kc securities association | may 2013 · 2016. 5. 10. · march 31, 2013 december 31, 2012 february...

KC Securities Association | May 2013

This presentation, contains “forward-looking statements.” Forward-looking statements can be identified by the words “may,” “will,” “intend,” “expect,” “estimate,” “continue,” “plan,” “anticipate,” “could,” “should” and similar terms and the negative of such terms. By their nature, all forward-looking statements involve risks and uncertainties, and actual results could differ materially from those contemplated by the forward-looking statements. See the "Risk Factors" section of the Form 10-K for factors that could materially affect our actual results.

Although we believe that the expectations expressed in our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in our forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and are subject to inherent risks and uncertainties, such as those disclosed in the “Risk Factors” section of the Form 10-K. All forward-looking statements contained in this presentation are excluded from the safe harbor protection provided by the Private Securities Litigation Reform Act of 1995 and Section 27A of the Securities Act of 1933, as amended.

Currently known risk factors that could cause actual results to differ materially from our expectations include, but are not limited to, the factors described in the “Risk Factors” section of the 10-K which we urge you to review carefully for a more detailed discussion of the risk of an investment in our securities.

This presentation is not, and under no circumstances is to be construed to be, a prospectus, offering memorandum or advertisement. The SEC

and state securities regulators have not reviewed or determined if this presentation is truthful or complete.

Disclaimer

REIT Transition Timeline

 April 8, 2011 – Receive shareholder approval to authorize board to withdraw election to be regulated as a Business Development Company

 June 30, 2011 – Acquire first energy infrastructure real property energy asset

 Sept. 21, 2011 – Withdrawal of election to be regulated as a BDC

 Sept. 21, 2011 – Effectively convert shelf registration from form N-2 to form S-3 to allow flexibility in raising capital

 Dec. 1, 2011 - Retain Corridor InfraTrust Management as primary manager

 June 6, 2012 – Shareholders authorize an amendment to the Articles of Incorporation which restricts the ownership of CorEnergy upon REIT conversion

 June 7, 2012 – S-3 declared effective by the S.E.C

 December 20, 2012 – Acquire real property infrastructure assets and prepare for REIT election

 Upcoming – Elect to be treated as a REIT for tax purposes (Expected 2013 Tax Return)

Progress Towards REIT Status

CorEnergy Infrastructure Trust (NYSE: CORR)

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Infrastructure Asset Class

CorEnergy’s Infrastructure Strategy


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  Asset Level Total Return Target: 8 to10% annualized

  Dividend Growth Target: 1 to 3% annually

  Return and growth targets are a product of quality infrastructure real property assets subject to triple-net participating leases with operating companies

  Targeted infrastructure assets may include pipelines, storage tanks, transmission lines and gathering systems, among others

Typical Operating Fundamentals

  Long-lived, critical assets

  Recurring revenues

  Relatively inelastic demand

  High barriers to entry

Typical Investment Characteristics

  High cash flow component of total return

  Potential for attractive risk-adjusted returns

  Diversification via low correlation

  Potential inflation protection

CorEnergy Return Targets and Strategy

Energy Market Opportunity


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120 Approximate number of publicly listed U.S.

E&P companies

$1.3T Combined market cap of publicly

listed U.S. E&P companies

$100B Estimated infrastructure

investments from 2013 to 2015. 1

(1) Source: Tortoise Capital Advisors

U.S. Natural Gas Demand and Production

Richard C. Green Corridor, Managing Director and CorEnergy Chairman

David J. Schulte Corridor, Managing Director and CorEnergy President and CEO Tortoise Capital Advisors, Managing Director

Rebecca M. Sandring Corridor Principal and CorEnergy Chief Accounting Officer and Treasurer

Mike Jonagan | Corridor, Senior Director Engineer with more than 25 years of U.S. and international experience in the energy sector including managing electric and gas assets (regulated and unregulated) as well as telecommunications, construction, mining and energy trading operations.

Jeffrey E. Fulmer | Corridor, Senior Director Petroleum engineer and professional geologist with more than 29 years of energy industry experience. Mr. Fulmer spent the last six years with Corridor’s affiliate Tortoise Capital Advisors and prior to that he headed a group of infrastructure analysts at the U.S. Department of Defense, which was engaged globally in critical infrastructure analysis, assessment and protection.

Rick Kreul | Omega Pipeline Company, President Mechanical engineer with over 33 years of energy industry experience including a previous role as President of Omega Pipeline Company, and nearly a decade at the international electric and gas utility, Aquila Inc., where he served as Vice President of Energy Delivery. He also served as Vice President of Inergy Services from 2003-2010.

Senior Management Team

CorEnergy Infrastructure Trust (NYSE: CORR) | 6

Top to bottom: Mike Jonagan, Jeff Fulmer, Rick Kreul

PINEDALE LGS CASE STUDY

Pinedale LGS


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Source: Ultra Petroleum Corp.

Customer working interest as a percentage of total acreage in the UPL LGS:

Ultra Petroleum Corp 70% Anadarko Petroleum Corp 15% Royal Dutch Shell 8% Others 7%

100% of the liquids passing through the LGS are produced by UPL operated wells

  The LGS consists of more than 150 miles of underground gathering pipelines with 107 receipt points and four above-ground central gathering facilities

  Current throughput of liquids in the LGS approximates 80% of the LGS’ estimated capacity

  Greater Green River Basin has estimated recoverable natural gas reserves of over 48 Tcfe (~10 Tcfe of 3P reserves net to UPL) as of 12/31/11

High Quality Asset


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Regulatory Background

LGS PRE-LGS

Initial Separation

Process

Wellhead Gas

Condensate (Oil) / Water

Lease Specific

Separator and Storage Facilities

(Three-Phase Separator)

Flash Gas is compressed, dehydrated, and sold on individual lease basis or is

used for fuel

Water is transported to disposal wells or a treatment facility for re-use

Condensate (Oil) is sold

Transported by 3rd party off the leased lands to

market

LGS Summary Process Diagram

  The majority of UPL’s exploration and development in the Pinedale Anticline area takes place on land under the jurisdiction of the U.S. Bureau of Land Management (“BLM”)

  The use of a full-field liquids gathering system was mandated in 2008 by BLM in connection with any natural gas production in the Pinedale area in Wyoming

  UPL previously transported water and condensate from producing wells via trucks

Wells

Triple-Net Participating Lease


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Lessor: Pinedale Corridor, LP (a subsidiary of CorEnergy Infrastructure Trust, Inc. formed for purposes of effecting the acquisition of the LGS)

Lessee and Operator: Ultra Wyoming LGS, LLC (an indirect wholly-owned subsidiary of Ultra Petroleum Corp.)

Guarantors: Ultra Petroleum Corp. and Ultra Resources, Inc.

Purchase Price: $228.0mm

Rent:   Base Rent: $20.0mm (subject to inflation adjustment) per annum (payable monthly)   Maximum Rent: $27.5mm per annum (payable monthly)   Actual Rent: The maximum of (i) Base Rent and (ii) a variable rent that is based on the

amount of liquids that pass through the system in excess of a pre-determined baseline, subject to Maximum Rent

Lease Structure: Absolute triple net lease. Lessee pays all taxes, insurance and maintenance costs related to LGS

Initial Term: 15 years

Renewal: Lessee has the option to renew for additional terms, each of which will equal the lesser of 5 years or 75% of the remaining useful life of the LGS at the time of each renewal

End of Lease: Lessee will return the assets to Lessor in good operating condition

2013 First Quarter Performance


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CorEnergy Financial Results Summary

The Company provides non-GAAP performance measures utilized by REITs, including Funds from Operations (“FFO”) and Adjusted Funds from Operations (“AFFO”). Management uses AFFO as a measure of long-term sustainable operational performance.

March 31, 2013 December 31, 2012 February 28, 2012

Lease Revenue $5.6 m $858,000 $638,000

CorEnergy Performance Summary Total Per Share

Net Income (Attributable to CorEnergy Stockholders) $2.4 m $0.100

Funds From Operations (FFO) $3.5 m $0.144

Adjusted Funds From Operations (AFFO) $3.1 m $0.130

Dividends Paid to Stockholders $3.0 m $0.125

Change in Lease Revenue due to Pinedale LGS Acquisition


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CorEnergy Balance Sheet Summary

0

50

100

150

200

250

300

350

Nov. 30, 2012 Dec. 31, 2012 Mar. 31, 2013

Liquidity and Capital Resources

 $18 million cash

 $20 million revolving credit facility (subsequent to March 31, 2013)

  Shelf Registration Statement

  Co-Investments / Partnerships

Private Securities

Public Securities

Other Assets

Cash

Eastern Interconnect Project

Mowood, LLC

Pinedale LGS

Non-Controlling Interest

Stockholders’ Equity includes $30 million co-investment by Prudential Capital Group in Pinedale LGS.

CorEnergy assets fulfilled quarterly REIT asset test

$

$

$

$

$

$

$

$

$ in millions

CorEnergy at a Glance

NYSE Symbol: CORR Dividend Yield: 6.5% Stock Price 2: $7.65 Shares Outstanding: 24 m

Market Capitalization 2: $185 m Total Debt 3: $70 m Non-Controlling Interest 3: $30 m

Enterprise Value: $285 m 0

1

2

3

4

5

6

7

CORR FTSE NAREIT Equity REIT

Index

Dow Jones Utility Average

Index

S&P Global Infrastructure

Index

DIVIDEND YIELD COMPARISON

(1)  Stock price as of 4/30/13 and annualized distribution of $0.50. (2)  As of 4/30/13 (3)  As of 3/31/13 (4)  The FTSE NAREIT Equity REIT Index is an unmanaged capitalization-weighted index of all equity real estate investment trusts. It is not possible to

invest directly in an index. Includes return of capital component, if any. (5)  As of 4/30/13. The Dow Jones Utility Average Index is an unmanaged price-weighted index composed of stocks of 15 utility companies listed on the

New york Stock Exchange. It is not possible to invest directly in an index. (6)  As of 4/30/13. The S&P Global Infrastructure Index provides liquid and tradable exposure to 75 companies from around the world that represent the

listed infrastructure universe including: Utilities, Transportation, and Energy.


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For more information please visit our website at corenergy.corridortrust.com

Or contact Investor Relations directly at: 877-699-CORR

[email protected]

kc securities association | may 2013 · 2016. 5. 10. · march 31, 2013 december 31, 2012 february...

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