Investor Presentation December 2013

Transcription

1 Investor Presentation December 2013

2 CAUTIONARY STATEMENTS & NON-GAAP MEASURES This presentation includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements can be identified by words such as anticipates, believes, forecasts, plans, estimates, expects, should, will or other similar expressions. Such statements are based on management s current expectations, estimates and projections, which are subject to a wide range of uncertainties and business risks. These forward-looking statements include statements regarding the stability and predictability of cash flows of QEP Midstream Partners, LP (); s financial flexibility and strong capital structure and ability to maintain same; quality of s assets; potential of drop-down of assets from QEP Resources, Inc. (QEP); plans to pursue third-party acquisition opportunities; increase in throughput by capturing third-party volumes; increase in production at QEP; and stability of s fee-based business and plans to focus on such business. Actual results may differ materially from those included in the forward-looking statements due to a number of factors, including weather conditions; global geopolitical and macroeconomic factors; the U.S. federal budget and debt ceiling crisis; acts of terrorism; changes in oil, natural gas and NGL prices; outcome of pending litigation; demand for oil and natural gas storage and transportation services; defaults by large customers; legislative or regulatory changes; actions taken by third-party operators, processors and transporters; and the other risks discussed in s filings with the Securities and Exchange Commission, including the Risk Factors section of s Registration Statement on Form S-1, as amended, effective August 8, 2013 ( s Registration Statement). undertakes no obligation to publicly correct or update the forward-looking statements in this news release, in other documents, or on the website to reflect future events or circumstances. All such statements are expressly qualified by this cautionary statement. Adjusted EBITDA is defined as net income attributable to s Predecessor or before the following items: depreciation and amortization, interest and other income, interest expense and deferred revenue associated with minimum volume commitment payments. Adjusted EBITDA is used as a supplemental financial measure by management and by external users of our financial statements, such as investors and commercial banks, to assess: (1) s operating performance as compared to those of other companies in the midstream sector, without regard to financing methods, historical cost basis or capital structure; (2) the ability of s assets to generate sufficient cash flow to make distributions to its partners; (3) s ability to incur and service debt and fund capital expenditures; and (4) the viability of acquisitions and other capital expenditure projects and the returns on investment of various investment opportunities. For a reconciliation of s Adjusted EBITDA to net income for the three months ended March 31, 2013, please see s Registration Statement. 1

3 INVESTMENT HIGHLIGHTS Affiliation with QEP Field Services Stable and Predictable Cash Flows Strategically Located Asset Base Experienced Management and Operating Teams Financial Flexibility and Strong Capital Structure On Dec 2 nd, QEP announced its intentions to separate QEP Field Services and ownership interest in (GP and LP) from QEP Resources 2

4 OVERVIEW Transaction Overview Units outstanding (MM) 54.5 Units sold to public (MM) (includes over-allotment) 23.0 Unit price at IPO (Pre-IPO range $19-$21) $21 First day of trading August 9 th Net cash proceeds to ($MM) $451 Adjusted EBITDA contributed (twelve months ended - 3/31/13, $MM) $82.2 Contributed gathering assets located in Colorado, North Dakota, Utah and Wyoming Ownership Overview QEP General Partner (includes all incentive distribution rights) 2.0% 2% $ $0.2875; 15% $ $0.3125; 25% $ $0.375; 50% above $0.375 QEP subordinated units 49.0% QEP common units 6.8% Public common units 42.2% 3

5 OWNERSHIP STRUCTURE QEP Resources, Inc. (Parent) 100% Ownership Public Unitholders QEP Midstream Partners GP, LLC (General Partner) 2.0% General Partner Interest & IDRs 55.8% Limited Partner Interest QEP Midstream Partners, LP : 42.2% Limited Partner Interest LTIP Participants 100% Ownership QEP Midstream Partners Operating, LLC Less than 1% Limited Partner Interest 100% Ownership Interest 50% Ownership Interest Gathering I, LLC Three Rivers Gathering, L.L.C. 100% Ownership Interest Rendezvous Pipeline Company, L.L.C. 78% Ownership Interest Rendezvous Gas Services, L.L.C. 4

6 STRATEGY Growth Significant drop-down potential from QEP Field Services Pursue third-party acquisition opportunities in existing and new areas Increase throughput by capturing third-party volumes and increased production from QEP Stability Focus on stable, fee-based businesses Maintain a conservative and flexible capital structure 5

7 ASSET OVERVIEW Over 2.6 Bcf/d and 54 MBbls/d throughput capacity Access to three prolific oil and natural gas basins in the Rockies Interconnects to six interstate natural gas pipelines providing access to multiple markets Fully integrated system provides wellhead to market services and prevents rate stacking QEP Field Services Total 1 QEP Midstream Partners, LP Miles of Gathering and Transmission Pipeline 2,415 1,507 Total Natural Gas Throughput Capacity (MMcf/d) 4,975 2,650 Total Oil Throughput Capacity (Bbls/d) 54,937 54,937 Approximate Receipt Points 3,259 1,062 Total Processing Capacity (MMcf/d) 1,583 0 Total Treating Capacity (MMcf/d) Total Fractionation Capacity (Bbls/d) 15,000 0 Compression Horsepower 145,390 77,024 1 Includes M LP assets 6

8 GREEN RIVER GATHERING Rendezvous Pipeline Company Pinedale System Moxa Arch System Rendezvous Gas Services Green River Gathering System gathers production in the Pinedale and Moxa Arch fields in Wyoming Pinedale System Approximately 220 miles of natural gas, crude oil and produced/flowback water gathering pipelines 36,065 bhp of compression and 679 MMcf/d of natural gas throughput capacity Natural gas delivered into the Rendezvous Gas system Crude oil transported on 61-mile, FERCregulated crude pipeline to the Rocky Mountain Pipeline System Throughput capacity of approximately 40,800 Bbls/d Moxa Arch System Approximately 323 miles of low-pressure gas gathering pipelines and 4,988 bhp of gas compression Approximately 58 MMcf/d of natural gas capacity 7

9 RENDEZVOUS GAS SERVICES Rendezvous Gas Services Rendezvous Gas Services is a joint venture between and Western Gas operates and owns 78% Transports gas from the Pinedale and Jonah fields to processing facilities owned by QEP or Western Gas Approximately 1,032 MMcf/d of capacity and 7,800 bhp of gas compression Three parallel, 103-mile high-pressure natural gas pipelines To support the joint venture, QEP and Western Gas dedicated natural gas gathered within an area of mutual interest 8

10 RENDEZVOUS PIPELINE COMPANY 21-mile, FERC-regulated transmission pipeline that transports natural gas from QEP s Blacks Fork processing complex to the Kern River Pipeline FERC-regulated, but utilizes marketbased rates negotiated with each customer Total throughput capacity of 460 MMcf/d Rendezvous Pipeline Company 9

11 VERMILLION GATHERING Gas gathering systems and compression assets located in southern Wyoming, northwest Colorado and northeast Utah Approximately 518 miles of lowpressure, gas gathering pipelines Approximately 206 MMcf/d of throughput capacity and 23,197 bhp of compression Volumes are underpinned by lifeof-reserves and long-term, feebased gathering agreements with MVCs Volumes are ultimately delivered into Questar Pipeline Company s interstate pipeline system 10

12 THREE RIVERS GATHERING Three Rivers Gathering Three Rivers Gathering is a 50/50 joint venture between and Ute Energy Midstream Holdings, LLC Approximately 52 miles of gathering pipeline and 4,735 bhp of gas compression Volumes primarily underpinned by long-term, fee-based gas gathering agreements with MVCs Currently fully subscribed, easily expanded through incremental compression Aggregate MVCs of 212 thousand MMBtu/d through 2018 Natural gas delivered to either QEP s Uinta processing complex or a thirdparty processing facility 11

13 WILLISTON BASIN GATHERING Williston Basin Gathering Crude oil and natural gas gathering system located in McLean County, North Dakota Approximately 30 miles of crude oil and gas gathering pipelines, with 239 bhp of gas compression Current throughput capacity of 7,000 Bbls/d and 3 MMcf/d for crude oil and natural gas, respectively Crude oil and natural gas handling facility on the Fort Berthold Indian Reservation Volumes supported by long-term, fee-based, agreements with MVCs Aggregate MVCs of approximately 5,600 Bbls/d of crude oil and 5,000 MMBtu/d of gas through

14 QEP Field Services Overview

15 POTENTIAL DROP-DOWNS NORTHERN TIER Green River Basin Blacks Fork Processing 505 MMcf/d cryogenic 330 MMcf/d J-T Emigrant Trail Processing 55 MMcf/d cryogenic Blacks Fork Fractionation 15,000 Bbls/d Blacks Fork Processing Complex QEP Field Services Remaining Revenue Based on LTM ending March 31, 2013, less Processing 28% NGL sales 42% Emigrant Trail Processing Plant Gathering 30% Vermillion Basin Vermillion Processing Plant Vermillion Processing 43 MMcf/d cryogenic 14

16 POTENTIAL DROP-DOWNS SOUTHERN TIER Uinta Gathering 24B Processing Plant Stagecoach/Iron Horse Processing Complex Uinta Basin Stagecoach Processing 200 MMcf/d refrigeration Iron Horse Processing 310 MMcf/d cryogenic Red Wash/24B Processing 140 MMcf/d refrigeration Uinta Gathering 609 miles pipeline 299 MMcf/d throughput capacity Uintah Basin Field Services (38% JV with Ute Energy) 99 miles gathering pipeline 26 MMcf/d throughput capacity Uintah Basin Field Services Haynesville Gathering Treating Facility Haynesville Gathering 200 miles gathering pipeline 2,000 MMcf/d throughput capacity 600 MMcf/d treating capacity 15

17 WHY INVEST IN? Affiliation with QEP Field Services Substantial drop-down potential Stable and Predictable Cash Flows Primarily long-term, fee-based contracts Strategically Located Asset Base Experienced Management and Operating Teams Financial Flexibility and Strong Capital Structure $500 million credit facility, undrawn on Sept. 30 th 16

18 PARTNERSHIP INFORMATION Analyst Contacts Richard J. Doleshek, Executive Vice President and CFO Greg Bensen, Director, Investor Relations QEP Midstream Partners, LP th Street, Suite 500 Denver, CO