Managing Risk in a Midstream Business Scotia Capital Energy Trusts 2006 Conference Marshal Thompson Senior Vice President Gathering and Processing October 12, 2006
Forward-looking information Certain information presented today may constitute forward-looking statements. Such statements reflect the Trusts current expectations, estimates, projections and assumptions. These forward-looking…
Our vision To be the leading Canadian integrated energy infrastructure organization by capitalizing on our solid underlying business, operational expertise and financial strength 3
We believe Focus on earnings is necessary By the market Promotes discipline in acquisitions Ensures long-term sustainability 4
Making connections along the energy value chain Field Gathering and Processing Extraction and Transmission Power Generation Energy Services 5
What we see Western Canada Sedimentary Basin maintains gas deliverability but becoming sweeter Continued demand for natural gas liquids but gas stream becoming leaner Continued strong demand for electricity with greening of…
Field Gathering and Processing 74 facilities with 1.0 Bcf/d of licensed capacity, including sour gas capacity Moveable facilities 6,000 km of gathering lines Ability to rapidly tie in new wells Interconnected processing…
Maintaining gas Northwest Region (Bcf/d) deliverability Central Region (Bcf/d) Southern Region (Bcf/d) Legend FG&P facility Extraction plant Transmission pipeline Source: Ziff Energy 8
Coalbed methane Main Mannville in the Pilot WCSB Mannville Potential Horseshoe Canyon
Sweetening of the basin West Central Alberta production 2005 = 1.2 Bcf/d 2010 = 1.4 Bcf/d 17% 47% 44% 18% 65% 9% Sweet Sour CBM & EDM Source: AJM Petroleum Consultants 10
The leaning of the gas stream Increased CBM will lean the gas stream Not expected to materially impact AltaGas in near term Taking steps to deal with in longer-term Actively managing gas stream through extraction plants…
Extraction and Transmission 539 Mmcf/d extraction inlet capacity, including Albertas newest extraction plant 2005 average production Continued strong demand 13,155 Bbls/d ethane and for natural gas liquids 6,202 Bbls/d NGLs 6…
Power Generation Supplies 5% of Albertas electricity demand Rights to 353 MW of coal- fired generation until 2020 25 MW of gas-fired peaking capacity Sells power and ancillary services in Alberta Risk mitigation through…
Western Canada electricity market drivers Continued population growth Alberta 1.6% in 2005 (52,000) Strong economy, driven by high commodity prices Alberta GDP grew 4.5% in 2005 Western Canada GDP grew 3.8% in 2005 Canada GDP grew…
Why wind power is a good investment for a trust Long-life assets Long-term contracts with creditworthy counterparties Provides geographic and fuel diversity Capitalizes on AltaGas operational expertise 15
Bear Mountain Wind Farm Located near Dawson Creek, B.C. 120 MW capacity AltaGas partnered with Aeolis in Bear Mountain Wind L.P. Seeking further partners 25-year electricity purchase agreement with BC Hydro signed on August…
Energy Services Energy procurement and consulting services, natural gas transportation and storage optimization to end-use customers 1,243 energy management contracts in 2005 95% contract renewal rate 312,272 GJ/d average…
Diversified integrated energy business Net Book Value EBITDA At December 31, 2005 YTD 2006 4% Field Gathering and Processing 27% 24% Extraction and Transmission 49% 72 Power Generation 13% 49% Energy Services 23%…
2006 acquisition strategy Up to 100 million available for acquisitions over 2006 without going to equity markets Potential for major acquisitions All acquisitions must meet following criteria Net income and return on equity…
Five-year highlights per unit 3.50 3.00 2.50 2.00 1.50 1.00 0.50 0.00 2001 2002 2003 2004 2005 EBITDA Net income Funds from operations 20
AltaGas total return vs. indices Assumes a 100 investment on Dec. 31, 2000 and reinvestment of dividends/distributions 800 700 600 500 400 300 200 100 0 Dec. 31 2000 Dec. 31 2001 Dec . 31 2002 Dec. 31 2003 Dec. 31…
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