investor presentation may 2017 - mlp association · pdf filecompetitive equity cost of capital...

Investor Presentation

May 2017

-2-

Risks and Forward-Looking Statements

This presentation includes forward-looking statements within the meaning of Section 21A of the

Securities Act of 1933, as amended, and Section 21E of the Exchange Act of 1934 as amended. Except

for the historical information contained herein, the matters discussed in this presentation include

forward-looking statements. These forward-looking statements are based on the Partnership’s current

assumptions, expectations and projections about future events, and historical performance is not

necessarily indicative of future performance. Although Genesis 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 Genesis’ business

prospects and performance, causing actual results to differ materially from those discussed during

this presentation. Genesis’ actual current and future results may be impacted by factors beyond its

control. Important risk factors that could cause actual results to differ materially from Genesis’

expectations are discussed in Genesis’ most recently filed reports with the Securities and Exchange

Commission. Genesis undertakes no obligation to publicly update any forward-looking statements,

whether as a result of new information or future events.

This presentation may include non-GAAP financial measures. Please refer to the presentations of the

most directly comparable GAAP financial measures and the reconciliations of non-GAAP financial

measures to GAAP financial measures included in the end of this presentation.

-3-

Master Limited Partnership (NYSE: GEL)

L.P. market capitalization of ~$3.7 billion(a)

Integrated portfolio of assets focused on

providing services to:

Handle crude oil upstream of refineries

Perform sulfur removal and other services

inside refineries

Handle products (primarily intermediate and

heavies) downstream of refineries

Culture committed to health, safety and

environmental stewardship

Genesis Energy, L.P.

Integrated asset portfolio creates opportunity

across the crude oil production / refining

value chain

Substantial footprint of increasingly integrated

assets and service capabilities

Fixed margin businesses, limited commodity

price exposure

Significant organic projects underway in and

around existing assets

Disciplined financial policy

Competitive equity cost of capital with no GP

incentive distribution rights (IDRs)

Investment Highlights Partnership Overview

(a) As of 5/5/17.

-4-

Integrated asset & services portfolio creates opportunities with producers and refineries

Genesis’ Business Proposition

Asset / Services Integration

Refinery

Services

Refineries

Sulfur Removal

CO2 Pipelines

Producers

Crude Pipelines

Supply & Logistics

Crude Oil

Trucks

Marine

Terminals

Rail

NaHS Markets

Supply & Logistics

Refined Products

Trucks

Marine

Terminals

Rail

Marine Transportation

Crude Oil


Refined Products

-5-

Supply & Logistics Refinery Services

Note: LTM Segment Margin pro forma for Material Projects and Acquisitions as of 1Q 2017.

$76 million (12%) $106 million (18%)

Genesis’ Operational Footprint

• Refinery sulfur removal services and sales of

by-products at 10 owned and / or operated

facilities; 4 marketing agreements

• Owned & leased NaHS and NaOH terminals in

Gulf Coast, Midwest, Montana, British

Columbia, Utah and South America

• Owned & leased logistical assets: trucks,

railcars, barges and ships

• Integrated suite of onshore crude oil and refined

products infrastructure, including pipelines,

terminals, trucks and railcars

• ~580 miles of oil pipelines in TX, MS, FL, AL, LA

& WY

• 5.2 mmbbl storage, ~200 trucks, ~400 trailers

and ~525 railcars

• ~270 miles of CO2 pipe including Free State and

NEJD

• Inland Marine Operations: 74 barges and 34

push-boats; Offshore Marine Operations: 9

boats / 9 barges, 1 ocean going tanker

• Total design capacity of ~2.1 mmbbl for Inland

Marine Operations, ~0.9 mmbbl for Offshore

Marine Operations, and ~0.3 mmbbl for

American Phoenix (ocean going tanker)


$64 million (11%)

Offshore Pipeline Transportation

• Own interests in crude oil pipelines and

related infrastructure located offshore in the

Gulf of Mexico, a producing region

representing ~18% of the crude oil production

in the United States in 2016

• ~2,500 miles of offshore pipelines, primarily

servicing deepwater production

$349 million (59%)


Crude Oil

2

Refinery Services

Owned / Operated Facilities NaHS/NaOH Terminals

Marketing Agreements Supply & Logistics

Crude Oil Operations Crude Oil Tanks

Refineries - Products


Product Tanks

Rail Services CO2 Facilities

Red River

Ouachita

River

Mississippi

River

Houston

Mobile

Corpus

Christi

Lake

Charles

Shreveport

TX City

Liberty

Port

Arthur

Jackson

MT

WV

WY

CO

GA

AZ

NY

Baton

Rouge

UT

Wink Natchez

Walnut Hill `

Midland

Boats & Barges

Natural Gas

Crude Oil CO Natural Gas

-6-

Limited Commodity Price Exposure

Business Segment General Commodity

Exposure Mitigant

Offshore Pipeline

Transportation No Direct Exposure • Tariff-based, fee income (except for PLA volumes)

Supply & Logistics

Onshore Pipeline:

No Direct Exposure

Crude Oil and Refined Products Services:

Crude Oil

Refined Products

Onshore Pipeline:

• Tariff-based, fee income (except for PLA volumes)

• Fixed lease payments from DNR for NEJD CO2 system through 2028

Crude Oil and Refined Products Services:

• Typically back-to-back monthly purchase / sales contracts for crude oil

• On average, carry low level crude inventory

• Refined products held for blending are hedged to remove volatility in

underlying value but subject to marked-to-market accounting

• No “paper” trading

• Tight controls under board approved risk management policy (VAR ≤

$2.5 mm)

Refinery Services NaHS (Long)

NaOH (Short)

• ~85% of our operating expense is cost of NaOH

• ~75% of NaHS sales contracts indexed to NaOH prices

• Remaining ~25% have short-term mechanism to change pricing in

response to changes in operating costs

Marine Transportation No Direct Exposure

• Marine contracts are based upon day rates for specified types of

equipment

• In 2016, ~62% of revenues were from term contracts and ~38% of

revenues were from spot contracts

Existing Businesses

-8-

380 367 120 184 Includes Allegheny,

Constitution, Marco Polo,

SEKCO, Shenzi and

Tarantula

Includes Anaconda, Falcon,

HIOS, Independence Trail,

Manta Ray, Nautilus, TPC

and Viosca Knoll ~500 kbd ~350 kbd ~200 kbd ~39 kbd

~238 kbd ~260 kbd ~115 kbd ~9 kbd NM(c) ~571,000 MMBtu/d

Texas City and Port

Arthur Refineries

Shell Tankage in

Houma, LA

Delta Loop 20”

(Venice, LA) Cailou Island, LA Various Various

100% 64% 29%

23% undivided joint

interest,

Two 100% owned

laterals

100% Various


CHOPS

Length (miles)

Average Daily

Volume(b)

Delivery

Points

• Positioned to provide deepwater producers maximum optionality with access to both Texas & Louisiana markets

• Potential for meaningful volume growth with increased development drilling in dedicated, currently connected fields

(a) Capacity figures represent gross system capacity except GOPL, which represents Genesis net capacity in undivided joint interest system.

(b) Average daily volume for 1Q 2017. All average daily volume represents gross system daily volume except GOPL, which represents volume shipped by GEL on system.

(c) Volumes in laterals are reflected in primary pipeline volumes.

Capacity(a)

Poseidon Odyssey GOPL

Ownership

Interest

Oil Pipeline

Laterals

Natural Gas

Transportation

Gas Pipeline Oil Pipeline Platform

TPC

Falcon

Viosca Knoll

Anaconda

Independence Trail HIOS

Manta Ray

Nautilus

CHOPS

SEKCO

Poseidon

Odyssey

Eugene Island

Constitution

Shenzi

Marco Polo

Allegheny

Viosca Knoll 817

Marco Polo

Independence Hub Garden Banks

72

East Cameron

373

Falcon Nest

Tarantula

Medusa

-9-

Deepwater Gulf of Mexico Activity

• Gulf of Mexico production to increase despite decline in oil price

– EIA projects Gulf of Mexico production will average ~1,630 kbd in

2017 and ~1,770 kbd in 2018

– Gulf of Mexico production expected to represent 18% and 19% of

total domestic production in 2017 and 2018, respectively

• Producers continuing to move forward with long-term projects

– Rystad Energy projects $70 billion dollars to be spent in 2017

offshore projects, equal to North American shale projects spending(a)

– Stampede producers to invest ~$1.7 billion to install tension leg

platform and drill wells to achieve first oil in 2018

– Anadarko anticipates drilling at Calpurnia, Phobos and Warrior

prospects

– Mad Dog producers sanctioned Phase 2 of field development, a ~$9

billion project, after cutting costs by ~60% through reengineering

and other measures(b)

(a) Per Rystad Energy February 2017 Oilfield Service Newsletter.

(b) Per BP press release dated 12/1/2016, BHP press release dated 2/9/2017 and Chevron 4Q 2016 earnings call dated 1/27/2017.

(c) Per BSEE. Includes oil production from Alaminos Canyon, Atwater Valley, East Breaks, Garden Banks, Green Canyon, Keathley Canyon, Mississippi Canyon and Walker Ridge areas.

(d) Per industry research. Includes only deepwater drillships and semi-submersibles.

Deepwater Gulf of Mexico Rig Activity

Deepwater Rig Count(d)

Deepwater Gulf of Mexico Oil Production

2016 Deepwater Production by Operator(c)

• 23 rigs currently active in the deepwater compared to 39 as of 3Q 2014,

a decrease of 16 rigs

• Decrease in deepwater rig count has been less substantial than

onshore rig count despite the recent decrease in oil prices

– Driven by continued commitment of Anadarko, BHP, BP, Chevron,

Shell, LLOG and Hess, representing ~87% of 2016 deepwater

production(c)

– 20 rigs currently working for previously referenced operators

compared to 27 as of 3Q 2014

• 3 drillships / semi-submersibles and 2 permanent spars with active

drilling in Genesis connected fields including:

– Atlantis, Delta House, Holstein (spar), Horn Mountain and Mad Dog

(spar)

• Since 3Q 2014, onshore rig count has decreased 55% (1,869 compared

to 849 as of 4/28/17). Over the same time period, deepwater rig count

has decreased 41% (39 compared to 23 as of 5/1/17)

304

278

197

152

97 83

55 43

19 19 12 3 2 -

50

100

150

200

250

300

350

RD

S

BP

AP

C

CV

X

LL

OG

BH

P

NB

L

HE

SS

XO

M

EN

I

MU

R

CO

P

AP

A

kb

d

39

46

42 42 42 43

38

33

26 2624 23

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

0

5

10

15

20

25

30

35

40

45

50

3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 Current

Deepwater Gulf Onshore

10

Deepwater Gulf of Mexico Producer Forecasts

Note: MBOE/d, unless otherwise noted.

(a) Per Anadarko 4Q 2016 Investor Book.

(b) Per slide 7 of BP Major Projects Presentation.

GEL Gas Pipeline

GEL Oil Pipeline

Caesar Tonga(a) Mad Dog(b)

Constitution, CHOPS, Poseidon, Anaconda, Manta Ray, Nautilus

SEKCO, Poseidon

CHOPS, Poseidon, Manta Ray, Nautilus Marco Polo, CHOPS, Poseidon, Anaconda, Manta Ray, Nautilus

Lucius

Constitution

Heidelberg

Marco Polo

Mad Dog

Atlantis

Shenzi

K2 Caesar Tonga

Marco Polo(a)

Lucius(a)

CHOPS, Poseidon

Heidelberg(a)

Delta House

Ram Powell Petronius

Horn Mountain

Allegheny

Front Runner

Lobster

Ticonderoga

Baldpate

11

Deepwater Gulf of Mexico Growth Prospects

Mad Dog Phase 2

Phobos

Constellation

Atlantis Announced plans

for additional infield drilling

Atlantis

Constellation Anticipated

first oil

Caesar Tonga

Lucius

Phobos (Lucius tieback) Announced plans for exploratory drilling

Mad Dog Phase 2 Anticipated first

oil

K2

Calpurnia (GEL connected APC facility tieback) Announced plans for exploratory drilling

Shenzi Caicos

Wilding

Wilding (Shenzi tieback) Announced plans for exploratory drilling

Samurai

Warrior (Marco Polo tieback) Announced plans for exploratory drilling

Warrior

Caicos (Shenzi tieback) Announced plans for exploratory drilling

Note: See appendix for sources.

Anchor

Buckskin

Coronado Gila

Guadalupe

Katmai

Logan

North Platte

Rydberg

Shenandoah

Sicily

Tiber

Tortuga

Troubadour

Vito

Yeti

Kaikias

Fort Sumter

Gibson Kaskida

Yucatan

Robust inventory of known discoveries not yet developed

GEL Gas Pipeline

GEL Oil Pipeline

GEL Connected and Producing

Announced Tieback Opportunity

Announced Discoveries, Undeveloped

Delta House 3-7 future

tiebacks planned

Delta House

Near Term (2017) Medium Term (2018-2020) Long Term 2020+

Heidelberg

Constitution Mad Dog

Marco Polo

Caesar Tonga Production exceeds 60 kbd. Additional wells with tieback potential

Lucius Production exceeds 100

kbd. Additional wells with tieback potential

Leon

Ram Powell Petronius

Horn Mountain

Lobster

Baldpate

Front Runner

Calpurnia

-12-

~8 kbd ~83 kbd ~17 kbd ~9 kbd ~15 kbd $5.2 mm per

quarter ~91 mmcfd

Webster Terminal w/

interconnect to XOM

Baytown Refinery;

Texas City Crude Oil

Terminal

XOM Anchorage

Tank Farm, Port of

Baton Rouge

Terminal & Krotz

Springs Refinery

Guernsey

Terminal:

Pronghorn Rail

Facility

Interconnect w/

Capline to Midwest

refiners

Shell’s Mobile

refinery & PAA’s

Mobile terminal

Denbury’s Phase I

fields in Mississippi

and Louisiana

Denbury’s Phase II

fields in Mississippi

Supply & Logistics

Onshore Crude Oil Pipelines CO2 Pipelines

TX System

Average Daily

Volume(a)

Delivery

Points

• Stable cash flows through pipeline tariffs combined with future volume growth

• Refiners are the shipper of ~80% of total crude oil moved through our onshore pipelines

LA System(b) WY System MS System NEJD Free State Jay System

NEJD

Texas

System

Mississippi

System

Free State

Jay System

Houston

Jackson

Baton Rouge

Mobile

Crude Oil Pipeline

CO2 Pipeline

Looped 18” Pipeline

Port Arthur

WY

Guernsey

Louisiana

System

Note: Refiner shipper % for 2016.

(a) Average daily volume for 1Q 2017.

(b) Louisiana system volume includes ~32 kbd of refined products associated with new Port of Baton Rouge Terminal pipelines which became operational in 4Q 2016.

Integrated Terminals

-13-

Supply & Logistics

Midland

Ouachita

River Mississippi

River

Crude Oil Tanks

Products Tanks

Supply & Logistics

Rail Services

Crude Oil Operation

Refineries-Products

Supply & Logistics Operational Footprint

• Crude oil services and logistics, refined products services and logistics and rail services

• Utilizing multiple integrated facilities with access to pipelines, rail, barges and trucks

– ~3.6 mmbbl crude storage and ~1.6 mmbbl refined product storage

• ~120 trucks / ~140 trailers in crude oil trucking fleet. Additional ~100 trucks / ~200 trailers in refined

products fleet

• Lease ~50 refined product rail cars and ~470 crude rail cars (all coiled and insulated DOT 111A new builds)

• Crude oil and petroleum product sales totaled ~47,000 bpd in 1Q 2017

Wink

Houston

Port Arthur

TX City Lake

Charles

Mobile

Corpus

Christi

Red River

Natchez

Walnut Hill

Shreveport

Liberty

Baton Rouge

WY

UT CO

-14-

Canadian Heavy Crude Material Imbalance

Canadian & U.S. Crude Oil Pipelines and Proposals(b)

Heavy Crude Supply Versus Takeaway Capacity(a)

(a) Per Company data, CAPP and Wells Fargo Securities, LLC estimates as of 12/19/2016.

(b) Per CAPP.

• Currently, insufficient heavy crude pipeline takeaway

infrastructure to support forecasted supply growth in

Western Canada

• Multiple export projects are planned, but require

significant capital / commitments and likely to meet

resistance from environmental groups

– Line 3 Replacement, Trans Mountain Expansion,

Energy East, Keystone XL and Northern Gateway

• Material imbalance to provide volume upside for

Genesis integrated terminals

-15-

• Refinery sulfur removal and sales of by-products at 10 owned and/or operated facilities; 4 marketing agreements

• Owned & leased NaHS and NaOH terminals in Gulf Coast, Midwest, Montana, British Columbia, Utah and South America

• Lease ~300 railcars, 6 chemical barges

• Purchase / Consume / Handle 200k – 300k DST of NaOH per year

Refinery Services

Midland

Red River

Ouachita

River

Houston

Corpus

Christi

Lake

Charles

Baton

Rouge

Shreveport

WV

TX City

Port

Arthur

Refinery Services

NaHS Facilities (Owned / Operated)

NaHS/NaOH Terminals

Refinery Services Marketing Agreement

WY

MT

GA AZ

NY

Tulsa

Refinery Services NaHS and NaOH Terminals and Facilities

-16-

Chemical

Tanning

Environmental

Note: Customer % breakout represents sales volumes for 2016.

Refinery Services Process Overview

Refiners

Nat Gas

H2S

Mining (48%) Pulp & Paper (33%)

Nat Gas

NaHS Unit

“Gas Processing”

Trucks Terminals

Barges & Ships Rail Cars

NaHS Service Units

Others (14%) Mining (62%) Pulp & Paper (24%)

Sour “Gas Processing” units inside the fence at 10 refineries

– Produce NaHS through proprietary process utilizing large amounts of Caustic Soda (NaOH)

– Take NaHS in kind as compensation for services

Sell NaHS primarily to large mining, pulp & paper and refinery customers:

– Mining (NaHS): Copper / Moly ore separation

– Pulp & Paper (NaHS/NaOH): Pulp/Fiber process

– ~85% of our operating expense is cost of NaOH

– ~75% of the Company’s sales contracts are indexed to caustic soda prices (cost-plus)

– Remaining ~25% of contracts are adjustable (typically 30 days advance notice)

Relationship Capacity

Refinery Operator Location History DST

Phillips 66 Westlake, LA 25 Years 110,000

Holly Refinery Salt Lake City, UT 7 Years 21,000

Citgo Corpus Christi, TX 15 Years 20,000

Delek El Dorado, AR 35 Years 15,000

Chemtura El Dorado, AR 15 Years 10,000

Albemarle Magnolia, AR 35 Years 8,000

Ergon Refinery Vicksburg, MS 35 Years 6,000

Cross Oil Smackover, AR 25 Years 3,000

Ergon Refinery Newell, WV 35 Years 2,800

Holly Refinery Tulsa, OK 4 Years 24,000

-17-


• Inland marine operations (brown water) – own 74

barges and 34 push-boats

– 8 barges and 3 push-boats on order with periodic

deliveries through 2017 and 2018

• Offshore marine operations (blue water) – own 9 boats

and 9 coastwise barges

• Acquired 330,000 bbl capacity ocean going tanker

American Phoenix in 4Q 2014

~2.1 mmbbl ~0.9 mmbbl ~0.3 mmbbl

23,000-39,000 bbl 65,000-136,000 bbl 330,000 bbl

34 9 -

74 9 -

- - 1

Inland Offshore American Phoenix

Total Fleet Capacity

Capacity Range

Push/Tug Boats

Barges

Product Tankers

Marine Transportation Overview


Marine Inland Routes

Marine Offshore Routes

American Phoenix Route Corpus

Christi

Houston Mobile

Pt. Everglades

Minneapolis

Cairo

Puerto Rico

Shreveport

Catoosa

Kansas City

Omaha

Sioux City

Cincinnati

Pittsburgh

Chicago

Nashville Knoxville

New Orleans

St. John N.B.

New York

Harbor

Detroit

Norfolk

Boston

Marine Transportation Operational Footprint

Business Objectives and

Recent Developments

-19-

Identify and exploit profit opportunities across an increasingly integrated

asset footprint

Continue to optimize existing asset base and create synergies

Evaluate internal and 3rd party growth opportunities that leverage core

competencies, lead to further integration and expand geographic reach

Opportunities focused on leveraging existing Genesis footprint and

providing an integrated midstream solution to our producer and refinery

customers

Project portfolio provides for continued investment at attractive returns

Maintain focus on HSSE

Business Objectives

-20-

Exxon Mobil Baton Rouge Infrastructure Project Integrated Crude Logistics / Baton Rouge Terminal

Recently Announced Expansion

Project Overview

• Genesis entered into definitive agreements with ExxonMobil (“XOM”) in which Genesis

improved existing assets and developed new infrastructure in Louisiana to connect into

XOM’s Anchorage Tank Farm which supplies its Baton Rouge Refinery, one of the largest

refinery complexes in North America

• Genesis has completed construction of the following infrastructure:

– Barge dock improvements and ~330,000 barrels of storage at Port Hudson, Louisiana (in

addition to existing 216,000 barrels of tank capacity)

– Crude oil unit train facility at the Scenic Station Terminal

– New 18 mile, 24” diameter crude oil pipeline connecting Port Hudson to the Scenic

Station Terminal and downstream to the XOM Anchorage Tank Farm (ultimate capacity

of ~350,000 bpd)

– New crude oil, intermediates and refined products storage and import / export terminal in

Baton Rouge, Louisiana including ~1.1 mmbbls of storage

• Connected to the deepwater docks of the Port of Greater Baton Rouge

(aframax capable)

• Ability to segregate, blend and batch multiple grades of crude oils, intermediates

and refined products for multiple customers

• Shippers to Scenic Station able to access both local refiners and other attractive

refining markets via the Baton Rouge Terminal

• Connected to XOM’s LOLA System from Longview to receive Permian volumes

from expansion of SXL’s West Texas Gulf System

• Port Hudson upgrades and new pipeline completed in 1Q 2014; Scenic Station Terminal

commissioned in July 2014; Baton Rouge Terminal in October 2016

XOM Baton Rouge

Refinery (506 kbd)

Port Hudson Truck Station

One existing 10 kbbl tank

Baton Rouge Terminal

~1.1 Million Barrels of Storage

~650 kbbls of Storage Under Construction

LA

XOM Anchorage Tank Farm

KCS

CN

Port Hudson Terminal

Three new 110 kbbl tanks

One existing 216 kbbl tank

Placid Refinery (60 kbd) Port of Greater Baton Rouge

Aframax Class Ships / Barges

Scenic Station Terminal

Unit Train Rail Facility

• Genesis has entered into definitive agreements to expand its existing footprint around the

Baton Rouge complex

• As part of the project Genesis will:

– Construct ~650,000 barrels of additional storage at its Baton Rouge Terminal

– Upgrade pumping capabilities at its Scenic Station rail facility

– Upgrade infrastructure at Port of Baton Rouge docks to handle crude oil importation

• Expected completion of new upgrades by the end of 1Q 2018

-21-

Houston Area Pipeline & Terminal Infrastructure • Genesis has completed the expansion of its Houston area

logistics services to include new terminal and pipeline

infrastructure capable of receiving various Gulf of Mexico

pipeline volumes for distribution to Texas City and

Houston refining and waterborne markets

• Genesis has entered into long term agreements with

ExxonMobil (“XOM”) underpinning its investment in the

project, which XOM will use to support its Baytown

Refinery (XOM’s largest refinery in North America)

• Genesis is able to receive, store and deliver several Gulf

of Mexico pipeline volumes including:

– Hoover Offshore Oil Pipeline System (“HOOPS”)

barrels (via the Department of Energy (“DOE”)

Pipeline)

– Cameron Highway Oil Pipeline System (“CHOPS”)

barrels

• As part of the project Genesis:

– Constructed 4 x 185 kbbl tanks at new Texas City

Terminal; capabilities to segregate and batch different

streams

– Constructed new pipeline connecting Texas City

Terminal to Genesis’ existing 18” pipeline

– Repurposed existing 18” line to northbound service

• Texas City Terminal and new pipeline operational as of

May 1st

Project Overview

GEL Webster Terminal

Existing 415 kbbl

XOM Baytown

VLO Houston

Lyondell

PSRI

VLO Texas City

MPC Galveston Bay

MPC Texas City

New GEL Texas City Terminal

New 4 x 185 kbbl tanks

CHOPS

DOE

Shell Deer Park

Hastings

GEL Eastman

Existing 235 kbbl

-22-

• Campbell Gathering pipeline provides access to significant

production in Campbell County, Wyoming

– Receives barrels by in-field gathering systems and strategic

truck station(s)

– Delivers barrels to Genesis’ existing Pronghorn Terminal hub

• Pronghorn Terminal affords shippers multiple market outlets:

– Downstream delivery options include Guernsey, WY, regional

refinery markets and various rail markets

• Powder River Basin Pipeline delivery options in

Guernsey, WY include regional refineries and Cushing,

Oklahoma via the Pony Express Pipeline

• Rail export optionality at Pronghorn via the leading

loading facility in the region (dual BNSF and UP service)

– Additional inbound barrels to Pronghorn by legacy in-field

gathering systems and multiple truck stations

• Project provides a number of important advantages:

– Comprehensive wellhead-to-market crude oil midstream

solution tailor-made for the Powder River Basin

– Improved year-round flow assurance combined with maximum

market optionality

– Over 750,000 barrels of storage to support volumes

• Project anchored by long-term acreage dedication from Devon

Energy Corporation covering acreage located in Campbell,

Converse and Johnson Counties, Wyoming

– Additional T&D commitments received from refinery and third-

party customers

Powder River Basin Midstream Solution Project Overview

Financial Summary

-24-

Financial Objectives

Continue to deliver disciplined growth in distributions

Grow our distribution coverage ratio, using excess Available Cash as equity

and to pay down debt

Target long-term total leverage ratio of +/- 3.75x. Allow to episodically

increase to fund construction of high return organic opportunities

Maintain financial flexibility to pursue organic and acquisition growth

opportunities

‒ Executed commitments from existing lenders to extend credit facility at its

current level into mid-2022

‒ Expanded debt covenant to 5.75x through 2Q 2018 to enhance flexibility

during current peak leverage period as recently completed growth projects

begin to meaningfully contribute

-25-

Strong Balance Sheet and Credit Profile

(a) Excludes debt used to finance short-term hedged inventory of $70.0 million as of 1Q 2017. Net of cash of $10.8 million as of 1Q 2017.

($ in 000s) Reported LTM Material Project & Acquisitions Pro Forma LTM

3/31/2017 EBITDA Adjustment 3/31/2017

Senior Secured(a) $1,129,227 $1,129,227

Senior Unsecured 1,814,712 1,814,712

Adjusted Debt $2,943,939 $2,943,939

LTM Pro Forma EBITDA $529,767 31,500 $561,267

Adjusted Debt / LTM Pro Forma EBITDA 5.25x

1Q 2017 Reported Available Cash Before Reserves $93,031

Less: Distributions (88,257)

Distribution Coverage ($) $4,774

Distribution Coverage 1.05x

-26-

47 consecutive quarters of distribution increases to L.P.s

Disciplined Distribution Growth

Historical LP Unit Distributions ($ / unit) $

0.1

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.58

00

$0

.59

50

$0

.61

00

$0

.62

50

$0

.64

00

$0

.65

50

$0

.67

25

$0

.69

00

$0

.70

00

$0

.71

00

$0

.72

00

$0.00

$0.05

$0.10

$0.15

$0.20

$0.25

$0.30

$0.35

$0.40

$0.45

$0.50

$0.55

$0.60

$0.65

$0.70

$0.75

2Q

06

3Q

06

4Q

06

1Q

07

2Q

07

3Q

07

4Q

07

1Q

08

2Q

08

3Q

08

4Q

08

1Q

09

2Q

09

3Q

09

4Q

09

1Q

10

2Q

10

3Q

10

4Q

10

1Q

11

2Q

11

3Q

11

4Q

11

1Q

12

2Q

12

3Q

12

4Q

12

1Q

13

2Q

13

3Q

13

4Q

13

1Q

14

2Q

14

3Q

14

4Q

14

1Q

15

2Q

15

3Q

15

4Q

15

1Q

16

2Q

16

3Q

16

4Q

16

1Q

17

Appendix I

Deepwater Gulf of Mexico

Activity Update

28

Resiliency of Gulf of Mexico

April 26, 2017 Operational Review

“The Board of BHP Billiton approved the development of the Mad Dog Phase

2 project in the deepwater Green Canyon area of the Gulf of Mexico. The

project includes a new floating production facility with the capacity to produce

up to 140,000 gross barrels of crude oil per day.”

“The Wildling-2 well was spud on 15 April 2017 and drilling is in progress, with

results expected in the September 2017 quarter. The Scimitar exploration well

is expected to be spud in the September 2017 quarter.”

February 1, 2017 Fourth Quarter 2016 Conference Call

“In the deepwater Gulf of Mexico, we achieved record production levels,

aided by strong performance from Caesar/Tonga and new wells at

Heidelberg and K2. This along with other successes we're having with our

tieback inventory makes us feel very good about the future in the Gulf of

Mexico.”

May 1, 2017 Offshore Technology Conference(a)

“The economics for deepwater investments make as much sense today as

they did in 2001.”

“BP has rebalanced the cost and revenue equation, so that our Gulf of

Mexico free cash breakeven point is less than $40 per barrel.”

March 7, 2017 Security Analyst Meeting(b)

“Beyond these legacy positions, we have many high-quality assets.

Examples include deepwater assets in the Gulf of Mexico, and Agbami in

Nigeria,heavy oil in Southern California and conventional gas in the Gulf of

Thailand, each of which generates significant cash and earnings.”

“We have some additional drilling in the Gulf of Mexico adjacent to our

Anchor discovery.”

April 26, 2017 First Quarter 2017 Conference Call

“The Hess operated Stampede development… is on track to start up in the

first half of 2018, after which production is expected to ramp up to 15,000

barrels of oil equivalent per day.”

“But quarter-on-quarter, TBells is up about 4,000 barrels a day.”

“So, the price trends are awesome in the deepwater.”

May 4, 2017 First Quarter 2017 Conference Call

“In the Gulf of Mexico, we developed a technology for opening closed-in

wells with oil foamer. It has been applied to a well and opened some 1,000

barrels of oil equivalent per day production on a 100% basis, a real

opportunity for replication across deep water with some 20 wells identified

already.”

“In our Deep water business, I think a pretty privileged portfolio as well…

our Gulf of Mexico portfolio, impressive.”

Note: Conference call quotes per Seeking Alpha (www.SeekingAlpha.com).

a) Per Rigzone article “BP: Deepwater Investments in GOM Make Sense” dated May 1, 2017.

b) Per Thomson Reuters edited transcript of Chevron’s 2017 Security Analyst Meeting dated March 7, 2017,

http://www.seekingalpha.com/

-29-

Known Deepwater Discoveries Not Yet Developed

Note: Per industry research.

GEL Gas Pipeline GEL Oil Pipeline GEL Platform

Anchor

Buckskin

Coronado Gibson Gila Guadalupe

Kaskida

Katmai

Leon

Logan

Mad Dog Phase 2 North Platte

Phobos

Rydberg

Samurai

Shenandoah

Sicily

Tiber

Tortuga Troubadour

Vito

Winter

Yeti Yucatan

Kaikias

Fort Sumter

Constellation Warrior

Field Name Operator Location Year of Discovery Field Name Operator Location Year of Discovery

Anchor Chevron Green Canyon 807 2015 Mad Dog Phase 2 BP Green Canyon 826 2009

Buckskin Repsol Keathley Canyon 872 2009 Magellan Apache East Breaks 424 2007

Calpurnia Anadarko Green Canyon 727 2017 North Platte Cobalt Garden Banks 959 2012

Constellation Anadarko Green Canyon 627 NA Phobos Anadarko Sigsbee Escarpment 39 2013

Coronado Chevron Walker Ridge 98 2013 Rydberg Shell Mississippi Canyon 525 2014

Fort Sumter Shell Mississippi Canyon 566 2016 Samurai Anadarko Green Canyon 432 2009

Gibson Chevron Keathley Canyon 97 NA Shenandoah Anadarko Walker Ridge 52 2009

Gila Chevron Keathley Canyon 93 2013 Sicily Chevron Keathley Canyon 814 2015

Guadalupe Chevron Keathley Canyon 10 2014 Tiber Chevron Keathley Canyon 102 2009

Kaikias Shell Mississippi Canyon 768 2014 Tortuga Noble Energy Mississippi Canyon 561/605 2008

Kaskida BP Keathley Canyon 292 2006 Troubadour Noble Energy Mississippi Canyon 699 2013

Katmai Noble Energy Green Canyon 40 2014 Vito Shell Mississippi Canyon 984 2009

Leon Repsol Keathley Canyon 642 2014 Yeti Statoil Walker Ridge 160 2015

Logan Statoil Walker Ridge 969 2011 Yucatan Shell Walker Ridge 95 2013

Calpurnia

30

Atlantis Field Development

Average Daily Production(c)

Field Overview

(a) Per industry research.

(b) See Appendix.

(c) Per BSEE.

• BP operated field

• Field Development:

– Discovery announced in 1998; first production in 2007

– Semisubmersible in ~7,000 feet of water with 200,000 bpd

of production capacity

– Initial development included southern portion of the field

– Initial estimated recoverable reserves in excess of 600

mboe(a)

• Future development plans

– In 2013, BP started developing the northern section of the

field

– The northern expansion includes an additional seven wells

to be tied back to the existing semisubmersible(a)

– During 2016, BP utilized the Seadrill West Auriga in the

Atlantis field(a)

– In 2017, BP announced an additional 200 million barrels of

possible resources at Atlantis due to use of new seismic

imaging technology(b)

-

20

40

60

80

100

120

2008 2009 2010 2011 2012 2013 2014 2015 2016

kb

d

31

Constitution Field Development

Historical Average Daily Production(a)

Caesar Tonga Forecasted Production(d)

(a) Per BSEE.

(b) Per slide 8 of Anadarko 3Q 2016 Operations Report.

(c) Per slides 8 and 9 of Anadarko 1Q 2017 Operations Report.

(d) Per slide 10 of Anadarko investor presentation dated 11/10/15.

• Anadarko operated development

• Includes production from the Constitution, Ticonderoga and

Caesar/Tonga fields. Potential for additional connection to

Constellation and Calpurnia fields



– Standalone TLP in ~5,000 feet of water with 70,000 bpd of

production capacity

– Initial estimated recoverable reserves of 200-400 mboe

from Caesar/Tonga development

– Seventh Caesar/Tonga development well completed at

Caesar/Tonga as of year-end 2016

– As of year-end 2016, oil production has averaged ~27 kbd

over life of field(a)

• Future development plans:

– Caesar Tonga field reached record production of more

than 60,000 bpd in 3Q 2016(b)

– 5-8 wells in inventory with tieback potential(b)

– In 2016, Anadarko acquired operating interest in

Constellation field. Development drilling began in 2Q 2017

with first production planned in 2018. Anadarko plans to

utilize existing Constitution facilities to develop

Constellation(c)

– Calpurnia exploration well completed drilling in 1Q 2017.

Discovery is located near Caesar/Tonga and Heidelberg

fields and is expected to be utilized for future production

as a tieback to the existing Anadarko facilities(c) -

10

20

30

40

50

60

2012 2013 2014 2015 2016

kb

d

32

Lucius Field Development

Lucius Forecasted Production(d)

Map


• Includes production from the Lucius field. Potential for

additional connection to the Phobos field



– Truss spar floating production facility in ~7,100 feet of

water with 80,000 bpd of production capacity

– Initial estimated recoverable reserves of 300 mboe

– Seven production wells completed as of year-end 2016


– In April 2013, Anadarko announced a discovery at the

Phobos field (located ~12 miles south of the Lucius spar).

Appraisal drilling planned for 2017(b)

– 8th development well to be spud in 2Q 2017 with

production expected by year end(b)

– 3-7 wells and 1 new field in inventory with tieback

potential(c)

(a) SEKCO pipeline volume per Genesis.

(b) Per slide 7 and 8 of Anadarko 1Q 2017 Operations Report.

(c) Per slide 21 of Anadarko 3Q 2016 Investor Book.

(d) Per slide 10 of Anadarko 3Q 2016 Investor Book.

33

Mad Dog Field Development

Average Daily Production(a)

Field Overview

• BP operated development



– Truss spar in ~4,500 feet of water with 80,000 bpd of

production capacity


– Only 12% of recoverable reserves produced to date(a)

– In 2009, BP drilled appraisal well in southern portion of the

field (“Mad Dog Phase 2”)

– 2009 appraisal drilling increased estimate of oil in place to

more than 4,000 mboe(a)

– Mad Dog Phase 2 sanctioned by producers at a projected

cost of ~$9 billion, a ~60% reduction from original

estimate(b)

– Mad Dog Phase 2 will include a new floating production

platform with the capacity to produce 140,000 bpd from up

to 14 production wells(b)

– Mad Dog Phase 2 anticipated first oil in late 2021(b)

(a) Per BP.

(b) Per BP press release dated 12/1/2016, BHP press release dated 2/9/2017 and Chevron 4Q 2016 earnings call dated 1/27/2017.

34

Marco Polo Field Development

Average Daily Production(d)

Map


• Includes production from the Marco Polo, K2 and Genghis

Khan fields. Potential for additional connection to the

Warrior field



– Standalone TLP in ~4,300 feet of water with 125,000 bpd


– Initial estimated recoverable reserves of 100 mboe;

subsequent discoveries tied back to the Marco Polo

development have expanded the estimated recoverable

reserves

– K2 reached a nine-year-high production rate for the third

consecutive quarter in 1Q 2017(a)


– New well completed at K2 in 2Q 2017 and production is

being ramped up(a)

– Exploration test of Warrior prospect encountered 210 net

feet of oil pay. Discovery is located ~3 miles from K2 field

and is expected to be tied back to the Marco Polo

production facility. Appraisal well planned to be spud in 2Q

2017(c)

(a) Per slide 8 of 1Q 2017 Operations Report.

(b) Per Technip November 13, 2014 press release.

(c) Per slide 10 of Anadarko 4Q 2016 Operation Report.

(d) Per BSEE.

-

5

10

15

20

25

30

35

2010 2011 2012 2013 2014 2015 2016

kbd

35

Shenzi

(a) Per industry research.

(b) Per BHP Billiton April 20, 2016, July 20, 2016, October 19, 2016 and January 25, 2017 Operational Reviews.

(c) Per BHP Billiton April 26, 2017 Operational Review.

(d) Per BSEE.

Field Development

Average Daily Production(d)

Field Overview

• BHP operated field

• Includes production from the Shenzi field. Potential for

additional connection to the Caicos and Wilding fields



– Standalone TLP in ~4,300 feet of water with 100,000 bpd


– Initial estimated recoverable reserves of 350-400 mboe(a)

– As of year-end 2016, oil production has averaged ~86 kbd

over life of field(b)

• Future Development Plans:

– Three wells drilled at Shenzi North during 2H 2015 / 1Q

2016 with positive results(b)

– Announced positive drilling results at Caicos field 2H

2016(b)

– Currently drilling the Wilding prospect with the Transocean

Deepwater Invictus with results expected in 3Q 2017(a)(c) -

20

40

60

80

100

120

2009 2010 2011 2012 2013 2014 2015 2016

kbd

36

Information regarding Anadarko operated connected fields and prospects

http://investors.anadarko.com/operations-report

Additional information regarding Anadarko operated connected fields and prospects

http://investors.anadarko.com/presentations

Information regarding BHP connected fields and prospects (Mad Dog, Atlantis, Caicos and Wilding)

http://www.bhpbilliton.com/~/media/bhp/documents/investors/reports/2016/161005_richsetofopportunitiestodrivevalu

ablegrowth2.pdf?la=en

Information regarding LLOG operated Delta House

http://www.llog.com/index.php/assets/delta-house-fps

Additional resources at Atlantis

http://www.reuters.com/article/us-bp-oil-gulf-idUSKBN17X25C

Deepwater Gulf of Mexico References / Sources








http://www.bhpbilliton.com/~/media/bhp/documents/investors/reports/2016/161005_richsetofopportunitiestodrivevaluablegrowth2.pdf?la=en




















Appendix II

Additional Financial Information

-38-

Pro Forma Segment Margin Reconciliation

($ in 000s) Pro Forma LTM

3/31/2017 2017 2016 2016 2015

Segment Margin Excluding Depreciation and Amortization:

OffshorePipeline Transportation $345,091 $87,089 $78,618 $336,620 $197,723

Refinery Services 75,805 17,496 21,199 79,508 80,246

Marine Transportation 64,126 12,963 18,916 70,079 103,222

Supply and Logistics 78,313 21,097 26,148 83,364 95,394

Total Segment Margin $563,335 $138,645 $144,881 $569,571 $476,585

Corporate General and Administrative Expense (37,874) (8,327) (11,358) (40,905) (61,370)

Depreciation, amortization and accretion (239,783) (58,395) (49,175) (230,563) (155,081)

Interest Expense, Net (142,299) (36,739) (34,387) (139,947) (100,596)

Distributable Cash from Equity Investees in Excess of Equity in Earnings (37,952) (9,290) (10,614) (39,276) (43,018)

Non-Cash Expenses Not Included in Segment Margin 1,590 437 (4,374) (3,221) 2,809

Cash Payments from Direct Financing Leases in Excess of Earnings (6,433) (1,667) (1,511) (6,277) (5,685)

Gain on step up of historical basis in CHOPS and SEKCO - - - - 332,380

Other income (expense), net - - - - (25,868)

Income tax (expense) benefit (2,596) (255) (1,001) (3,342) (3,987)

Differences in timing of cash receipts for certain

contractual arrangements 13,092 2,681 2,842 13,253 6,359

Non-cash valuation allowance related to collectibility (6,044) - (6,044) -

Discontinued operations - - - - -

Net Income $105,036 $27,090 $35,303 $113,249 $422,528

Total Segment Margin $563,335

Acquisitions and Material Projects EBITDA Adjustment 31,500

Pro Forma Segment Margin $594,835

3 months Ended March 31,

-39-

Available Cash Before Reserves


3/31/2017 2017 2016 2016 2015

Net income $105,036 $27,090 $35,303 $113,249 $422,528

Depreciation, amortization and accretion 239,783 58,395 49,175 230,563 155,081

Cash received from direct financing leases not

included in income 6,433 1,667 1,511 6,277 5,685

Cash effects of sales of certain assets 1,869 1,234 2,974 3,609 2,811

Effects of distributable cash generated by equity method

investees not included in income 37,952 9,290 10,614 39,276 43,018

Expenses related to acquiring or constructing assets

that provide new sources of cash flow 2,276 587 256 1,945 18,901

Unrealized loss (gain) on derivative transactions

excluding fair value hedges (1,323) (959) 2,154 1,790 1,674

Maintenance capital expenditures -

Maintenance capital utilized (8,901) (2,775) (1,570) (7,696) (3,731)

Non-cash tax expense (benefit) 1,647 205 700 2,142 2,787

Loss on debt extinguishment - - - - 19,225

Gain on step up of historical basis - - - - (332,380)


contractual arrangements (13,092) (2,681) (2,842) (13,253) (6,359)

Non-cash valuation allowance related to collectibility 6,044 - - 6,044 -

Other items, net 1,754 978 (481) 295 2,181

Available Cash before Reserves $379,478 $93,031 $97,794 $384,241 $331,421

Distributions $336,013 $88,257 $73,961 $254,607 $271,934

Distribution Coverage Ratio 1.1x 1.1x 1.3x 1.5x 1.2x


-40-

Pro Forma EBITDA Reconciliation


3/31/2017 2017 2016 2016 2015

Net Income $105,036 $27,090 $35,303 $113,249 $422,528

Depreciation, amortization and accretion 239,783 58,395 49,175 230,563 155,081

Interest expense, net 142,299 36,739 34,387 139,947 100,596

Cash expenditures not included in Adjusted EBITDA

or net income 1,886 559 215 1,542 18,114

Adjustment to include distributions from equity investees

and exclude equity in investees net income 37,952 9,290 10,614 39,276 43,018


contractual arragements (13,092) (2,681) (2,842) (13,253) (6,359)

Non-cash valuation allowance related to collectibility 6,044 - - 6,044 -

Other non-cash items 7,263 1,715 5,973 11,521 12,025

Income tax expense (benefit) 2,596 255 1,001 3,342 3,987

Other income (expense), net - - - - (314,851)

Discontinued operations - - - - -

Adjusted EBITDA $529,767 $131,362 $133,826 $532,231 $434,139

Acquisitions and Material Projects EBITDA Adjustment 31,500 - - 44,008 132,818

Pro Forma EBITDA $561,267 $131,362 $133,826 $576,239 $566,957


-41-

Adjusted Debt Reconciliation


Long-term debt 3/31/2017 2016 2015

Senior secured credit facility $1,210,000 $1,278,200 $1,115,000

Senior Unsecured Notes 1,814,712 1,813,169 1,807,054

Adjustment for short-term hedged inventory (70,000) (74,500) (33,800)

Cash and cash equivalents (10,773) (7,029) (10,895)

Pro Forma Adjusted Debt $2,943,939 $3,009,840 $2,877,359

EBITDA (as reported) $529,767 $532,231 $434,139

Acquisitions and Material Projects EBITDA Adjustment 31,500 44,008 132,818

Pro Forma EBITDA $561,267 $576,239 $566,957

Pro Forma Adjusted Debt / Pro Forma EBITDA 5.25x 5.22x 5.08x

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