Morgan Stanley MLP Bus Tour

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Transcription:

Morgan Stanley MLP Bus Tour January 26, 2016 Strong. Innovative. Growing. 1

Forward-Looking Statements This presentation contains forward-looking statements within the meaning of the federal securities laws. Although these statements reflect the current views, assumptions and expectations of our management, the matters addressed herein involve certain assumptions, risks and uncertainties that could cause actual activities, performance, outcomes and results to differ materially than those indicated herein. Such forward-looking statements include, but are not limited to, statements about future financial and operating results, guidance, projected or forecasted financial results, objectives, project timing, expectations and intentions and other statements that are not historical facts. Factors that could result in such differences or otherwise materially affect our financial condition, results of operations and cash flows include, without limitation, (a) the dependence on Devon for a substantial portion of the natural gas that we gather, process and transport, (b) our lack of asset diversification, (c) our vulnerability to having a significant portion of our operations concentrated in the Barnett Shale, (d) the amount of hydrocarbons transported in our gathering and transmission lines and the level of our processing and fractionation operations, (e) fluctuations in oil, natural gas and NGL prices, (f) construction risks in our major development projects, (g) our ability to consummate future acquisitions, successfully integrate any acquired businesses, realize any cost savings and other synergies from any acquisition, (h) changes in the availability and cost of capital, (i) competitive conditions in our industry and their impact on our ability to connect hydrocarbon supplies to our assets, (j) operating hazards, natural disasters, weather-related delays, casualty losses and other matters beyond our control, (k) a failure in our computing systems or a cyber-attack on our systems, and (l) the effects of existing and future laws and governmental regulations, including environmental and climate change requirements and other uncertainties. These and other applicable uncertainties, factors and risks are described more fully in EnLink Midstream Partners, LP s and EnLink Midstream, LLC s filings (collectively, EnLink Midstream ) with the Securities and Exchange Commission, including EnLink Midstream Partners, LP s and EnLink Midstream, LLC s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. Neither EnLink Midstream Partners, LP nor EnLink Midstream, LLC assumes any obligation to update any forward-looking statements contained herein. The assumptions and estimates underlying the forecasted financial information included in the guidance information in this presentation are inherently uncertain and, though considered reasonable by the EnLink Midstream management team as of the date of its preparation, are subject to a wide variety of significant business, economic, and competitive risks and uncertainties that could cause actual results to differ materially from those contained in the forecasted financial information. Accordingly, there can be no assurance that the forecasted results are indicative of EnLink Midstream s future performance or that actual results will not differ materially from those presented in the forecasted financial information. Inclusion of the forecasted financial information in this presentation should not be regarded as a representation by any person that the results contained in the forecasted financial information will be achieved. 2

Non-GAAP Financial Information & Investor Notice Non-GAAP Financial Information This presentation contains non-generally accepted accounting principle financial measures that we refer to as adjusted EBITDA, gross operating margin and segment cash flow. Gross operating margin is defined as revenue minus the cost of sales. Segment cash flows is defined as revenue less the cost of purchased gas, NGLs, condensate, crude oil and operating and maintenance expenditures. Adjusted EBITDA is defined as net income from continuing operations plus interest expense, provision for income taxes, depreciation and amortization expense, impairment expense, unit-based compensation, (gain) loss on noncash derivatives, transaction costs, distribution of equity investment and non-controlling interest and income (loss) on equity investment. The amounts included in the calculation of these measures are computed in accordance with generally accepted accounting principles (GAAP). EnLink Midstream believes these measures are useful to investors because they may provide users of this financial information with meaningful comparisons between current results and prior-reported results and a meaningful measure of EnLink Midstream's cash flow after satisfaction of the capital and related requirements of their respective operations. Adjusted EBITDA, segment cash flows, gross operating margin and maintenance capital expenditures, as defined above, are not measures of financial performance or liquidity under GAAP. They should not be considered in isolation or as an indicator of EnLink Midstream s performance. Furthermore, they should not be seen as measures of liquidity or a substitute for metrics prepared in accordance with GAAP. Investor Notice The SEC permits oil and gas companies, in their filings with the SEC, to disclose only proved, probable and possible reserves that meet the SEC's definitions for such terms, and price and cost sensitivities for such reserves, and prohibits disclosure of resources that do not constitute such reserves. This presentation may contain certain terms, such as resource potential and exploration target size and risked resource. These estimates are by their nature more speculative than estimates of proved, probable and possible reserves and accordingly are subject to substantially greater risk of being actually realized. The SEC guidelines strictly prohibit us from including these estimates in filings with the SEC. Investors are urged to consider closely the disclosure in Devon Energy Corporation s Form 10-K, available at Devon Energy Corporation, Attn. Investor Relations, 333 West Sheridan, Oklahoma City, OK 73102-5015. You can also obtain this form from the SEC by calling 1-800-SEC-0330 or from the SEC s website at www.sec.gov. 3

Focused on Stability & Execution Stable cash flows ~95% of 2015E gross operating margin from fee-based contracts * ~50% of 2015E gross operating margin from our sponsor, Devon Energy * Significant portion of cash flows supported by contracts with MVCs and firm transport agreements Execution in Core Areas Focused on three core areas: Oklahoma, Permian Basin and Louisiana Partnering with our sponsor, Devon Energy, on execution in Oklahoma & North Texas Strong Financial Position Investment grade credit rating at ENLK since inception Strong liquidity on $1.5 billion credit facility High quality customers: ~85% of gross operating margin from investment grade customers No near-term marketed equity needs * Based on 2015 Guidance Note: Gross operating margin and segment cash flows are non-gaap financial measures and are explained on page 3. 4

EnLink Is Unique Among MLPs ~120 ~16 ~8 Public MLP Universe Gas Gathering and Processing * 90%+ Fee-Based * 2 Investment Grade 1 Long Organic Growth History * Source: Barclay s Energy Infrastructure Weekly, August 3, 2015; excludes large cap, diversified MLPs. 5

Strong Financial Position Well Positioned with a Strong Balance Sheet Strong Balance Sheet & Credit Profile Investment grade balance sheet at ENLK (BBB, Baa3) Near-term debt / adjusted EBITDA of ~4-4.5x * Over $1.0 billion of liquidity on $1.5 billion credit facility * ~85% of gross operating margin comes from investment grade customers Stable Distributions Announced flat distributions for Q4 2015 No near-term marketed equity needs Gross Operating Margin vs. Commodity Prices $MM $ / Bbl (Gas index to WTI Crude) $350 $120 $300 $250 $200 $150 $100 $50 $100 $80 $60 $40 $20 $0 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Gross Operating Margin HH Gas Index to WTI Wti Crude * Based on public comments on December 7, 2015 for Tall Oak Midstream Acquisition Investor Call Note: Adjusted EBITDA, segment cash flow and gross operating margin are non-gaap financial measures and are explained on page 3. $0 6

Core Areas of Execution 7

Execution in Core Areas Focus On Oklahoma, West Texas & Louisiana The Tall Oak acquisition is the next step in positioning EnLink as a midstream leader in North America s best resource plays Midland Permian Leading midstream position in Midland Basin Coronado and LPC acquisitions expanded developing platforms Riptide plant under construction Mid-Continent Tall Oak acquisition creates a strong position in STACK and Cana-Woodford Years of organic follow-on investment given early stage of development of the play Delaware Permian Matador acquisition established platform for growth Lobo II opportunity * Louisiana Demand-driven market Franchise NGL position supported by Cajun-Sibon Franchise natural gas position Opportunities to interconnect with other growth areas * EnLink has % 30.6% ownership interest in Howard Energy. 8

Execution in Oklahoma Partnering with Devon in the STACK Devon Acquired Felix Energy for ~$1.9 B Acreage in economic core with highest returns in STACK ~ 80,000 net surface acres Devon expects to spend ~$500MM in 2016 to drive STACK growth of >30% year-over-year * Accelerating activity to ~10 rigs * Best in Class STACK Position Largest and best position in the play ~ 430,000 net surface acres (Devon and Felix included) ~ 5,300 risked locations (Devon and Felix included) Alignment with EnLink 100% of Felix acreage dedicated to Tall Oak Largest customer on Tall Oak system 15-year acreage dedication 5-year minimum volume commitments that cover gathering and processing for dedicated Felix acreage * Source: Devon Sharpens Focus investor presentation on Dec. 7, 2015. 9

Franchise Position in Oklahoma EnLink s Acquisition of Tall Oak in STACK & CNOW Tall Oak Assets Central Oklahoma System Map 1 Chisholm Plant: 100 MMcf/d cryogenic processing plant Additional 200 MMcf/d cryogenic plant to be in-service by third quarter 2016 Chisholm site expandable up to 700 MMcf/d Battle Ridge Plant: 75 MMcf/d cryogenic processing Over 500 miles of pipeline in service or under construction Currently constructing 42-mile, 16 pipeline that will connect Battle Ridge and Chisholm plant systems Allows gas to be processed at either processing plant Allows movement of gas from STACK to eastern residue markets, which trade at a premium STACK Play Chisolm CNOW Play Battle Ridge EnLink s Central Oklahoma System 1 3 processing plants with 525 MMcf/d of capacity Expanding to 725 MMcf/d upon completion of Chisolm Plant expansion in Q3 2016 ~715 miles of pipeline in-service with additional pipelines under construction (1) Includes EnLink s Cana processing plant and gathering pipelines. 10

MMcf/d Superior Contracts, Focused Producers Providing Long-Term, Stable Cash Flows 15 customers Tall Oak s Customers Largest customers include Devon (through its acquisition of Felix Energy), PayRock Energy, American Energy-Woodford and other major producers in the area 250 200 Devon Minimum Volume Commitments 150 Contract Terms Fee-based contract structure Weighted-average remaining contract term of ~15 years ~220,000 net acres dedicated in the STACK ~280,000 net acres dedicated in the CNOW Minimum volume commitments from Devon (through acquisition of Felix Energy) and American Energy - Woodford 100 50 0 2016 2017 2018 2019 2020 Devon Daily Minimum Average Volume Commitments 11

Expanded Platform in Oklahoma Creates Long-Term Opportunities Crude/condensate opportunities Holds crude dedications from select producers including Felix Energy Close proximity to Cushing and local refineries Devon and EnLink exploring crude development opportunities in the STACK NGL development opportunities Liquids rich plays create significant NGL production at processing facilities NGL pipeline and fractionation opportunities with expanded processing footprint Oklahoma Express Project Potential to link Oklahoma and North Texas assets Will de-bottleneck production growth from the Midcontinent and utilize capacity and market access in North Texas Goal to interconnect with demand-driven markets on Gulf Coast Access EnLink s Louisiana system 12

Execution in the Permian Basin Expanded Platforms in Midland & Delaware Basins Committed ~$1.2 billion of capital since 2011 Four acquisitions in 2015 LPC Crude Logistics: ~$100 MM Coronado Gas Gathering and Proc.: ~$600 MM Matador Gas Gathering & Proc: ~$143 MM Remaining 50% Interest in Deadwood: ~$40 MM Key customers are growing production & footprints Source on Rigs Above: Rigdata, January 2016 13

Strategic Position in Louisiana Gas Supply Moving from Northeast to Gulf Coast to Meet LNG and Industrial Markets Source RBN Energy, January 2015 Source: EIA/RBN Energy 14

Execution in Louisiana South Louisiana Market Leading Position Region defined by demand growth from industrial expansions and LNG exports Franchise NGL platform One of largest NGL footprints in Louisiana: ~165,000 Bbl/d of Y-Grade fractionation capacity Executing on 50/50 JV with Marathon to build NGL pipeline to Garyville refinery Franchise natural gas platform Largest intrastate gas pipeline system in the state Executed on multiple optimization projects from integrating acquired systems from Chevron 15

Focused on Stability & Execution Stable cash flows ~95% of 2015E gross operating margin from fee-based contracts * ~50% of 2015E gross operating margin from our sponsor, Devon Energy * Significant portion of cash flows supported by contracts with MVCs and firm transport agreements Execution in Core Areas Focused on three core areas: Oklahoma, Permian Basin and Louisiana Partnering with our sponsor, Devon Energy, on execution in Oklahoma & North Texas Strong Financial Position Investment grade credit rating at ENLK since inception Strong liquidity on $1.5 billion credit facility High quality customers: ~85% of gross operating margin from investment grade customers No near-term marketed equity needs * Based on 2015 Guidance Note: Gross operating margin and segment cash flows are non-gaap financial measures and are explained on page 3. 16