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Q2 2011 Earnings Call – EP Energy Corp

EP Energy Corp · Aug 4, 2011 · 30 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. Q2 2011 Earnings Call – EP Energy Corp – slide 1
    Interstate Pipelines Exploration & Production Midstream www.elpaso.com NYSE: EP August 4, 2011 D E P E N D A B L E N A T U R A L G A S
  2. Q2 2011 Earnings Call – EP Energy Corp – slide 2
    2011 Objectives Separation Nearing completion of Management teams 8 B pipeline backlog and BOD in place E&P core programs IRS tax ruling filed; performing very well Form 10 imminent Midstream business Completing separation…
  3. Q2 2011 Earnings Call – EP Energy Corp – slide 3
    El Paso Corporation E&P Spinco Doug Foshee1 Doug Foshee1 Michael Talbert2 David Crane Juan Carlos Braniff Bob Goldman Anthony Hall Ferrell McClean Thomas Hix Steve Shapiro Ferrell McClean Brent Smolik Timothy Probert Robert Vagt…
  4. Q2 2011 Earnings Call – EP Energy Corp – slide 4
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  5. Q2 2011 Earnings Call – EP Energy Corp – slide 5
    Very good financial results Another MLP drop completed 750 MM; 1.4 B YTD Will continue as market conditions permit 3.25 B credit facilities extended to 2016 EP1.25 B; EPB1.0 B; E&P1.0 B EP & EPBample liquidity E&Pflexibility to fund…
  6. Q2 2011 Earnings Call – EP Energy Corp – slide 6
    Millions, Except EPS ADJUSTED ADJUSTED ADJUSTED DILUTED EPS SEGMENT EBIT SEGMENT EBITDA 843 0.25 581 809 567 6 0.22 2 323 177 301 173 428 392 538 502 (24) (18) 2011 2010 2011 2010 2011 2010 Pipelines E&P Other…
  7. Q2 2011 Earnings Call – EP Energy Corp – slide 7
    Millions CASH FLOW FROM OPERATIONS CAPITAL EXPENDITURES1 2,016 996 65 894 675 1,502 52 549 1,276 901 2011 2010 2011 2010 Pipelines E&P Other Cash flow and capital programs on track 8 1 Capital expenditures are…
  8. Q2 2011 Earnings Call – EP Energy Corp – slide 8
    Natural Gas Production Hedges Volume % of U.S. Gas EP Avg. Hedge Price1 Current Market Year (Bcf) Production (/MMBtu) Prices (NYMEX) 2011 96 80% 5.89 4.25 2012 105 40% 6.01 4.63 Oil Production Hedges Volume % of Total Oil EP Avg.…
  9. Q2 2011 Earnings Call – EP Energy Corp – slide 9
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  10. Q2 2011 Earnings Call – EP Energy Corp – slide 10
    Earnings benefiting from expansions Ruby in service Two more expansions before year-end Settled CIG rate case Pursuing new opportunities Continue to deliver very good results 11
  11. Q2 2011 Earnings Call – EP Energy Corp – slide 11
    Year-to-date 2011 vs. 2010 TGP SNG CIG/WIC/CPG EPNG1 CHANGE: 21% -3% -8% -8% KEY DRIVERS: Marcellus Weather Rockies CA storage production withdrawals Weather Powergen Region exports Economy/ Weather weather Overall…
  12. Q2 2011 Earnings Call – EP Energy Corp – slide 12
    FGT TGP PHASE VIII SNG SOUTH RUBY 300 LINE SYSTEM III1 GULF LNG In Service In Service In Service October November Nearing the finish line with original 8 B backlog 13 1Phase two of three-phase project, includes SESH II
  13. Q2 2011 Earnings Call – EP Energy Corp – slide 13
    July completion No material change to cost estimate Long-term market fundamentals remain positive Large Rockies resource base Canadian exports to U.S. declining Slower Rockies production remains a near-term challenge Valuable…
  14. Q2 2011 Earnings Call – EP Energy Corp – slide 14
    On timeOctober in-service On budget (1.1 B100%) Cool-down tankers in June Fully subscribed 20-year contracts with Angola LNG group and ENI Demand charge-driven asset No price/volume exposure 15
  15. Q2 2011 Earnings Call – EP Energy Corp – slide 15
    On timeNovember in-service On budget0.7B 127 miles of looping, much through rock 1-mile directional drill under wetlands Expanding/modifying 9 compressor stations Fully subscribed for 15 years TGPLeading Marcellus pipeline 16
  16. Q2 2011 Earnings Call – EP Energy Corp – slide 16
    Nearing completion of 8 billion backlog Will result in significant free cash flow Excellent opportunities for future growth Marcellus/Utica Shale Powergen Mexico export market Pipelines will drive EP yield story 17
  17. Q2 2011 Earnings Call – EP Energy Corp – slide 17
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  18. Q2 2011 Earnings Call – EP Energy Corp – slide 18
    Higher production & oil pricing generating Adj. Segment EBITDA increase Production up 4% vs. 2Q10; oil volumes ramping up Unit cash costs down Positive Wolfcamp results Eagle Ford advancing as planned Capital, drilling efficiencies on…
  19. Q2 2011 Earnings Call – EP Energy Corp – slide 19
    (MMCFE/D) Up 4% from 2Q10 823 Despite 17 MMcfe/d outages 788 GOM12 MMcfe/d Enbridge pipeline Haynesville5 MMcfe/d TGGT facility 2011 2010 Increase driven by Eagle Ford & Haynesville programs 20 Note: Includes proportionate…
  20. Q2 2011 Earnings Call – EP Energy Corp – slide 20
    Targeting 400 MM500 MM non-core asset sales 190200 Bcfe proved reserves 3540 MMcfe/d current production 15 MMcfe/d impact on full-year volumes 122 MM closed; two others in progress Expect to complete by early 4th quarter On track for…
  21. Q2 2011 Earnings Call – EP Energy Corp – slide 21
    1214 rigs for remainder of 2011 Programs benefiting from efficiency gains Drilling more wells with fewer rigs Will add more oil rigs in 2012 On track for 1.6 B capital 22
  22. Q2 2011 Earnings Call – EP Energy Corp – slide 22
    8-1 V 8-7-1H REAGAN 8-12-1H 8-12-3H 11-18-1H IRION 43-19-1H 43-22-1H CROCKETT TX Currently Drilling 47-18-1H 38-29-1H Wells Drilled 39-11-1H 39-7-1H +7000' Laterals 2000' 4500' Laterals Vertical Well Activity…
  23. Q2 2011 Earnings Call – EP Energy Corp – slide 23
    Gas Oil Equivalent IP 24 per Well Lateral Length No. of Stages (Mcf/d) (BOPD) (BOEPD) Stage SHORT 4,0006,000 1220 250340 250340 300400 22 MODEL UL 39-7-1H 4,000 12 275 291 337 28 (east) UL 43-22-1H 3,600 13 341 335 393 30 (central)…
  24. Q2 2011 Earnings Call – EP Energy Corp – slide 24
    IP 24 WELL COST EUR STAGES (BOE/D) ( MM) (MBOE) IRR* 2427 575675 7.08.2 440500 30%40% 7,000'8,000' 25 *Assumes 80/Bbl (WTI) oil and 4.00/MMBtu (Henry Hub) gas
  25. Q2 2011 Earnings Call – EP Energy Corp – slide 25
    Wells drilled: 48 Central area remains Wells completed: 36 Oil Wells on-line: 27 focus of Eagle Ford TX LA SALLE program DIMMIT 3 rigs running Accelerating completion backlog Volatile Oil Infrastructure build on track Wet Gas…
  26. Q2 2011 Earnings Call – EP Energy Corp – slide 26
    1400 10 wells 800 BOED 1200 15 wells 600800 BOED 2 wells < 600 BOED Gross IP (24)BOEPD 1000 800 600 400 200 0 27
  27. Q2 2011 Earnings Call – EP Energy Corp – slide 27
    Gross Volumes (BOED) 20,000 Sales Volumes Shut-in Waiting on Infrastructure 16,000 12,000 8,000 4,000 0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 2010 2010 2010 2010 2011 2011 2011E 2011E Current productive capacity 7,700 Bbl/d and 23 MMcf/d,…
  28. Q2 2011 Earnings Call – EP Energy Corp – slide 28
    Very good execution in all phases Focused on four core programs 3 of 4 are oil All delivering as planned Oil volumes on the rise Continue to mitigate inflation with efficiency gains 10+ year drilling inventory & repeatable results…
  29. Q2 2011 Earnings Call – EP Energy Corp – slide 29
    Excellent progress on all fronts Pipelines nearing completion of backlog Will shift to significant cash flow generator Continued great execution of MLP strategy E&P delivering consistent results Oil production will continue to…
  30. Q2 2011 Earnings Call – EP Energy Corp – slide 30
    Interstate Pipelines Exploration & Production Midstream www.elpaso.com NYSE: EP August 4, 2011 D E P E N D A B L E N A T U R A L G A S

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