bringing more value to the midcontinent
BRINGING MORE VALUE TO THE MIDCONTINENT Richard Bradsby, vice president - Midcontinent business unit
March 3, 2014
Forward-Looking Statements Under the Private Securities Litigation Act of 1995 This document may contain or incorporate by reference forward-looking statements as defined under the federal securities laws regarding DCP Midstream Partners, LP (the “Partnership”), including projections, estimates, forecasts, plans and objectives. Although management believes that expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to be correct. In addition, these statements are subject to certain risks, uncertainties and other assumptions that are difficult to predict and may be beyond our control. If one or more of these risks or uncertainties materialize, or if underlying assumptions prove incorrect, the Partnership’s actual results may vary materially from what management anticipated, estimated, projected or expected. The key risk factors that may have a direct bearing on the Partnership’s results of operations and financial condition are highlighted in the earnings release to which this presentation relates and are described in detail in the Partnership’s periodic reports most recently filed with the Securities and Exchange Commission, including its most recent Form 10-K. Investors are encouraged to consider closely the disclosures and risk factors contained in the Partnership’s annual and quarterly reports filed from time to time with the Securities and Exchange Commission. The Partnership undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Information contained in this document speaks only as of the date hereof is unaudited, and is subject to change. Regulation G This document includes certain non-GAAP financial measures as defined under SEC Regulation G, such as distributable cash flow, adjusted EBITDA, adjusted segment EBITDA, adjusted net income attributable to partners, and adjusted net income per limited partner unit. A reconciliation of those measures to the most directly comparable GAAP measures is included in supplementary material to this presentation and on our website at www.dcppartners.com.
DCP Enterprise Structure
Enterprise value of $46B(1)
50%
50% 22.5% LP/GP Interest(2)
Enterprise value of $43B(1)
Public Unitholders 77.5% Common LP Interest(2)
NYSE: DPM
DCP Midstream, LLC (BBB- / Baa2 / BBB) Assets of ~$13B(3) 44 plants 3 fractionators ~54,000 miles of pipe 1. 2. 3. 4.
As of Dec. 31, 2013
DCP Midstream Partners, LP (BBB- /Baa3 / BBB-) DPM enterprise value of ~$6B(4) 20 plants 9 fractionators ~13,000 miles of pipe As of Dec. 31, 2013
Source: Bloomberg as of Dec. 31, 2013 As of Dec. 31, 2013 Consolidated assets, includes DPM Source: Bloomberg as of Sept. 30, 2013
3
Energy Value Chain – DCP Midstream DCP Midstream is one of the few midstream companies with leadership position in both gathering and processing and NGL logistics
4
Diversified Business Portfolio DCP Midstream Pipeline DCP Midstream Gas Processing Plant DPM Owned or Joint Venture Plant / Fractionator / Storage DPM Terminal DPM Owned or Joint Venture Pipeline Gas Shale Formation New Plant
NGL Production (1) (Bbls/d)
#1 DJ Basin / Niobrara
65 natural gas processing plants(4) ~67,000 miles of pipeline, including Wattenburg ~4,200 miles of NGL pipeline(4.6) NGL Pipeline
Mississippi Lime
Front Range Pipeline #1 Permian
#1 Midcontinent
Granite Wash
Southern Hills Pipeline
Wolfberry
#1 Gas Processor(1) #1 NGL Producer(1) #3 Pipeline Operator(2)
Texas Express Pipeline Avalon / Bone Springs
1. 2. 3. 4. 5. 6.
DCP
~426 MBbl/d(3)
Natural Gas Processed (1) (MMcf/d)
Black Lake Pipeline
Sand Hills Pipeline #2 Eagle Ford
DCP Midstream enterprise Enterprise Products Williams Companies Targa Resources Energy Transfer Enterprise Devon Energy Copano Energy Oneok Partners MarkWest Energy Partners Crosstex Energy Services
Keathley Canyon(5)
Source: Hart Energy Midstream Monitor/Midstream Business.com, August 2013, Top Gas Processors-NGL Producers of 2012 Source: Bentek and company data As of December 31, 2013 As of February 2014 Under construction Parts are jointly owned
DCP Midstream enterprise Enterprise Products Targa Resources MarkWest Energy Partners Encana Williams Crosstex Energy Services Western Gas Partners Shell Oil Company Devon Energy /Energy Transfer
DCP
~6.4
TBtu/d(3)
5
Large-Scale Resource Development E&P
Gathering
Processing
Residue & NGL Pipe
Frac
PetChem & Export
Exploration & Production
Fractionation
• Explores for resource • Drills and begins production • Mississippi Lime, SCOOP, etc.
• Separates various NGL products into purity products for delivery to market and petchem facilities
Gathering & Processing
PetChem
• Gathers product from E&P wells • Network delivers product to processing plants • Fill existing capacity
• Petchem uses frac’d product as feedstock
Residue & NGL Pipe
Export
• Residue pipes transport processed natural gas to market • NGL pipes transport products to fractionation facilities
• Export facilities provide access to foreign markets for NGL products
6
Development Progression E&P
Gathering
Processing
• E&P drilling begins and new production follows
Residue & NGL Pipe
Frac
PetChem & Export
Emerging Midcontinent Plays: Gas Volume 6
• Gathering pipeline constructed
30% CAGR 2013
• Idle processing capacity utilized
5
Production Bcf/d
4
3
2
1
0 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029 Woodford Gas
Mississippi Lime Gas
Granite Wash Gas
Anadarko TO Gas
Source: Hart Energy Research Source: Baker Hughes Rig Count
2010-2011
2012-2014
2015-2017 7
Development Progression E&P
Gathering
Processing
• Access existing and idle capacity through large-scale interconnectivity projects
• New plants up to 24-month lead time • ~1 Bcf/d of new processing capacity added in 2013
PetChem & Export
Frac
Total Capacity (Bcf/d) 10000 9500 9000
• Existing capacity far from growth locations • New rich gas processing capacity constructed and growing
Residue & NGL Pipe
8500 8000 7500 7000 2012 2013 Source: EIA, Company Reports, Bentek
2014
2015
2016
Total Midcontinent NGL Production Forecast (Mbp/d) 850 750 650 550 450 350
Source: Bentek
2010-2011
2012-2014
2015-2017 8
Development Progression E&P
Gathering
Processing
Residue & NGL Pipe
Frac
PetChem & Export
• New NGL pipelines provide takeaway capacity to Mont Belvieu/Texas Gulf Coast o ~750 Mbp/d of new capacity in 2013 and 200 Mbp/d in 2014 Southern Hills 175 Mbp/d, Texas Express via Skellytown 90 Mbp/d
• Residue capacity may be constrained in coming years, specifically in Southern OK
Total Pipeline Capacity
Frac Capacity Projected Volume
Source: Argus media BP PERC presentation 2013
9
Development Progression E&P
Gathering
Residue & NGL Pipe
Processing
• 2.5 MMbp/d of Frac Capacity added January 2013 and Q1 2016 • 820 Mbp/d being added at Belvieu • 566 Mbp/d was added at Belvieu from ‘09 to ’12 • Total Mont Belvieu capacity grows to 2,000 Mbp/d
• ZERO new fractionation plants in the Midcontinent
PetChem & Export
Frac
North America Fractionation Capacity (Mbp/d) 6,000 5,000
Other N. America
4,000
Mid-Continent
3,000
Texas Gulf Coast
2,000
Louisiana
1,000
Mont Belvieu, TX
0 2013
2014
2015
2016
2017
2018
Source: Envantage Inc., Company Reports, BofA Merrill Lynch
MB : Conway Spread ¢/gal 40 35
Source: BofA Merrill Lynch, Argus Media BP PERC Presentation 2013
30 25
28% 30% Barrel Composition
20 15
Propane (C3)
10 5
Butanes & Heavier (C4+)
0 Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13
42%
Ethane (C2)
10
Development Progression E&P
Gathering
Processing
Residue & NGL Pipe
Frac
PetChem & Export
• 18 potential new ethylene projects o Four are world-scale
o Increases cracking capacity 30% by 2018
• Export expansion o LNG o Propane and butanes
Source: Bentek Market Call
2010-2011
2012-2014
2015-2017 11
DCP in the Midcontinent Significant presence across the region Midcontinent Highlights
Integrated System
National Helium
2 Bcf/d total processing capacity
13 plants, 2 Bcf/d ~30,000 mile pipeline super system Gathering expansions into South Cana, Granite Wash and Mississippi Lime Continue to increase system interconnectivity Upgrade existing assets: o 600 MMcf/d National Helium deep-cryo upgrade
* *
*
Market access to Mont Belvieu via Southern Hills
*
Eagle Plant Ra
G&P Plant Expansion/Restart
12
Q&A
March 3, 2014
Forward-Looking Statements Under the Private Securities Litigation Act of 1995 This document may contain or incorporate by reference forward-looking statements as defined under the federal securities laws regarding DCP Midstream Partners, LP (the “Partnership”), including projections, estimates, forecasts, plans and objectives. Although management believes that expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to be correct. In addition, these statements are subject to certain risks, uncertainties and other assumptions that are difficult to predict and may be beyond our control. If one or more of these risks or uncertainties materialize, or if underlying assumptions prove incorrect, the Partnership’s actual results may vary materially from what management anticipated, estimated, projected or expected. The key risk factors that may have a direct bearing on the Partnership’s results of operations and financial condition are highlighted in the earnings release to which this presentation relates and are described in detail in the Partnership’s periodic reports most recently filed with the Securities and Exchange Commission, including its most recent Form 10-K. Investors are encouraged to consider closely the disclosures and risk factors contained in the Partnership’s annual and quarterly reports filed from time to time with the Securities and Exchange Commission. The Partnership undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Information contained in this document speaks only as of the date hereof is unaudited, and is subject to change. Regulation G This document includes certain non-GAAP financial measures as defined under SEC Regulation G, such as distributable cash flow, adjusted EBITDA, adjusted segment EBITDA, adjusted net income attributable to partners, and adjusted net income per limited partner unit. A reconciliation of those measures to the most directly comparable GAAP measures is included in supplementary material to this presentation and on our website at www.dcppartners.com.
DCP Enterprise Structure
Enterprise value of $46B(1)
50%
50% 22.5% LP/GP Interest(2)
Enterprise value of $43B(1)
Public Unitholders 77.5% Common LP Interest(2)
NYSE: DPM
DCP Midstream, LLC (BBB- / Baa2 / BBB) Assets of ~$13B(3) 44 plants 3 fractionators ~54,000 miles of pipe 1. 2. 3. 4.
As of Dec. 31, 2013
DCP Midstream Partners, LP (BBB- /Baa3 / BBB-) DPM enterprise value of ~$6B(4) 20 plants 9 fractionators ~13,000 miles of pipe As of Dec. 31, 2013
Source: Bloomberg as of Dec. 31, 2013 As of Dec. 31, 2013 Consolidated assets, includes DPM Source: Bloomberg as of Sept. 30, 2013
3
Energy Value Chain – DCP Midstream DCP Midstream is one of the few midstream companies with leadership position in both gathering and processing and NGL logistics
4
Diversified Business Portfolio DCP Midstream Pipeline DCP Midstream Gas Processing Plant DPM Owned or Joint Venture Plant / Fractionator / Storage DPM Terminal DPM Owned or Joint Venture Pipeline Gas Shale Formation New Plant
NGL Production (1) (Bbls/d)
#1 DJ Basin / Niobrara
65 natural gas processing plants(4) ~67,000 miles of pipeline, including Wattenburg ~4,200 miles of NGL pipeline(4.6) NGL Pipeline
Mississippi Lime
Front Range Pipeline #1 Permian
#1 Midcontinent
Granite Wash
Southern Hills Pipeline
Wolfberry
#1 Gas Processor(1) #1 NGL Producer(1) #3 Pipeline Operator(2)
Texas Express Pipeline Avalon / Bone Springs
1. 2. 3. 4. 5. 6.
DCP
~426 MBbl/d(3)
Natural Gas Processed (1) (MMcf/d)
Black Lake Pipeline
Sand Hills Pipeline #2 Eagle Ford
DCP Midstream enterprise Enterprise Products Williams Companies Targa Resources Energy Transfer Enterprise Devon Energy Copano Energy Oneok Partners MarkWest Energy Partners Crosstex Energy Services
Keathley Canyon(5)
Source: Hart Energy Midstream Monitor/Midstream Business.com, August 2013, Top Gas Processors-NGL Producers of 2012 Source: Bentek and company data As of December 31, 2013 As of February 2014 Under construction Parts are jointly owned
DCP Midstream enterprise Enterprise Products Targa Resources MarkWest Energy Partners Encana Williams Crosstex Energy Services Western Gas Partners Shell Oil Company Devon Energy /Energy Transfer
DCP
~6.4
TBtu/d(3)
5
Large-Scale Resource Development E&P
Gathering
Processing
Residue & NGL Pipe
Frac
PetChem & Export
Exploration & Production
Fractionation
• Explores for resource • Drills and begins production • Mississippi Lime, SCOOP, etc.
• Separates various NGL products into purity products for delivery to market and petchem facilities
Gathering & Processing
PetChem
• Gathers product from E&P wells • Network delivers product to processing plants • Fill existing capacity
• Petchem uses frac’d product as feedstock
Residue & NGL Pipe
Export
• Residue pipes transport processed natural gas to market • NGL pipes transport products to fractionation facilities
• Export facilities provide access to foreign markets for NGL products
6
Development Progression E&P
Gathering
Processing
• E&P drilling begins and new production follows
Residue & NGL Pipe
Frac
PetChem & Export
Emerging Midcontinent Plays: Gas Volume 6
• Gathering pipeline constructed
30% CAGR 2013
• Idle processing capacity utilized
5
Production Bcf/d
4
3
2
1
0 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029 Woodford Gas
Mississippi Lime Gas
Granite Wash Gas
Anadarko TO Gas
Source: Hart Energy Research Source: Baker Hughes Rig Count
2010-2011
2012-2014
2015-2017 7
Development Progression E&P
Gathering
Processing
• Access existing and idle capacity through large-scale interconnectivity projects
• New plants up to 24-month lead time • ~1 Bcf/d of new processing capacity added in 2013
PetChem & Export
Frac
Total Capacity (Bcf/d) 10000 9500 9000
• Existing capacity far from growth locations • New rich gas processing capacity constructed and growing
Residue & NGL Pipe
8500 8000 7500 7000 2012 2013 Source: EIA, Company Reports, Bentek
2014
2015
2016
Total Midcontinent NGL Production Forecast (Mbp/d) 850 750 650 550 450 350
Source: Bentek
2010-2011
2012-2014
2015-2017 8
Development Progression E&P
Gathering
Processing
Residue & NGL Pipe
Frac
PetChem & Export
• New NGL pipelines provide takeaway capacity to Mont Belvieu/Texas Gulf Coast o ~750 Mbp/d of new capacity in 2013 and 200 Mbp/d in 2014 Southern Hills 175 Mbp/d, Texas Express via Skellytown 90 Mbp/d
• Residue capacity may be constrained in coming years, specifically in Southern OK
Total Pipeline Capacity
Frac Capacity Projected Volume
Source: Argus media BP PERC presentation 2013
9
Development Progression E&P
Gathering
Residue & NGL Pipe
Processing
• 2.5 MMbp/d of Frac Capacity added January 2013 and Q1 2016 • 820 Mbp/d being added at Belvieu • 566 Mbp/d was added at Belvieu from ‘09 to ’12 • Total Mont Belvieu capacity grows to 2,000 Mbp/d
• ZERO new fractionation plants in the Midcontinent
PetChem & Export
Frac
North America Fractionation Capacity (Mbp/d) 6,000 5,000
Other N. America
4,000
Mid-Continent
3,000
Texas Gulf Coast
2,000
Louisiana
1,000
Mont Belvieu, TX
0 2013
2014
2015
2016
2017
2018
Source: Envantage Inc., Company Reports, BofA Merrill Lynch
MB : Conway Spread ¢/gal 40 35
Source: BofA Merrill Lynch, Argus Media BP PERC Presentation 2013
30 25
28% 30% Barrel Composition
20 15
Propane (C3)
10 5
Butanes & Heavier (C4+)
0 Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13
42%
Ethane (C2)
10
Development Progression E&P
Gathering
Processing
Residue & NGL Pipe
Frac
PetChem & Export
• 18 potential new ethylene projects o Four are world-scale
o Increases cracking capacity 30% by 2018
• Export expansion o LNG o Propane and butanes
Source: Bentek Market Call
2010-2011
2012-2014
2015-2017 11
DCP in the Midcontinent Significant presence across the region Midcontinent Highlights
Integrated System
National Helium
2 Bcf/d total processing capacity
13 plants, 2 Bcf/d ~30,000 mile pipeline super system Gathering expansions into South Cana, Granite Wash and Mississippi Lime Continue to increase system interconnectivity Upgrade existing assets: o 600 MMcf/d National Helium deep-cryo upgrade
* *
*
Market access to Mont Belvieu via Southern Hills
*
Eagle Plant Ra
G&P Plant Expansion/Restart
12
Q&A
