Duke Energy Corporation (holding Company) · NYSE:DUK
Duke Energy Corporation (holding Company) — Duke Energy Field Services — Duke Energy Analyst Conference 2003
16 slides from Duke Energy Corporation (holding Company)'s conference presentation, May 30, 2003
Slide 1: Duke Energy Field Services
Duke Energy Field Services Jim Mogg Chairman, President and CEO
Slide 2: Disclosures
Disclosures Safe Harbor Statement Under the Private Securities Litigation Act of 1995 This document contains forward looking information which is subject to risks and uncertainties, including, but not limited to, changes in the utility regulatory environment, the impact of competition from other ene
Slide 3: Leading Industry Position
Leading Industry Position NGLs (MBbls/d) Top NGL Producers 2001 500 396 400 300 199 200 158 121 120 100 75 0 DEFS DEFS BP Amoco El Paso Williams ExxonMobil Enterprise Source: Gas Processors Report - November 18, 2002 3
Slide 4: Structure Overview
Structure Overview Duke Energy $1.2 B $1.2 B ConocoPhillips Corporation DEFS Ownership Split GPM 69.7% / 30.3% Contribution Contribution of 100% of 100% of Stock Duke Energy Field of Stock Services, LLC $600 MM7.5% notes due 2005* Long-Term Debt $300 MM5.75% notes due 2006 $800 MM7.875% notes due 20
Slide 5: Strategically Located
Strategically Located 60,000 miles of pipelines • Growth/Acquisitions 71 plants; 15 fractionators Processing Plants 7 5 offices BRITISH COLUMBIA ALBERTA Processed Volumes 366 MMcf/d 8 propane terminals NGL Production 8 MBbl/d SASKATCHEWAN 375 MBbl/d NGL production 5.4 Bcf/d gas volumes process
Slide 6: Processed Volumes
Processed Volumes (Bcf/d) 8 6 5.6 5.6 5.4 4 2 0 2001 2002 1Q '03 6
Slide 7: Commodity Exposure
Commodity Exposure 2003 Annual 2002 Margin Unhedged Price Sensitivity EBIT Fee NGLs ±$0.01/gal = ±$25 MM Commodity 25% 75% Natural Gas +/-$0.10/MMBtu = -/+$5 MM 7
Slide 8: Hedging Summary
Hedging Summary 80% Fixed Price Propane Fixed Price Gas 60% Fixed Price Crude % Hedged 40% 35% 35% 30% 3% 2% 6% 7% 9% 20% 4% 26% 26% 10% 17% 10% 0% Q2 '03 Q3 '03 Q4 '03 Yr '04 Fixed Crude ($/Bbl) $28.13 $27.20 $27.04 $24.44 Fixed Propane ($/Bbl) $22.94 $21.42 $20.69 N/A Fixed Gas ($/MMBtu) $4.02 $4.
Slide 9: 1Q '02 vs 1Q '03 Prices
1Q ’02 vs 1Q ’03 Prices Jan - Feb Mar 1Q ’02 2003 2003 ● NGL ($/gal) $ 0.31 $ 0.59 $ 0.57 ● Crude Oil Equivalent ($/Bbl) $ 18.34 $ 34.90 $ 33.72 ● Correlation 60% 72% 73% ● Crude Oil Actual ($/Bbl) $ 21.64 $ 34.22 $ 33.16 ● Frac Spread ($/MMBtu) $ 1.19 $ 1.58 ($ 2.38) ● Natural Gas ($/MMBtu) $ 2.32
Slide 10: Operational Flexibility to Manage Spikes in Natural Gas Prices
Operational Flexibility to Manage Spikes in Natural Gas Prices • Ethane rejection (15% reduction in total NGL Bbls) • Keep-whole contract provisions (approx. 400 MMcf/d reverts to minimum fee) • Buy/Sell Plant BTU Reduction (PBR) to manage frac spread (3/1/03 = ($2.38); daily 3/03 spread = $1.09) •
Slide 11: Capital Structure
Capital Structure $6,000 $5,401 $5,122 $5,148 $213 $5,000 $215 $189 $2,265 Revolver: Up to $350 million $4,000 $2,259 ($ in millions) $2,256 364-Day Senior Unsecured Revolving $3,000 $300 Credit Facility with a $200 $200 1-year Term Out Option $2,000 Term Loan: $100 million 6-Month $2,653 Unsecured
Slide 12: DEFS Actions
DEFS Actions • Focus on Positive Net Cash Generation Reduced capex to $220 million (Q1 ’03 capex was $31 million) Signed agreements for over $90 million of asset sales Collateral balance of $3 million at 4/30/03 • Invest in Strongest Businesses DUK has received $1.65 billion cash from DEFS s
Slide 13: DEFS Actions (cont.)
DEFS Actions (cont.) • Size/Change Businesses to Reflect Market Realities Signed agreements for over $90 million of asset sales Reduced 174 full time employees / contractors during the past 6 months Reduced exposure on 400 MMcf/d of our 2,000 MMcf/d keep-whole volumes by negotiating a minimum
Slide 14: Business Diversification: TEPPCO's Growth
Business Diversification TEPPCO’s Growth TEPPCO Upstream Downstream Midstream ● Crude oil ● Refined products ● Natural gas gathering transportation, and LPG ● NGL transportation marketing and transportation, ● 45% of EBITDA terminaling storage and ● 18% of EBITDA terminaling ● Petrochemicals transpo
Slide 15: TEPPCO Distributions
TEPPCO Distributions ($/Unit) ($/MM) $3.00 60 53* $2.50* $2.50 $2.35 50 Annual Distribution per Unit Annual Distribution to GP $2.15 $2.00 $2.00 $1.85 38 40 $1.75 $1.55 $1.45 $1.50 30 22 $1.00 20 14 $0.50 8 10 4 5 3 $0.00 0 1996 1997 1998 1999 2000 2001 2002 2003 * Current quarterly cash distributio
Slide 16: DEFS Strategy
DEFS Strategy • Capitalize on size and focus of our existing operations • Be a top-3 player in every producing region we have assets • Optimize / rationalize the asset base • Focus on operational / commercial excellence • Maintain our strong financial position / self-funding status • Grow TEPPCO 16
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