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2015 Evercore ISI Conference – Excel Oil Gas Llc

Excel Oil Gas Llc · Jan 9, 2015 · 58 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. 2015 Evercore ISI Conference – Excel Oil Gas Llc – slide 1
    A Strategic Plan for Growth 2015 Evercore ISI Conference January 8-9, 2015
  2. 2015 Evercore ISI Conference – Excel Oil Gas Llc – slide 2
    Fully Regulated, Diverse Utility NSP-Minnesota (NSPM) NSP-Wisconsin (NSPW) 35-45% of earnings 5-10% of earnings Public Service Co. of Colorado (PSCo) Southwestern 45-55% of earnings Public Service (SPS) 5-15% of earnings Operate in…
  3. 2015 Evercore ISI Conference – Excel Oil Gas Llc – slide 3
    Xcel Energy Investment Merits Focused strategic plan Offering an attractive total return EPS growth of 4% 6% * Dividend growth of 4% 6% Strong credit metrics Unsecured credit ratings of BBB+ to A Secured credit ratings in A range…
  4. 2015 Evercore ISI Conference – Excel Oil Gas Llc – slide 4
    Xcel Energy Strategic Plan Objectives Measurable Results Improve Utility Close ROE gap 50 bps by 2018 Performance Derive 75% of revenue from MYPs Drive Operational Manage workforce transition Excellence Limit annual O&M growth to…
  5. 2015 Evercore ISI Conference – Excel Oil Gas Llc – slide 5
    Improve Utility Performance Existing ROE gap is approximately 100 bps Regulatory Lag Contribution by Jurisdiction NSPM 75% Close ROE Objective Gap by 50 bps by 2018 SPS 20% PSCo & NSPW 5% 6
  6. 2015 Evercore ISI Conference – Excel Oil Gas Llc – slide 6
    Streamlining Minnesota Regulation Based upon four key objectives Pursue more predictable and nimble regulation Reduce carbon emissions by 40% by 2030 Pioneer grid modernization Provide new services and product offerings Potential…
  7. 2015 Evercore ISI Conference – Excel Oil Gas Llc – slide 7
    Minnesota Regulatory Calendar 2014 2015 2015 2015 2015 Q4 Q1 Q2 Q3 Q4 MN 2014 2015 Rate Case Monticello Case MN Legislative Session MN Regulatory Filing Resource Plan Filing Alternative Plan: 2016 2018 Rate Case…
  8. 2015 Evercore ISI Conference – Excel Oil Gas Llc – slide 8
    Legislative Initiatives in Texas Collaborating with other non-ERCOT utilities Pursuing legislative changes to reduce regulatory lag Ability to implement temporary rates 35 days from filing Allow the addition of post test year capital…
  9. 2015 Evercore ISI Conference – Excel Oil Gas Llc – slide 9
    Closing the ROE Gap Key Opportunity for EPS Growth 2014 Estimated 20.7 billion 20.7 billion 20.7 billion Rate Base Equity Ratio 54% 54% 54% ROE Improvement 25 bps 50 bps 75 bps Net Income 28 million 56 million 84 million…
  10. 2015 Evercore ISI Conference – Excel Oil Gas Llc – slide 10
    Impact of Improved Earned ROE Consolidated 5-year EPS Earned ROE CAGR 11.0% 6% - 7% 10.5% 5% - 6% 10.0% 4% - 5% Based on Xcel Energys consolidated GAAP ROE 11
  11. 2015 Evercore ISI Conference – Excel Oil Gas Llc – slide 11
    Improve Utility Performance Derive 75% of Revenue from Multi-Year Plans Percent of Jurisdiction Status Rate Plan Rate Base Minnesota Electric Pending Multi-Year Plan (2014-15) 35% Colorado Electric Pending Multi-Year Plan (2015-17)…
  12. 2015 Evercore ISI Conference – Excel Oil Gas Llc – slide 12
    Driving Operational Excellence Bending the Cost Curve Sustainable cost control Standardization of processes Optimize purchasing power Objective Technology Annual O&M Growth Stabilization of nuclear costs Drives 2014: 2% - 3%…
  13. 2015 Evercore ISI Conference – Excel Oil Gas Llc – slide 13
    Base Capital Investment Plan Five-Year Total of 14.5 Billion Dollars in millions 3,375 2,780 2,825 2,650 2,850 2015 2016 2017 2018 2019 Transmission Generation Distribution Other 14
  14. 2015 Evercore ISI Conference – Excel Oil Gas Llc – slide 14
    Base Capital Investment Plan Drives Rate Base Growth 2015-2019 Base Capital Expenditures 14.5 Billion Distribution 22% Transmission 4.7% 31% Drives Rate Base Other CAGR 24% 2014 - 2019 Generation 23% 15
  15. 2015 Evercore ISI Conference – Excel Oil Gas Llc – slide 15
    Investing for the Future Potential Natural Gas Investment Take advantage of organic growth opportunities Leverage existing natural gas footprint Potential incremental investment opportunities Natural gas pipelines Natural gas…
  16. 2015 Evercore ISI Conference – Excel Oil Gas Llc – slide 16
    Xcel Energy An Experienced Natural Gas Provider Sixth largest natural gas consumer in the country Annual natural gas usage 450 Bcf Spend 1.5 - 2.0 billion annually 2013 Natural Gas Consumption NSPM 28% Operating Miles of Gas…
  17. 2015 Evercore ISI Conference – Excel Oil Gas Llc – slide 17
    Transmission: A Two-Pronged Strategy Operating Company: A low risk base business Driven by reliability standards & state/regional energy policies Incumbent in areas with a substantial need for investment Will defend using ROFR…
  18. 2015 Evercore ISI Conference – Excel Oil Gas Llc – slide 18
    Transmission Base Capital Investment Plan Majority of base plan is driven by reliability targets, state & regional energy policies and asset renewal Minimal execution risk Transmission CapEx of 4.5 billion 2015 2019 Regional…
  19. 2015 Evercore ISI Conference – Excel Oil Gas Llc – slide 19
    Advancing Transco Strategy Create transco subsidiaries Submit proposed projects to SPP Initiate FERC filing process Make state regulatory filings Pursue initial SPP RFPs 2015 Reply to MISO RFPs 2015/2016 20
  20. 2015 Evercore ISI Conference – Excel Oil Gas Llc – slide 20
    Proven Track Record of Delivering Value Consistent Dividend Growth Annual Dividend Increase 1.20 1.12 1.04 1.08 0.98 1.01 0.95 0.92 0.86 0.89 2005 2013 2014 Dividend growth CAGR 2005-2013 = 3.4% Dividend increase for 2014…
  21. 2015 Evercore ISI Conference – Excel Oil Gas Llc – slide 21
    Proven Track Record of Delivering Value Consistent EPS Growth Ongoing earnings per share * 2014 & 2015 Ongoing Earnings Guidance Ranges 2.00- 1.95- 2.15 2.05 1.95 1.15 2005 2014E 2015E Ongoing EPS CAGR 2005-2013 = 6.8% EPS…
  22. 2015 Evercore ISI Conference – Excel Oil Gas Llc – slide 22
    Proven Track Record Delivering on Financial Objectives EPS Guidance 2005 Achieved 2006 Achieved 2007 Exceeded 2008 Achieved 2009 Achieved 2010 Achieved 2011 Achieved 2012 Achieved 2013 Achieved 2014 On Track 23
  23. 2015 Evercore ISI Conference – Excel Oil Gas Llc – slide 23
    Appendix 24
  24. 2015 Evercore ISI Conference – Excel Oil Gas Llc – slide 24
    Reconciliation Ongoing EPS to GAAP EPS 2005 2006 2007 2008 2009 2010 2011 2012 2013 Ongoing EPS 1.15 1.30 1.43 1.45 1.50 1.62 1.72 1.82 1.95 PSRI-COLI 0.05 0.05 (0.08) 0.01 (0.01) (0.01) - - - Prescription Drug Tax Benefit - - - - - - -…
  25. 2015 Evercore ISI Conference – Excel Oil Gas Llc – slide 25
    Dividend Flexibility Annual dividend growth target range of 4% 6% No dividend payout range target Dividend growth may periodically exceed EPS growth Dividend considerations Providing a competitive dividend yield Capital investment…
  26. 2015 Evercore ISI Conference – Excel Oil Gas Llc – slide 26
    Strong Credit Ratings and Liquidity 45% equity ratio as of September 30, 2014 2.75 billion credit line, maturity of October 2019 Moodys * S&P Fitch Xcel Unsecured A3 BBB+ BBB+ NSPM Secured Aa3 A A+ NSPW Secured Aa3 A A+ PSCo Secured…
  27. 2015 Evercore ISI Conference – Excel Oil Gas Llc – slide 27
    Modest Financing Needs Financing Plan 2015-2019 Funding capital expenditures millions 14,480 11,500 2,605 2,995 0 375 Cap CFO * New Equity ** DRIP & Refinanced Ex Debt Benefits Debt * Cash from operations is net of dividend…
  28. 2015 Evercore ISI Conference – Excel Oil Gas Llc – slide 28
    Manageable Debt Maturities Dollars in millions 1,600 Hold Co NSPM NSPW PSCo SPS 1,200 800 400 0 2015 2016 2017 2018 2019 2020 2021 2022 2023 29
  29. 2015 Evercore ISI Conference – Excel Oil Gas Llc – slide 29
    Projected Rate Base Growth Dollars in billions CAGR 2014 2019 = 4.7% 25.2 26.1 24.5 23.5 22.5 CAGR 2005 2013 = 7.5% 20.7 19.2 17.6 16.9 15.2 14.4 13.3 12.5 11.7 10.8 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015…
  30. 2015 Evercore ISI Conference – Excel Oil Gas Llc – slide 30
    Transmission Rate Base Growth Dollars in Billions CAGR 2014 2019 = 10% 7.5 6.9 6.2 5.7 5.2 4.6 3.8 3.0 2012 2013 2014 2015 2016 2017 2018 2019 Estimate 31
  31. 2015 Evercore ISI Conference – Excel Oil Gas Llc – slide 31
    Capital Expenditures by Major Project Dollars in millions 2015 2019 Major Project Summary 2014 2015 2016 2017 2018 2019 Total CapX 2020 270 130 5 5 - - 140 CACJA 240 90 10 - - - 100 Nuclear Fuel 130 90 120 120 65 150 545 SPP…
  32. 2015 Evercore ISI Conference – Excel Oil Gas Llc – slide 32
    Capital Expenditures by Function Dollars in millions 2015 - 2019 2014 2015 2016 2017 2018 2019 Total Electric Generation 715 1,190 630 620 415 450 3,305 Electric Transmission 985 875 780 905 975 1,000 4,535 Electric Distribution 560…
  33. 2015 Evercore ISI Conference – Excel Oil Gas Llc – slide 33
    Capital Expenditures by Company Dollars in millions 2015 2019 2014 2015 2016 2017 2018 2019 Total NSPM 1,130 1,625 990 975 845 950 5,385 PSCO 1,055 950 820 815 885 1,010 4,480 SPS 535 570 710 735 595 565 3,175 NSPW 280 230 260…
  34. 2015 Evercore ISI Conference – Excel Oil Gas Llc – slide 34
    NSP-M Capital Expenditures by Function Dollars in millions NSPM 2015 2016 2017 2018 2019 Total Electric Generation 860 245 270 220 210 1,805 Electric Transmission 285 205 195 170 190 1,045 Electric Distribution 210 220 220 225 230 1,105…
  35. 2015 Evercore ISI Conference – Excel Oil Gas Llc – slide 35
    PSCo Capital Expenditures by Function Dollars in millions PSCo 2015 2016 2017 2018 2019 Total Electric Generation 195 125 85 95 170 670 Electric Transmission 155 100 170 215 230 870 Electric Distribution 245 250 265 270 280 1,310…
  36. 2015 Evercore ISI Conference – Excel Oil Gas Llc – slide 36
    SPS Capital Expenditures by Function Dollars in millions SPS 2015 2016 2017 2018 2019 Total Electric Generation 125 245 250 85 50 755 Electric Transmission 315 330 360 390 380 1,775 Electric Distribution 95 100 95 95 105 490 Other 35 35…
  37. 2015 Evercore ISI Conference – Excel Oil Gas Llc – slide 37
    NSP-W Capital Expenditures by Function Dollars in millions NSPW 2015 2016 2017 2018 2019 Total Electric Generation 10 15 15 15 20 75 Electric Transmission 120 145 180 200 200 845 Electric Distribution 55 60 60 60 65 300 Natural Gas 25…
  38. 2015 Evercore ISI Conference – Excel Oil Gas Llc – slide 38
    Proximity to U.S. Energy Plays Increasing oil & gas exploration D-J Basin (Colorado) Bakken/Williston (Dakotas) Permian Basin (NM/Texas) Current assets are well positioned Multiple gas supply basins Associated gas from Bakken is…
  39. 2015 Evercore ISI Conference – Excel Oil Gas Llc – slide 39
    WYCO Development Company Joint venture (50/50) owned with Kinder Morgan Operates and develops natural gas pipelines, storage and compression WYCO assets High Plains Pipeline 164 miles of 30 pipe Front Range Pipeline 53 miles of…
  40. 2015 Evercore ISI Conference – Excel Oil Gas Llc – slide 40
    Potential Transmission Opportunities Oil & Gas Interregional Ties Expansion MISO North Next MVP/EPA 111(d) Portfolio SPP North-South Integration MISO/SPP Seam WECC/WestConnect First Regional Portfolio MISO North-South…
  41. 2015 Evercore ISI Conference – Excel Oil Gas Llc – slide 41
    SPP Planning Process Timeline May/June 2014 2015 Mid 2015 2014 Q4 Q1 2015 2H SPP Board Approval Initial Detailed and Initial Project RFPs Issued Draft Initial RFP Proposals Due Responses Regional Plan Due and RFP Released…
  42. 2015 Evercore ISI Conference – Excel Oil Gas Llc – slide 42
    SPP Scoring Methodology Criteria Xcel Energy Brings Engineering Design 200 pts Accomplished development team Project Management 200 pts Skillful project execution Operating Ability 250 pts Seasoned operator Cost Analysis 225 pts…
  43. 2015 Evercore ISI Conference – Excel Oil Gas Llc – slide 43
    Proven Low Cost Leader 345 kV Lines Dollars in millions per mile Average Cost per Mile, Adjusted * 2.5 Overall Average = 2.1 million/mile 2.0 1.5 1.0 0.5 of 13 25 55 12 35 projects 0.0 Xcel Energy SPP ERCOT WECC MISO Average…
  44. 2015 Evercore ISI Conference – Excel Oil Gas Llc – slide 44
    Regulatory vs. Authorized ROE - 2013 Rate Base Authorized W/A Earned OPCO Jurisdiction Regulatory Plan Millions ROE ROE MN Electric 6,719 9.83% 8.22% 2014-15 MYP Filed MN Gas 436 10.09 9.76 NSPM ND Electric 389 9.75 9.54 2013-2016…
  45. 2015 Evercore ISI Conference – Excel Oil Gas Llc – slide 45
    Pending Regulatory Cases Requested Requested Rate Case Expected Decision Increase ROE 248 million Minnesota Electric 10.25% 2015 Q1 Over Two Years Colorado Electric 107 million 10.25% 2015 Q2 South Dakota Electric 16 million…
  46. 2015 Evercore ISI Conference – Excel Oil Gas Llc – slide 46
    Minnesota Multi-Year Electric Rate Case NSP-Minnesota filed a two-year, electric rate case seeking a revised 248 million over two years The filing is based on a requested ROE of 10.25%, a 52.5% equity ratio, a 2014 average rate base…
  47. 2015 Evercore ISI Conference – Excel Oil Gas Llc – slide 47
    Minnesota Multi-Year Electric Rate Case 2014 2015 (Millions of Dollars) % % Amount Amount increase increase Initial pre-moderation deficiency 273.8 81.4 Excess depreciation reserve (81.1) 52.9 DOE settlement proceeds __ (35.8) Initial…
  48. 2015 Evercore ISI Conference – Excel Oil Gas Llc – slide 48
    Minnesota Multi-Year Electric Rate Case 2014 (millions of dollars) DOC NSP-M ALJ Surrebuttal Rebuttal NSP-Minnesotas original request 192.7 192.7 192.7 Monticello EPU (31.3) (33.9) (12.2) Sales forecast* (15.8) (43.2) (15.8) ROE (DOC…
  49. 2015 Evercore ISI Conference – Excel Oil Gas Llc – slide 49
    Minnesota Multi-Year Electric Rate Case 2015 (millions of dollars) DOC NSP-M ALJ Surrebuttal Rebuttal NSP-Minnesotas original request 98.5 98.5 98.5 Monticello EPU * 29.1 18.9 11.7 Excess depreciation reserve adjustment ** - (22.7) -…
  50. 2015 Evercore ISI Conference – Excel Oil Gas Llc – slide 50
    Monticello EPU/LCM Prudence Filing Original estimate was 320 million and final cost was 665 million Monticello uprate & life extension was a sound investment Rebuilt plant provides customer value for the next 20 years Essential for…
  51. 2015 Evercore ISI Conference – Excel Oil Gas Llc – slide 51
    South Dakota 2015 Electric Rate Case Seeking a 2015 electric rate increase of 15.6 million, or 8.0% Requested ROE of 10.25% Equity ratio of 53.86% 2013 historic test year with known and measurable adjustments for 2014 and 2015…
  52. 2015 Evercore ISI Conference – Excel Oil Gas Llc – slide 52
    Colorado 2015 Electric Rate Case Seeking a total 2015 rate increase of 107 million, or 3.8% The filing is based on a 2015 test year, an ROE of 10.25%, an equity ratio of 56% and an electric rate base of 6.39 billion Request reflects…
  53. 2015 Evercore ISI Conference – Excel Oil Gas Llc – slide 53
    Colorado 2015 Electric Rate Case PSCo (Millions of Dollars) Staff OCC Rebuttal PSCos filed rate request 136.0 136.0 136.0 Transfer from transmission rider to base rates 19.9 19.9 19.9 PSCos filed revenue requirement deficiency 155.9…
  54. 2015 Evercore ISI Conference – Excel Oil Gas Llc – slide 54
    Texas 2015 Electric Rate Case Requested a 2015 electric rate increase of 64.75 million (6.7%) Based on a June 2014 historic test year with known and measurable adjustments ROE of 10.25% Electric rate base of 1.56 billion Equity…
  55. 2015 Evercore ISI Conference – Excel Oil Gas Llc – slide 55
    Proactive Environmental Leadership Fuel Mix Based on Energy 2005 2013 2020 5% 1% 4% 1% 2% 3% 3% 56% 15% 12% 46% 22% 43% 11% 23% 12% 23% 18% Coal Natural Gas Nuclear Wind Hydro Other 56
  56. 2015 Evercore ISI Conference – Excel Oil Gas Llc – slide 56
    Proactive Environmental Leadership Emission Reductions Nitrogen Oxide Emissions (lbs/MWh) CO2 Emissions 150,000 Million tons 100,000 95 50,000 90 0 2005 2006 2007 2008 2009 2010 2011 2012 85 Sulfur Dioxide Emissions (lbs/MWh)…
  57. 2015 Evercore ISI Conference – Excel Oil Gas Llc – slide 57
    Better Than Expected YTD Sales Growth YTD Weather-Adjusted Retail Electric Sales Through 2014 Q3 3.3% 2.3% 1.4% 1.3% 0.7% Xcel NSPM PSCo NSPW SPS Energy 2014 guidance assumes W/A electric sale growth of about 1% 58
  58. 2015 Evercore ISI Conference – Excel Oil Gas Llc – slide 58
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