Attached files
| file | filename |
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| 8-K - COPANO ENERGY, L.L.C. FORM 8-K - Copano Energy, L.L.C. | form8-k.htm |
Copano’s expansions in the Eagle
Ford Shale, including a joint
venture with Kinder Morgan
Platts 5th Pipeline Development &
Expansion Conference
September 24, 2010
NASDAQ: CPNO
Disclaimer
This presentation includes “forward-looking statements,” as defined in the federal securities laws.
Statements that address activities, or events that Copano believes will or may occur in the future are
forward-looking statements. These statements include, but are not limited to, statements about future
producer activity and Copano’s total distributable cash flow and distribution coverage. These statements
are based on management’s experience and perception of historical trends, current conditions, expected
future developments and other factors management believes are reasonable.
Statements that address activities, or events that Copano believes will or may occur in the future are
forward-looking statements. These statements include, but are not limited to, statements about future
producer activity and Copano’s total distributable cash flow and distribution coverage. These statements
are based on management’s experience and perception of historical trends, current conditions, expected
future developments and other factors management believes are reasonable.
Important factors that could cause actual results to differ materially from those in the forward-looking
statements include the following risks and uncertainties, many of which are beyond Copano’s control:
The volatility of prices and market demand for natural gas and natural gas liquids; Copano’s ability to
continue to obtain new sources of natural gas supply and retain its key customers; the impact on
volumes and resulting cash flow of technological, economic and other uncertainties inherent in
estimating future production and producers’ ability to drill and successfully complete and attach new
natural gas supplies and the availability of downstream transportation systems and other facilities for
natural gas and NGLs; higher construction costs or project delays due to inflation, limited availability of
required resources, or the effects of environmental, legal or other uncertainties; general economic
conditions; the effects of government regulations and policies; and other financial, operational and legal
risks and uncertainties detailed from time to time in Copano’s quarterly and annual reports filed with
the Securities and Exchange Commission.
statements include the following risks and uncertainties, many of which are beyond Copano’s control:
The volatility of prices and market demand for natural gas and natural gas liquids; Copano’s ability to
continue to obtain new sources of natural gas supply and retain its key customers; the impact on
volumes and resulting cash flow of technological, economic and other uncertainties inherent in
estimating future production and producers’ ability to drill and successfully complete and attach new
natural gas supplies and the availability of downstream transportation systems and other facilities for
natural gas and NGLs; higher construction costs or project delays due to inflation, limited availability of
required resources, or the effects of environmental, legal or other uncertainties; general economic
conditions; the effects of government regulations and policies; and other financial, operational and legal
risks and uncertainties detailed from time to time in Copano’s quarterly and annual reports filed with
the Securities and Exchange Commission.
Copano undertakes no obligation to update any forward-looking statements, whether as a result of new
information or future events.
information or future events.
2
Introduction to Copano
Independent midstream company founded in 1992
■ Best in class service to customers
■ Entrepreneurial approach
■ Focus on long-term accretive growth
Provides midstream services in multiple producing areas through
three operating segments
three operating segments
■ Texas
● South Texas conventional and Eagle Ford Shale
● North Texas Barnett Shale Combo play
■ Central and Eastern Oklahoma
● Conventional, Hunton De-Watering play and Woodford Shale
■ Rocky Mountains
● Powder River Basin
3
Key Copano Metrics
Service throughput volumes approximate 1.8 Bcf/d of natural
gas(1)
gas(1)
Approximately 6,700 miles of active pipelines
8 natural gas processing plants with over 1.1 Bcf/d of combined
processing capacity
processing capacity
One NGL fractionation facility with total capacity of 22,000 Bbls/d
Equity market cap: $1.6 billion(2)
Enterprise value: $2.7 billion(3)
4
Based on 2Q 2010 results. Includes unconsolidated affiliates.
As of September 8, 2010.
As of September 8, 2010. Includes $300 million of convertible preferred equity issued to an affiliate of TPG Capital in July 2010.
5
Copano in 1992
Copano began
with a 23-mile
pipeline in
Copano Bay in
1992
with a 23-mile
pipeline in
Copano Bay in
1992
Acquired and
extended
multiple
gathering
systems
extended
multiple
gathering
systems
Acquired
Houston Central
plant in 2001
Houston Central
plant in 2001
Developed
KMTP
relationship
KMTP
relationship
6
Copano Assets in South Texas - Pre-Eagle
Ford
Ford
Copano’s Houston Central Complex
700 MMcf/d of processing capacity
■ 200 MMcf/d of readily available expansion capacity
NGL fractionation and transportation
■ Newly commissioned 22,000 BPD fractionator (May 2010)
■ Ability to further expand fractionation facility
■ Over 250 miles of NGL pipelines provide access to markets
Multiple residue markets and close proximity to the Houston Ship
Channel provide better producer netback pricing
Channel provide better producer netback pricing
■ Access to Tennessee, Texas Eastern, HPL and KMTP
■ Ability to add additional interstate interconnects
7
8
Eagle Ford Shale Development
Eagle Ford Shale Advantages
Substantial infrastructure exists today
Rich gas and condensate/crude provide drilling incentive to producers
Lower break-even prices compared to most other shale and
conventional plays
conventional plays
Significant demand for natural gas and NGLs on the Texas Gulf Coast
Historically fewer land-related issues (leasing and ROW)
Lower construction costs relative to many other places (topography
and development)
and development)
Regulatory environment is conducive to energy development
9
10
2010 - DeWitt-Karnes Header System
Built Dewitt
Karnes Header
(45 miles of 24”
pipeline)
Karnes Header
(45 miles of 24”
pipeline)
■ In-service
September
2010
September
2010
Services the
most prolific
rich gas window
of the Eagle
Ford Shale
most prolific
rich gas window
of the Eagle
Ford Shale
Access to
Houston Central
complex via
KMTP 30”
pipeline
Houston Central
complex via
KMTP 30”
pipeline
11
Why is the Joint Venture a Natural Fit?
Long-standing relationship between Copano and Kinder Morgan
Copano
■ Gathering and processing expertise
■ Available processing and fractionation capacity
■ Multiple market access for natural gas and NGLs
Kinder Morgan
■ Transmission expertise
■ Available pipeline capacity
■ Direct gas market access
Combined (Eagle Ford Gathering, LLC, a Kinder Morgan / Copano
joint venture)
joint venture)
■ Complementary assets offer comprehensive producer solution
■ Significant infrastructure currently available (lower barriers to entry)
■ Combined focus on customer service
12
Eagle Ford Gathering, LLC
50/50 Kinder Morgan/Copano
■ Initial build-out of 85 miles of 24” and 30”
pipelines (expected completion: summer 2011)
pipelines (expected completion: summer 2011)
■ Copano acts as operator and managing member
■ 520,000 MMBtu/d of capacity without
compression
compression
Kinder Morgan and Copano share
commercial development activities
commercial development activities
Kinder Morgan contributes 375,000
MMBtu/d of downstream pipeline capacity
MMBtu/d of downstream pipeline capacity
Copano contributes 375,000 MMBtu/d of
processing capacity
processing capacity
Entered into firm service agreement with
SM Energy, anchor tenant, for up to
200,000 MMBtu/d
SM Energy, anchor tenant, for up to
200,000 MMBtu/d
13
Potential Extensions - 2012 and beyond
Copano 24”
extensions (KM
loop to HCP)
extensions (KM
loop to HCP)
Possible
processing
expansion
processing
expansion
14
Eagle Ford Shale Expansion Summary
Integrated midstream solutions throughout the Eagle Ford trend
Immediately available capacity
Readily expandable infrastructure
Access to multiple markets for natural gas and NGLs
Contact Information
Jim Wade
Copano Energy - Texas
President
jim.wade@copanoenergy.com
Duane Kokinda
Kinder Morgan Texas Pipeline LLC
President
Duane.kokinda@kindermogan.com
15
Brian Eckhart
Copano Energy - Texas
Senior Vice President, Supply and
Transportation
brian.eckhart@copanoenergy.com
Bruce Boyd
Kinder Morgan Texas Pipeline LLC
Vice President - Gas Supply,
Processing
Bruce.boyd@kindermorgan.com