Forward Looking Statements

Transcription

1 Master Limited Partnership Investor Conference March 2007

2 Forward Looking Statements NASDAQ: RGNC This presentation may contain statements about future events and Regency Energy Partners LP s ( Regency Energy Partners, Regency or the Partnership ) outlook and expectations, which are forward-looking statements. Although Regency believes that the assumptions underlying these statements are reasonable, investors are cautioned that such forward-looking statements are inherently uncertain and necessarily involve risks that may affect Regency s business prospects and performance, causing actual results to differ from those discussed during this presentation. Any forward-looking statements made are subject to all of the risks and uncertainties, many of which are beyond management s control, involved in gathering, processing, marketing and transportation of natural gas and natural gas liquids, or NGLs. Should one or more of these risks or uncertainties occur, or should underlying assumptions prove incorrect, Regency s actual results and plans could differ materially from those expressed in any forward-looking statements. These risks and uncertainties are discussed in more detail in Regency s filings with the Securities and Exchange Commission, copies of which are available to the public. The Partnership undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information or future events. 1

3 Regency Energy Partners Overview 2

4 Regency s Role in the Industry Midstream natural gas company offering comprehensive services from wellhead to market Transmission Lines Markets Gathering, Dehydration, and Compression Treating and Processing Mixed NGLs Marketable NGL Products Wellhead 3

5 Regency s Formation and History June 2003 Acquired midstream assets from El Paso Field Services December 2004 HM Capital Partners acquired Regency for $405 million and implemented comprehensive risk management strategy February 2006 Completed initial public offering, with an enterprise value of $1.1 billion September 2006 Completed private equity placement totaling $60 million April March 2004 Acquired midstream assets from Duke Energy Field Services December 2005 Completed construction of the Regency Intrastate Enhancement Project August 2006 Acquired TexStar Field Services LP December 2006 Completed private placement of $550 million in seven-year senior notes Regency established as a standalone company 4

6 Regency Overview Simplified Organizational Chart Key Metrics HM Capital Investors 9,127,085 Common Units 19,103,896 Subordinated Units Private Investors 2,857,143 Common Units Public Unitholders 15,656,500 Common Units 2 Capitalization as of 2/9/2007 Market Capitalization ($bn) Enterprise Value ($bn) % 61.2% L.P. Interest 1 2.0% G.P. Interest 6.0% L.P. Interest 32.8% L.P. Interest Regency Energy Partners LP NASDAQ: RGNC Operating Statistics Pipeline (Miles) 4,746 Treating/Processing Plants 11 Compression (hp) 167,450 Throughput (Bcf/d) 1.1 Geographic Regions 5 Employees 280 Transportation Segment Gathering & Processing Segment 1 Includes 2.0% General Partner Interest in Regency Energy Partners LP. 2 Includes 506,500 restricted units that have been issued pursuant to the Regency Energy Partners LP Long Term Incentive Plan. 3 Includes 19,103,896 subordinated units. 5

7 Strategically Located Platform of Assets Regency s core operations are located in the key natural gas producing basins of Texas, Louisiana, Kansas and Oklahoma Mid-Continent: Hugoton/Anadarko Basin 1,600 miles of gathering pipeline 2 processing plants 1 Key Producers: BP, Oxy, EOG, Anadarko Petroleum North Louisiana: TX-LA-MS Salt Province Basin 320 miles of intrastate pipeline 600 miles of gathering pipeline 5 processing plants Key Producers: Anadarko Petroleum, Chesapeake, Devon, Petrohawk, Samson West Texas: Permian Basin 750 miles of gathering pipeline 1 processing plant Key producers: Exxon Mobil, Apache, Chevron, Duke South Texas: Western Gulf Basin 1,047 miles of gathering pipeline 2 processing/treating plants Key producers: BlackBrush, Escondido, Lewis, The Exploration Company Corporate Office Regional Office Regency Gas System Gas Treating / Processing Facility East Texas: East Texas Basin 371 miles of gathering pipeline 2 processing/treating plants 2 Key producers: Valence, Redmond Notes: 1 Includes the currently inactive Lakin plant. 2 Includes the Como processing plant which was taken out of service March

8 Regency Operating Structure Operations divided into Gathering & Processing Segment and Transportation Segment Gathering & Processing Segment Approximately 4,400 miles of gathering pipelines Nine active processing plants with 845 MMcf/d throughput capacity 1 One stand-alone treating facility with 100 MMcf/d throughput capacity 44% of volumes under fee-based contracts Adjusted Segment Margin Contribution % 72.3% Gathering & Processing Transportation Transportation Segment 320 mile intrastate system extending from near the TX/LA border to Winnsboro, LA 35 MMcf/d refrigeration plant Design capacity is 910 MMcf/d Includes Gulf States Transmission, a 10 mile 20-inch interstate pipeline that extends from Harrison County, Texas to Caddo Parish, Louisiana Notes: 1 Excludes the Lakin processing plant and the Como processing plant which was taken out of service in March For the LTM period ending September 30, Segment margin adjusted for unrealized hedging gains / losses. 7

9 Experienced & Incentivized Management Regency s executives have an average of over 25 years of industry experience Employees own 7.4% of the Limited Partner units and management owns 8.7% of the General Partner Name Title Years James Hunt Chairman, President & Chief Executive Officer 38 Michael Williams Executive Vice President & Chief Operating Officer 25 Stephen Arata Executive Vice President & Chief Financial Officer 15 Bill Joor Executive Vice President, Chief Legal and Administrative Officer and Secretary Charles Davis Senior Vice-President, Corporate Development 20 Richard Moncrief Senior Vice President, Gas Supply and Business Development Durell Johnson Vice President, Operations and Engineering 20 Lawrence Connors Vice President, Finance and Chief Accounting Officer

10 Key Operational Highlights

11 Transportation Segment Transportation throughput volumes provide stable, fee-based cash flow System Map Operating Statistics Length (Miles) 320 Compression (hp) 27,400 Throughput Capacity (MMcf/d) 910 Market Outlets 11 Other Assets Haughton Plant 35 MMcf/d Transportation segment consists of RIGS, a 320-mile natural gas pipeline in north Louisiana and a 35 MMcf/d refrigeration plant for hydrocarbon dewpoint control Transports natural gas primarily from northwest Louisiana to northeast Louisiana where it connects to a number of interstate and intrastate markets Connected to 10 mile FERC regulated interstate pipeline (Gulf States Transmission) Completed the $30 million Bossier Loop project Expanded capacity of RIGS by adding additional looping and compression west of Haughton RIGS design capacity increased to 910 MMCf/d 10

12 Transportation Segment Connecting constrained supply to premium markets Louisiana Basis Differential 1 Centerpoint Market Nat Gas Price/MMBtu 2005: $ : $6.01 WASKOM FIELD ADA FIELD SLIGO FIELD SIBLEY FIELD VERNON FIELD Columbia Gulf Market Nat Gas Price/MMBtu 2005: $ : $6.74 ELM GROVE FIELD DRISCOLL FIELD VIXON FIELD CARTHAGE FIELD 2005 Basis Differential: $ Basis Differential: $0.73 Source: Gas Daily Notes: 1 Prices reflect the daily average over the stated period. 11

13 Gathering and Processing Segment Providing integrated services across five geographic areas in the United States Regency s gathering and processing segment operates in LA, TX and the midcontinent region Gathering and processing assets include: 10 active processing plants 1, 2, 3 1 stand-alone treating facility 2 inactive processing plant Approximately 4,400 miles of gathering and pipeline infrastructure Region Asset Type Facilities Length (Miles) Compression (Horsepower) Throughput Capacity (MMcf/d) North Louisiana Gathering Pipelines , Plants , East Texas Gathering Pipelines 371 9, Plants , South Texas Gathering Pipelines 1,047 14, Plants 2 2, West Texas Gathering Pipelines , Plants 1 8, Mid-Continent Gathering Pipelines 1,600 39, Plants 3 2 3, Notes: 1 Includes 35 MMcf/d Haughton plant, which is accounted for in the Transportation Segment. 2 Excludes 35 MMMcf/d Como processing plant which was taken out of service in March Excludes 80 MMcf/d of throughput capacity available at Regency s inactive Lakin processing facility. 12

14 Gathering and Processing Segment North Louisiana System Map Operating Statistics Plants 1 5 Gathering System Length (Miles) 600 Compression (hp) Pipeline 24,255 Plant 14,417 DUBBERLY PLANT Throughput (MMcf/d) Pipeline 300 Plant Note: 1 Includes 35 MMcf/d Haughton Plant, which is accounted for in the Transportation Segment. North Louisiana gathering system is connected to our RIGS system Region continues to experience significant levels of drilling activity Regency continues to expand regional footprint via additional organic growth projects Built two new $8 million dewpoint-control facilities (Elm Grove and Dubberly) Spending $17 million to expand compression and gathering capacity in north Louisiana 13

15 Gathering and Processing Segment East Texas System Map Operating Statistics Plants 1 1 Gathering System Length (Miles) 371 Compression (hp) Pipeline 9,064 Plant 14,531 Throughput (MMcf/d) Pipeline 150 Plant 1 65 Note: Excludes the Como processing plant which was taken out of service in March Natural gas connected to these systems is typically high in hydrogen sulfide content. Both systems are connected to processing and treating facilities that include sulfur removal units 14

16 Gathering and Processing Segment South Texas System Map Operating Statistics Plants 2 Gathering System Length (Miles) 1,047 Compression (hp) Pipeline 14,652 Plant 2,400 Throughput (MMcf/d) Pipeline 800 Plant 110 Includes the Tilden System, Mainline System and various other gathering systems as well as a 50% interest in the Palafox Joint Venture Natural gas exploration and production drilling in this area has primarily targeted productive Wilcox, Olmos, and Edwards zones in the Western Gulf Basin $8 million La Salle County Project was completed in early November 2006 Allows separation of sweet, rich gas packages for processing rather than blending with surrounding lean, sour gas 15

17 Gathering and Processing Segment West Texas System Map Operating Statistics Plants 1 Gathering System Length (Miles) 750 Compression (hp) Pipeline 32,296 Plant 8,536 Throughput (MMcf/d) Pipeline 200 Plant 125 Increased natural gas exploration and production drilling in this area has primarily targeted productive Delaware and Devonian zones in the Permian Basin Recent large oil and natural gas discoveries in the region by Chesapeake Energy Corporation and Anadarko Petroleum Company Waha gathering system has a variety of market outlets, including several major interstate and intrastate pipelines serving the western and mid-continent regions of the United States as well as Texas natural gas markets 16

18 Gathering and Processing Segment Mid Continent System Map Operating Statistics Plant 1 2 Gathering System Length (Miles) 1,600 Compression (hp) Pipeline 39,877 Plant 3,200 Throughput (MMcf/d) Pipeline 265 Plant 1 55 Note: 1 Excludes 80 MMCf/d of throughput capacity available at Regency s inactive Lakin processing facility Located in two of the largest and most prolific natural gas producing regions in the United States: the Hugoton Basin in southwest Kansas and the Anadarko Basin in western Oklahoma and the Texas panhandle Mature basins with stable average decline rates Advances in technology have driven continued development of these basins 17

19 Key Financial Highlights

20 Attractive Cash Flow Characteristics Favorable contract mix and structure 74% of Regency s 2006 volumetric contract mix is fee-based Fees earned are volume driven and typically not affected by shortterm changes in commodity prices Regency has reduced its risk profile by successfully renegotiating keep-whole contracts into fee-based or POP contracts Remaining keep-whole contracts commonly include one or more risk mitigants, such as Embedded fees Embedded discounts Conditioning floors Bypassability 2006 Pro Forma Volumetric Contracted Mix 1 Percent of Proceeds 20.0% Keep- Whole 6.0% Fee 74.0% Note: 1 YTD as of September 2006 includes Gathering and Processing Segment and Transportation Segment Volumes 19

21 Segment Margin Contribution Analysis Favorable contract mix and structure Adjusted Segment Margin Contribution ($) 1 Adjusted Segment Margin Contribution (%) ($mm) (% ) LTM 9/30/06 Gathering and Processing Adjusted Margin Transportation Segment Margin LTM 9/30/06 Gathering and Processing Adjusted Margin Transportation Segment Margin Gathering and Processing Segment comprised of 44% fee based contracts as measured by volume Transportation Segment has become a larger part of the business since 2004 Essentially all fee based contracts Note: 1 Segment margin adjusted for unrealized hedging gains / losses. 20

22 Commodity Risk Management As a result of Regency s portfolio of contracts, the Company is a net seller of NGLs, condensate, and natural gas Regency actively manages its commodity price exposure via an integrated strategy, including: Management of contract portfolio Matching indices used for purchases and sales of commodities Portfolio optimization by monitoring basis and other price differentials Derivative contracts Regency uses swap contracts settled against natural gas, WTI, ethane, propane, butane, and natural gasoline to mitigate its exposure to commodity prices 21

23 2/3/07 22 Unit Price Performance Since IPO (through 2/27/07) Regency s total annualized return for 2006 was 46.1% $31.00 $29.00 $27.00 $25.00 $23.00 $21.00 $19.00 $17.00 $ /3/07 12/3/06 11/3/06 10/3/06 9/3/06 8/3/06 7/3/06 6/3/06 5/3/06 4/3/06 3/3/06 2/3/06

24 Master Limited Partnership Investor Conference March 2007