Enbridge Energy Partners, L.P. and Midcoast Energy Partners, L.P. Investment Community Presentation January 2015 enbridg e p a rtn e r s . c o m
Investment Proposition Strong Business Fundamentals: Strength & Stability Migrating to a Much Lower Risk Business Model Strong General Partner Stable Distributions & Prudent Growth Attractive Yield 2 enbridg e p a rtn e r…
Investment Highlights Strong Investment Grade Commercially secured Enterprise Value - Low-risk transformative (S&P, Moodys, DBRS) organic growth Large-Cap MLP growth underway underway Highlights Total Shareholder Return One of…
Strength Strength ofof GPGP Enbridge Enbridge Inc. Inc. ENB: North American leader in energy delivery Owner and operator of largest crude oil pipeline system 41 billion equity market cap Strong investment grade (A-, Baa1)…
Strategic Position Competitive Advantages Refiners: Access to multiple crude streams Norman Wells Producers: Access to multiple premium markets Zama WCSB Flexible system Fort McMurray Size and scale unmatched: Will expand to…
WCSB Supply Forecast vs. Pipeline Takeaway Capacity* MMb/d Keystone XL 9.0 ENB Northern Gateway Supply Forecast 8.0 TransMountain Expansion Energy East 7.0 6.0 5.0 4.0 3.0 ENB 2.0 1.0 OTHER 0.0 2014 Enbridge Forecast…
Bakken Crude Supply and Pipeline Takeaway Capacity Kbpd 2,500 Range of External Forecasts 2,000 3rd-Party Proposed 1,500 1,000 Enbridge - Sandpiper Enbridge - Bakken 500 3rd Party Pipes 0 Local Refining High Case…
Market Access Well Advanced Three major initiatives provide 1.7 MMbpd of increased market access and diversification +50 kbpd +250 kbpd +50 kbpd +250 +80 Organic Growth Projects: kbpd kbpd Commercially secured +50 Low risk…
Project Execution 2014 In-Service Eastern Access: Ln 6B Replacement 160 miles of Line 6B replacement entered service in May 2014 Remaining 50 mile replacement entered service October 2014 2.1 billion capital Mainline Expansions…
Bakken Expansion Sandpiper Pipeline Hardisty Regina Gretna Montreal Clearbrook Superior Scope: 610 mile, 24/30 pipeline Capacity: 225 kbpd/375 kbpd Target in-service: 2017 Westover Marathon Funding: Sarnia 37.5% of…
Line 3 Replacement ENB Funded EEP/ENB Joint Funded EEP Capital Investment: border to Superior 2.6 billion capital to be joint funded with ENB Expected Completion: 2nd Half of 2017 30 year Cost-of-Service 15 year primary…
Risk Profile Low Risk Business Model Defensive nature of cash flows position EEP to navigate through commodity price uncertainty Unconsolidated View 2017e 2015e 32% 27% 18% Crude oil projects progressively transform…
Drop Downs Boost Distributable Cash Flow Initial Drop Down: 1 billion drop down from Enbridge closed 1/2/2015 66.7% interest in the U.S. segment of Alberta Clipper pipeline (Line 67) Immediately accretive 2.7% distribution increase…
ENB Liquids Pipelines Drop-Down Potential: 10 Billion + Distributable Cash Examples: Capital Cost/ Pipeline System Upsize Option Book Value* Eastern Access 0.4 (2016/2017) 1.5 Mainline Expansion 0.4 (2016/2017) 1.4 Line…
Key Takeaways Strategic position supported by strong business fundamentals Secured Liquids projects collectively transform the Partnership to an even lower risk business model Minimal equity funding requirements ENB reviewing…
Supplemental Slides Enbridge Energy Partners, L.P. Investment Community Presentation January 2015
Western Canada Supply Growth Forecast Western Canada Production MMbpd 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0 Oil Sands Conventional Heavy Conventional Light & Medium Pentanes/Condensate Oil sands production projected to…
North American Crude Oil Price Fundamentals Significant Infrastructure Investment Opportunities Light Differentials 1/22/15 1/30/13 Asia Brent WTI - 19 48 42 Alberta Light LLS WTI 1 18 41 34 WCS Asia WTI 1 22 WTI Bakken 4 3…
Low-Risk Sustainable Growth Distribution coverage strengthens as growth projects enter service Expected Project In-Service Period 1H13 2H13 1H14 2H14 1H15 2H15 1H16 2H16 1H17 2H17 Liquids Projects (1) Bakken Pipeline Expansion…
Delivering Prudent Growth Growth Net Capital Target (MM) Capital EEP In-Service Risk Profile Liquids: Bakken Growth Projects Long-term Ship-or Pay/ Cost of Sandpiper 2,600 1,625 2017 Service Eastern Access (1) 30 year Cost of…
Midcoast Energy Partners, L.P. Investment Community Presentation January 2015
Vision and Strategy VISION Be recognized as a leading natural gas and NGL midstream infrastructure developer, operator and service provider in North America SCALE SCOPE STRATEGY Provide best in class gathering, processing and…
MEP Strategic Priorities Strengthen underlying business Recontract and capture new business that enhances cash flow certainty Continue focused cost management measures Secure and execute on organic growth opportunities Continue to…
Long-Term Transformation of Risk Profile Risk profile transforms as base business grows and new business is captured Demand volumes and revenue progressively ramping on Texas Express Re-contract and capture new business that enhances…
Growth Outlook 100% Natural Gas business 48.4% 61% ownership 51.6% 39% IPO July 1, 2014 2017e Drop-down program is strategic to EEP Position for 2H 2015 drop-down Secure growth opportunities Cost management measures…
Strong Sponsor Support EEP incentivized to invest alongside MEP Jointly fund on and off footprint growth EEP evaluating other forms of support Execute drop-down that enhances accretion at MEP Enhance MEP Cost of Equity Gas-Focused…
Strategically Positioned Asset Base Midcoast Business Segments Key Assets Natural Gas Deliveries 2.5 bcf/d Gathering, Processing & Transportation: strong asset foundation 90% EBITDA Gathering and Transportation Pipelines 11,400…
Regional Outlook Gathering, Processing & Transportation Highlights East Texas Beckville plant 2015 in-service NGL production volumes expected to increase Eaglebine activity encouraging 36 active rigs * North Texas New gathering…
Texas Express A Growing Base of Secure Cash Flow Texas Express NGL System Shipper committed and spot volumes ramping up; committed volumes step- up to 147,000 Bpd in July 2015 Underpinned by fee-based demand revenue System is…
Capital Forecast & Funding Outlook Capital Expenditures(1) Growing Financial Strength: 2014e 2015e Coverage expected to strengthen Beckville Gas Processing Plant 105 15 Debt/EBITDA expected to improve Well Connect Expansion Capital…
Accelerating Scope & Pace of Change Bottom-line enhancement initiatives 2014e O&A Costs (1) 405 MM 50 million of annual cost reductions at New Assets In Service +12 Midcoast Operating Insurance & Taxes +6 Cost structure to be…
2015 Financial Outlook Midcoast Operating, L.P. ( millions) 2015e Adjusted EBITDA, inclusive of other cash items(1) 255 - 280 + 25% YoY Midcoast Energy Partners, L.P. (MEP) 2015e ( millions) Adjusted EBITDA (2) 120 - 135 + 67%…
Key Takeaways Accelerating pace and increasing scope of change Executed cost reduction measures bolster distributable cash flow Adding to demand-based business Sponsor support remains strong Drop-down strategy intact Aggressively…
Appendix
Strengthening Business Performance 2015 Earnings and Cash Flow Outlook ( millions) 290.0 280 inclusive of other cash items (1) 270.0 MOLP Adjusted EBITDA, 250.0 255 230.0 220 210.0 190.0 170.0 150.0 1Q15e…
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