nyse: wes, wgpfilecache.investorroom.com/mr5ir_westerngas/99/download/wes_w… · presentation....
TRANSCRIPT
www.westerngas.com NYSE: WES, WGP
www.westerngas.com
Western Gas
This presentation contains forward-looking statements. Western Gas Partners, LP and Western Gas EquityPartners, 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 actualresults to differ materially from the projections, anticipated results or other expectations expressed in thispresentation. These factors include the ability to meet financial guidance or distribution-growthexpectations; the ability to safely and efficiently operate WES’s assets; the ability to obtain new sources ofnatural gas supplies; the effect of fluctuations in commodity prices and the demand for natural gas andrelated products; the ability to meet projected in-service dates for capital growth projects; constructioncosts or capital expenditures exceeding estimated or budgeted costs or expenditures; and the other factorsdescribed in the “Risk Factors” section of WES’s and WGP’s most recent Forms 10-K and Forms 10-Qfiled 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 publiclyupdate or revise any forward-looking statements. Please also see our earnings release, posted on ourwebsite at www.westerngas.com, for reconciliations of the differences between any non-GAAP financialmeasures used in this presentation and the most directly comparable GAAP financial measures.
Cautionary Language Re: Forward-Looking Statements
2
www.westerngas.com
A Large, Diversified Portfolio
Greater GreenRiver Basin
Niobrara
DJ Basin
Marcellus
Dry Gas Basin
Pipelines
Liquids-Rich Basin
Powder River
Uintah
DelawareBasin
Hugoton
Eagleford
Maverick
Western Gas
Number of basins 8
Gathering systems 21
Processing & treating facilities 44
Interstate gas pipelines 4
NGL/Crude oil pipelines 6
Pipeline (miles) 13,980
Western Gas Assets
3
www.westerngas.com
Combination of Scale and Growth
AnnualDistribution
Growth
AdjustedEBITDA1
($MM)
WES / WGP Enterprise Value
($MM)2
2010 14.3% 186 2,717
2011 14.9% 254 4,163
2012 18.4% 328 9,941
2013 16.3% 458 14,163
2014 16.2% 646 21,985
2015 15.1% 758 14,810
2016E 10% 860-950 17,615
Notes:
1. As reported
2. As of December 31st for each historical year represented; 2016 as of 5/18/2016. Enterprise value includes WGP public equity valuation, excluding value of WES units owned, the Class C Units priced at WES common unit value less a 10% discount and the Series A Preferred Units priced at $32.00 per unit
Rare Combination of Large Scale and Robust Growth
4
www.westerngas.com
The APC/WGP/WES Relationship1
WGPPublic
Unitholders
60.30%3
30.09% LP-and-
1.55% GPInterest
83.63%2
8.06% LPInterest
16.37%2
Notes:
1. As of March 31, 2016
2. Assumes outstanding Tangible Equity Units (NYSE: AEUA) convert into 7.9MM WGP Common Units
3. Assumes outstanding Series A Preferred Units convert into 21.9MM WES Common Units
5
www.westerngas.com
Best-in-Class Sponsor Support
Fixed-Price Agreements
Supportive Financings
Accretive Acquisition Multiples
Significant WGP Ownership
COS and Demand Charge Contracts
6
www.westerngas.com
Remaining Inventory Provides “Safety Net”
AT WES IPO (May 2008)
San Juan
Natural Buttes
Rendezvous
Wind River
Red Desert Complex
Atlantic Rim
Wattenberg
Sabine Valley
Tyler County
Mitchell / Gomez
APC Midstream Assets
At WES IPO
Since WES IPO
Ft. Union
Powder River Complex
Granger Complex
~$3.8 Billion
of Dropdowns Later…
TODAY
Natural Buttes
Wattenberg Plant
Bone Spring Plant
Satanta Plant
Marcellus
MiVida PlantLone Creek – Oil
DJ Basin Oil Gath
Alta Haynesville
Sabine Valley
~$150-200MM of Current Run-Rate EBITDA in
Inventory
7
www.westerngas.com
DJ Basin Fueled Past WES Growth
Throughput
Asset Operating Income
DJ Basin Infrastructure
8
274
375 439
507 530
779
-
100
200
300
400
500
600
700
800
900
2010 2011 2012 2013 2014 2015
MM
cf/d
45
71 6686
122
227
-
50
100
150
200
250
2010 2011 2012 2013 2014 2015
($M
M)
www.westerngas.com
Delaware Opportunity – The Next DJ
Wolfcamp Shale – Delaware Basin
Niobrara/Codell Focus Area
Niobrara / Codell – Wattenberg
Anadarko Petroleum Investor Slides
9
www.westerngas.com
Blue-Chip Customers in Our Service Area…
NEW MEXICO
TEXAS
Ward
Winkler
10 MILES
Culberson
Pecos
Reeves
Anadarko
Eddy Lea
10
www.westerngas.com
…with APC Representing the Next Stage of Growth
Anadarko Petroleum Investor Slide:
11
www.westerngas.com
Other Key Areas
Key Takeaways
• High-quality basin with solid midstream
infrastructure
• Backed by COS agreements
• Most prolific natural gas play in lower 48
MARCELLUS
Key Takeaways
• Backstopped by new 20-yr gathering agreement
• MVC and COS hybrid
• APC largest producer behind system
• Unique system with high barriers to entry
EAGLEFORD
APC Acreage
Gas Gathering
Oil Gathering
Oil Handling Facility
Dimmit La Salle
Webb
Maverick
10 Miles
Oil Handling FacilityBrasada Gas Plant
12
www.westerngas.com
Risk Mitigation Throughout Portfolio
VOLUMETRICCOMMODITY
Fee-Based &Fixed-Price
Unhedged
Contract Type
% ofTotal Gas
Throughput2
Demand Charge 45.0
Cost of Service 33.6
Total Demand Charge orCost of Service
78.6
Notes:
1. Last twelve months ending 3/31/2016; adjusted gross margin as defined in the latest Western Gas earnings release
2. All information for the quarter ended March 31, 2016
3. Credit ratings as of quarter ended March 31, 2016; includes split-rated entities
COUNTERPARTY3
13
www.westerngas.com
0.20
0.30
0.40
0.50
0.60
0.70
0.80
0.90
May-08 Mar-09 Jan-10 Nov-10 Sep-11 Jul-12 May-13 Mar-14 Jan-15 Nov-15
Dis
trib
utio
n ($
/Un
it)
May-16
Consistent Distribution Growth Across Multiple Cycles2008 – Financial Crisis– Commodity price decline– No capital markets access– Lehman bankruptcy
2010 – BP Oil Spill– Limited cap mkts access– Market-based sponsor
concerns
2012 – NGL/NatGas & Euro Concerns– Dramatic ∆ NGL prices– European market fears
2013 – DJ Basin Floods– 1-in-100 year flood impact to
operations
2013/14 – TRONOX– Dec 2013: Opinion rendered– April 2014: Settlement
announced
2014/2015 & 2015/2016 – Crude oil price decline of
~75% from peak to trough
14
www.westerngas.com
Key Investment Considerations
Strong Sponsor Support
High Potential Basins
Investment Grade Credit
Ratings
ConsistentTrack
Record
Visible Growth Opportunities
FocusedRisk
Mitigation
15
www.westerngas.com NYSE: WES, WGP