% — With unhedged prices, IRR would have been 40.2%  Adding in Gas Processing excluded from 25% disclosures increases I

  27. Slide 27: KM CO2 Current Outlook

    KM CO2 Current Outlook Development Plans 2013-2022 1. SACROC Group Forecast — 55 MMBoe net (a), $1,210MM KM-share capex ($258MM Capitalized CO2) DCF ($MM) (b) • 5 Year Capex $606MM — Continue platform development plan; production forecast is based on existing recovery expectations — Forecast assumes

  28. Slide 28: 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  Oil prices have decreased from $100 to $95/Bbl — Increased costs but also opportunities  Higher CO2 volumes and prices — Increased demand, improved con

Kinder Morgan — Kinder Morgan 2013 Analyst Conference on 6ix