Skip to main content Investment Conference – Black Hills Corporation Investor Presentation | Shale Experts
Loading...
Pm

Investment Conference – Black Hills Corporation

Black Hills Corporation · Aug 6, 2014 · 60 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. Investment Conference – Black Hills Corporation – slide 1
    InvestMNt Conference Aug. 6, 2014
  2. Investment Conference – Black Hills Corporation – slide 2
    Black Hills Corp. Investment Highlights Utility-centered energy company with strong earnings growth Oil and Gas provides upside growth and value creation (potential funding source for utility growth opportunities) Operational…
  3. Investment Conference – Black Hills Corporation – slide 3
    Company Overview Pueblo Airport Generating Station near Pueblo, Colo. 2014 InvestMNt Conference - Aug. 6, 2014 4
  4. Investment Conference – Black Hills Corporation – slide 4
    Black Hills Corporation Today Started serving electric customers in Deadwood, SD in 1883 Incorporated Black Hills Power in 1941 Listed on NYSE in 1980 under BKH Market capitalization of approximately 2.5 billion Annual Period…
  5. Investment Conference – Black Hills Corporation – slide 5
    Black Hills Corporation Overview A growth-oriented, vertically-integrated energy company with a tradition of exemplary service and a vision to be the energy partner of choice. Based in Rapid City, S.D., the company serves 777,000 electric…
  6. Investment Conference – Black Hills Corporation – slide 6
    Electric and Gas Utilities Black Hills Power Cheyenne Nebraska Light Gas Iowa Cheyenne Black Hills Gas Light Power Colorado Gas Kansas Colorado Gas Electric Electric Utilities* Natural Gas Utilities* Generates, transmits…
  7. Investment Conference – Black Hills Corporation – slide 7
    Non-Regulated Energy Power Generation* Owns interests in three power generation facilities totaling 309 MW Wygen I - 69 MW of a 90 MW coal-fired facility in Gillette, WY CT II - 40 MW combustion turbine in Gillette, WY (will be sold…
  8. Investment Conference – Black Hills Corporation – slide 8
    Strategic Overview Busch Ranch Wind Farm near Pueblo, Colo. 2014 InvestMNt Conference - Aug. 6, 2014 9
  9. Investment Conference – Black Hills Corporation – slide 9
    Strategic Objectives Utility-centered energy company well positioned to build upon a track record of successful utility growth EARNINGS: Lead industry peers in CUSTOMER: Provide quality OPERATIONAL PERFORMANCE: ENGAGEMENT: Achieve…
  10. Investment Conference – Black Hills Corporation – slide 10
    Operating Performance Power Plant Fleet Availability by Fuel Type Natural Gas Turbine Starting Reliability 100% 100% BHC Industry BHC Industry 95% 96% 90% 85% 92% 80% 88% 75% 70% 84% 65% 60% 80% Coal Gas Diesel Wind…
  11. Investment Conference – Black Hills Corporation – slide 11
    Operating Performance 2012 IEEE Reliability Benchmarking Study Total Annual Outage Minutes AGA Energy Analysis 2012 Performance Benchmarks for Gas Utilities Represents average outage in minutes per customer, per year based on…
  12. Investment Conference – Black Hills Corporation – slide 12
    Capital Expenditures Historical and Forecasted Capital Expenditures (in millions)* 490 441 416 369 385 205 340 127 341 199 84 134 127 133 285 285 314 217 213 251 208 2010 2011 2012 2013 2014F 2015F 2016F Regulated…
  13. Investment Conference – Black Hills Corporation – slide 13
    Capital Investment by Segment (in millions) 2009 2010 2011 2012 2013 2014F 2015F 2016F Generation 168 146 85 72 130 92 42 58 Transmission 21 28 20 38 32 64 38 14 Other 53 59 68 57 60 95 109 89 Subtotal Electric Utilities 242 233…
  14. Investment Conference – Black Hills Corporation – slide 14
    Select Major Utility Projects Forecasted Capital Expenditures * Excludes routine capital expenditures for maintenance Projected of assets In-service 2017F (in millions) Date 2013 2014F 2015F 2016F - 2018F Total** Utilities…
  15. Investment Conference – Black Hills Corporation – slide 15
    Cheyenne Prairie Generating Station New Generation Helps Meet Growing Demand and New Environmental Regulations Overview: New 222 million, 132 MW generating plant jointly owned by Cheyenne Light and Black Hills Power being built in…
  16. Investment Conference – Black Hills Corporation – slide 16
    Utilities Regulatory Update Filing Utility & Filing Description* 2013 2014 2015 Status Date CPGS - 2.8MM BHP Hearing Aug. 20, 2014 request, 53%/47%, Q1 2014 Rate case WY Approval before Q4 2014 10.25% ROE CPGS - 14.6MM Hearing…
  17. Investment Conference – Black Hills Corporation – slide 17
    Oil and Gas Strategy Prove up and capture value of existing oil and gas properties Prove up probable and possible reserves Capture value through optionality Pursue disciplined oil exploration, appraisal and development program…
  18. Investment Conference – Black Hills Corporation – slide 18
    Oil and Gas Strategy Complete 2014 Program Drill and complete up to six Mancos Shale wells in southern Piceance Basin Continue Mancos Shale infrastructure improvements Continue participation in non-operated Bakken drilling…
  19. Investment Conference – Black Hills Corporation – slide 19
    Financial Update Elmo Bailey & Ebi Kazemi prepare for pole line installation in the mountains near Victor, Colo. 2014 InvestMNt Conference - Aug. 6, 2014 20
  20. Investment Conference – Black Hills Corporation – slide 20
    Earnings Per Share Analysis Q2-2014 Q1-2014 Q4-2013 Q3-2013 Q2-2013 Net Income (loss) (GAAP) 0.44 1.08 0.41 0.52 0.69 Loss (income) from discontinued operations (GAAP) - - 0.02 - - Income (loss) from continuing operations (GAAP)…
  21. Investment Conference – Black Hills Corporation – slide 21
    Income Statement (in millions, except earnings per share) 2nd Qtr 2014 2013 Revenue 283.2 279.8 Gross margin* 181.9 180.7 Operating expense (98.6) (96.5) DD&A (36.7) (35.2) Operating Income 46.6 49.0 Interest expense (16.7)…
  22. Investment Conference – Black Hills Corporation – slide 22
    Q2 Revenue/Op Income Total Revenue, as adjusted* (in millions) Total Operating Income, as adjusted* (in millions) 283 280 46.6 49.0 Q2 2014 Q2 2013 Q2 2014 Q2 2013 162 30.8 Electric Util Electric Util 158 31.5 103…
  23. Investment Conference – Black Hills Corporation – slide 23
    Operating Income and EPS, as Adjusted (in millions, except per share amounts) 350 3.00 2.75 ** 2009 2014 EPS CAGR = 14.8% 300 2.45 2.50 2.09 250 36.1 2.00 36.2 1.67 1.69 200 1.38 5.2 1.50 19.0 150 19.9 1.00 210.4 219.8…
  24. Investment Conference – Black Hills Corporation – slide 24
    Estimated Utility Rate Base Estimated Rate Base* by Utility Segment 2010 2011 2012 2013 (in millions) Electric Utilities 901 1,007 1,272 1,248 Gas Utilities 425 443 450 454 Total 1,326 1,450 1,722 1,702 * Estimated rate base…
  25. Investment Conference – Black Hills Corporation – slide 25
    Capital Structure (In millions, except for ratios) June 30, March 31, Dec. 31, Sept. 30, June 30, 2014 2014 2013 2013 2013 Capitalization Short-term Debt 408 100 83 394 356 Long-term Debt 1,122 1,397 1,397 956 959 Total Debt 1,530…
  26. Investment Conference – Black Hills Corporation – slide 26
    In Millions 0 100 200 300 400 500 600 2014 2015 275MM Term Loan 2016 2017 2018 75MM 2019 2020 200MM 5.88% Note 2014 InvestMNt Conference - Aug. 6, 2014 2021 CLFP IR Bond 2022 Debt Maturities 2023 525MM…
  27. Investment Conference – Black Hills Corporation – slide 27
    Credit Rating On June 13, Fitch Ratings upgraded its corporate credit rating on Black Hills Corp. and Black Hills Power to BBB+ from BBB; they also raised Black Hills Powers senior secured ratings to A from A-; all ratings issued with…
  28. Investment Conference – Black Hills Corporation – slide 28
    Dividend Growth Dividend Increased for 44 Consecutive Years 1.60 Dividend yield was 2.8% on July 29, 2014* 1.56 1.55 1.52 1.50 1.48 1.46 Annual Dividend 1.45 1.44 Per Share 1.42 1.40 1.35 1.30 1.25 1.20 2009…
  29. Investment Conference – Black Hills Corporation – slide 29
    2014 Scorecard Strategy Construct cost effective rate-base Construct additional utility Achieve top-tier operational Be the safest company in the energy generation and transmission to serve infrastructure that supports growing…
  30. Investment Conference – Black Hills Corporation – slide 30
    Questions 2014 InvestMNt Conference - Aug. 6, 2014 31
  31. Investment Conference – Black Hills Corporation – slide 31
    Appendix Dory Batka and Jerry Likewise monitor the energy supply at our Neil Simpson Complex in Gillette, Wyo. 2014 InvestMNt Conference - Aug. 6, 2014 32
  32. Investment Conference – Black Hills Corporation – slide 32
    Black Hills Corporation History Originating company started in Deadwood in 1883 (131 years ago) Company was soon sold to new investors to introduce lights into all the towns and cities of the Hills and the name Black Hills Electric…
  33. Investment Conference – Black Hills Corporation – slide 33
    Black Hills Organizational Structure 2014 InvestMNt Conference - Aug. 6, 2014 34
  34. Investment Conference – Black Hills Corporation – slide 34
    Electric Utility Generation Availability(%) * Excludes KS HDD data since state has weather normalization 89.9 Q2 2014 84.8 711 Q2 2014 78.1 Q1 2014 (Total for all gas service* areas weighted by 95.5 3,524 Q1 2014 Gas…
  35. Investment Conference – Black Hills Corporation – slide 35
    Siting Synergies Multiple generation sites with expansion potential along the Front Range Shared staff, facilities, land, infrastructure Each location has advantageous fuel supply logistics and/or wind potential Reduces asset…
  36. Investment Conference – Black Hills Corporation – slide 36
    Gillette Energy Complex Value proposition through integrated approach Coal production, generation, transmission utility and non-regulated assets Shared staff, facilities, land and infrastructure Wyodak Mine I-90 Wyodak…
  37. Investment Conference – Black Hills Corporation – slide 37
    Pueblo Airport Generating Station Colorado Electrics 180 MW Generation Project completed on Dec. 31, 2011 Two 90 MW simple cycle natural gas-fired turbines Colorado IPPs Non-Regulated 200 MW Generation Project completed on Dec. 31,…
  38. Investment Conference – Black Hills Corporation – slide 38
    Utility Regulatory Results Authorized Electric Effective Return on Rate Base Jurisdiction Or Gas Date Equity Capital Structure (in millions) BHP-SD Electric 6/16/2013 Global Settlement Global Settlement 440.2 BHP-WY Electric…
  39. Investment Conference – Black Hills Corporation – slide 39
    Mitigating Regulatory Recovery Risk Mechanisms reduce regulatory lag and the risk of non-recovery Electric Utility Cost Recovery Mechanisms Jurisdiction Environmental DSM/ Trans- Fuel Cost Trans- Purchased Fixed Cost Financing Cost…
  40. Investment Conference – Black Hills Corporation – slide 40
    Q2 2014 Non-Regulated Update IPP Generation Contract Availability (%) Coal Production Revenue and Expense per Ton Sold (Coal in millions of tons and overburden in millions (Units = tons sold plus cubic yards of overburden Coal-fired…
  41. Investment Conference – Black Hills Corporation – slide 41
    Coal Contracts Summary Approximately 50% of coal production sold under contracts that include price adjustments based on actual mining costs plus a return on mine capital investments Most of the remaining 50% of coal production sold…
  42. Investment Conference – Black Hills Corporation – slide 42
    Oil & Gas Exploration & Development Program Note: approximate areas of geologic basins does not reflect BHEP acreage 2014 InvestMNt Conference - Aug. 6, 2014 43
  43. Investment Conference – Black Hills Corporation – slide 43
    Reserve Data and Net Present Value Reserve calculation at Dec. 31, 2013 Average Average Net Oil Net Gas Net Equiv PV10 Price Oil Price Nat Gas (MMBO)** (BCF)** (BCFE)** (MM) Per BBL per MCF PDP* 3.7 55.1 77.1 163.5 89.88 3.26 PNP*…
  44. Investment Conference – Black Hills Corporation – slide 44
    Oil and Gas Mancos Shale Strategy Three successful test wells drilled in 2011 (4,000 5,000 foot horizontal laterals) affirmed potential in San Juan and southern Piceance Basins Two wells drilled and completed in southern Piceance…
  45. Investment Conference – Black Hills Corporation – slide 45
    Southern Piceance Basin Western Colorado 2014 InvestMNt Conference - Aug. 6, 2014 46
  46. Investment Conference – Black Hills Corporation – slide 46
    Southern Piceance Basin Mancos Drilling Program 2013-2015 2014 InvestMNt Conference - Aug. 6, 2014 47
  47. Investment Conference – Black Hills Corporation – slide 47
    Southern Piceance Basin Mancos Production Piceance Basin Type Curve 10,000 10,000' Lateral Type Curve 9.5 BCFE GAS, Mcf/D 5,000' Lateral Type Curve 5.4 BCFE 1,000 100 1 11 21 31 41 51 61 MONTHS Note: Predicted…
  48. Investment Conference – Black Hills Corporation – slide 48
    San Juan Basin Mancos Shale 16 miles 45 miles Encana Five Mancos horizontal wells drilled. One reported completion 786 BOPD 838 MCFD Nine additional locations staked 2014 InvestMNt Conference - Aug. 6, 2014 49
  49. Investment Conference – Black Hills Corporation – slide 49
    San Juan Basin Mancos Production Production Rates in Mcf/D 100,000 10,000 Gas Flow in Mcf/D EUR 6.9 BCFE 1,000 100 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37…
  50. Investment Conference – Black Hills Corporation – slide 50
    Use of Non-GAAP Financial Measures Segment Revenue, Operating Income, Income from Continuing Operations and EPS, as adjusted We have provided non-GAAP earnings data reflecting adjustments for special items as specified in the GAAP to…
  51. Investment Conference – Black Hills Corporation – slide 51
    Use of Non-GAAP Financial Measures Revenue, as adjusted (in thousands) Utilities Non-Regulated Energy Electric Power QTD June 30, 2014 Utilities Gas Utilities Generation Coal Mining Oil and Gas Corporate Total Revenue 158,740…
  52. Investment Conference – Black Hills Corporation – slide 52
    Use of Non-GAAP Financial Measures Operating Income, as adjusted (in thousands, pre-tax) Utilities Non-Regulated Energy Electric Power QTD June 30, 2014 Utilities Gas Utilities Generation Coal Mining Oil and Gas Corporate Total…
  53. Investment Conference – Black Hills Corporation – slide 53
    Use of Non-GAAP Financial Measures Operating Income, as adjusted (in thousands, pre-tax) Utilities Non-Regulated Energy Electric Power YTD Dec. 31, 2013 Utilities Gas Utilities Generation Coal Mining Oil and Gas Corporate Total…
  54. Investment Conference – Black Hills Corporation – slide 54
    Use of Non-GAAP Financial Measures Operating Income, as adjusted (in thousands, pre-tax) Utilities Non-Regulated Energy YTD Dec. 31, 2011 Electric Utilities Gas Utilities Power Generation Coal Mining Oil and Gas Corporate Total…
  55. Investment Conference – Black Hills Corporation – slide 55
    Use of Non-GAAP Financial Measures Income from Continuing Operations, as adjusted (in thousands, after-tax) Utilities Non-Regulated Energy Electric Power QTD June 30, 2014 Utilities Gas Utilities Generation Coal Mining Oil and Gas…
  56. Investment Conference – Black Hills Corporation – slide 56
    Use of Non-GAAP Financial Measures EBITDA For the Three Months Ended June 30, (in thousands) 2014 2013 Income from continuing operations 19,820 30,518 Depreciation, depletion and amortization 36,712 35,151 Interest expense,…
  57. Investment Conference – Black Hills Corporation – slide 57
    Use of Non-GAAP Financial Measures Depreciation, Depletion & Amortization, adjusted for Intercompany Capital Lease* (in thousands, pre-tax) Utilities Non-Regulated Energy Electric Power Total Non- YTD Dec. 31, 2013 Utilities Gas…
  58. Investment Conference – Black Hills Corporation – slide 58
    Use of Non-GAAP Financial Measures EPS, as adjusted 2009 2010 2011 2012 2013 Net income (GAAP) 2.11 1.76 1.24 1.85 2.59 Discontinued Operations (0.11) (0.14) (0.23) 0.16 0.02 Income from continuing operations (GAAP) 2.00 1.62 1.01…
  59. Investment Conference – Black Hills Corporation – slide 59
  60. Investment Conference – Black Hills Corporation – slide 60
    To see more ways we are improving life with energy visit us at www.blackhillscorp.com.

From the store

Browse maps, data & reports in the Shale Experts store