DCP Midstream

2013
DCP Midstream
Evolving to Meet DJ Basin Growth
7th Annual Rockies Oil & Gas
April 16, 2013
Forward-Looking Statements
2013
Under the Private Securities Litigation Act of 1995
This document may contain or incorporate by reference forward-looking statements as defined under the
federal securities laws regarding DCP Midstream Partners, LP (the “Partnership”) and DCP Midstream, LLC
(the “Company”), including projections, estimates, forecasts, plans and objectives. Although management
believes that expectations reflected in such forward-looking statements are reasonable, no assurance can be
given that such expectations will prove to be correct. In addition, these statements are subject to certain risks,
uncertainties and other assumptions that are difficult to predict and may be beyond our control. If one or
more of these risks or uncertainties materialize, or if underlying assumptions prove incorrect, the actual
results may vary materially from what management anticipated, estimated, projected or expected.
The key risk factors that may have a direct bearing on the Partnership’s results of operations and financial
condition are highlighted and described in detail in the Partnership’s periodic reports most recently filed with
the Securities and Exchange Commission, including its most recent Form 10-K and most recent Form 10-Q.
Investors are encouraged to consider closely the disclosures and risk factors contained in the Partnership’s
annual and quarterly reports filed from time to time with the Securities and Exchange Commission and in the
Company’s annual and quarterly financial statements. The Partnership and the Company undertake no
obligation to publicly update or revise any forward-looking statements, whether as a result of new information,
future events or otherwise. Information contained in this document is unaudited, and is subject to change.
Non-GAAP Reconciliation
This document may include certain non-GAAP financial measures as defined under SEC Regulation G. In such
an event, a reconciliation of those measures to the most directly comparable GAAP measures is included in
this presentation.
2013
DCP Overview
Perspective
• Ownership
• Market Position
• Evolution
3
DCP “Enterprise” Overview
2013
~$30B
~$35B
Enterprise Value
50%
25% LP Interest
1% GP Interest
50%
Enterprise Value
Public Unitholders
74% Common
LP Interest
~$3.5B
Enterprise Value
Enterprise value based on available market data; ownership interests as of 6/30/2012
DCP Midstream, LLC
DCP Midstream Partners, LP
49 plants
6 fractionators
~57,000 miles of pipe
13 plants
6 fractionators
~6,000 miles of pipe
4
Integrated Assets with Scale & Scope
#1 NGL producer, ~17% of U.S. NGL production
■ Top gatherer and processor
■ Super systems in key basins
■ Complementary NGL pipelines
■
DCP enterprise has an industry
leading footprint in the liquids rich
gathering and processing regions
coupled with an expanding NGL
pipeline position
Gas processing plant
Propane terminal
Storage
Shale gas formations
62 plants
~63,000 miles of pipeline
NGL Production
Front Range
*
Texas Express
Or
aw
2013
Processing Capacity
DCP Midstream
Enterprise Products
Enterprise Products
DCP Midstream
Williams Company Inc.
Williams Company Inc.
*
Southern
Hills
MarkWest Energy
Sand Hills
Targa Resources
DCP
~400
MBPD
Targa Resources
DCP
~7.1
Bcf/d
Crosstex Energy
Source: Bentek June 2012 (18 month trailing average)
5
DCP Transformation
2013
DCP 2015
DCP 2012
2011-2015
Growth CapEx
Opportunity
Niobrara/Codell
Niobrara/Codell
Lucerne 2
LaSalle
Plant 10
Mewbourn
Wattenberg
$5B to $7B
~$10B
Assets
$15B+
62
# of plants
70+
6.3
Processing volume
(TBtu/d)
*
7.0+
~400
NGL production
(MBPD)
500+
~1,250
NGL pipelines (mi)*
~3,000
*Reflects partial ownership
Top tier gatherer and
processor
Front
Range
Conway
National
Helium Mississippi
Lime
*
Granite WashWoodford
Cana
Texas
Southern
Wolfberry Express
Hills
Midway
Rawhide
Black
Avalon /
Lake
Bone
Springs
Mont
Sand
Belvieu
Hills Eagle Seabreeze/
Eagle Goliad Wilbreeze
Ford
aw
Leader in midstream logistics
services
6
2013
DCP Gathering
& Processing
•
•
•
•
•
G&P Footprint
Commercial Overview
NGL Economics
Liquids Rich Drilling
Growth Opportunities
7
Unmatched Footprint
2013
6.3 TBtu/d
processing
volume
Lucerne 2
LaSalle
Plant 10
Mewbourn
• 62 plants
• ~63,000 miles of
Wattenberg
pipeline
National Helium
Front Range
*
Texas Express
Existing footprint
enables growth
*
Southern Hills
Or
Midway
Rawhide
aw
~400 MBPD
NGL production
Super systems in
high growth areas
of Permian, Eagle
Ford, DJ Basin and
Midcon
Black Lake
Announced Growth Under Construction
Sand
Hills
G&P Plant
New Plant
Expansion/Restart
Seabreeze/
Eagle Wilbreeze
Goliad
Additional processing
capacity
~15%
Additional
NGL production
~25%
8
Commercial Overview
Diversified customer base
2013
Top customers
■ 70% of volume coming from liquids rich
drilling (3+ GPM)
■ Top 10 customers make up ~30% of
margin
■ G&P super system capability in all
major basins
Diversified contract portfolio
■ ~9,500 commercial contracts
― ~45% of contract volumes are fee-based
― ~45% POP
― ~10% keepwhole
■ Contract portfolio provides
diversification benefit through
commodity cycle
9
NGL Economics Support Infrastructure
2013
Composite MB Frac Spread
Producer Value From NGL Uplift
Growth
*
**
Area
$/MMBtu
$14
$12
$/MMBtu
$8
$10
GPM
Permian
5 – 10
DJ Basin
5–7
Eagle Ford
5-7
Granite Wash
4–6
$7
$8
$6
$6
$5
$4
$4
16%
32%
47%
61%
74%
86%
97%
108%
118%
127%
$3
$2
$2
$0
$1
Jan 2013
Jan 2007
Composite
Frac Spread
5yr Avg.
Minus 1 stdev
(2007-2011)
Plus 1 stdev
*DCP analysis, based on composite Mont Belvieu NGL and Houston Ship Channel gas
prices
$0
1
2
3
4
Gas Price
5 6 7
Inlet GPM
9
10
NGL Upgrade
**DCP analysis, based on $1/gal NGL and $3/MMBtu gas prices
Current NGL economics support continued liquids rich drilling
* Frac spread is MB vs. Houston Ship Channel
8
10
* Uplift assumes $2.50 natural gas and $0.84 NGL (Source Barclays) 10
Liquids Rich Drilling
MMcf/d
70,000
Rig Count and Gas Volume
Jan 2007 to May 2012
Rig Count
US Lower 48
G&P
NGL Logistics
1,300
55,000
500
260
3,100
Eagle Ford
190
1,000
750
2013
60
Drilling based on crude and NGL economics
Continued transition from dry gas to liquids rich
drilling
Oil and liquids rich rig counts continue to climb in
all DCP focused areas
DJ Basin
25
10
450
5,200
Permian Basin
425
4,800
Increased oil rig count + Improved technologies =
Growth in liquids rich volumes
0
Gas Production MMcf/d
Source: EIA, Smith Technologies, IHS
Gas Rigs
Oil Rigs
11
Growth in All Regions
Niobrara /Codell
Lucerne 2
LaSalle
Plant 10
Mewbourn
Wattenberg NGL
Wattenberg
Midcon
Granite Wash
Texas Express
Wolfberry
*
Woodford
*
Cana
Southern Hills NGL
Avalon /
Bone Springs
Midway
Rawhide
Wolfcamp
aw
Eagle Ford
Sand
Hills NGL
Eagle
Goliad
Existing Plant
New Plant
Expansion/Restart
Processing
Capacity
Bcf/d
Permian
~130
1.3
$850-$1,000+
South
~125
3.0
$500-$750
North
~40
0.9
$850-$1,000+
Midcon
~110
2.0
$750-$1,000
Processing Volume
NGL Production
(TBtu/d)
(MBPD)
6.2 CAGR
South
Permian
Black Lake
Seabreeze/
Wilbreeze
CapEx
Opportunity
$MM (2011-2015)
YTD NGL
Production
MBPD
North
National Helium
Mississippi
Lime
Front Range
2013
6.0
3%
402
6.3
5.9
FY 2010 FY 2011 FY 2012
383
CAGR
4%
369
2010
2011
H1‘12
Geographical diversification provides a well
balanced portfolio of growth
12
2013
NGL
Pipelines
• NGL Super system
• Front Range / Texas Express
The Future – NGL Super System
$2B - $3B CapEx 2011-2015
Niobrara/Codell
Significant
fee-based
growth
opportunity
Lucerne 2
LaSalle
Plant 10
Mewbourn
Wattenberg
Mississippi Lime
Granite Wash *
Woodford Cana
*
Wolfberry
Texas Express
Midway
Rawhide
aw
Avalon /
Bone Springs
NGL super system to premium priced
markets
Provide wellhead to market solution:
― Increase capacity to ~550 MBPD
― Improved value to DCP and customers
― Bolt on opportunities
Conway
National Helium
Front Range
2013
Southern Hills
NGL Capacity Growth (MBPD)
~500+
Texas Express
Front Range
Black
Lake
Southern Hills
~400
Sand Hills
Mont Belvieu
Seabreeze/
Eagle Wilbreeze
Eagle Ford Goliad
Sand Hills
DCP Legacy
3rd
DCP
DCP
Party
Production Production
Production
Growth
Future
Capacity
14
Front Range & Texas Express Update
Strategic Importance
Niobrara/Codell
Connects Rockies producers to Mont
Belvieu market
Capitalize on DJ Basin growth
Lucerne 2
LaSalle
Plant 10
Mewbourn
Wattenberg NGL
Conway
National Helium
Granite Wash *
Woodford Cana
*
Wolfberry
Texas Express
r
Avalon /
Bone Springs
Midway
Rawhide
aw
Long-term fee-based income
Front Range
Mississippi Lime
Front Range
2013
Southern Hills NGL
Black Lake
435 mile pipeline
33% DCP Midstream interest
Initial 150,000 Bbl/d capacity
Expandable to 230,000 Bbl/d
In-service Q4 2013
Texas Express
Mont Belvieu
Seabreeze/
Eagle Wilbreeze
Eagle FordGoliad
Sand
Hills NGL
580 mile pipeline
10% DPM Ownership
Initial 280,000 Bbl/d capacity
Expandable to 400,000 Bbl/d
In-service by Q2 2013
15
2013
D-J Basin
Expansion
•
•
•
•
Continuing Growth via Niobrara Shale
Capacity Build-Out Execution
Creation of a DJ Basin G&P Super System
Investing in our Key Stakeholders
Niobrara Focus on Crude Oil
2013
WELD COUNTY, COLORADO - MONTHLY OIL & GAS PRODUCTION
Data Source: IHS Energy
1200
120
1000
100
800
80
600
60
400
40
Impressive Production Growth:
Crude Oil @ 112 MB/d - CAGR 1Y: 137% / 3Y: 75%
Gas @ 771 MMcf/d – CAGR 1Y: 109% / 3Y: 46%
200
0
Jan-00
Jan-01
Jan-02
Jan-03
Jan-04
Jan-05
Jan-06
Jan-07
Jan-08
Jan-09
Jan-10
Jan-11
Jan-12
MBopd
MMcfd
85% of Rigs Hz
20
0
Jan-13
17
Jan-09
Mar-09
May-09
Jul-09
Sep-09
Nov-09
Jan-10
Mar-10
May-10
Jul-10
Sep-10
Nov-10
Jan-11
Mar-11
May-11
Jul-11
Sep-11
Nov-11
Jan-12
Mar-12
May-12
Jul-12
Sep-12
Nov-12
Jan-13
Key Producers Adding Hz Niobrara to
DCP
2013
Horizontal Production on DCP as a Percentage of the Total
35%
30%
25%
20%
15%
10%
5%
0%
18
DCP G&P Expansion to Meet Demand
2013
Lucerne 200
800 MMcf/d
LaSalle 160
Mewbourn
125
355 MMcf/d
Mewbourn
160
600 MMcf/d
440 MMcf/d
405 MMcf/d
19
Project 1: Mewbourn Plant (2011-13)
2013
Phase 1: 2Q11
 Replaced 75 MMcfd refrig plant with
cyrogenic turbo-expander plant
 Initial capacity 125 MMcfd
Phase 2: 3Q12 – 2Q13
 Expand to 160 MMcfd
 Increase field HP and gathering
 Plant modifications
• propane refrigeration
• liquid handling
20
Project 2: LaSalle Plant (2012-14)
2013
Phase 1: In-service 3Q13
• New cryogenic turbo-expander plant
initially 110 MMcfd; 15 MBpd NGLs
• Includes 55 miles of high pressure
gathering and residue gas pipelines
Phase 2: In-service 1Q14
• Adds 50 MMcfd capacity
• Produce 20+ MBpd NGLs
21
Project 3: Lucerne 2 Plant (2H 2014)
2013
(DCP Eagle Plant)
In-service 2H14*
• 200 MMcfd Processing Plant
• Adds 60-80 miles of HP P/L
• 3-4 new compressor stations
• 25+ MBpd NGLs
* Subject to permit timing
22
Plant Connectivity / Super System a Key
2013
23
Meeting Capacity Needs Driven by
Niobrara
WY
’11 – ’16
Opportunities
$1B +
NE
2013
Expectations by 2016
CO

DCP region capacity expected to more than
double - 1 Bcf/d with 90+ MBPD of NGL



Mewbourn expanded to 160 MMcf/d
LaSalle adds 160 MMcf/d in 2013-14
Developing Lucerne 2 and Plant 10 to add
400 MMcf/d capacity in 2014-16
DCP could spend well over $1B by 2016!
Existing Plant
New Plant
Expansion/Restart
Plant Name
In-service
Capacity
Cost
Mewbourn 2
2011
160
$250 M
LaSalle
2013
160
$365 M
Lucerne 2
2014/15
200
$450 M
Plant 10
2015/16
200
$450 M
24
2013
25