Attached files
| file | filename |
|---|---|
| 8-K - COPANO ENERGY, L.L.C. FORM 8-K - Copano Energy, L.L.C. | form8-k.htm |
Platts Midstream Development
& Management Conference
May 12, 2011
& Management Conference
May 12, 2011
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, 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, 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
Operating Segments
Texas
■ Conventional, Eagle Ford Shale and
north Barnett Shale Combo play
north Barnett Shale Combo play
Oklahoma
■ Conventional, Hunton dewatering
play and Woodford Shale
play and Woodford Shale
Rocky Mountains
■ Powder River Basin
3
Eagle Ford Landscape
Eagle Ford is currently the best-situated U.S. shale play
■ Regulatory environment familiar with industry
■ Land owners are more industry-friendly
■ Some existing infrastructure
■ Proximity to large consuming market, industrial load and petrochemical
markets
markets
Significant producer activity with large upstream representation
■ Over 160 rigs currently running in the Eagle Ford
■ Significant investment by offshore firms encouraging activity
■ Lack of completion crews and liquids-handling capabilities partially restricting
near-term growth
near-term growth
Many competitors in midstream space, but early-movers and those
with existing infrastructure are advantaged
with existing infrastructure are advantaged
■ Producers fostering competition (i.e. multiple midstream providers desired)
■ Midstream providers with full-service capabilities lead the pack
● Producers require both natural gas and liquids solutions
4
Eagle Ford Volume Growth Outlook
Volume growth driven by oil, NGLs and natural gas
■ Post-processing NGLs could be over 320,000 Bbls/d by year-end 2020(1)
5
Source: Ross Smith Energy Group.
Source: Ross Smith Energy Group
Copano’s Eagle Ford Shale Strategy
Utilize existing assets as a platform to provide additional
midstream solutions for rich Eagle Ford Shale production in
excess of 1 Bcf/d of gas and just under 100,000 Bbls/d of NGLs
midstream solutions for rich Eagle Ford Shale production in
excess of 1 Bcf/d of gas and just under 100,000 Bbls/d of NGLs
Leverage existing assets
■ Gathering
■ Processing
■ Fractionation
■ NGL transportation
Execution of this strategy is well underway
6
Northern Eagle Ford Shale
DK Pipeline
■ Existing pipeline - 38 miles of 24”
pipe placed into full service October
2010
pipe placed into full service October
2010
■ February 2011 - announced
extension of existing pipeline back
to Houston Central Complex
extension of existing pipeline back
to Houston Central Complex
● Additional 58 miles of 24” pipe
● Expected completion in 4Q 2011
■ Current capacity of 225,000
MMBtu/d; extension to Houston
Central Complex will increase
capacity to 350,000 MMBtu/d
MMBtu/d; extension to Houston
Central Complex will increase
capacity to 350,000 MMBtu/d
7
Northern Eagle Ford Shale
DK Pipeline
■ Services the most prolific rich gas
window in the Eagle Ford Shale
window in the Eagle Ford Shale
■ Loops Kinder Morgan Index 50
pipeline, effectively boosting
pipeline capacity to Houston Central
pipeline, effectively boosting
pipeline capacity to Houston Central
■ Key producer contracts with
Abraxas, GeoSouthern, Petrohawk,
Pioneer, Riley and others
Abraxas, GeoSouthern, Petrohawk,
Pioneer, Riley and others
■ Existing pipeline capital investment
of $48 million
of $48 million
■ DK Extension additional capital
investment of $100 million
investment of $100 million
■ Potential DK to Fashing project
under consideration - estimated
additional capital investment of $50
million
under consideration - estimated
additional capital investment of $50
million
8
Southern Eagle Ford Shale
Eagle Ford Gathering (EFG)
■ 50/50 JV with Kinder Morgan
EFG pipeline
■ 114 miles of 30” and 24” pipe -
currently under construction
currently under construction
■ Expected completion 3Q2011
■ Nominal capacity of 600,000
MMBtu/d
MMBtu/d
■ Long-term, fee-based contracts with
aggregate volume commitments
approaching 500,000 MMBtu/d
aggregate volume commitments
approaching 500,000 MMBtu/d
● SM Energy - July 2010
● Chesapeake - November 2010
● Anadarko - February 2011
■ Net capital investment of $87.5
million
million
9
Eagle Ford Gathering Crossover Project
Crossover project
■ 66 miles of 24” and 20” pipe
connecting Kinder Morgan’s Index
50 and Tejas 30” pipelines to
Formosa
connecting Kinder Morgan’s Index
50 and Tejas 30” pipelines to
Formosa
● Nominal pipeline capacity of
400,000 MMBtu/d
400,000 MMBtu/d
● Expected completion 4Q2011
■ Allows an incremental 210,000
MMBtu/d of gas to flow on Eagle
Ford Gathering 30” pipeline
MMBtu/d of gas to flow on Eagle
Ford Gathering 30” pipeline
■ Processing, fractionation and
product sales at Formosa’s Point
Comfort Complex
product sales at Formosa’s Point
Comfort Complex
■ Net capital investment of $50
million
million
10
Houston Central Complex
Current capacity of 700 MMcf/d
■ 500 MMcf/d of lean oil processing
■ 200 MMcf/d of cryogenic processing
Multiple residue interconnects
■ Anticipated additional connection - Tres Palacios storage and header system
Cryogenic processing expansion of 400 MMcf/d in progress
■ Improves NGL recoveries
■ Allows base loading of cryogenic plants with spillover to lean oil plant
■ Total capital investment of $145 million
11
Houston Central Complex
Fractionation expansion
■ Responding to increased producer demand, liquids
handling capacity will double at Houston Central
Complex
handling capacity will double at Houston Central
Complex
■ Fractionation expansion from 22,000 Bbls/d to
44,000 Bbls/d
44,000 Bbls/d
● All ethane and propane will move to Dow through
Copano purity pipelines
Copano purity pipelines
■ Total capital investment of $66 million
● Includes fractionation facilities and related plant
upgrades and product pipeline expansions
upgrades and product pipeline expansions
● Expected completion 3Q2011
12
Liberty NGL Pipeline
83-mile, 12” NGL pipeline extending from the Houston Central
Complex to Markham NGL storage and Formosa’s Point Comfort
Complex
Complex to Markham NGL storage and Formosa’s Point Comfort
Complex
■ Total capacity of 75,000 Bbls/d
■ Constructed through 50/50 JV with Energy Transfer
■ Expected completion early 3Q2011
Long-term fractionation and product sales agreement with Formosa
on favorable terms
on favorable terms
■ Initial access to a minimum of 5,000 Bbls/d - 7,000 Bbls/d following Liberty
NGL pipeline completion
NGL pipeline completion
■ Upon completion of Formosa’s fractionation expansion, will have up to 37,500
Bbls/d of firm capacity starting 1Q 2013 for a 15-year term
Bbls/d of firm capacity starting 1Q 2013 for a 15-year term
Net capital investment of $26 million
13
Houston Central NGL Infrastructure
14
Gulf Coast Petrochemical Market Access
Copano has access to Dow
and, upon completion of
the Liberty NGL pipeline,
Formosa
and, upon completion of
the Liberty NGL pipeline,
Formosa
15
Source: Hodson Report.
■ Among the largest end
users of NGLs in the U.S.
users of NGLs in the U.S.
■ Taking into account
announced expansions,
Dow and Formosa’s
combined steam cracker
capacity is approximately
19% of total U.S.
capacity(1)
announced expansions,
Dow and Formosa’s
combined steam cracker
capacity is approximately
19% of total U.S.
capacity(1)
Summary of Eagle Ford Shale
Infrastructure
Infrastructure
16
Total capital investment of over $500 million
In excess of 1 Bcf/d of pipeline and processing capacity
Approaching 100,000 Bbls/d of fractionation capacity
Access to multiple markets for residue gas and NGLs
Combined Eagle Ford Map
17
Conclusions
Focused on execution in the Eagle Ford Shale
Multiple projects underway with in-service dates beginning in 2011
Access to multiple residue markets and NGL markets
Producer support has been strong but capacity still available
Ample access to capital and liquidity for existing projects and new
growth opportunities in the Eagle Ford Shale
growth opportunities in the Eagle Ford Shale
18