JEFFERIES 2017 ENERGY...
Transcript of JEFFERIES 2017 ENERGY...
w w w . w e s t e r n g a s . c o m | N Y S E : W E S , W G P
W E S T E R N G A S
JON VANDENBRAND
Director, Investor Relations
(832) 636-1007
I N V E S T O R
R E L A T I O N S
JEFFERIES 2017 ENERGY CONFERENCE
November 28, 2017Benjamin Fink – President & CEO
W E S T E R N G A Sw w w . w e s t e r n g a s . c o m | N Y S E : W E S , W G P W E S T E R N G A Sw w w . w e s t e r n g a s . c o m | N Y S E : W E S , W G P 2
Cautionary Language Regarding Forward Looking Statements
This presentation contains forward-looking statements. Western Gas Partners, LP and Western Gas Equity Partners, LP believe that their expectations are based on reasonable assumptions. No assurance, however, can be given that such expectations will prove to have been correct. A number of factors could cause actual results to differ materially from the projections, anticipated results or other expectations expressed in this presentation. These factors include the ability to meet financial guidance or distribution-growth expectations; the ability to safely and efficiently operate WES’s assets; the ability to obtain new sources of natural gas supplies; the effect of fluctuations in commodity prices and the demand for natural gas and related products; the ability to meet projected in-service dates for capital growth projects; construction costs or capital expenditures exceeding estimated or budgeted costs or expenditures; and the other factors described in the “Risk Factors” section of WES’s and WGP’s most recent Forms 10-K and Forms 10-Q filed with the Securities and Exchange Commission and in their other public filings and press releases. Western Gas Partners, LP and Western Gas Equity Partners, LP undertake no obligation to publicly update or revise any forward-looking statements.
W E S T E R N G A Sw w w . w e s t e r n g a s . c o m | N Y S E : W E S , W G P W E S T E R N G A Sw w w . w e s t e r n g a s . c o m | N Y S E : W E S , W G P 3
WES Today
Western Gas Portfolio1
Gathering Systems 20
Natural Gas Processing Plants,
Trains and Treating Facilities51
Natural Gas Pipelines 5
NGL/Crude Oil Pipelines 7
Pipeline Miles 13,280
1) As of September 30, 2017 and includes equity interests. Pipeline miles as of December 31, 2016.
Greater
Green
River Basin
Dry Gas Basin
Pipelines
Liquids-Rich Basin
Powder
River
Eagleford
Marcellus
DJ Basin
Our Largest Asset
Delaware Basin
Our Fastest Growing Asset
W E S T E R N G A Sw w w . w e s t e r n g a s . c o m | N Y S E : W E S , W G P W E S T E R N G A Sw w w . w e s t e r n g a s . c o m | N Y S E : W E S , W G P 4
DJ Basin: A Core WES AreaI N T E G R A T E D I N F R A S T R U C T U R E I N P L A C E
C O N T I G U O U S C O R E
2+ BBOENET RESOURCES
4,500+DRILLING LOCATIONS1
35%ROYALTY UPLIFT2
~560MBOE WELL EUR1
A P C D E V E L O P M E N T A R E A
Source: Anadarko Petroleum Corp. November 2017 Investor Book1) 6,700-foot mid-lateral equivalents: 18-24 wells per section2) BTAX NPV-10 per well, based on WTI $55/Bbl and HH $3/Mcf
APC Acreage
APC Mineral Interest
WES Gas Gathering
APC Oil Pipelines
WES/APC Processing or
Stabilization Facility
Future Processing Facility
Front Range(33.33% WES)
OPPL
White Cliffs
Saddlehorn(10% WES)
Lancaster
Wattenberg
Platte Valley
COSF
Latham 1&2
Texas Express(20% WES)
Mt. BelvieuNGL HUB
CushingWTI HUB
ConwayNGL HUB
5 MILES
Market Center
Oil Equity Pipeline
NGL Equity Pipeline
NGL Pipeline
Development Area: 400,000 Net Acres
W E S T E R N G A Sw w w . w e s t e r n g a s . c o m | N Y S E : W E S , W G P W E S T E R N G A Sw w w . w e s t e r n g a s . c o m | N Y S E : W E S , W G P
0
200
400
600
800
1000
1200
0
2
4
6
8
10
12
14
16
Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3
2012 2013 2014 2015 2016 2017
Vo
lum
es
Mm
cfe
/d
Rig
Co
un
t
APC Rig Count APC Volumes
5
DJ Basin: Growth Follows Rig Increases
Steady Rig Increase in
2013 – 2014…
… Significant Volume Growth in
2014 – 2015
Rig Count Decreased in
2015 – 2016…… Rig Count Increasing
2016 – 2017…
Source: Anadarko Petroleum Corp. Operations Reports1APC Volumes include dry gas and NGL volumes converted assuming a 6 Mcf to 1 Bbl conversion ratio
1
W E S T E R N G A Sw w w . w e s t e r n g a s . c o m | N Y S E : W E S , W G P W E S T E R N G A Sw w w . w e s t e r n g a s . c o m | N Y S E : W E S , W G P 6
Delaware Basin: Even Bigger
BECKMAN AGNES /26/2
WFMP_FOXTROT_T-WFMP_B_T
PENN_T
WFMP_T-WFMP_A_T
Z_WFMP_GULF_T
WFMP_FOXTROT_T-WFMP_B_T
PENN_T
WFMP_T-WFMP_A_T
Z_WFMP_GULF_T
-660
0-6
800
-700
0-7
200
-740
0-7
600
-780
0-8
000
-820
0-8
400
-860
0-8
800
-900
0-9
200
-940
0-9
600
WFMP_FOXTROT_T-WFMP_B_T
PENN_T
WFMP_T-WFMP_A_T
Z_WFMP_GULF_T
WFMP_FOXTROT_T-WFMP_B_T
PENN_T
WFMP_T-WFMP_A_T
Z_WFMP_GULF_T
HS=0
PETRA 2/28/2017 1:28:57 PM (IR_Support_WFMP_Beckman_Agnes_JGrant-Feb2017.CSP)
For internal information only. Depicted information is subjective and its accuracy has not been verified.
Printed or saved versions may be outdated. Depictions and information are intended to be confidential,
and may be subject to legal restrictions or protections. For questions regarding appropriate use,
contact BITS E&P Systems, Tim Donovan.
Ev
alu
ati
ng
Po
ten
tia
l
A
B
C
D
Wolfcamp
Type Log
~3,000-FOOT
THICKNESS
UP
PE
RM
IDD
LE
LO
WE
R
3+
Ta
rge
t Z
on
es
8 -
24
+ P
ote
nti
al
We
lls
/Se
cti
on
Source: Anadarko Petroleum Corp. November 2017 Investor Book
1) 7,500-foot mid-lateral equivalents
A P C W O L F C A M P A
3+ BBOENET RESOURCES
6,000+DRILLING LOCATIONS1
1,500+MBOE WELL EUR*
A P C W O L F C A M P P O S I T I O N A D VA N TA G E
WOLFCAMP
PRODUCTIVITY
DRIVERSCULBERSON
WARD
WINKLER
LOVING
REEVES
NEW MEXICO
TEXAS
10 MILES
APC ACREAGE
IMPROVING QUALITY
Thickness
Porosity
GOR
Pressure
Approximate APC DJ Basin Acreage Footprint
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Haley: An Original WES IPO Asset
D e l a w a r e B a s i n I n f r a s t r u c t u r e D e l a w a r e B a s i n S t a c k
P r i m a r y
T a r g e t
Lean Gas
~8
,500
-FO
OT
TH
ICK
NE
SS
AVALON B
3rd BONE SPRING
2nd BONE SPRING
AVALON A
WOLFCAMP B
WOLFCAMP A
WOLFCAMP C
WOLFCAMP D
PENNSYLVANIAN
Haley Gas Gathering
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DBJV: Exploring the Delaware Basin Stack
D e l a w a r e B a s i n I n f r a s t r u c t u r e D e l a w a r e B a s i n S t a c k
~8
,500
-FO
OT
TH
ICK
NE
SS
AVALON B
3rd BONE SPRING
2nd BONE SPRING
AVALON A
WOLFCAMP B
WOLFCAMP A
WOLFCAMP C
WOLFCAMP D
PENNSYLVANIAN
P r i m a r y
T a r g e t
Oil & Rich Gas
Haley Gas Gathering
50% DBJV Gas Gathering
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Integrating the System: Bone Spring and MiVida Processing Capacity
D e l a w a r e B a s i n I n f r a s t r u c t u r e D e l a w a r e B a s i n S t a c k
~8
,500
-FO
OT
TH
ICK
NE
SS
AVALON B
3rd BONE SPRING
2nd BONE SPRING
AVALON A
WOLFCAMP B
WOLFCAMP A
WOLFCAMP C
WOLFCAMP D
PENNSYLVANIAN
P r i m a r y
T a r g e t
Oil & Rich Gas
U p s i d e
T a r g e t s
Oil & Rich Gas
Haley Gas Gathering APC Processing Plant Interest
50% DBJV Gas Gathering
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Nuevo Acquisition: Creating a 3rd Party Business
D e l a w a r e B a s i n I n f r a s t r u c t u r e W E S 3 r d P a r t y B u s i n e s s
525+ MMcf/dAs of September 2017
Volumetr ic
Commitments
160,000+ AcresAs of September 2017
Acreage
Dedicat ions
Haley Gas Gathering APC Processing Plant Interest
50% DBJV Gas Gathering Ramsey Processing Plant
DBM Gas Gathering
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The Delaware Basin: One Step Ahead of Permania
U p s t r e a m D e l a w a r e B a s i n M & A
( S i n c e 2 0 1 5 )
M i d s t r e a m D e l a w a r e B a s i n M & A
( S i n c e 2 0 1 5 )
Date Buyer Seller
Jun-17 Howard Energy Partners WPX Energy
Apr-17 Blackstone Energy EagleClaw Midstream
Apr-17 NuStar Energy Navigator Energy Services
Feb-17 Five Point Capital Matador Resources
Jan-17 Plains All American Alpha Crude Connector
Jan-17 Targa Resources Outrigger Energy
Sep-16 EagleClaw Midstream PennTex Midstream
Sep-16 Lucid Energy Agave Energy
Jul-16 Caprock Midstream Resolute Energy
Sep-15 Enlink Midstream Matador Resources
Feb-15 Enlink Midstream Coronado Midstream
Jan-15 Enlink Midstream LPC Crude Oil Marketing
Oct-14 Western Gas Nuevo Midstream
Source: Public company announcements
1
2
43
5
12
13 19
1625
10
22
14
8
9
6
7
27
31
1124
1829
28
23
26
21
17
1530
20
34
3332
35
36
37
38
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Preparing for the Future: DBJV Consolidation & Mentone
D e l a w a r e B a s i n I n f r a s t r u c t u r e
40+%5-YEAR OIL CAGR
10,000+DRILLING LOCATIONS1
3+ BBOEWOLFCAMP A
1+ BBOEPOTENTIAL UPSIDE
REST OF STACK
NET RESOURCES
A P C D e l a w a r e O p p o r t u n i t y 1
Haley Gas Gathering APC Processing Plant Interest
100% DBJV Gas Gathering Ramsey Processing Plant
DBM Gas Gathering Mentone Processing Plant (Under Construction)Source: Anadarko Petroleum Corp. November 2017 Investor Book1) 7,500-foot mid-lateral equivalents
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Near Term Delaware Basin Development Plan – Natural Gas
CULBERSON
NEW MEXICO
TEXAS
REEVES
WARD
LOVING
WINKLER
5 MILES
LEAEDDY
APC Leasehold
Gas Gathering Lines
Compressor Station
Gas Plant
Future Gas Gathering Lines
Future Compressor Station
Future Gas Plant
~300 miles
Pipelines
F U T U R E A D D I T I O N S
~77,000 hp
Compression
~600 MMcf/d
ProcessingCapacity
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Near Term Delaware Basin Development Plan – Crude Oil
CULBERSON
NEW MEXICO
TEXAS
WARD
WINKLER
5 MILES
EDDY
REEVES
APC Leasehold
Gas Gathering Lines
Central Processing Facility
Oil Storage Facility
Future Oil Pipeline
Future Pump Station
Future Oil Treating Facility
LEA
LOVING
~250 miles
Pipelines
F U T U R E A D D I T I O N S
~180 MBOPD
Oil Treating
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Near Term Delaware Basin Development Plan – Water
CULBERSON
NEW MEXICO
TEXAS
REEVES
WARD
WINKLER
APC Leasehold
Existing Water Pipelines
Saltwater Disposal
EDDY LEA
LOVING
Future Water Pipelines
Future Saltwater Disposal 5 MILES
~230 miles
Pipelines
F U T U R E A D D I T I O N S
~690 MBW/d
Disposal Capacity
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APC Divestitures Fuel Growth in Other Areas
$3.5 Billion Divestiture Proceeds to Redeploy Into
DJ Basin and Delaware Basin
M a r c e l l u sE a g l e f o r d
Sanchez Energy acquired APC acreage in 1Q17
Returned to sequential volumetric growth in 3Q17
Alta Resources Development acquired APC acreage in 1Q17
▪ Marcellus acreage is only asset in portfolio
▪ Established track record of successful shale development
Dimmit La Salle
Webb
Maverick
10 Miles
Oil Handling FacilityBrasada Gas Plant
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High-Quality Dropdown Inventory Provides Safety
Current Inventory
Natural Buttes
Gathering
Panola
Pipeline1
Delaware Basin
Bone Spring
Plant1 MiVida Plant1
Crude Oil
Gathering
Delaware Basin
Water
Extremely attractive locations
▪ 80+% cash flow from Delaware and DJ Basin assets
Significant anticipated growth
▪ $150 to $200 million run-rate EBITDA same as 2016,
despite APC Marcellus divestiture (~$40 million
EBITDA)
Substantial Anadarko investment
▪ Significant 2017E APC midstream capital spend
▪ ~60% directed towards crude oil gathering in
Delaware and DJ Basins
▪ ~40% directed towards Delaware Basin produced
water infrastructure
▪ Equity investment optionality
DJ Basin
Wattenberg
Plant
DJ Basin Oil
Gathering
Saddlehorn
Pipeline1
1) Anadarko owns a non-operated interest
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Preparing for the Next Stage of Growth
L a r g e s t C a p i t a l B u d g e t i n
H i s t o r y
( $ 8 0 0 M M - $ 8 5 0 M M )
F u l l o w n e r s h i p o f D B J V
D r o p d o w n I n v e n t o r y
R e p l e n i s h m e n t
E a r l y C o n v e r s i o n o f
S e r i e s A P r e f e r r e d u n i t s
2 Q 1 7
2017
The Year
of Action
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Why WES?
F o r e c a s t e d 2 0 1 7 & 2 0 1 8
D i s t r i b u t i o n G r o w t h o f 7 %
S u p p o r t i v e B l u e - C h i p E & P
S p o n s o r
L a r g e - C a p G a t h e r i n g , P r o c e s s i n g
a n d T r a n s p o r t a t i o n M L P
V i s i b l e O r g a n i c & I n o r g a n i c
G r o w t h P r o f i l e
S t r o n g C o m m o d i t y & V o l u m e t r i c
R i s k M i t i g a t i o n