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JP Morgan Inaugural Energy Equity Conference – Enterprise Products Partners LP

Enterprise Products Partners LP · Jun 28, 2016 · 47 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. JP Morgan Inaugural Energy Equity Conference – Enterprise Products Partners LP – slide 1
    ENTERPRISE PRODUCTS PARTNERS L.P. JPMORGAN ENERGY EQUITY CONFERENCE 1X1S June 2729, 2016 Bryan Bulawa Chief Financial Officer ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. enterpriseproducts.com
  2. JP Morgan Inaugural Energy Equity Conference – Enterprise Products Partners LP – slide 2
    KEY INVESTMENT CONSIDERATIONS One of the largest integrated midstream energy companies Integrated system enables EPD to reduce impact of cyclical commodity swings Large supply aggregator and access to domestic and international…
  3. JP Morgan Inaugural Energy Equity Conference – Enterprise Products Partners LP – slide 3
    SIGNIFICANT INSIDER OWNERSHIP Supportive GP with significant EPCO & ownership Affiliates EPCO and affiliates own 33% of 100% LP units General Public Partner Facilitated elimination of IDRs in 32.8% L.P. a nontaxable…
  4. JP Morgan Inaugural Energy Equity Conference – Enterprise Products Partners LP – slide 4
    EPD: NATURAL GAS, NGLS, CRUDE OIL, PETROCHEMICALS AND REFINED PRODUCTS Asset Overview Connectivity Pipelines: 49,000 miles of natural gas, NGL, crude oil, petrochemicals and Fully integrated midstream energy company refined…
  5. JP Morgan Inaugural Energy Equity Conference – Enterprise Products Partners LP – slide 5
    SUCCESSFUL EXECUTION THROUGHOUT CYCLES Increased Cash Distributions for 47 Consecutive Quarters MLP Equities: Higher Correlation to Crude for Last 12 Months EPD Has Delivered Consistent Results Throughout Cycles 400% 1,600 160 Gross…
  6. JP Morgan Inaugural Energy Equity Conference – Enterprise Products Partners LP – slide 6
    DIVERSIFIED SOURCES OF CASH FLOW BACKED BY FEEBASED BUSINESS MODEL 5.3 Billion Gross Operating Margin Natural Gas Gathering & Processing for 12 months ended March 31, 2016 Contribution to Gross Operating Margin Total GOM: 3,871…
  7. JP Morgan Inaugural Energy Equity Conference – Enterprise Products Partners LP – slide 7
    COMPOSITE OF TOP 200 CUSTOMERS (1) Revenue from Top 200 Customers by Rating Top 200 customers account for 95.7% of EPD's 2015 revenue Not Rated 75.3% of revenue from our 9.9% AA / Aa3 Top 200 customers is from < B / B3 LC…
  8. JP Morgan Inaugural Energy Equity Conference – Enterprise Products Partners LP – slide 8
    SUPPLY / DEMAND FUNDAMENTALS ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. enterpriseproducts.com
  9. JP Morgan Inaugural Energy Equity Conference – Enterprise Products Partners LP – slide 9
    THE SUPPLY TREADMILL: 1/3 OF GLOBAL OIL PRODUCTION MUST BE REPLACED BY 2020 Oil and Gas Industry Needs to Replace Declines and Satisfy Demand Growth MMBPD of Oil 2016 2017 2018 2019 2020 Declines of Existing Fields 5.0 5.0 5.0…
  10. JP Morgan Inaugural Energy Equity Conference – Enterprise Products Partners LP – slide 10
    THE WISDOM OF THE MARKETSOR CANT THEY GET ANYTHING RIGHT 160 June 2008 The Reality: Forward Markets 140 Are Not Paid to Predict Prices 120 Jul 2013 100 80 Oct 2014 Feb 2010 June 2015 60 Jun 2016 March 2015 40 Dec…
  11. JP Morgan Inaugural Energy Equity Conference – Enterprise Products Partners LP – slide 11
    FORECASTS FOR 2017 FORWARD ARE MUCH HIGHER THAN NYMEX Currently, 2016 WTI market price is above forecasters expectations Majority banks / consultants expect WTI prices at 60+ next 3 years Very few are forecasting long term prices…
  12. JP Morgan Inaugural Energy Equity Conference – Enterprise Products Partners LP – slide 12
    GLOBAL OIL INVENTORIES REMAIN VERY HIGH BY HISTORICAL STANDARDS Global Refining OECD Total Oil Stocks Crude Throughput 2015 Refining Margins in Three Refining Centers Cushing Stocks Sources: IEA and Bloomberg ALL RIGHTS…
  13. JP Morgan Inaugural Energy Equity Conference – Enterprise Products Partners LP – slide 13
    THE SHALE REVOLUTION Rapidly Growing Production and Falling Prices Bcf/d NYMEX Natural Gas Price vs. Shale Production /MMBtu 50 16.0 45 14.0 40 Natural Gas Price 12.0 35 30 10.0 25 8.0 20 Shale Gas 6.0 15 4.0 10 5 2.0…
  14. JP Morgan Inaugural Energy Equity Conference – Enterprise Products Partners LP – slide 14
    U.S. OFFERS WORLD CLASS RESOURCES AT COMPETITIVE PRICES /Bbl Crude Breakeven Price 70 Production Increases 60 50 Production Stable 40 30 20 10 0 Source: EPD Fundamentals Estimate Average Highgrade Note: Assumes gas…
  15. JP Morgan Inaugural Energy Equity Conference – Enterprise Products Partners LP – slide 15
    U.S. HAS PLENTIFUL NATURAL GAS BELOW 3.50 /MMBtu Natural Gas Breakeven Price 5.0 Production Increases 4.5 4.0 3.5 3.0 Production Stable 2.5 2.0 1.5 1.0 0.5 0 0.0 Source: EPD Fundamentals Estimate Average Highgrade…
  16. JP Morgan Inaugural Energy Equity Conference – Enterprise Products Partners LP – slide 16
    OIL PRODUCTION FORECAST Sensitivity to +25% Oil Rig Count Swing U.S. Oil & Condensate Forecast MMBPD April 2016 11 11 10 10 9 9 8 8 7 7 +25% Oil Rigs Base Case (439 oil rigs) 6 6 Jan14 Jan15 Jan16 Jan17 Jan18…
  17. JP Morgan Inaugural Energy Equity Conference – Enterprise Products Partners LP – slide 17
    NGL PRODUCTION FORECAST Sensitivity to +25% Oil Rig Count Swing U.S. Available NGL Supply Forecast April 2016 5.0 5.0 4.5 4.5 4.0 4.0 MMBPD 3.5 3.5 3.0 3.0 2.5 2.5 +25% Oil rigs Base Case (439 oil rigs) 2.0 2.0…
  18. JP Morgan Inaugural Energy Equity Conference – Enterprise Products Partners LP – slide 18
    U.S. ETHANE SUPPLY / DEMAND OUTLOOK Demand Increases by 800 MBPD MBPD 3,000 Supply Range 2,500 2,000 1,500 1,000 500 2015 2016 2017 2018 2019 2020 Supply Range Ethane Supply Existing Demand Conversions &…
  19. JP Morgan Inaugural Energy Equity Conference – Enterprise Products Partners LP – slide 19
    U.S. LPGBALANCES WILL BE DRIVEN BY EXPORTS MBPD Supply Range 3,000 1.2 MMBPD LPG 1.2 MMBPD LPG Export Capacity 2,500 2,000 1,500 1,000 500 0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 LPG Demand Current…
  20. JP Morgan Inaugural Energy Equity Conference – Enterprise Products Partners LP – slide 20
    U.S. THE LARGEST EXPORTER OF LPG LPG Exports by Destination through 1Q2016 2016 EPD LPG Exports by Destination Region: 41.0 MMBbls % of Cargos Loaded EPD% of Destination Market North America / Caribbean 25% 51% Central & South…
  21. JP Morgan Inaugural Energy Equity Conference – Enterprise Products Partners LP – slide 21
    LPG LOADINGS Historical and Committed Loadings vs. Capacity 1,150 Cargos Scheduled from 20152020 16 Avg Monthly Loadings Per Year (As of Aug2015) Operational Capacity 14 12 10 MMBbls 8 6 MONT 4 HOUSTON SHIP CHANNEL…
  22. JP Morgan Inaugural Energy Equity Conference – Enterprise Products Partners LP – slide 22
    NGLs: U.S. GULF COAST IS SHORT NGLs; PRODUCERS NEED PRICE SIGNAL TO PRODUCE / TRANSPORT 20162020 (MBPD) OTHER ROCKIES 131 769 759 APPALACHIAN +100 MIDCONTINENT 426 PERMIAN 900 Total Demand Current Supply 1,111…
  23. JP Morgan Inaugural Energy Equity Conference – Enterprise Products Partners LP – slide 23
    ETHANE: APPALACHIA ALONE CANNOT MEET U.S. DEMAND 20162020 (MBPD) +50 Utopia Export Rejection Production Demand* Current 285 178 178 All Regions West of MTBV 2020 152 403 403 Rejection Production Current 297 1,099 105 2020…
  24. JP Morgan Inaugural Energy Equity Conference – Enterprise Products Partners LP – slide 24
    THE CHEMICALS INDUSTRY IS MAKING LARGE INVESTMENTS BASED ON U.S. SHALES American Chemistry Council (ACC) analysis shows 164 billion in capital spending could lead to 105 billion per year in new chemical output. Support 738,000…
  25. JP Morgan Inaugural Energy Equity Conference – Enterprise Products Partners LP – slide 25
    PROJECT UPDATES ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. enterpriseproducts.com
  26. JP Morgan Inaugural Energy Equity Conference – Enterprise Products Partners LP – slide 26
    VISIBILITY TO GROWTH: 10.1B OF MAJOR CAPITAL PROJECTS BY INSERVICE DATE 3.6 Billion 6.5 Billion 5.0 4.9 Petchem NGL PDH facility 30% Crude oil / refined 37% products infrastructure MidlandtoSealy 4.0 NGL & propylene pipeline…
  27. JP Morgan Inaugural Energy Equity Conference – Enterprise Products Partners LP – slide 27
    ETHANE TAKEAWAY SOLUTIONS PROVIDES ACCESS TO GULF COAST MARKETS ATEX C2 Contracted Volumes ATEX Pipeline 150 120 Current capacity of 125 MBPD MBPD 90 Expandable to 265 MBPD; would require 60 131 104 116 81 30…
  28. JP Morgan Inaugural Energy Equity Conference – Enterprise Products Partners LP – slide 28
    EXPANDING FOOTPRINT IN PERMIAN BASIN Bringing Gas Processing Capacity to 800 MMcf/d South Eddy cryogenic gas processing facility and related pipelines 200 MMcf/d natural gas; 25 MBPD NGLs Constructed 90 miles of new gathering…
  29. JP Morgan Inaugural Energy Equity Conference – Enterprise Products Partners LP – slide 29
    MIDLAND TO HOUSTON CRUDE OIL PIPELINE From the Permian Supply Hub to Multiple Markets 400mile, 24 pipeline from Midland O k l a h o m a Cushing to Sealy, Texas 60% of initial capacity of 300 MBPD contracted Capacity expandable…
  30. JP Morgan Inaugural Energy Equity Conference – Enterprise Products Partners LP – slide 30
    CRUDE DISTRIBUTION SYSTEM Interconnectivity: The Enterprise Business Model Seaway JV EHSC System Chambers South TX Crude System Moore Rd Jct EDS Header Third Party Pipeline Dashed lines indicate under construction EHSC 24…
  31. JP Morgan Inaugural Energy Equity Conference – Enterprise Products Partners LP – slide 31
    ETHANE EXPORT FACILITY Largest of Its Kind New ethane export facility with a HOUSTON SHIP combined operating rate of 200 CHANNEL MBPD across two docks MORGANS 18 miles of 24 pipeline MTBV to POINT Morgans Point 90% of…
  32. JP Morgan Inaugural Energy Equity Conference – Enterprise Products Partners LP – slide 32
    LONG TERM PROPYLENE MARKET STRONGER THAN EXPECTED PDH competition is reduced with 6 projects cancelled or indefinitely delayed only Dow is building a facility in addition to Enterprise PDH projects are leading to unexpected…
  33. JP Morgan Inaugural Energy Equity Conference – Enterprise Products Partners LP – slide 33
    PROPANE DEHYDROGENATION (PDH) FACILITY Produce up to 1.65 billion lbs/year (25 MBPD) of PGP Consume 35 MBPD of propane 100% of capacity subscribed under feebased contracts with investment grade companies averaging 15 years No…
  34. JP Morgan Inaugural Energy Equity Conference – Enterprise Products Partners LP – slide 34
    ETHYLENE EXPORT: CULTIVATING DEMAND Enterprises export position for LPG, Ethane and Propylene can be broadened to include Ethylene Asian demand for ethylene continues to grow beyond local production; Asia is looking to diversify…
  35. JP Morgan Inaugural Energy Equity Conference – Enterprise Products Partners LP – slide 35
    FINANCIAL UPDATE ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. enterpriseproducts.com
  36. JP Morgan Inaugural Energy Equity Conference – Enterprise Products Partners LP – slide 36
    STRONG FINANCIAL RESULTS (1) Gross Operating Margin (GOM) Distributable Cash Flow (DCF) 6.0 6.0 5.6 5.3 5.3 4.8 5.0 5.0 4.4 4.1 4.1 4.0 4.0 3.8 Billions Billions 3.9 4.0 3.0 3.7 3.0 3.0 2.0 2.0 1.3 1.0 1.0 1.1 0.0…
  37. JP Morgan Inaugural Energy Equity Conference – Enterprise Products Partners LP – slide 37
    HISTORY OF FINANCIAL DISCIPLINE WHILE EXECUTING GROWTH STRATEGY Total Growth Capex & Debt Leverage 8.0 7.8 4.6 4.7x 7.0 6.2 4.5x 6.0 2.5 Debt / Adjusted EBITDA 4.3x 5.0 in Billions 4.2x 4.2 4.2x 4.2x(2) 3.9 4.1x…
  38. JP Morgan Inaugural Energy Equity Conference – Enterprise Products Partners LP – slide 38
    STRENGTHENING DEBT PORTFOLIO Extending Maturities Without Increasing Costs 19.6 Billion Notes Issued 93.1 % Fixed Rate Debt (1) 20 8.0% 2009 April 2016 18 17.7 17.6 17.4 17.2 17.3 7.0% 9.7% 16 Average Maturity Years…
  39. JP Morgan Inaugural Energy Equity Conference – Enterprise Products Partners LP – slide 39
    INVESTOR TAKEAWAYS EPDS MLP MODEL WORKS BBB+/Baa1 credit rating provides financial strength / access to capital No GP IDRs provides financial flexibility and lower cost of capital EPDs current 10year WACC (50% 10year debt / 50%…
  40. JP Morgan Inaugural Energy Equity Conference – Enterprise Products Partners LP – slide 40
    APPENDIX ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. enterpriseproducts.com
  41. JP Morgan Inaugural Energy Equity Conference – Enterprise Products Partners LP – slide 41
    VISIBILITY TO GROWTH: MAJOR CAPITAL PROJECTS 3.6B InService 2015/1H16; 6.5B Under Construction In Service Date 2015 1Q 2016 2Q 2016 3Q 2016 4Q 2016 20172018 NGL Pipeline & Services LPG export facility on Gulf Coast (up to 16…
  42. JP Morgan Inaugural Energy Equity Conference – Enterprise Products Partners LP – slide 42
    REGIONAL NGL HUBS: GULF COAST VS. EAST COAST NO COMPARISON USGC East Coast SUPPLY Diversity 7 unique basins linked 1 basin for all supply 2016 4.1 MMBPD Estimated 0.8 MMBPD STORAGE Capacity 300 MMBbls (salt dome) 11 MMBbls…
  43. JP Morgan Inaugural Energy Equity Conference – Enterprise Products Partners LP – slide 43
    MARINE TERMINAL / DOCK ACTIVITY (1) Crude Oil & Condensate Petrochemical & Refined Products 750 691 400 388 347 600 481 557 97 95 300 270 366 479 MBPD MBPD 450 97 258 284 200 252 300 210 173 100 150 172 210 191…
  44. JP Morgan Inaugural Energy Equity Conference – Enterprise Products Partners LP – slide 44
    GROSS OPERATING MARGIN We evaluate segment performance based on the nonGAAP financial measure of gross operating margin. Gross operating margin (either in total or by individual segment) is an important performance measure of the core…
  45. JP Morgan Inaugural Energy Equity Conference – Enterprise Products Partners LP – slide 45
    ADJUSTED EBITDA Adjusted EBITDA is commonly used as a supplemental financial measure by our management and external users of our financial statements, such as investors, commercial banks, research analysts and ratings agencies to…
  46. JP Morgan Inaugural Energy Equity Conference – Enterprise Products Partners LP – slide 46
    DISTRIBUTABLE CASH FLOW Distributable cash flow is an important nonGAAP financial measure for our limited partners since it serves as an indicator of our success in providing a cash return on investment. Specifically, this financial…
  47. JP Morgan Inaugural Energy Equity Conference – Enterprise Products Partners LP – slide 47
    CONTACT INFORMATION Randy Burkhalter Vice President, Investor Relations (713) 3816812 rburkhaltereprod.com Jackie Richert Director, Investor Relations (713) 3813920 jmricherteprod.com ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS…

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