Regency Energy Partners LP Investor Day Presentation June 11, 2013
Forward-Looking Statements Certain matters discussed in this report include forward-looking statements. Forward-looking statements are identified as any statement that does not relate strictly to historical or current facts. Statements…
Agenda 1. Overview & Strategy Mike Bradley, President & CEO 2. Natural Gas Transportation and Gathering & Jim Holotik, EVP & Chief Commercial Officer Processing Segment Overviews Jennifer Street, Senior Director of Engineering…
Overview & Strategy
Recent Developments Closed on 1.5 billion acquisition of Southern Union Completed nearly 1 billion of major, fee-based organic Gathering Services (SUGS) growth projects on time and within budget Creates a leading gathering and…
Execution: Major Expansions Under Construction Regency has an extensive capital project portfolio providing strong visibility for continued growth RGP Growth Capital Project Contract Type Expected Completion Date ( in millions)…
Invest In Future Growth: Driven By Liquids-Rich Shale Plays Regencys capital investments are focused in emerging shale plays located near existing assets that require additional midstream infrastructure Gathering & Processing NGL…
Summary Extensive midstream portfolio and strong position in liquids-rich plays driving expansion opportunities Visibility for Continued Integrated Midstream High-Quality Assets Focused on Execution Organic Growth Platform 1…
Transportation and Gathering & Processing
Transportation and Gathering & Processing: Asset Overview Gathering & Processing Asset Summary Total Gathering Capacity (MMcf/d) 3,217 Transportation Asset Summary Total Processing Capacity (MMcf/d) 1,330 Total Intrastate…
Intrastate Transportation: RIGS The Dubberly expansion project, which is expected to be completed by year-end 2013, will utilize the RIGS pipeline for transportation of residue volumes RIGS Haynesville Joint Venture Partnership…
Interstate Transportation: MEP MEP Joint Venture Partnership Structure MEP Details Capacity / 1.8 Bcf/d 50/50 Joint Venture with Kinder Morgan Pipeline Length 500 miles Kinder Morgan operates the assets on behalf of the Joint…
Gathering and Processing: Mid-Continent Mid-Continent YTD 2013 Total Gathering Capacity (MMcf/d) 437 Total Processing Capacity 50 (MMcf/d) Growth Opportunities FrontStreet assets continue to provide steady, fee-based…
Gathering and Processing: NLA North Louisiana YTD 2013 Total Processing Capacity 540 (MMcf/d) Total Treating Capacity 325 (MMcf/d) Total Gathering Capacity (MMcf/d) 800 Growth Opportunities New 70 MMcf/d cryogenic…
Gathering and Processing: South Texas South Texas YTD 2013 Total Treating Capacity (MMcf/d) 320 Total Gathering Capacity (MMcf/d) 1,200 Growth Opportunities In-field drilling around the Eagle Ford Expansion Project is…
Gathering and Processing: Combined Permian On April 30, 2013, Regency acquired Southern Union Gathering Services, Ltd. (SUGS), from Southern Union Company, a jointly owned affiliate of Energy Transfer Equity, L.P. and Energy Transfer…
Permian Integration Strategy Immediately upon closing, Regency implemented comprehensive plan to integrate and capture synergies Organization Integration Resource Maximization Improved Reliability Process System Integration…
Expected Financial Impacts from Synergies Reduced Expenses Reduced and Deferred Increased Gross Margin (Operating and G&A) Capital Expenditures Lower costs due to more efficient organizational Deferred capital Increased volumes…
Reliability and Performance Improvement Operations Planning & Maintenance Coordination Organization and Technology Reliability Efficiencies Integration Operate as a collective group Gathering System Control Information:…
System and Commercial Integration: Synergies Optimization projects identified by combining the two systems will optimize gas flows, increase reliability and provide for greater system flexibility West Texas System 21
System and Commercial Integration: Synergies Example Consolidation of Regency and SUGS field assets will allow for alternative use of redundant assets and reduce overall operating costs Woodward Mountain Assets Consolidation…
Gathering & Processing Opportunities Summary Bone Spring/Permian Newly combined assets of Regency/SUGS are well positioned to access current and geographically expanding Delaware Basin activity in the Cotton Valley Wolfcamp,…
NGL Services
NGL Services: Overview Lone Stars midstream assets include storage, NGL pipeline, fractionation and processing facilities which handle a wide array of energy products, including natural gas, NGLs, petrochemicals and refined products…
NGL Services: Expansion Plans 2013 Opportunities Recently announced propane export project Mont Belvieu assets (Fractionation, storage and purity product transportation) are positioned to further expand Evaluating opportunities…
Contract Services
Contract Services: Who We Are CDM Resource Management is a natural gas contract compression company that services the oil and gas industry using custom-engineered compression packages Zephyr Gas Services supplies the natural gas…
Contract Compression: Asset Overview CDM is well positioned to provide fee-based, turn-key services in the majority of all shale plays and able to capitalize on those that are currently experiencing increased drilling activity…
Contract Compression: 2013 Outlook Have seen a significant increase in demand for compression in shale plays which is expected to continue throughout 2013 Horsepower By Shale Play 2013 Opportunities and Growth Strategies 250,000…
Contract Treating: Asset Overview Zephyr is well positioned in several rapidly growing shale plays, which is expected to allow us to capitalize on increased activity and production Fayetteville Asset Utilization 350 100% Barnett…
Contract Treating: 2013 Outlook In 2013, with the successful integration of the treating and compression sales teams, we have experienced an increase in sales coverage and diversified our customer base Assets by Shale Play 2013…
Contract Services: Where We Are Going In summary, our contract services segment presents tremendous opportunities and upside potential with the results we have experienced from the existing and developing shale plays Basins…
Financial Review
Financial Objectives Maintain a disciplined capital management program and a leverage ratio near Maintain Strong Balance 4.0x Sheet Maintain ample liquidity and flexibility to fund organic growth projects Maximize Return on…
Capital Markets Update Revolving Credit Facility Amended our credit facility in May 2013 Extended the maturity date to May 2018 Increased capacity from 1.15 billion to 1.2 billion with a 300 million accordion feature Improved…
Pro-forma Debt Maturity Profile Weighted average maturity of debt is 8.5 years, with no debt maturing for nearly 5 years Pro-forma Debt Maturity Profile 2,000 1,800 1,600 666 1,400 1,200 in millions 1,000 600 534…
Financial Discipline During Growth Over the past seven years, Regency has maintained its credit metrics while investing in substantial acquisitions and organic growth projects Long-Term Debt to Adjusted EBITDA Long-Term Debt to…
Maximize Returns: 2013 Capital Expenditures 2013 Estimated Growth Capital Growth Capital Business Segment Major Projects ( in millions) Primarily Edwards Lime JV Expansion, Dubach Gathering & Processing1 410 Expansion, Red…
Diverse Portfolio The Lone Star Joint Venture broadened Regencys asset base by adding a significant NGL logistics platform to our portfolio Acquisition of complimentary SUGS assets increases scale in core Gathering & Processing…
Maintain Stable Cash Flows: Business Mix Acquisition of the SUGS assets significantly increases the scope of Regencys core gathering and processing business in one of the top oil-producing basins in the U.S Currently executing on…
Maintain Stable Cash Flows: DCF Sensitivities DCF Sensitivity to Commodity Price Changes Balance of 2013 Change in WTI Price (/Bbl) Change in Natural Gas Price Decrease 10.00 Flat Increase 10.00 (/MMbtu) Decrease 1.00…
Conclusion
Concluding Thoughts Well positioned to increase DCF/Unit and achieve investment grade ratings over time Integrated Midstream Diverse portfolio of services provides attractive options for producers Platform Assets strategically…
Q&A
Appendix
Maintain Stable Cash Flows: Comprehensive Hedging Program Executed Hedges by Product1 Balance of 2013 Full Year 2014 Natural Gas/Ethane 53% 45% Propane 77% - Normal Butane 69% 11% C5+/Condensate 83% 19% 1 As of June…
Maintain Stable Cash Flows: Comprehensive Hedging Program Executed Hedges by Product1 Balance of 2013 Full Year 2014 Price Price Bbls/d Bbls/d (/gal) (/gal) Propane 2,510 0.93 - - Normal Butane 908 1.43 150 1.54 Price…
Gathering and Processing: 2013 Margin By Type Mid-Continent - 2013 Estimated Margin by Type North Louisiana - 2013 Estimated Margin by Type 4% 2% 12% 12% 8% 12% 3% 73% 73% Gas Margin NGL Margin Condensate Margin Net…
Gathering and Processing: Volumes By Region Mid-Continent Average Annual Throughput North Louisiana Average Annual Throughput 251 470 237 459 240 460 220 220 214 450 441 200 440 435 (000's MMBtu/d) (000's MMBtu/d)…
CDP Illustration Established CDP allows for a fully-integrated system, which utilizes the complete suite of Regencys services offerings, including gathering & processing, compression and treating Modular design is easily replicated…
Non-GAAP Reconciliation Three Months Ended March 31, 2013 2012 ( in thousands) Net income (4,803) 28,900 Add (deduct): Interest expense, net 36,771 29,557 Depreciation and amortization 48,259 51,506 Income tax expense (benefit)…
Non-GAAP Reconciliation Thre e Months Ende d De ce mbe r 31, 2012 Se pte mbe r 30, 2012 June 30, 2012 March 31, 2012 ( in thousands) Net income (loss) (8,949) (1,454) 29,327 28,900 Add: Interest expense, net 36,314 28,567 27,934…
Non-GAAP Reconciliation December 31, 2011 September 30, 2011 June 30, 2011 March 31, 2011 Net income 13,628 30,849 14,837 14,305 Add (deduct): Interest expense, net 28,926 28,852 24,689 20,007 Depreciation and amortization 45,989…
Non-GAAP Reconciliation Three Months Ended March 31, 2013 December 31, 2012 September 30, 2012 June 30, 2012 March 31, 2012 ( in millions) Net income (5) (9) (1) 29 29 Add (deduct): Operation and maintenance 45 45 41 39 41 General…
Non-GAAP Reconciliation Three Months Ended March 31, 2013 2012 Haynesville Joint Venture ( in millions) Net income 20 23 Add: Operation and maintenance 5 5 General and administrative 5 4 Depreciation and amortization 9 9 Total…
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