2014 Analyst & Investor Day May 12, 2014 Strong. Innovative. Growing. 1
Non-GAAP Financial Information This presentation contains non-generally accepted accounting principle financial measures that EnLink Midstream refers to as adjusted EBITDA, gross operating margin, segment cash flows, growth capital…
Investor Notice The SEC permits oil and gas companies, in their filings with the SEC, to disclose only proved, probable and possible reserves that meet the SEC's definitions for such terms, and price and cost sensitivities for such…
Agenda & Speakers Barry Davis President & CEO Roadmap for Growth Michael Garberding EVP and CFO Devon Energy John Richels Devon Energy Corporation, CEO Sponsorship Steve Hoppe EVP, President of Gas Gath., Proc. & Trans. Natural…
The Roadmap for Growth Barry E. Davis, President and Chief Executive Officer 6
The Leadership: Experienced Management Team with a Proven Track Record EnLink Midstream management team is comprised of former Crosstex and Devon senior management and other experienced midstream leaders Management Team Experience…
The Vehicle for Sustainable Growth: MLP Structure with a Premier Sponsor Devon Energy Corp. Public NYSE: DVN Unitholders (BBB+ / Baa1) 70% 30% EnLink Midstream, LLC ENLC owns 100% of IDRs 52% General Partner 40% NYSE: ENLC…
The Vehicle for Sustainable Growth: Strategically Located and Complementary Assets PA Gas Gathering and Transportation OH MARCELLUS 7,300 miles of gathering and transmission lines CANA-WOODFORD OK Gas Processing UTICA 12…
The Vehicle for Sustainable Growth: Devon is Committed to the Success of EnLink Midstream Devons Upstream Portfolio & Devon has dedicated 800,000 net acres Non-Contributed Midstream Assets to EnLink Midstream Long-term contracts in…
The Vehicle for Sustainable Growth: Diverse, Fee-Based Cash Flows Devon is EnLink Midstreams largest customer (50% of consolidated 2014E adjusted EBITDA*) EnLink Midstreams growth projects focused on crude/NGL services and rich gas…
The Vehicle for Sustainable Growth: Strong Balance Sheet and Liquidity Devon assets contributed with no debt Investment grade balance sheet at ENLK (BBB / Baa3) provides low cost of capital Long-term commitment to investment grade…
The Road Conditions: Exponentially Growing Energy Market Surging U.S. Production Requires the Re-Piping of America, With Expected Midstream Investment of 30 Billion Annually for 20+ years * * Pipeline Infrastructure Capital Spending…
The Road Conditions: Presence in the Profitable Plays Devon and EnLink Midstream Have Significant Presence in Most Prolific and Profitable Shale Plays NYMEX Gas Breakeven Price (/MMBtu) for 10% Return WTI Oil Breakeven Price (/Bbl)…
The Road Conditions: Global Shift in Petrochemical Industry U.S. Petrochemical Producers in Gulf Coast have tremendous demand for NGLs, and there is now a shortfall of locally produced supply in South Louisiana* North American…
Destination 2017: The Four Avenues for Growth AVENUE 1 AVENUE 2 AVENUE 3 AVENUE 4 Dropdown Growing Organic Growth Mergers & Opportunities With Devon Projects Acquisitions E2 dropdown Potential Areas where South Louisiana…
Devon Energy Sponsorship John Richels, Chief Executive Officer of Devon Energy Corporation 17
Devon Overview Sharpening The Focus Proved reserves: 2.6 billion BOE(1) Devons Core & Emerging Assets 2014e net production: 580 620 MBOED(1) Expect multi-year oil growth 20% Oil & liquids 55% of 2014e production Heavy Oil Core…
Sharpening The Focus Devons Recent Strategic Actions Innovative midstream combination Accretive Eagle Ford acquisition Announced non-core asset sales 19
2014 E&P Capital Program Delivering Strong Oil Growth Devons 2014 Capital Budget Key Highlights 5.0 - 5.4 Billion Devon 2014 E&P capital expenditures: 2% 5% Go-forward assets: 4.8 - 5.2 billion 260 million attributable to non-core…
Permian Basin 2014 Focus Areas Devon Net acreage: 1.3 million NEW MEXICO OKLAHOMA basin-wide with stacked-pay potential New Mexico Texas TEXAS Q4 2013 net production: 86 MBOED (60% oil) Eastern Northwestern Midland Shelf…
Eagle Ford World-Class Oil Asset OKLAHOMA Located in best part of Eagle Ford TEXAS Devon Net acreage: 82,000 Working interest: 50% Net revenue interest: 38% Gonzales Acquisition closed on February 28th Lavaca 2014e net…
Heavy Oil Jackfish & Pike SAGD Oil Development Jackfish 1 Facility running at peak capacity Delivering top-tier operating results T76 Jackfish 1 Jackfish 2 Jackfish 2 Q4 production increased 30% sequentially T75 New well pad…
Barnett Shale & Anadarko Basin Liquids-Rich Gas Net risked resource: 25 TCFE Risked locations: 10,000 Hemphill Blaine Devon net acreage: 950,000 Canadian Oklahoma City Wheeler Low average royalty…
Mississippian-Woodford & Rockies Emerging Oil Opportunities Mississippian-Woodford Multiple oil-bearing intervals Best wells to-date: IPs 1,000 BOED Rockies Oil Net Acres: 150,000 Drilling activity focused on JV acreage Q4…
Why EnLink Is Important to Devon PA OH MARCELLUS Devon retains majority ownership CANA-WOODFORD OK GP (ENLC 70%) UTICA MLP (ENLK 52%) ARKOMA- WOODFORD WV PERMIAN EnLink transaction highly accretive BASIN to shareholders…
Potential Drop Down Asset Access Pipeline (SAGD Oil Midstream) JACKFISH & PIKE Three 180 mile pipelines from Sturgeon Terminal to Devons thermal acreage 30 miles of dual pipeline from Sturgeon Terminal to Edmonton Devon ownership:…
Potential Drop Down Asset Victoria Express Pipeline (VEX) (Eagle Ford) 56 mile crude oil pipeline from Eagle Colorado Ford core to Devons Port of Victoria Gonzales terminal Lavaca Wharton 50 MBOPD start-up capacity (expandable…
Other Potential Midstream Activity Potential for additional midstream activity in: Eagle Ford Permian Basin Oklahoma New basins 29
The Four Avenues for Growth Barry E. Davis, President & Chief Executive Officer Michael J. Garberding, EVP & Chief Financial Officer 30
Destination 2017: The Four Avenues for Growth AVENUE 1 AVENUE 2 AVENUE 3 AVENUE 4 Dropdown Growing Organic Growth Mergers & Opportunities With Devon Projects Acquisitions E2 dropdown Potential Areas where South Louisiana…
Avenue 1: Future Dropdowns Devon Sponsorship Creates Dropdown Opportunities Devon Sponsorship Provides Potential for 375 MM of Cash Flow from Dropdowns 2014 2015 2016 2017 E2 Legacy Devon Midstream Assets Estimated Capital…
Avenue 2: Growing With Devon Serving Devons Needs is a Priority Devon 2014 E&P Capital Budget Devon has significant financial incentive to contract 5.0 - 5.4 Billion midstream development with EnLink 70% ownership of ENLC, 52%…
Avenue 3: Organic Growth Significant Organic Growth Projects Already Underway Focused on bolt-on expansions around premier South Louisiana South Louisiana liquids position Platform Expansion Cajun-Sibon expansion expected to be…
Avenue 4: Mergers & Acquisitions Near-term focus on platform expansion opportunities Longer-term focus on pursuing scale positions in new basins, especially in areas where Devon is active Superior financing capabilities already in…
EnLink Midstream Today & Tomorrow EnLink Midstream EnLink Midstream Today Potential Future in 2017 Access Pipeline E2 CANADIAN Dropdown Dropdown OIL Complete Complete SANDS Heavy Oil Potential for 375 MM of Additional Cash…
Natural Gas Assets Steve Hoppe, EVP, President of Gathering, Processing and Transportation Mike Burdett, SVP of Commercial Development Brad Iles, SVP of Business Development Stan Golemon, SVP of Engineering 37
Natural Gas Gathering, Processing and Transportation Business Unit Gas Business Unit Q2-Q4 2014 Forecasted Segment Cash Flow: 420 126 MM * 114 Liquids 24% Gas 76% North Texas Gas gathering Gas processing & NGL…
Devon Contracts Provide Cash Flow Stability in North Texas and Oklahoma Legacy Devon Midstream assets supported by fee-based contracts with minimum volume guarantees for five years Term: 10 year initial term (acreage dedication),…
North Texas Assets Positioned for Long-Term Performance Gathering 3,640 miles of pipeline 2,600 MMcf/d capacity Processing 4 plants 1,100 MMcf/d capacity 1 Stabilizer 5 MBbl/d Truck and rail loading Fractionation 1 plant, 15…
North Texas Assets: Solid Platform Broad Reach Key Considerations Key Customers Premier position in Barnett shale (most active operators in basin) Largest gatherer and processor in the basin Stable cash flow from firm contracts…
North Texas Synergies: Operational Flexibility Reduced O&M costs or increased revenues Goal 20 MM annually Currently implementing projects that save 4 MM annually Interconnect systems reducing rental compression Flow…
North Texas Assets: Current Trends and Growth Strategy Average Annual Barnett Shale Current Trends Production (Bcf/d) * Reduced gas well drilling as result of low gas prices 5.6 5.7 Producers focused on optimizing base production…
Oklahoma Assets: Solid Platform for Bolt-On Projects Cana 126 Gathering 114 Stack 410 miles of pipeline 530 MMcf/d capacity Processing 1 plant 350 MMcf/d capacity Northridge Gathering 140 miles of pipeline 75 MMcf/d capacity…
Oklahoma Assets: Stable Cash Flows and Opportunities for 3rd Party Cash Flows Key Considerations Key Customers Large acreage commitments Stable cash flow from firm contracts with significant volumes Many undrilled locations on…
Oklahoma Assets: Current Trends and Growth Strategy Devon Acreage in Oklahoma * Current Trends Reduced gas well drilling due to low gas prices Producers focused on optimizing base production Increased oil drilling generating…
Permian Assets: A Platform in a Prolific Basin Gathering 65 miles of pipeline under construction 65 miles of fuel and gas lift pipeline under construction 200 MMcf/d capacity Processing 1 plant, 58 MMcf/d capacity (50%…
Permian Assets: Growing From Our Platform Key Considerations Key Customers Focused on providing high pressure gathering and processing services for associated gas in extremely active drilling area Deadwood: Currently constructing…
Permian Assets: Bearkat Project Processing and Gathering System Currently Under Construction Builds on success of Deadwood joint venture with Apache, which was on-time, on-budget and is near full capacity 60 MMcf/d processing plant…
Permian Assets: Current Trends and Growth Strategy Permian Basin Resource Plays* Permian Basin Current Trends Increased oil drilling generating more associated gas, condensate and NGL production Midland Basin Central Basin…
Natural Gas Assets: Potential Growth Projects from 2014-2017 North Texas Potential Projects Consolidation of Midstream Assets / Potential Acquisitions Compressor and Plant Consolidations Gathering Expansions Strategic…
Liquids Assets Mac Hummel, EVP, President of NGL and Crude Chris Tennant, VP of NGL Stan Golemon, SVP of Engineering Paul Weissgarber, SVP of Ohio River Valley 52
Liquids Business Unit Liquids Business Unit Q2-Q4 2014 Forecasted Segment Cash Flow: 133 126 MM * 114 Liquids 24% Gas 76% Louisiana NGL gathering and transportation NGL fractionation NGL storage Crude handling Natural…
Cajun-Sibon Expansion: Game Changer for EnLink in the Gulf Coast 258 miles of NGL pipeline from Mont Belvieu area to NGL fractionation assets in south Louisiana (195 miles new, 63 miles re-purposed) 140 MBbl/d south Louisiana…
Louisiana Assets: Growing Gulf Coast Capabilities NGL Transportation Crude Handling 120 MBbl/d capacity 2 terminals post-Cajun-Sibon 18 MBbl/d capacity 789 miles of NGL Natural Gas pipeline in service Transportation 119 miles of…
Cajun-Sibon Expansion Phase I: Complete 139 mile, 12-inch NGL pipeline from Mt. Belvieu to Eunice with NGL capacity of 70,000 Bbl/d Expansion of Eunice NGL fractionator from 15,000 to 55,000 Bbl/d Completed in Q4 2013 56
Cajun-Sibon Expansion Phase 2: Expected completion in Q4 2014 Adding pumps to expand NGL pipeline capacity from 70,000 to 120,000 Bbl/d 100,000 Bbl/d fractionator at Plaquemine under construction Converting Riverside fractionator to…
Louisiana NGL Assets: Linking North American Supply to Louisiana Demand Key Considerations Key Customers / Suppliers Cajun-Sibon expansion provides access to North American NGL length flowing into Mont Belvieu and access to…
Louisiana NGL Assets: Current Trends and Growth Strategy Current Trends Louisiana Ethane Supply/Demand * (MBbl/d) Louisiana industrial complex built to take advantage of offshore supply 500 now reliant on non-Louisiana supplies 400…
Louisiana Crude Assets: Terminals at Eunice and Riverside Facilities Key Considerations Key Customers Crude assets at Eunice and Riverside with attractive rail, truck and barge capabilities Well positioned to service local demand…
Louisiana Crude Assets: Current Trends and Growth Strategy Current Trends U.S. Crude Production * Dramatic growth in U.S. crude production Significant crude supplies moving by truck and rail with producers increasingly involved with…
Louisiana Natural Gas Assets: Pipeline and Processing Plant Flexibility Key Considerations Key Customers Largest intrastate gas pipeline system in Louisiana - north Pipeline Customers Processing Customers Louisiana assets supported…
Louisiana Natural Gas Assets: Current Trends and Growth Strategy Current Trends Louisiana Gas Demand (Bcf/d) Tuscaloosa Marine Shale, Austin Chalk and Deep 2010 2025 * Miocene/Wilcox targets continue to attract producer interest and…
Ohio River Valley Assets: Established History of Service Crude/Condensate Transportation 200 miles of crude pipeline, 17 MBbl/d capacity 2,500 miles of unused right-of-way Truck fleet capacity of 25 MBbl/d Barge terminal on Ohio…
Ohio River Valley Assets: Well Positioned in the Utica and Western Marcellus Key Considerations Key Customers Pipeline and terminal assets strategically located in Uticas condensate-rich window where stabilization requirements are…
ORV Assets: Current Trends and Growth Strategy Current Trends ORV Rig Count * 45 Producers are delineating their acreage and high-grading drilling locations 40 Condensate supplies from the Utica and Western Marcellus are 35 growing…
Liquids Assets: Potential Growth Projects from 2014-2017 Louisiana Potential Projects Consolidation of Midstream Assets / Potential Acquisitions LPG Export Facility Mixed Heavy NGL Pipeline Terminal Repurposing NGL Batching…
Non-Operated Investments Brad Iles, SVP of Business Development 68
Howard Energy Investment: Strategic South Texas Asset Footprint Key Considerations Key Customers Howard Energy Partners (HEP) is a high growth midstream company with a strategically located asset base in South Texas Franchise position…
E2 Investment: Innovative Solution to Grow ORV Condensate Business E2 Compression & Condensate Stabilization Customer Capacity of 320 MMcf/d and 16,000 Bbl/d Two facilities completed, one under construction E2 Q2-Q4 Cash Flow…
Gulf Coast Fractionator Investment: Serving Devon in Mont Belvieu Key Considerations EnLink owns a contractual right to the economics of Devons interest in the Gulf Coast Fractionator (GCF) GCF is a partnership between Devon, Targa…
Financial Outlook Michael Garberding, EVP & Chief Financial Officer 72
Long Term Vision: EnLinks Key Financial Attributes Investment grade balance sheet at ENLK (BBB, Baa3) Strong B/S Credit Profile Debt/EBITDA of 3.5x 1.0 billion in liquidity ORV 95% fee-based margin Louisiana Diverse, Projects…
Long Term Vision: Strong Balance Sheet EnLink has one of the strongest balance sheets in the industry ENLK has investment grade (BBB/Baa3) credit ratings Leverage target of 3.5x EBITDA provides access to relatively inexpensive debt…
Strong Balance Sheet: Execution of Financial Synergies At the time the merger was announced, EnLink guided the market to expect financial synergies of 25 million EnLink financing activity has positioned the company to realize…
Long Term Vision: Stable and Diversified Cash Flows Each of EnLink Midstreams segments benefits from the stability provided by long-term, fee-based contracts % of Q4 2014 Segment / Key Contract Segment Cash Flow Texas New Devon…
Long Term Vision: Sustainable Growth Distribution growth targets are high single digits for MLP and 20% plus for GP 2014 2015 2016 2017 E2 Legacy Devon Midstream Assets Estimated Capital Cost: 80 Access Pipeline MM Estimated…
Key Performance Drivers Short Term Performance Drivers Timing and execution of Cajun Sibon II and Bearkat Projects Drilling activity in Barnett and Oklahoma Remediation of Bayou Corne Sinkhole Timing/amount of operational…
2014 Consolidated Capital Expenditures Potential long term capital spending of 1.0 billion - 2.0 billion per year with drop downs Growth Capex * Maintenance Capex * Q2-Q4 14 Combined: 490 MM Q2-Q4 14 Combined: 65 MM Cajun-Sibon…
ENLC Tax ENLC has three principal sources of cash flow, each with different level of exposure to federal income tax GP Distributions/IDRs: ENLC receives an allocation of taxable income in the amount of its IDR distributions such that…
Closing Remarks Barry Davis, President & CEO 82
Key Takeaways The right team in place Strategically located and complementary assets Stability of cash flows Strong sponsorship support from Devon Continued focus on organic growth projects 83
Appendix 84
Reconciliation: Segment Cash Flow to Operating Income (Amounts in MM) Q2-Q4 Forecasted Total business unit segment cash flow 555 Shared services (26) General and administrative expenses (53) Other * (14) Depreciation,…
Reconciliation: Net Income to Consolidated Adjusted EBITDA (Amounts in MM) Q2-Q4 Annualized Net Income 287 Interest expense 45 Depreciation, amortization and impairment 287 Net distribution from equity investments 40 Other * 16…
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