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2015 Investor & Analyst Day – Markwest Energy Partners, L.P.

Markwest Energy Partners, L.P. · Jun 3, 2015 · 65 slides

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Slides

  1. 2015 Investor & Analyst Day – Markwest Energy Partners, L.P. – slide 1
    2015 INVESTOR & ANALYST DAY June 3, 2015
  2. 2015 Investor & Analyst Day – Markwest Energy Partners, L.P. – slide 2
    INVESTOR PRESENTATION AGENDA MARKWEST STRATEGY FRANK SEMPLE Chairman, President & CEO COMMERCIAL STRATEGY GREG FLOERKE Executive Vice President & Chief Commercial Officer RANDY NICKERSON Executive Vice President & Chief Commercial…
  3. 2015 Investor & Analyst Day – Markwest Energy Partners, L.P. – slide 3
    MARKWEST ENERGY: EXPANDING ON SUCCESS Create the top performing midstream MLP in the industry by consistently providing best-of-class service and relentless pursuit of safe, efficient, and effective solutions for our customers…
  4. 2015 Investor & Analyst Day – Markwest Energy Partners, L.P. – slide 4
    U.S. NATURAL GAS SUPPLY & DEMAND U.S. Dry Natural Gas Production Total U.S. natural gas supply is forecasted (billion cubic feet per day) to grow by over 26 Bcf/d from 2015 to 120 2015 2040 Shale gas is forecasted to account for…
  5. 2015 Investor & Analyst Day – Markwest Energy Partners, L.P. – slide 5
    MARCELLUS & UTICA: DRIVING U.S. GAS SUPPLY The Marcellus & Utica account for over 20% of total U.S. Gas Supply 65 21 64 Marcellus & Utica 19 Marcellus & Utica Billion cubic feet per day (Bcf/d) Rest of U.S. Billion cubic feet…
  6. 2015 Investor & Analyst Day – Markwest Energy Partners, L.P. – slide 6
    IRR BY RESOURCE PLAY MarkWest is focused in high IRR resource plays 35% 30% 75% 2015 Operating Income Forecasted 25% from Marcellus & Utica 20% 15% 10% 5% 0% Areas where Year: 2015 2016 2017 2018 2019 2020…
  7. 2015 Investor & Analyst Day – Markwest Energy Partners, L.P. – slide 7
    COMMERCIAL STRATEGY GREG FLOERKE EXECUTIVE VICE PRESIDENT, CHIEF COMMERCIAL OFFICER RANDY NICKERSON EXECUTIVE VICE PRESIDENT, CHIEF COMMERCIAL OFFICER
  8. 2015 Investor & Analyst Day – Markwest Energy Partners, L.P. – slide 8
    OUR COMMERCIAL STRATEGY Develop a deep understanding of our customers value drivers Create unique solutions and competitive advantages Build trust and long-term relationships at all levels Combine world-class assets with an…
  9. 2015 Investor & Analyst Day – Markwest Energy Partners, L.P. – slide 9
    OUR COMMERCIAL PROCESS MarkWests growth is the result of applying a consistent and detailed process that creates significant value for our customers Develop a deep understanding of the underlying resource play drivers and create…
  10. 2015 Investor & Analyst Day – Markwest Energy Partners, L.P. – slide 10
    CONTRACT STRUCTURE Durable long-term partnerships across leading basins Marcellus Segment Utica Segment Southwest Segment Northeast Segment Resource Play Marcellus Utica Haynesville, Cotton Valley, Huron/Berea, Rogersville Woodford,…
  11. 2015 Investor & Analyst Day – Markwest Energy Partners, L.P. – slide 11
    PROCESSING IN THE NORTHEAST (CURRENT AND ANNOUNCED PLANTS) Northeast Processing Capacity (Bcf/d) KEYSTONE Mahoning 5 PLANTS 12 OHIO 7 of the top 10 Beaver Butler Columbiana 10 processing complexes Others FOX Carroll are…
  12. 2015 Investor & Analyst Day – Markwest Energy Partners, L.P. – slide 12
    FRACTIONATION IN THE NORTHEAST (CURRENT AND ANNOUNCED PLANTS) Northeast Fractionation Capacity (MBbl/d) KEYSTONE Mahoning 4 PLANTS 900 PENNSYLVANIA Butler HOPEDALE 800 8 of the top 14 Other 3 PLANTS Beaver fractionation complexes…
  13. 2015 Investor & Analyst Day – Markwest Energy Partners, L.P. – slide 13
    SIGNIFICANT DRY GAS OPPORTUNITY & GATHERING PROJECTS Potentially the most economically viable dry gas KEYSTONE play in the U.S. Butler OHIO EURs ranging from 10 Bcfe to HOPEDALE in excess of 15 Bcfe and IPs UTICA CONDENSATE…
  14. 2015 Investor & Analyst Day – Markwest Energy Partners, L.P. – slide 14
    NORTHEAST GAS PRODUCTION FORECAST 35 30 30% 25 Northeast Rich Gas Billion cubic feet per day (Bcf/d) 20 15 70% 10 Northeast Dry Gas 5 - 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024…
  15. 2015 Investor & Analyst Day – Markwest Energy Partners, L.P. – slide 15
    RESIDUE GAS TAKEAWAY EXPANSION PROJECTS ORIGINATE AT OUR FACILITIES Over 25 billion in capital investments and 30 Bcf/d of natural gas pipeline projects announced, driven by production growth in the Northeast New residue gas takeaway…
  16. 2015 Investor & Analyst Day – Markwest Energy Partners, L.P. – slide 16
    NORTHEAST NGL SUPPLY IS RAPIDLY INCREASING Northeast NGL production is forecasted to account for 22% of total U.S. NGL production in 2020 5,000 NGL Production from Gas Plants (MBld/d) 170 Mb/d 4,000 Williston 3,000 DJ…
  17. 2015 Investor & Analyst Day – Markwest Energy Partners, L.P. – slide 17
    NORTHEAST ETHANE PRODUCTION IS SUPPORTED BY MARKWEST MarkWest is producing ONTARIO Mariner East MARKETS approximately 80% of the Mariner West purity ethane being recovered in the Northeast MarkWest and is delivering ethane into…
  18. 2015 Investor & Analyst Day – Markwest Energy Partners, L.P. – slide 18
    MARKWEST 2015 PROPANE & HEAVIER NGL MARKETING EDMONTON Markets % of 2015 C3+ NORTHEAST MARKETS Mariner East Bbls. ONTARIO MARKETS Northeast 43% MIDWEST MARKETS Export 15% MARKETS Gulf Coast 14% MarkWest SOUTH AM. Edmonton 10%…
  19. 2015 Investor & Analyst Day – Markwest Energy Partners, L.P. – slide 19
    NGL MARKETING INFRASTRUCTURE Hopedale Houston Keystone Siloam NGL Marketing Capacity 120,000 Bbl/d C3+ 100,000 Bbl/d C2+ 26,000 Bbl/d C2+ 26,000 Bbl/d C3+ Truck Logistics 12 loading racks & 12 loading racks & 6 loading racks 6 loading…
  20. 2015 Investor & Analyst Day – Markwest Energy Partners, L.P. – slide 20
    CONDENSATE SOLUTIONS IN THE UTICA SHALE Utica New Light Naphtha to Gasoline Condensate Fractionator Blending MPLX Cornerstone Pipeline Heavy Naphtha to Reforming Sweet Distillates to Hydrotreating Canton, OH Hopedale Heavier…
  21. 2015 Investor & Analyst Day – Markwest Energy Partners, L.P. – slide 21
    DEVELOPING MONT BELVIEU CAPABILITIES IN THE NORTHEAST MWE Complex MarkWests NGL fractionation Refinery Export Terminal and marketing infrastructure is Potential Cracker integral to supporting the Midwest East Coast abundant NGL…
  22. 2015 Investor & Analyst Day – Markwest Energy Partners, L.P. – slide 22
    OPERATIONAL STRATEGY JOHN MOLLENKOPF EXECUTIVE VICE PRESIDENT, CHIEF OPERATING OFFICER
  23. 2015 Investor & Analyst Day – Markwest Energy Partners, L.P. – slide 23
    MARKWEST - ONE OF THE LARGEST MIDSTREAM SERVICE PROVIDERS 1.4 Bcf/d Transmission Capacity 2.7 Bcf/d 4.9 Bcf/d 291 MBbl/d 246 MBbl/d Total Gathering Total Processed Total NGL Total Fractionated Volumes Volumes Production…
  24. 2015 Investor & Analyst Day – Markwest Energy Partners, L.P. – slide 24
    OPERATIONAL OVERVIEW & PHILOSOPHY Provide Efficient Efficient & Safety & Exceptional Focus on Project Reliable Environmental Customer Growth Execution Facilities Excellence Service 25
  25. 2015 Investor & Analyst Day – Markwest Energy Partners, L.P. – slide 25
    GROWTH DRIVEN BY CUSTOMER SATISFACTION MarkWest has received the 1 rating for total customer satisfaction in every EnergyPoint Research survey since its inception in 2006 26
  26. 2015 Investor & Analyst Day – Markwest Energy Partners, L.P. – slide 26
    SIGNIFICANT GROWTH REQUIRES A HIGHLY SKILLED TEAM... and a culture focused on execution and best-in-class customer service 1,600 1,475 530% 1,400 1,401 1,200 1,067 growth over 10 years Number of full-time employees…
  27. 2015 Investor & Analyst Day – Markwest Energy Partners, L.P. – slide 27
    BEST IN INDUSTRY EXECUTION GROWS CAPACITY 8X IN 10 YEARS Tried and true standardized plants Processing Capacity (Bcf/d) Decades long plant vendor relationships 8 Highly efficient turbo-expander design 52 Modular skid mounted…
  28. 2015 Investor & Analyst Day – Markwest Energy Partners, L.P. – slide 28
    Million cubic feet per day (MMcf/d) - 200 400 600 Month 1 Month 2 Month 3 Month 4 Month 5 Plant 1 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 Month 13 Month 14 Month 15 Month 16 Plant 2…
  29. 2015 Investor & Analyst Day – Markwest Energy Partners, L.P. – slide 29
    PROCESSED VOLUME GROWTH Total processed volumes averaged nearly 5 Bcf/d and capacity utilization reached 82% for the first quarter 2015 5,000 4,000 35% Million cubic feet per day (MMcf/d) 3,000 Compound Annual Growth in…
  30. 2015 Investor & Analyst Day – Markwest Energy Partners, L.P. – slide 30
    FOCUS ON NATIONS BEST RESOURCE PLAYS DRIVES DRAMATIC GROWTH Increase of 4 Bcf/d in 4 years 1.3 Bcf/d 2.3 Bcf/d 5.3 Bcf/d 31
  31. 2015 Investor & Analyst Day – Markwest Energy Partners, L.P. – slide 31
    27 MAJOR FACILITIES COMPLETED IN THE LAST TWO YEARS Majorsville III & V Cadiz I Mobley II & III Sherwood II & III Seneca I Houston De-ethanizer Majorsville De-ethanizer Buffalo Creek Seneca II & III Hopedale Fractionator I…
  32. 2015 Investor & Analyst Day – Markwest Energy Partners, L.P. – slide 32
    MOBLEY COMPLEX CHALLENGING TERRAIN: 2011 MOBLEY I CONSTRUCTION 33
  33. 2015 Investor & Analyst Day – Markwest Energy Partners, L.P. – slide 33
    MOBLEY COMPLEX: 2015 Mobley I Mobley II Mobley III Mobley IV Mobley V & De-ethanizer 34
  34. 2015 Investor & Analyst Day – Markwest Energy Partners, L.P. – slide 34
    SOUTHWEST SEGMENT OVERVIEW 100% VOLUME GROWTH SINCE 2010 2.1 1.2 Processed Volumes (MMcf/d) Bcf/d Bcf/d Gathering capacity Processing capacity 1,200 100% Increase in processed 29 MBbl/d 1,000 volumes 2011-2015 10%…
  35. 2015 Investor & Analyst Day – Markwest Energy Partners, L.P. – slide 35
    ENTERING THE CANA-WOODFORD: TO SUPPORT NEWFIELD EXPLORATION We are expanding our significant Western Oklahoma presence into the Cana-Woodford to support Newfield Explorations development of their STACK acreage Our Western Oklahoma…
  36. 2015 Investor & Analyst Day – Markwest Energy Partners, L.P. – slide 36
    ENTERING THE PERMIAN: TO SUPPORT CIMAREX & CHEVRON We recently executed definitive agreements with Cimarex and Chevron to support their joint development of the Delaware PERMIAN Basin Eddy HIDALGO COMPLEX 200 MMcf/d 2Q16 BASIN…
  37. 2015 Investor & Analyst Day – Markwest Energy Partners, L.P. – slide 37
    NORTHEAST SEGMENT: EXPOSURE TO EMERGING ROGERSVILLE SHALE We are the largest processor and fractionator in the southern portion of the Appalachian Basin Our existing infrastructure in Kentucky and West 620 MMcf/d Processing capacity…
  38. 2015 Investor & Analyst Day – Markwest Energy Partners, L.P. – slide 38
    MARCELLUS SEGMENT OVERVIEW 3,200% GROWTH SINCE 2010 1.0 3.1 Processed Volumes (MMcf/d) Bcf/d Bcf/d 3,500 Gathering capacity Processing capacity 3,000 50% 286 Forecasted 2Q15 through 4Q15 Avg. Avg. Increase from MBbl/d…
  39. 2015 Investor & Analyst Day – Markwest Energy Partners, L.P. – slide 39
    MARCELLUS COMPLEXES HOUSTON MAJORSVILLE MOBLEY SHERWOOD 40
  40. 2015 Investor & Analyst Day – Markwest Energy Partners, L.P. – slide 40
    UTICA JOINT VENTURE SEGMENT OVERVIEW 1,500% GROWTH SINCE 2013 Processed Volumes (MMcf/d) 700 925 900 MMcf/d Gathering capacity Processing capacity MMcf/d 800 95% Forecasted 2Q15 through 4Q15 Avg. 700 Avg. Increase…
  41. 2015 Investor & Analyst Day – Markwest Energy Partners, L.P. – slide 41
    UTICA JOINT VENTURE COMPLEXES CADIZ COMPLEX SENECA COMPLEX HOPEDALE RAIL HOPEDALE OHIO CONDENSATE TERMINAL FRACTIONATION 42
  42. 2015 Investor & Analyst Day – Markwest Energy Partners, L.P. – slide 42
    OHIO GATHERING: A PREMIER SYSTEM IN THE CORE OF THE UTICA Ohio Gathering is owned by MarkWest Condensate Facility Utica EMG (60%), a joint venture Cadiz Complex between MarkWest & The Energy & Minerals Group, and Summit Investments…
  43. 2015 Investor & Analyst Day – Markwest Energy Partners, L.P. – slide 43
    OPERATIONAL SUMMARY Best-in-class operations and engineering teams that are focused on growth Exceptional safety & environmental performance record Impressive and diverse customer base Recognized for exceptional customer service…
  44. 2015 Investor & Analyst Day – Markwest Energy Partners, L.P. – slide 44
    FINANCIAL STRATEGY NANCY BUESE EXECUTIVE VICE PRESIDENT, CHIEF FINANCIAL OFFICER
  45. 2015 Investor & Analyst Day – Markwest Energy Partners, L.P. – slide 45
    FINANCIAL STRATEGY MarkWest is a growth MLP focused on generating strong financial returns and delivering long-term, top-quartile total returns for its unitholders No incentive distribution rights, which drives a lower cost of capital…
  46. 2015 Investor & Analyst Day – Markwest Energy Partners, L.P. – slide 46
    CONTRACT STRUCTURE Over 9 million acres dedicated to MarkWest in leading basins Utica Marcellus Area Dedications: 3.7 million acres Area Dedications: 4 million acres Volume Protection: 25% of 2015 capacity Volume Protection: 70% of…
  47. 2015 Investor & Analyst Day – Markwest Energy Partners, L.P. – slide 47
    LIQUIDITY SUMMARY MarkWest has over 1.1 billion of liquidity We preserve a strong balance sheet to fund growth We have over 1.1 billion of liquidity to support our capital investment program We maintain flexible financing options…
  48. 2015 Investor & Analyst Day – Markwest Energy Partners, L.P. – slide 48
    CAPITAL STRUCTURE MarkWest maintains a well-balanced capital structure Long-Term Debt Maturity Schedule Investment-grade rated Senior ( in millions) 1,400 Secured Credit Facility of 1.3 billion matures March 2019 1,200 4.2 billion…
  49. 2015 Investor & Analyst Day – Markwest Energy Partners, L.P. – slide 49
    RATING AGENCIES We are committed to achieving consistent improvement in the metrics that drive credit ratings. As a result of our financial performance and based on our future outlook, our objective is to reach investment grade Our…
  50. 2015 Investor & Analyst Day – Markwest Energy Partners, L.P. – slide 50
    JOINT VENTURE RELATIONSHIPS PROVIDE FLEXIBILITY Strong history of optimizing our footprint through joint ventures Joint Venture with The Energy & Minerals Group (EMG) in the Utica Shale provides significant flexibility for developing…
  51. 2015 Investor & Analyst Day – Markwest Energy Partners, L.P. – slide 51
    RISK MANAGEMENT 2015 Forecast 90% of our 2015 net operating Net Operating Margin margin is fee based 100% We have a disciplined 2015 weighted average approach to managing the risk 80% hedged price: 90% Fee-based - NGLs…
  52. 2015 Investor & Analyst Day – Markwest Energy Partners, L.P. – slide 52
    OPERATING INCOME BY SEGMENT: CAPITALIZING ON HIGH RETURN AREAS 75% of 2015 Forecasted Operating Income from Marcellus & Utica 1,200 1,000 800 In Millions () 600 400 200 0 2010 2011 2012 2013 2014 2015F…
  53. 2015 Investor & Analyst Day – Markwest Energy Partners, L.P. – slide 53
    ORGANIC GROWTH RETURN PROFILE Economics expected are mid-teen unlevered rates of return over a full cycle We achieve a 7 times operating cash flow multiple 24 to 36 months after capital is deployed Marcellus Cash Flow Multiple…
  54. 2015 Investor & Analyst Day – Markwest Energy Partners, L.P. – slide 54
    INCREASING PLANT UTILIZATION DRIVES HIGHER INCOME Operating Income per Mcf Operating Expenses per Mcf Just-in-time plant completions drive high utilization High utilization results in operating efficiencies, Plant Utilization %…
  55. 2015 Investor & Analyst Day – Markwest Energy Partners, L.P. – slide 55
    CAPITAL INVESTMENT FORECAST Continuously optimizing capital to match producers 2015 Capital Investment revised drilling plans Forecast: 1.5B to 1.9B Current Forecast 1.5-1.9 billion Just-In-Time philosophy for capacity additions…
  56. 2015 Investor & Analyst Day – Markwest Energy Partners, L.P. – slide 56
    2015 DCF & ADJUSTED EBITDA FORECAST DCF Forecast Adjusted EBITDA Forecast 700MM800MM 925MM1,025MM 900 900 2015 Adjusted EBITDA in Millions () 600 2015 DCF in Millions () 600 300 300 - - 2011 2013 2015F…
  57. 2015 Investor & Analyst Day – Markwest Energy Partners, L.P. – slide 57
    2015 DISTRIBUTABLE CASH FLOW: SENSITIVITY TABLE MarkWest is more sensitive to changes in volumes than changes in commodity prices MarkWest Partnership periodically estimates the effect on DCF resulting from changes in its volume…
  58. 2015 Investor & Analyst Day – Markwest Energy Partners, L.P. – slide 58
    CUMULATIVE DISTRIBUTION GROWTH OF 264% SINCE IPO Forecasted distribution of 3.70 for 2015, 3.97 for 2016 and annual growth rate of 10% from 2017 to 2020 3.97 4.00 3.70 11% 3.54 3.38 3.22 2.86 CAGR since IPO 3.00 2.51…
  59. 2015 Investor & Analyst Day – Markwest Energy Partners, L.P. – slide 59
    MARKWEST TOTAL RETURN SINCE IPO MarkWest provides superior total return MWE Alerian TR S&P 500 TR 1,511% 1,550 Cumulative Total Return (%) 1,150 750 474% 350 153% 0 -50 2002 2003 2004 2005 2006 2007 2008 2009…
  60. 2015 Investor & Analyst Day – Markwest Energy Partners, L.P. – slide 60
    M A R K W E S T I N V E S T M E N T C O N S I D E R AT I O N S : W H AT T O E X P E C T Maintain strong customer base in key resource plays with high-quality assets and exceptional service Continue to execute on growth projects that…
  61. 2015 Investor & Analyst Day – Markwest Energy Partners, L.P. – slide 61
    APPENDIX
  62. 2015 Investor & Analyst Day – Markwest Energy Partners, L.P. – slide 62
    RECONCILIATION OF DCF & DISTRIBUTION COVERAGE Three Months Ended Year Ended ( in millions) 3/31/2015 12/31/2014 Net Income 5.5 160.3 Depreciation, amortization and other non-cash operating expenses 135.7 489.4 (Gain) loss on sale…
  63. 2015 Investor & Analyst Day – Markwest Energy Partners, L.P. – slide 63
    RECONCILIATION OF ADJUSTED EBITDA LTM Ended Year Ended Year Ended ( in millions) 3/31/2015 12/31/2014 12/31/2013 Net income 149.9 160.3 40.4 Non-cash compensation expense 12.3 10.3 7.8 Unrealized (gain) loss on derivative…
  64. 2015 Investor & Analyst Day – Markwest Energy Partners, L.P. – slide 64
    RECONCILIATION OF NET OPERATING MARGIN Three Months Ended Year Ended ( in millions) 3/31/2015 12/31/2014 Income from operations 52.5 377.2 Facility expenses 91.8 343.4 Derivative gain (2.8) (95.3) Revenue deferral adjustment…
  65. 2015 Investor & Analyst Day – Markwest Energy Partners, L.P. – slide 65
    1515 ARAPAHOE STREET TOWER 1, SUITE 1600 DENVER, COLORADO 80202 PHONE: 303-925-9200 INVESTOR RELATIONS: 866-858-0482 EMAIL: INVESTORRELATIONSMARKWEST.COM WEBSITE: WWW.MARKWEST.COM

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