Regency ege cy Energy e gy Partners a t e s Investor Day Presentation March 31, 2009
Agenda f Business Overview & Strategy f Transportation Segment & Joint Venture Overview f Gathering G th i & PProcessing i O Overview i f Contract Compression Overview f Financial Overview 3
Business Overview & Strategy
2008 A Year of Two Journeys January Through September October Through Present Market Meltdown A Journey of Growth A Journey of Adaptation 5
2008 - January Through September A Journey of Growth Accomplishments Through September Announced and integrated three major acquisitions valued at 936 million Increased revolver capacity from 500 million to 900 million…
2008 Review A Journey of Growth Step-out Acquisition Bolt-on Acquisitions Organic Growth Total 1,291 million 700 million 236 million 355 million invested Acquisitions Performance To Date 2008 EBITDA Acquisition Description…
2008 Review Step-out Acquisition Bolt-on Acquisitions Organic Growth Total 1,291 million 700 million 236 million 355 million invested Growth Projects Overview Growth Project Description Region Status Investment ( in…
2008 October Through Present A Journey of Adaptation Accomplishments October Through Present Restructured Haynesville Expansion Project to add an incremental 1.1 Bcf/d of capacity Renegotiated contracts with Haynesville…
Strategy - 2009 Regency will work toward strengthening our position in North Louisiana while continuing to work toward our goal of achieving an investment grade rating Implications Haynesville Expansion Project in service by year…
Strategy 2010 and Beyond Regency's long-term goal is to achieve an investment grade rating Capitalize on strategic position and grow: Location Obtain Scale in Business Segments Product range across all sectors Reliability…
Key to Success Relentless Relentless focus on execution execution Regency will strive for top quartile total annualized returns to unit holders through our relentless focus on execution 14
The Future: Long-term Fundamentals Are Sound
US Gas Demand Forecast Demand likely to rebound and increase over time 90 80 70 60 50 Bcf/d d 40 30 20 10 0 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003…
Supply Trending Toward Unconventional Gas Plays C Conventional ti lSSupply l 1 U Unconventional ti lSSupply l 1 60 60 50 50 40 40 Bcf/d Bcf/d 30 30 20 20 10 10 0 0 2000 2002 2004 2006 2008 2010…
Supply is Becoming Increasingly Dependent on New Drilling Higher rig counts will likely be needed to keep supply in-line with demand Accelerating decline curves leading to greater dependence Production as % of Total Production1…
Relative Production Costs Across Shale Plays Estimated Current Est. Peak Play Recoverable Comments Production1 Production1 Resource1 f Developed infrastructure Approximately f Low F&D cost Haynesville 0.1 Bcf/d 5.0+ Bcf/d3 60…
Additional Upside in the Haynesville Shale Despite recent credit market deterioration deterioration, outlook for Haynesville remains robust 10.0 9.0 8.0 7.0 6.0 Bcf/d 5.0 B 4.0 3.0 2.0 1.0 - Jan-09 Mar-09…
Business Overview and Strategy gy Long-term Fundamentals Questions & Answers Q
Transportation Segment & Joint Venture Update
Regency Intrastate Gas System (RIGS) Overview 2009 total t t l RIGS EBITDA will ill be b approximately i t l 40 million illi RIGS Details f Petrohawk f Exco Major Shippers f Union Power f JW Operating f El Paso Corporation…
Overview of Haynesville Expansion Project Regency is significantly expanding RIGS to capitalize on development in the Haynesville Shale f Project adds incremental 1.1 Bcf/d capacity to existing RIGS system f Currently 84%, or 925…
Capacity Analysis Perryville Hub to Market Based on existing pipeline capacity and announced pipeline expansions, Regency believes that Perryville will have initial takeaway capacity to absorb forecasted Haynesville production 18…
Project Overview Project Costs Total cost of the project is projected to be 653 million Project Description Expected Cost ( millions) Pipeline Bienville Loop 25 miles of 36 pipeline3 118 Elm Grove Pipeline p 21 miles of 36 p…
Project Overview: Key Components of Cost The following three categories represent 85% of the total project cost Category % of Cost Comments f Construction is under a fully executed, unit priced contract, where The unit rates are…
Haynesville Joint Venture Regency has formed a partnership with Alinda Capital Partners LLC (Alinda) and an affiliate of GE Energy Financial Services to co-develop the Haynesville Expansion Project f Regency contributed its RIGS asset,…
Joint Venture Benefits By forming B f i the th Joint J i t Venture, V t R Regency h has successfully f ll secured d fi financing i on tterms accretive to unitholders in 2010 and beyond Key Highlights f The formation of the…
Transaction Overview Transaction Details f Regency Haynesville Intrastate Gas LLC, a subsidiary of Regency Energy Partners LP Parties f General Electric Capital Corporation, an affiliate of GE Energy Financial Services (GE EFS) f…
Commercial Update: Haynesville Shale Development Approximately 2.9 million acres have been leased in the Haynesville area and initial well results are positive 32 Source: Louisiana Department of Natural Resources and public…
Commercial Update: Haynesville Production Results The 6 producers listed on this slide project spending approximately 2.5 2 5 billion of capital and forecast drilling approximately 350 wells in 2009 1 Company Headlines2 Estimated…
Construction Update Approximate Project Construction Timeline Aug08 Sep08 Oct08 Nov08 Dec08 Jan09 Feb09 Mar09 Apr09 May09 Jun09 Jul09 Aug09 Sep09 Oct09 Nov09 Dec09 Surveyy Environmental Permits LA Department of Natural Resources…
Midstream Overview Regencys midstream operations are primarily located in Texas, Louisiana, Oklahoma and Kansas1 Mid-Continent East Texas Plants2 1 Plants 1 Gathering System 3,470 Length (Miles) Gathering System 371 Length (Miles)…
North Louisiana Gathering & Processing Key Assets Dubach Processing Plant1 95 MMcf/d Dubach/Lisbon/ Calhoun Lisbon Processing Plant 30 MMcf/d gathering system El Grove Elm G Refrigeration R f ig ti Pl Plantt 200 MM MMcf/d…
South Texas Gathering & Processing Key Assets Tilden Treating Plant 100 MMcf/d Fashing Processing and Treating Edwards Lime JV 75 MMcf/d Tilden (Lean/Sour) Gathering System 60 MMcf/d Tilden (Rich/Sour) Gathering System 40 MMcf/d…
South Texas - Upside Potential Eagleford Shale and Maverick Basin both represent additional upside for Regencys South Texas assets Austin Chalk Buda Eagleford Shale Pearsall & Eagleford Georgetown Pearsall Shale Edwards…
Mid-Continent Gathering & Processing Key Assets Mocane Processing Plant 50 MMcf/d Greenwood FrontStreet Hugoton Gathering System1 152 MMcf/d Lakin and Lakin Gathering System 120 MMcf/d FrontStreet Hugoton Mocane-Laverne…
West Texas Gathering & Processing Key Assets Waha Processing Plant 125 MMcf/d Waha Gathering System 200 MMcf/d Primary Producing Formations Devonian Cherry Canyon Delaware Wolfcamp Atoka/Morrow Bone Springs Key Producer…
2008 Accomplishments 2008 Accomplishments f Acquired and integrated Nexus gathering system in DeSoto Parish. Nexus is running at full capacity since March North Louisiana f Completed 11 million Dubach plant expansion which increased…
2009 Outlook and Initiatives 2009 Outlook f Focus on expansion projects to tie new Haynesville production into existing system North Louisiana f Evaluate additional gathering and treating opportunities associated with Haynesville…
2009 Forecasted Contract Mix by Volume Regencys R contract mix i is i weighted i h d toward d a fee-based f b d structure with ih limited keep whole exposure Total Gathering and Processing Segment Gathering and Processing…
Environmental, Health and Safety Committed to the achievement of excellence in the area of environmental, health and safety performance Goal: Reliable delivery of products to customers with commitment to excellence in…
Environmental Initiatives Completed In 2008 Proactively invested capital to reduce emissions while optimizing our assets Capture Gas Instead of Replacement of Old Consolidation Send to Atmosphere Compressors X Retired…
Gathering & Processing Questions & Answers
Segment Detail Contract Compression Overview
Contract Compression Overview1 Core compression operations are located in Texas, Louisiana and Arkansas HP by Region,2 State Total HP of Units Southwest (TX) 213,802 281 Southeast (LA & TX) 120,835 137 Northwest (TX) 125,831…
Contract Compression Segment Overview Contract Compression Segment will continue to grow in 2009 X Providing superior run-time performance Maximize customers cash flow creates an opportunity to increase market share as customers are…
Contract Compression Horsepower Growth Contract Compression has seen impressive year-over-year growth in horsepower Operating Horsepower 1,000,000 2009E 895,000 HP1 900,000 116,333 800,000 700,000 778,667 New Horsepower…
Contract Compression Segment Questions & Answers
Financial Overview
Finance Agenda X Disciplined Financial Growth X Track Record of Solid Performance X Limited Commodity Exposure X Liquidity Update X Growth Projects X Significant Sponsor X 2009 Guidance 56
Disciplined Financial Growth Strategy Regencys key objective is to achieve an investment grade rating within the next 3 years X Credit profile targets Ratio Target 2008 Debt/Adjusted EBITDA < 4.0x 4.2x Adj t d EBITDA/I…
Key Milestones X Closed RIGS Joint Venture with Alinda and affiliate of GE Energy Financial Services Deleverages balance sheet providing us sufficient liquidity to execute our 2009 business plan X Issued 204 million in equity in…
Track Record of Performance Adjusted EBITDA 300 CAGR 50% 254 250 200 in millions 150 142 93 100 50 51 50 0 2004 2005 2006 2007 2008 59 Recast to reflect the TexStar and FrontStreet acquisitions…
Changing Business Mix Total Adjusted Segment Margin 500 CAGR 55% 441 450 400 350 in millions 300 229 250 200 154 150 88 76 100 50 0 2004 2005 2006 2007 2008 G Gathering & Processing Transportation C…
Commodity Price Risk Management Regencys executed hedge pricing increases in 2010, which translates into built-in growth in adjusted segment margin on currently hedged products Executed Hedges by Product: 2009 2010 Bbl/d Price…
Commodity Price Risk Management Based on Regencys contract mix we are a net seller of both liquids and natural gas, and on a portfolio basis Regency has no net keep whole exposure Estimated 2009 Adjusted Segment Margin Fee-Based…
Sufficient Liquidity for Capital Requirements Assuming no additional growth capex projects are approved, Regency has sufficient capital for 2009 Liquidity Update ( iin millions) illi ) Current Availability on Revolver (as of…
Balance Sheet Strength Capitalization Summary 12/31/2008 Capitalization Summary ( in millions) Drawn on Revolver 769 Senior Notes 358 Long Term Debt 1,126 Partner Capital 1,086 Book Capitalization 2 212 2,212 Credit…
Caterpillar Lease Facility Operating leases provide financial flexibility, while adding long-term value through purchase options f Fi Financing i allows ll Compression C i SSegmentt to t continue ti tto meett steady t d…
Organic Growth & Bolt-on Acquisitions Based on current market conditions, Regency plans to spend 120 million in 2009 and 100 million in 2010 Pro Forma Historical Organic Growth & Bolt-on Acquisitions 800 711 700 600 ons…
Significant Sponsor GE Energy Financial Services and its affiliates have invested 965 million in Regency since June 2007 1,200 1,000 21 965 127 50 800 139 millio ns 628 600 400 200 - GE Initial FrontStreet…
Adjusted EBITDA Walkforward Managements adjusted EBITDA guidance range is 220 - 240 million for 2009 300 254 (7) (10) 250 (13) (4) 12 230 (2) millions 200 m 150 100 50 - Primarily from compression…
2009 Outlook Adjusted EBITDA ( in millions) Adjusted EBITDA 220 - 240 RIGS JV Adjustment (20) (26) Adjusted EBITDA Post JV 200 - 214 f Assuming no incremental capital issuance, 2009 interest expense is expected to be…
Financial Impact to Regency JV structure t t provides id one off th the mostt efficient ffi i t costt off capital it l options ti currently tl available il bl f Base project returns exceed the costs of the new equity capital…
Strong Foundation- 2009 DCF Analysis DCF Sensitivity to Commodity Price Changes - 2009 Change in WTI Price (/bbl) Change in Natural Gass ( in millions) Decrease 10.00 Flat Increase 10.00 e (/MMbtu) Decrease 1.00 (1.1)…
Historical & Forecasted Price Deck O 2009 forecast Our f t reflects fl t the th currentt commodity dit environment i t Mid-Continent Market PEPL 2008 Gas Price/MMBtu 7.08 2009 RGNC Budget 3.37 North Louisiana & East…
2009 Outlook and Goals X Evaluation of existing assets for optimization opportunities X Maintain strong hedging program for 2010 and beyond to limit exposure to commodity price fluctuation X Continued development of organic growth…
JV Reporting X RIGS will be deconsolidated in March 2009 X The balance sheet will show an investment in an unconsolidated subsidiary: Estimated investment balance is expected to be approximately 400 million (estimated fair value)…
Financial Overview O er ie Question & Answers
Non-GAAP Non GAAP Reconciliations 80
Non-GAAP Reconciliation Reconciliation of Non-GAAP Measures to GAAP Measure Year to Date December 31, ( in thousands) 2008 2007 2006 Net income (loss) 101,016 (13,836) (7,244) Income tax expense (benefit) (266) 931 - Interest…
Non-GAAP Reconciliation Non-GAAP Adjusted Segment Margin to GAAP Net Income (Loss) Year to Date December 31, ( in thousands) 2008 2007 2006 Net income (loss) 101,016 (13,836) (7,244) Add: Operation and maintenance 131,629 58,000…
Non-GAAP Reconciliation R Reconciliation ili i off fforecasted d 12 months h ended d dDDecember b 3131, 2008 net iincome to EBITDA ( in thousands) Low Estimate High Estimate Forecasted net income 166,000 180,000…
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