Dug Midcontinent Conference Mississippi Lime Midstream Infrastructure
Dug Midcontinent Conference
Mississippi Lime Midstream Infrastructure March 2, 2014
Bill Ward Vice President, Gas Supply & Business Development 1
Disclaimer This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical facts, included in this presentation that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are forward-looking statements. The words “believe,” “expect,” “anticipate,” “plan,” “intend,” “foresee,” “should,” “would,” “could,” or other similar expressions are intended to identify forward-looking statements, which are generally not historical in nature. However, the absence of these words does not mean that the statements are not forward-looking. Without limiting the generality of the foregoing, forward-looking statements contained in this presentation specifically include the expectations of plans, strategies, objectives and anticipated financial and operating results of the Company, including as to the Company’s drilling program, production, hedging activities, capital expenditure levels and other guidance included in this presentation. These statements are based on certain assumptions made by the Company based on management’s expectations and perception of historical trends, current conditions, anticipated future developments and other factors believed to be appropriate. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Company, which may cause actual results to differ materially from those implied or expressed by the forward-looking statements. These include the factors discussed or referenced in the “Risk Factors” section of the Company’s Offering Memorandum provided in connection with this offering, risks relating to financial performance and results, current economic conditions and resulting capital restraints, prices and demand for oil and natural gas, availability of drilling equipment and personnel, availability of sufficient capital to execute the Company’s business plan, the Company’s ability to replace reserves and efficiently develop and exploit its current reserves and other important factors that could cause actual results to differ materially from those projected. Any forward-looking statement speaks only as of the date on which such statement is made and the Company undertakes no obligation to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by applicable law. The SEC generally permits oil and gas companies, in filings made with the SEC, to disclose only proved reserves, which are reserve estimates that geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions. In this communication, the Company uses the term “unproved reserves” which the SEC guidelines prohibit from being included in filings with the SEC. “Unproved reserves” refers to the Company’s internal estimates of hydrocarbon quantities that may be potentially discovered through exploratory drilling or recovered with additional drilling or recovery techniques. Unproved reserves may not constitute reserves within the meaning of the Society of Petroleum Engineer’s Petroleum Resource Management System or proposed SEC rules and does not include any proved reserves. Actual quantities that may be ultimately recovered from the Company’s interests will differ substantially. Factors affecting ultimate recovery include the scope of the Company’s ongoing drilling program, which will be directly affected by the availability of capital, drilling and production costs, availability of drilling services and equipment, drilling results, lease expirations, transportation constraints, regulatory approvals and other factors; and actual drilling results, including geological and mechanical factors affecting recovery rates. Estimates of unproved reserves may change significantly as development of the Company’s core assets provide additional data. In addition, our production forecasts and expectations for future periods are dependent upon many assumptions, including estimates of production decline rates from existing wells and the undertaking and outcome of future drilling activity, which may be affected by significant commodity price declines or drilling cost increases.
2
Superior Pipeline Company Agenda Superior Defined Track Record Current Position Mississippi Lime Wells Pro’s & Con’s
Processing Plant Locations Gas Take Away
NGL Take Away Positioned for Growth
3
Superior Pipeline Company
Superior Defined
4
Superior Pipeline Company Midstream company engaged in buying, selling, gathering, processing, compressing and treating natural gas. Proven track record of developing green field projects. Entrepreneurial culture Exceptional customer service
Record of disciplined growth
5
Superior Pipeline Company Midstream Core Operations Texas Panhandle 32,000 dedicated acres 135 MMcf/d processing capacity 308 miles of gathering pipeline
Northern Oklahoma and Kansas 1,200,000+ dedicated acres 223 MMcf/d processing capacity* 501 miles of gathering pipeline
Pittsburgh Mills
Reno Central & Eastern OK 70,000+ dedicated acres 12 MMcf/d processing capacity 540 miles of gathering pipeline
Bellmon Hemphill
Panola
Appalachia 43,000 dedicated acres 33 miles of gathering pipeline
Key Metrics 39 Active Systems
East Texas 53 Miles of gathering pipeline
Three Natural Gas Treatment Plants Segno
1435 miles of Pipeline 370 MMcf/d Processing Capacity
Processing facilities Gathering systems
Indicates Company Headquarters in Tulsa, Oklahoma Indicates Regional office in Pittsburgh, Pennsylvania
*Includes 60 MMcf/d plant from Bellmon, which will be operational in late Q4
6
Superior Pipeline Company
Superior’s Track Record
7
Superior Pipeline Company Track Record
Established in 1996 Acquired by Unit Corporation in July 2004 Wholly-owned subsidiary of Unit Corporation Corporate Headquarters in Tulsa, OK Currently Operating in Oklahoma, Texas, Kansas, Pennsylvania and West Virginia
8
Superior Pipeline Company Track Record Annual Cash Flow
600
70
500
60 $ in millions
400 300 200
50 40 30 20 10
0
0 20 04 20 05 20 06 20 07 20 08 20 09 20 10 20 11 20 12 20 13
100
20 04 20 05 20 06 20 07 20 08 20 09 20 10 20 11 20 12 20 13
$ in millions
Total Investment
39% compound growth rate in assets since year-end 2004 Installed 15 processing plants at eight different locations with combined processing capacity of 345 MMcf/d Increased from 12 to over 140 employees since 2004
9
Superior Pipeline Company
Superior’s Current Position
10
Superior Pipeline Company Northern Oklahoma and Kansas
First Mover in Area
Grass Root Facilities
Leading Position on Eastern Half of Mississippi Lime Play
Serving Active Independent Producers
Key Metrics 1,100,000+ Dedicated Acres 6 Processing Facilities 120 MMcf/d Available Processing Capacity*
Tulsa
500+ Miles of Pipe *Includes 60 MMcf/d plant from Bellmon, which will be operational in late Q4
Oklahoma City
11
Superior Pipeline Company Modular Concept to Construct Projects
Secure tenant to build from core Provide stages approach
Design to scale up for future growth Initial Refrigeration plant – Start Up Provide mainline laterals and CDP Install Cryogenic plant – Ramp up
12
Superior Pipeline Company Bellmon Plant KANSAS OKLAHOMA Size: 12” & 16” Type: Poly pipe Pressure: Low (50-60 lbs)
MEDFORD
PONCA CITY
ENID
13
Superior Pipeline Company
Mississippi Lime
14
Superior Pipeline Company Mississippi Lime Well Pro’s & Con’s Pro’s
Con’s
•
Oil Driven
•
Sharp Decline – Gas & Oil
•
Rich Gas
•
High Nitrogen
•
Favorable ROR
•
Science Project – Eastern Half
•
Market Location •
Capital Planning
•
Favorable Regulatory Environment
–
Low Pressure
–
Pipeline & Plant Size
15
Superior Pipeline Company Mississippi Lime Well Spuds
600
500 400 300
200 100 0
2010
2011
2012
2013
Well Count consists of Miss. Lime Spuds located in Alfalfa, Garfield, Grant, Kingfisher, Logan, Kay & Major Counties, Oklahoma 16
Superior Pipeline Company
Processing Plant Locations
17
Superior Pipeline Company Processing Plant Locations Plant Capacities
Atlas – 450 Mmcf/d Caballo – 100 Mmcf/d Mustang – 140+ Mmcf/d Semgroup – 400 Mmcf/d Superior – 223 Mmcf/d
18
Superior Pipeline Company
Pipeline – Gas Take away
19
Superior Pipeline Company Pipeline – Gas Take Away
20
Superior Pipeline Company
Pipeline NGL Take away
21
Superior Pipeline Company Pipeline – NGL Take Away
22
Superior Pipeline Company
positioned for growth
23
Superior Pipeline Company Positioned for Growth Growth Through Existing Assets
Strong Core Asset Base in High Growth Areas Existing Plant Capacity Provides Near Term Growth Opportunity with Limited Additional Capital
Planned Expansion Project on Existing Assets
Ability to Add Additional Capacity as Existing Assets Grow
Growth Opportunities in New Basins
Actively Exploring Opportunities in:
Permian Eaglebine Tuscaloosa
New Infrastructure Construction that Fits our Scalable Business Model
Focused on Long-Term Growth and Increasing Cash Flow 24
Superior Pipeline Company Mississippi Lime Well Profile/Trend
25
Mississippi Lime Midstream Infrastructure March 2, 2014
Bill Ward Vice President, Gas Supply & Business Development 1
Disclaimer This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical facts, included in this presentation that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are forward-looking statements. The words “believe,” “expect,” “anticipate,” “plan,” “intend,” “foresee,” “should,” “would,” “could,” or other similar expressions are intended to identify forward-looking statements, which are generally not historical in nature. However, the absence of these words does not mean that the statements are not forward-looking. Without limiting the generality of the foregoing, forward-looking statements contained in this presentation specifically include the expectations of plans, strategies, objectives and anticipated financial and operating results of the Company, including as to the Company’s drilling program, production, hedging activities, capital expenditure levels and other guidance included in this presentation. These statements are based on certain assumptions made by the Company based on management’s expectations and perception of historical trends, current conditions, anticipated future developments and other factors believed to be appropriate. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Company, which may cause actual results to differ materially from those implied or expressed by the forward-looking statements. These include the factors discussed or referenced in the “Risk Factors” section of the Company’s Offering Memorandum provided in connection with this offering, risks relating to financial performance and results, current economic conditions and resulting capital restraints, prices and demand for oil and natural gas, availability of drilling equipment and personnel, availability of sufficient capital to execute the Company’s business plan, the Company’s ability to replace reserves and efficiently develop and exploit its current reserves and other important factors that could cause actual results to differ materially from those projected. Any forward-looking statement speaks only as of the date on which such statement is made and the Company undertakes no obligation to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by applicable law. The SEC generally permits oil and gas companies, in filings made with the SEC, to disclose only proved reserves, which are reserve estimates that geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions. In this communication, the Company uses the term “unproved reserves” which the SEC guidelines prohibit from being included in filings with the SEC. “Unproved reserves” refers to the Company’s internal estimates of hydrocarbon quantities that may be potentially discovered through exploratory drilling or recovered with additional drilling or recovery techniques. Unproved reserves may not constitute reserves within the meaning of the Society of Petroleum Engineer’s Petroleum Resource Management System or proposed SEC rules and does not include any proved reserves. Actual quantities that may be ultimately recovered from the Company’s interests will differ substantially. Factors affecting ultimate recovery include the scope of the Company’s ongoing drilling program, which will be directly affected by the availability of capital, drilling and production costs, availability of drilling services and equipment, drilling results, lease expirations, transportation constraints, regulatory approvals and other factors; and actual drilling results, including geological and mechanical factors affecting recovery rates. Estimates of unproved reserves may change significantly as development of the Company’s core assets provide additional data. In addition, our production forecasts and expectations for future periods are dependent upon many assumptions, including estimates of production decline rates from existing wells and the undertaking and outcome of future drilling activity, which may be affected by significant commodity price declines or drilling cost increases.
2
Superior Pipeline Company Agenda Superior Defined Track Record Current Position Mississippi Lime Wells Pro’s & Con’s
Processing Plant Locations Gas Take Away
NGL Take Away Positioned for Growth
3
Superior Pipeline Company
Superior Defined
4
Superior Pipeline Company Midstream company engaged in buying, selling, gathering, processing, compressing and treating natural gas. Proven track record of developing green field projects. Entrepreneurial culture Exceptional customer service
Record of disciplined growth
5
Superior Pipeline Company Midstream Core Operations Texas Panhandle 32,000 dedicated acres 135 MMcf/d processing capacity 308 miles of gathering pipeline
Northern Oklahoma and Kansas 1,200,000+ dedicated acres 223 MMcf/d processing capacity* 501 miles of gathering pipeline
Pittsburgh Mills
Reno Central & Eastern OK 70,000+ dedicated acres 12 MMcf/d processing capacity 540 miles of gathering pipeline
Bellmon Hemphill
Panola
Appalachia 43,000 dedicated acres 33 miles of gathering pipeline
Key Metrics 39 Active Systems
East Texas 53 Miles of gathering pipeline
Three Natural Gas Treatment Plants Segno
1435 miles of Pipeline 370 MMcf/d Processing Capacity
Processing facilities Gathering systems
Indicates Company Headquarters in Tulsa, Oklahoma Indicates Regional office in Pittsburgh, Pennsylvania
*Includes 60 MMcf/d plant from Bellmon, which will be operational in late Q4
6
Superior Pipeline Company
Superior’s Track Record
7
Superior Pipeline Company Track Record
Established in 1996 Acquired by Unit Corporation in July 2004 Wholly-owned subsidiary of Unit Corporation Corporate Headquarters in Tulsa, OK Currently Operating in Oklahoma, Texas, Kansas, Pennsylvania and West Virginia
8
Superior Pipeline Company Track Record Annual Cash Flow
600
70
500
60 $ in millions
400 300 200
50 40 30 20 10
0
0 20 04 20 05 20 06 20 07 20 08 20 09 20 10 20 11 20 12 20 13
100
20 04 20 05 20 06 20 07 20 08 20 09 20 10 20 11 20 12 20 13
$ in millions
Total Investment
39% compound growth rate in assets since year-end 2004 Installed 15 processing plants at eight different locations with combined processing capacity of 345 MMcf/d Increased from 12 to over 140 employees since 2004
9
Superior Pipeline Company
Superior’s Current Position
10
Superior Pipeline Company Northern Oklahoma and Kansas
First Mover in Area
Grass Root Facilities
Leading Position on Eastern Half of Mississippi Lime Play
Serving Active Independent Producers
Key Metrics 1,100,000+ Dedicated Acres 6 Processing Facilities 120 MMcf/d Available Processing Capacity*
Tulsa
500+ Miles of Pipe *Includes 60 MMcf/d plant from Bellmon, which will be operational in late Q4
Oklahoma City
11
Superior Pipeline Company Modular Concept to Construct Projects
Secure tenant to build from core Provide stages approach
Design to scale up for future growth Initial Refrigeration plant – Start Up Provide mainline laterals and CDP Install Cryogenic plant – Ramp up
12
Superior Pipeline Company Bellmon Plant KANSAS OKLAHOMA Size: 12” & 16” Type: Poly pipe Pressure: Low (50-60 lbs)
MEDFORD
PONCA CITY
ENID
13
Superior Pipeline Company
Mississippi Lime
14
Superior Pipeline Company Mississippi Lime Well Pro’s & Con’s Pro’s
Con’s
•
Oil Driven
•
Sharp Decline – Gas & Oil
•
Rich Gas
•
High Nitrogen
•
Favorable ROR
•
Science Project – Eastern Half
•
Market Location •
Capital Planning
•
Favorable Regulatory Environment
–
Low Pressure
–
Pipeline & Plant Size
15
Superior Pipeline Company Mississippi Lime Well Spuds
600
500 400 300
200 100 0
2010
2011
2012
2013
Well Count consists of Miss. Lime Spuds located in Alfalfa, Garfield, Grant, Kingfisher, Logan, Kay & Major Counties, Oklahoma 16
Superior Pipeline Company
Processing Plant Locations
17
Superior Pipeline Company Processing Plant Locations Plant Capacities
Atlas – 450 Mmcf/d Caballo – 100 Mmcf/d Mustang – 140+ Mmcf/d Semgroup – 400 Mmcf/d Superior – 223 Mmcf/d
18
Superior Pipeline Company
Pipeline – Gas Take away
19
Superior Pipeline Company Pipeline – Gas Take Away
20
Superior Pipeline Company
Pipeline NGL Take away
21
Superior Pipeline Company Pipeline – NGL Take Away
22
Superior Pipeline Company
positioned for growth
23
Superior Pipeline Company Positioned for Growth Growth Through Existing Assets
Strong Core Asset Base in High Growth Areas Existing Plant Capacity Provides Near Term Growth Opportunity with Limited Additional Capital
Planned Expansion Project on Existing Assets
Ability to Add Additional Capacity as Existing Assets Grow
Growth Opportunities in New Basins
Actively Exploring Opportunities in:
Permian Eaglebine Tuscaloosa
New Infrastructure Construction that Fits our Scalable Business Model
Focused on Long-Term Growth and Increasing Cash Flow 24
Superior Pipeline Company Mississippi Lime Well Profile/Trend
25
