Analyst Conference March 27, 2012

Transcription

1 Analyst Conference March 27, 2012

2 Forward Looking Statements This presentation contains forward looking statements within the meaning of the federal securities laws. Forward looking statements are not guarantees of performance. They involve risks, uncertainties and assumptions. The future results of Crosstex Energy, L.P. and its affiliates (collectively known as Crosstex ) may differ materially from those expressed in the forward-looking statements contained throughout this presentation and in documents filed with the SEC. Many of the factors that will determine these results are beyond Crosstex s ability to control or predict. These statements are necessarily based upon various assumptions involving judgments with respect to the future, including, among others, the ability to achieve synergies and revenue growth; national, international, regional and local economic, competitive and regulatory conditions and developments; technological developments; capital markets conditions; inflation rates; interest rates; the political and economic stability of oil producing nations; energy markets; weather conditions; business and regulatory or legal decisions; the pace of deregulation of retail natural gas and electricity; the timing and success of business development efforts; and other uncertainties. You are cautioned not to put undue reliance on any forward looking statement. Crosstex has no obligation to publicly update or revise any forward looking statement, whether as a result of new information, future events or otherwise. 2

3 Welcome and Introduction Mike Garberding Senior Vice President & Chief Financial Officer

4 Agenda I. Welcome and Introduction Pg. 3 II. Strategic Vision Pg. 6 III. Asset Overview NTX, LIG & PNGL Pg. 21 IV. Growth Projects Overview Pg. 37 V. Financial Overview Pg. 47 VI. Closing Remarks Pg. 55 VII. Appendix Pg. 58 4

5 Management Team Barry Davis - President and Chief Executive Officer Bill Davis - EVP, Chief Operating Officer Joe Davis - EVP, General Counsel Michael Garberding - SVP, Chief Financial Officer Mike Burdett - SVP, Commercial Stan Golemon - SVP, Engineering and Operations Jennifer Johnson - SVP, Human Resources Steve Spaulding - SVP, Processing and NGLs Royston Lightfoot SVP, Business Development 5

6 Strategic Vision Barry Davis President and Chief Executive Officer

7 Crosstex Energy: Services Provided Over 2,800 miles of natural gas gathering and transmission pipeline 9 natural gas processing plants 3 fractionators Over 470 miles of NGL pipeline 2.4 MM barrels of NGL cavern storage Crude logistics Riverside/Eunice 7

8 Corporate Structure GSO Crosstex Holdings Public Unitholders 51% 25% 22% Public/Other Shareholders 87% Crosstex Energy, Inc. (NASDAQ: XTXI) 100% Crosstex GP, LLC 2% Crosstex Energy, L.P. (NASDAQ: XTEX) Directors / Executive Officers 13% 2% GP Interest 100% IDRs Crosstex Energy Services, L.P. All Assets and Operations Current Position Dist./Q Split Level $ % / 98% $ % / 85% $ % / 75% > $ % / 50 % 8

9 Strategically Positioned Assets Permian 50 MMcf/d new build gas processing plant Mesquite fractionation & rail terminal to transport stranded NGLs from this region North Texas ~840 miles of pipeline 3 processing plants 2 treating plants PNGL ~440 miles of NGL pipeline 4 processing plants 3 fractionation facilities Eagle Ford Strategic partnership with Howard, Quanta, and GE to pursue opportunities in Eagle Ford LIG ~2,100 miles of pipeline 2 processing plants 2 treating plants Cajun Sibon ~130-mile NGL pipeline From Mt. Belvieu to expanded fractionation assets in LA Crude Crude truck/rail/barge facilities - Eunice & Riverside 9

10 2011 Accomplishments The Plan Maximize earnings, growth of existing businesses Enhance scale, diversification Safety Maintaine solid financial performance, balance sheet Accomplishments - Achieved 2011 EBITDA results at the upper end of the guidance - Barnett Shale completed Benbrook, Fossil Creek expansions - PNGL restarted the Eunice fractionator - LIG have five-year weighted average contract life in North LIG; exposure to liquids-rich plays in central Louisiana - Cajun-Sibon NGL expansion - Permian Basin Apache JV - Partnership in Eagle Ford with Howard Energy Partners - Crude Oil terminals - implemented Phase I crude project at Riverside, Eunice - Excellent improvement with an injury rate of.41 versus a target of less than 1.4 and a vehicle accident rate of 1.45 versus target of Strong dividend/distribution growth - XTEX distributions declared of $1.23/unit with coverage of 1.42x and XTXI dividends declared of $0.40/share - Liquidity no near-term debt maturities; over $400mm available on revolver - Fourth Quarter Debt-to-EBITDA of 3.9 to 1 - Improved long-term capital structure; increased financial flexibility 10 10

11 Strong EBITDA & Distribution Growth $230,000 Total Fiscal Year EBITDA ($ 000s) $225,000 $214,000 $210,000 $190,000 $187,000 $170,000 $150,000 FY 2010 FY 2011 FY 2012** Q4 Annualized Distribution/Unit $1.50 $1.44 $1.40 $1.30 $1.28 $1.20 Projected EBITDA growth of ~20% from 2010 to to 2012 projected distribution growth of ~38% Distribution and dividend growth guidance for 2012 is 10% and 20%, respectively Strong distribution coverage Reduced overall leverage - debt to EBITDA less than 4.0X $1.10 $1.04 $1.00 FY 2010 FY 2011 FY 2012** ** 2012 represents mid-point of guidance 11 11

12 Critical Trends for Robust industry environment for midstream infrastructure build Hyper-competitive market for midstream services Producers production focus on rich gas and crude XTEX: Eunice Facility Size and diversity are highly valued in marketplace Capital markets expected to remain volatile XTEX: Mesquite Rail Facility 12

13 2012 Strategic Plan Our strategy is to: Maximize earnings and growth of existing businesses. Grow business to enhance scale and diversification and to create value In 2012 we will focus on new core businesses to enhance diversification and scale: Increase NGL business Grow Crude business Develop GP&T business in rich gas areas 13

14 2012 Strategic Plan Increase NGL Business 60 Mb/d Pipeline Capacity Fractionation Capacity (Mb/d) +701 Source: Bentek ~1.7 MMbpd of new NGL pipeline capacity to Mont Belvieu by 2014 Gulf Coast -- largest market & only major market for NGLs Louisiana Petrochemical plants short Ethane supply 14

15 2012 Strategic Plan Increase NGL Business Current NGL projects/opportunities include the following: Cajun Sibon Phase I: 70,000 Bbls/d with anticipated completion Q Cajun Sibon Phase II: Additional potential 50,000 Bbls/d opportunity with proposed completion 2014 Mesquite Fractionator NGL & Propane rail export terminal: In Service Other Target Opportunities Develop downstream NGL services Develop new NGL storage caverns at Napoleonville 15

16 2012 Strategic Plan Grow Crude Business 2011 WTI Basis Source: Bentek Crude Oil supply is outpacing crude pipeline solutions Gulf Coast largest market for Crude Oil Large price differentials between production regions and Gulf Coast market 16

17 2012 Strategic Plan Grow Crude Business Current Crude projects/opportunities include the following: Crude oil rail trans-loading terminals Phase I at Riverside & Eunice: In Service; up to 6,000 Bbls/d Phase II at Riverside: Additional 10,000 Bbls/d opportunity with proposed completion in Q Phase III at Riverside: Unit Train Incremental 20,000-40,000 Bbls/d opportunity with potential completion in Q Other Target Opportunities Crude trans-loading at Mesquite Terminal in Permian Crude Gathering, Transportation, Terminals, Trucking, and Rail in new basin 17

18 2012 Strategic Plan Develop GP&T Business 5/-3 Bakken 218/+55 Dry Gas Focused Areas 51/-5 Liquids Rich/Oil Focused Areas 25/-5 35/+5 2/+0 22/+3 23/-10 9/+2 Permian 480/+89 47/+10 Anadarko 251/+16 87/-23 68/+4 61/-29 Eagle Ford 250/+85 76/+18 30/-1 18/-5 66/-43 3/+1 32/+9 86/+20 13/-1 7/+5 17/+7 118/+3 39/+21 6/ Rig Declines Source: Bentek, March 2012 Note: Active rig count: Feb. 24, 2012 / Change in rig count from Feb. 25, 2011 Source: Bentek 18

19 2012 Strategic Plan Develop GP&T Business Current GP&T projects/opportunities include the following: Continue to execute the Apache JV, which will provide opportunities to expand Permian footprint Execute on Howard Energy acquisition of Meritage Execute on Central Louisiana Opportunities (Tuscaloosa Marine/ Austin Chalk) as producers continue development Enter new basin with focus on Mississippi Lime, Bakken, Marcellus and Utica 19

20 Key Takeaways Strong distribution and dividend growth targeting an increase of more than 10% distribution growth and 20% dividend growth Strong fundamentals and asset position Attractive/Robust organic growth opportunities in liquids rich areas Continued focus on high-return growth projects 20

21 Business Overview by Asset Bill Davis Executive Vice President and Chief Operating Officer

22 North Texas

23 NTX: Strategically Positioned in the Barnett Shale 2011Segment Cash Flow Well Positioned Assets (current capacity) : NTPL 375 MMcf/d NTX Gathering Assets 1 Bcf/d + Azle plant 50 MMcf/d Goforth plant 30 MMcf/d Silvercreek plant 200 MMcf/d Compression HP 191,652 LTM 12/31/2011 Throughput : NTX Gathering 773,000 MMBtu/d NTX Transmission 352,000 MMBtu/d NTX Processing 249,000 MMBtu/d Note: Segment Cash Flow is a non-gaap financial measure. See Appendix for reconciliation to Operating Income (loss) 23

24 Barnett Shale: A Leading Unconventional Resource Avg. Rig Count Rig Count (Monthly Average) Production (MMcf/d) Production MMcf/d 7,000 6,000 5,000 NTX Growth Projects Fossil Creek Expansion: On Time: March 2011; Capital: < $10MM; Cash flow: >$9MM /year Benbrook Expansion: On Time; March 2011 (Phase I), & February 2012 (Phase II); Capital: ~$28MM; Cash flow: >$11MM/year 150 4, ,000 2, , Source: Powell Shale Digest XTEX: Benbrook Facility We have 20 years of identified drilling locations throughout the Barnett. In 2012, we plan to invest approximately $950 million of capital in the Barnett and drill approximately 300 wells. - Devon Energy, 2011 Earnings "We've drilled more than 1,500 wells in the Barnett and we have more than 4,000 wells planned for the future. We're not half way through our development plan for the Barnett. XTO Energy, 2011 Earnings Call 24

25 NTX: Segment Cash Flows & Volumes Segment Cash Flows ($000) Volumes (MMBtu/d) $140,000 Gathering & Transmission Fee Based Processing Commodity Based Processing 1,600,000 Gathering Transmission Processing $120,000 1,400,000 $100,000 1,200,000 $80,000 1,000, ,000 $60, ,000 $40, ,000 $20, ,000 $ * * Note: Segment Cash Flow is a non-gaap financial measure. See Appendix for reconciliation to Operating Income (loss) * 2012 represents mid-point of guidance 25

26 NTX: Strategically Positioned for Long-Term Performance Short term Strategy: Optimization/consolidation of existing assets Contract reviews and renew / extend key contracts Aggressive pursuit of new gas supply for gathering and processing Long term Strategy: Capitalize on our franchise position - gathering, processing, transmission Develop opportunities for further bolt on system expansions Explore acquisitions, joint ventures, strategic interconnects and 3 rd party exchanges Pursue gathering and compression consolidation opportunities with 3 rd parties 26

27 LIG

28 LIG: Strategically Positioned Assets 2011Segment Cash Flow Well Positioned Assets (current capacity): LIG Pipeline 1Bcf/d+ LIG Red River 24 Expansion 465 MMcf/d Plaquemine Plant 225 MMcf/d; 10,000 Bbls/d Fractionator Gibson Plant 110 MMcf/d LTM 12/31/2011 Throughput: LIG Gathering / Transmission 912,000 MMBtu/d LIG Processing 247,000 MMBtu/d Note: Segment Cash Flow is a non-gaap financial measure. See Appendix for reconciliation to Operating Income (loss) 28

29 LIG: Strong Exposure to Multiple Resource Plays North LIG Contracts Firm Capacity (440 MMBtu/Day) North/South Crosstex Delivery Option (145 MMBtu/Day) South LIG On-System and On/Off System Delivery (624 MMBtu/Day) Total Volume Q (919 MMBtu/Day) Multi-dimensional system with exposure to multiple resource plays: Haynesville Cotton Valley Smackover Tuscaloosa Marine Austin Chalk Wilcox/Miocene Market flexibility via interstate pipeline interconnects and on-system markets North LIG 440 MMcf/d contracted with a weighted average remaining contract life of approximately 5 years Exposure to Tuscaloosa Marine and Austin Chalk with producer activity targeting liquids LIG is strategically positioned to capitalize on multiple resource plays 29

30 LIG: Segment Cash Flows & Volumes Segment Cash Flows ($000) Volumes (MMBtu/d) $100,000 Gathering & Transmission Fee Based Processing Commodity Based Processing Gathering & Transmission Processing $90,000 1,400,000 $80,000 1,200,000 $70,000 1,000,000 $60,000 $50, ,000 $40, ,000 $30, ,000 $20,000 $10, ,000 $ * * Note: Segment Cash Flow is a non-gaap financial measure. See Appendix for reconciliation to Operating Income (loss) * 2012 represents mid-point of guidance 30

31 LIG: Growth Strategies Short term Strategy: Identify and develop processing opportunities across the LIG System Aggressively pursue wellhead supply and strategic interconnects throughout LIG Miocene/Wilcox opportunities in South Louisiana Austin Chalk/Tuscaloosa Marine Shale plays Long term Strategy: Franchise position wellhead to plant to end user value chain Exceptional connectivity to interstate markets Connected to 7 major interstate pipelines Explore acquisitions Capitalize on access to river markets on South LIG Well positioned to take advantage of new and existing shale developments 31

32 Processing & Natural Gas Liquids (PNGL)

33 PNGL: Strategically Positioned Assets 2011Segment Cash Flow Well Positioned Assets (current capacity): Eunice 750 MMcf/d; 15,000 Bbls/d Pelican 600 MMcf/d Sabine 300 MMcf/d Blue Water 525 MMcf/d Riverside 27,000 Bbls/d Napoleonville Storage 2.4 MMBBL LTM 12/31/2011 Throughput : Processing 829,000 MMBtu/d NGL Fractionation 1,109,000 gal/d Note: Segment Cash Flow is a non-gaap financial measure. See Appendix for reconciliation to Operating Income (loss) 33

34 PNGL Eunice Case Study XTEX: Eunice Facility Fractionation /Crude: $0.0MM Fractionation /Crude: $10.9MM Processing: $12.1MM Condensate stabilization Opportunity processing optimization Raw make Truck & Rail volumes Amine gas treating Processing: $4.4MM

35 PNGL: Segment Cash Flows & Volumes Segment Cash Flows ($000) Volumes (MMBtu/d) $80,000 Fee Based Processing & Fractionation Commodity Based Processing 1,800,000 Processing (MMbtu/d) NGL's Fractionated (Gallons/d) $70,000 1,600,000 $60,000 1,400,000 $50,000 1,200,000 1,000,000 $40, ,000 $30, ,000 $20, ,000 $10, ,000 $ * * Note: Segment Cash Flow is a non-gaap financial measure. See Appendix for reconciliation to Operating Income (loss) * 2012 represents mid-point of guidance 35

36 PNGL: Growth Strategies Short Term Strategies: Maximize new crude and condensate terminals Target additional NGL rail & truck supply from rich gas plays Aggressively pursue gas supply for processing Maximize LIG synergies for gas supply to processing plants Execute the NGL Cajun Sibon project Long Term Strategies: Expand Fractionation to projected 120,000 Bbls/d capacity of Cajun Sibon NGL pipeline Expand NGL storage cavern business at Napoleonville New gas supply from Miocene, Wilcox, Tuscaloosa Marine, and Austin Chalk Continue to expand Riverside crude terminal and provide unit train capabilities targeting Canadian production with diluent backhaul Acquire or construct new crude assets in targeted basins 36

37 Defined Growth Projects Stan Golemon, SVP Engineering & Operations Royston Lightfoot, SVP Business Development

38 Cajun Sibon Phase I Project includes building ~130-mile NGL pipeline from Mt. Belvieu and expanding fractionation assets in LA Estimated in service date in first half of 2013 Estimated Capex of $230MM excluding raw make storage 38

39 Cajun Sibon Phase I NGL Executed approximately 40,000 Bbls/d, or 60% of the capacity under long-term agreements and expect to begin operations at or near initial capacity of 70,000 barrels of NGLs per day Currently negotiating definitive agreements for remaining capacity Ordered pipe in early March and now acquiring right of way Pipeline construction scheduled to begin Sept 2012 In process of evaluating phase II expansion of an additional 50,000 bbls/d given market expansion 39

40 Permian Basin Expansion Provided 20 MMcf/d refrigeration plant as interim solution. 50 MMcf/d cryogenic facility as permanent processing solution will be in service June 2012 Jointly investing $85MM with Apache Mesquite rail terminal: 100% owned; currently operating 40

41 Permian Basin Expansion Project - Apache Joint Development Apache and Crosstex to jointly develop Deadwood processing facility First Phase Refrigeration Plant operational February 2012 Second Phase Cryo Plant in operation by June 2012 Acquired Mesquite rail terminal & fractionation to transport stranded Permian Basin NGLs Facility upgraded to provide service for 7,500 Bbls/d of NGLs Currently evaluating expansion options including propane sales Facilities provide additional opportunities in region Provide processing and NGL services to additional producers Receive NGLs by truck and ship to Louisiana via rail/pipeline access Receive crude/condensate by truck and ship to premium markets via rail access Move purity products to regional demand centers via pipeline access Apache to drill ~600 wells in 2012; increase pace of activity in the Permian according to 2011 earnings report 41

42 Eagle Ford Expansion Strategic partnership to pursue opportunities in Eagle Ford Shale; Crosstex, Quanta Services and GE each own 30.6% in Howard Energy Partners Completed a 30-mile, 12-inch diameter pipeline expansion for rich gas header since acquisition Agreements to acquire Meritage assets in South Texas 42

43 Eagle Ford Expansion Project - Howard Energy Strategic partnership between industry leaders to pursue opportunities in Eagle Ford shale Howard Energy offers a total solutions approach to Eagle Ford producers with midstream and construction services Assets are well positioned in the Eagle Ford shale for growth After Meritage acquisition, 450 total miles of pipe with 600 MMBtu/d capacity in lean and rich gas service Strategically located to access multiple pay zones of the Eagle Ford 43

44 Eagle Ford Expansion - Meritage Acquisition Meritage Acquisition Overview: New lean natural gas gathering system (103 miles of pipeline, system start-up in September 2010) New rich natural gas gathering system ( ~70 miles of pipeline, system start-up in February 2012) Amine treating and dehydration installed with ~145 MMcfd of capacity Over 162,500 acres of northern Webb County dedicated with volume commitments serving Eagle Ford, Wilcox, Escondido, Lobos, Austin Chalk, Olmos and San Miguel formations Long term fee based contracts with no direct commodity risk 44

45 South Louisiana Crude Terminals Site Location: Riverside Plant Eunice and Riverside have rail, truck, pipeline, and barge facilities that are adding crude capabilities Fee based contracts with commodity upside Average expected crude/condensate volume for 2012 is ~ 4,000-6,000 Bbls/day Ability to expand Riverside by an additional 10,000 barrels per day by end of 2012 Unit Train opportunity could add an additional 20,000 40,000 Bbls/d 45

46 NGL & Crude Rail Logistics Barge (ic4, nc4, C5+) Mesquite Terminal Railcars (R) Frac Capacity (bbl/d) Current: 15,000 Post Cajun-Sibon Expansion: 55,000 Eunice Facility Trucks (R, CM, C3, ic4, nc4, C5+) Railcars (R, CM, C3, ic4, nc4) Pipeline (R, C2, C3, ic4, nc4) Pipeline (R) Pipeline (R) Railcars (R, C, C3, ic4, nc4) Napoleonville Storage Dome Legend: R - Raw Make C - Crude CM Condensate Mix C2 Ethane C3 Propane ic4 Iso-butane nc4 Normal Butane C5+ - Natural Gasoline Storage Capacity 2.4 million bbls Pipeline ( C3, ic4, nc4) Riverside Facility Frac Capacity (bbl/d) Current: 28,000 Combining Mesquite, Eunice, and Riverside facilities, XTEX has 68 Rail loading/unloading spots and 11 Truck loading/unloading spots. Trucks (R, C3, ic4, nc4, C5+) Pipeline (R, C2, C3, ic4, nc4) Barge (C, C3, ic4, nc4, C5+) 46

47 Financial Overview Mike Garberding Senior Vice President & Chief Financial Officer

48 Current Financial Focus Maintaining strong liquidity position for flexibility 4.50x Quarterly Leverage and Distribution $0.35 No near term debt maturities ~ $450 million available on revolver 4.00x 4.23x 4.08x 3.96x 3.90x 3.96x 3.92x $0.30 Maintaining conservative capital structure and leverage ratios 3.50x $0.25 Match distributions with more reliable cash flows 3.00x $0.20 Reinvest excess coverage from less sustainable cash flows 2.50x $0.15 Fourth Quarter 2011 Debt-to-EBITDA of 3.9 to 1 Improving cash flows by: 2.00x 1.50x 1.34x 1.60x 1.57x 1.53x 1.19x 1.41x $0.10 $0.05 Investing in high-return projects 1.00x Improving efficiencies of existing assets We remain committed to distribution growth while maintaining disciplined balance sheet management 3Q Q Q Q Q Q 2011 Dist/unit Leverage Dist. Coverage $

49 Fee Based Focus Non-commodity based margins represented 70% of contract mix in 2011 and projected to represent 73% of contract mix in % 80% 60% 15% 17% 10% 9% 13% 13% 11% 12% 14% 19% 17% 11% 10% 13% 19% 40% 20% 58% 66% 62% 57% 54% ~ 73% Fee-based business projected for % * Gathering & Transmission Fee Based Processing & Fractionation Percent of Liquids Processing Processing Margin * 2008 excludes discontinued operations ** 2012 represents mid-point of guidance 49

50 Solid Performance in All Core Areas Years Ended December 31, Segment Cash Flow * (Amounts in Millions) North Texas ** $ 103 $ 113 $ 114 $ 126 $ 126 LIG PNGL ** Total Asset Segments $ 197 $ 214 $ 235 $ 272 $ 287 CAGR ( ) for total segment cash flows of 11.3% PNGL crude terminals and NGL opportunities in PNGL and Permian will drive growth in 2012 Note: Segment Cash Flow is a non-gaap financial measure. See Appendix for reconciliation to Operating Income (loss) * 2012 represents mid-point of guidance ** Cash flows from Permian assets are included in the North Texas and PNGL segment amounts 50

51 Growth & Maintenance Capital Growth Capital Expenditures ($ in millions) Maintenance Capital Expenditures for Base Business ($ in millions) $350 $300 $250 $200 $294 Crude $27 Permian $45 $20 $18 $16 $14 $12 $10 $18 $11 $11 $13 $17 51 $150 $100 $257 Cajun-Sibon $175 $8 $6 $50 $0 $91 $37 $85 Other $ * 2012** $4 $2 $ ** * 2011 Growth Capital expenditures do not include $35MM investment in Howard Energy Partners ** 2012 Represents the mid-point of guidance 51

52 Guidance 2012 (Amounts in millions except for prices, ratios, per unit and per share information) Low Midpoint High Crosstex Energy, L.P. Adjusted EBITDA* $205 $225 $245 Distributable Cash Flow* $114 $134 $154 Distribution per Unit $1.28 $1.34 $1.41 Distribution Coverage 1.1x 1.3x 1.4x EBITDA Grow th n/a 5% 14% Distribution Grow th** n/a 13% 25% Grow th Capex $294 $294 $294 Maintenance Capex $18 $17 $16 Crosstex Energy, Inc. Cash Available for Dividends $21 $23 $27 Dividend Per Share $0.44 $0.48 $0.55 Dividend Growth** n/a 27% 74% Price Assumptions Weighted Average NGL Price ($/gal) $1.04 $1.21 $1.38 Brent Crude ($/Bbl) $93.00 $ $ Henry Hub Gas Price ($/MMBtu) $4.00 $3.48 $3.00 NGL/Gas Ratio 307% 410% 543% * Adjusted EBITDA and Distributable Cash Flow are non-gaap financial measures. ** Distribution and dividend growth calculated using annualized fourth quarter declared amounts

53 Impact of Growth Projects $70 Operating Income Opportunity Potential by Growth Project ($MM) Crude Terminals Crude Terminals Potential Apache Range Howard Energy Range Cajun-Sibon Range $60 $50 $40 $30 $20 $10 $ Q4 13 Annualized Represents potential range of opportunity 53

54 2012/2013 Hedge Positions Hedged Volume as a % of Hedgeable Volume Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 POL Total VAR Volumes Total Hedgeable Volumes Total Hedged Volumes Hedged Percentage 83% 55% 26% 34% 27% 24% 35% 42% Proc Margin Total VAR Volumes Total Hedgeable Volumes Total Hedged Volumes Hedged Percentage 86% 77% 47% 34% 23% 21% 13% 17% 54

55 Processing Sensitivities Matrix Total Year 2012 NGL Basket Price Per Gallon Gross Margin From Total POL & PM Contracts NGL to Gas Ratio Natural Gas Price NGL to Natural Gas Price $ 2.00 $ 2.50 $ 3.00 $ 3.50 $ 4.00 Gas Ratio $ 2.00 $ 2.50 $ 3.00 $ 3.50 $ % $ $ $ $ $ % $ 51,715 $ 58,871 $ 66,026 $ 73,182 $ 80, % $ $ $ $ $ % $ 57,262 $ 65,805 $ 74,347 $ 82,889 $ 91, % $ $ $ $ $ % $ 69,149 $ 80,662 $ 92,176 $ 103,690 $ 115, % $ $ $ $ $ % $ 81,035 $ 95,520 $ 110,006 $ 124,491 $ 138, % $ $ $ $ $ % $ 91,337 $ 108,397 $ 125,458 $ 142,519 $ 159,579 Gross Margin From Total POL Contracts Gross Margin From Total PM Contracts NGL to Gas Ratio NGL to $ 2.00 $ 2.50 $ 3.00 $ 3.50 $ 4.00 Gas Ratio $ 2.00 $ 2.50 $ 3.00 $ 3.50 $ % $ 21,180 $ 23,780 $ 26,379 $ 28,979 $ 31, % $ 30,535 $ 35,091 $ 39,647 $ 44,203 $ 48, % $ 22,409 $ 25,315 $ 28,222 $ 31,128 $ 34, % $ 34,854 $ 40,490 $ 46,125 $ 51,761 $ 57, % $ 25,040 $ 28,605 $ 32,169 $ 35,734 $ 39, % $ 44,108 $ 52,058 $ 60,007 $ 67,956 $ 75, % $ 27,672 $ 31,895 $ 36,117 $ 40,339 $ 44, % $ 53,363 $ 63,626 $ 73,889 $ 84,152 $ 94, % $ 29,953 $ 34,746 $ 39,538 $ 44,331 $ 49, % $ 61,383 $ 73,652 $ 85,920 $ 98,188 $ 110,456 Approximates Year 2012 Low Guidance Approximates to Year 2012 Midpoint of Guidance Approximates to Year 2012 High Guidance Note: Amounts include hedge impacts. 55

56 Closing Remarks Barry Davis President and Chief Executive Officer

57 Our Commitment to you Maximize the earnings and growth of our existing assets Enhance scale and diversification Run our assets efficiently and manage our balance sheet conservatively Execute the growth projects that are underway, and pursue new opportunities Expand our NGL business Expand our crude business Develop gas processing and transportation projects in new rich-gas areas 57

58 Appendix

59 Reconciliation: Segment Cash Flow to Operating Income (Loss) Years Ended December 31, (Amounts in Millions) * Total Asset Team Segment Cash Flow $ 176 $ 197 $ 214 $ 235 $ 272 $ 287 Shared Services (11) (15) (14) (13) (16) (18) Other ** (3) (7) (3) Asset Team Segment Profits $ 161 $ 176 $ 197 $ 233 $ 263 $ 270 Corporate Segment Profits Segment Profits $ 169 $ 182 $ 201 $ 233 $ 263 $ 270 General and administrative expenses (60) (69) (60) (48) (53) (59) Gain (loss) on derivatives (9) (8) - Gain on sale of property (0) - Depreciation, amortization and impairment (83) (137) (122) (113) (125) (126) Operating income (loss) $ 31 $ (14) $ 23 $ 77 $ 77 $ 86 * 2012 represents mid-point of guidance ** Other includes LOC fees, Stock Based Compensation and gains or losses on derivatives 59 59