Investor vestor Pr Prese senta ntation tion March 2014 Forwar - - PowerPoint PPT Presentation

Investor vestor Pr Prese senta ntation tion

March 2014

Forwar ard d Looki king ng Stat atemen ements ts

This presentation contains forward looking statements within the meaning of the federal securities laws. Forward-looking statements are not guarantees of performance. They involve risks, uncertainties and assumptions. The future results of EnLink Midstream, LLC, EnLink Midstream Partners, LP and their respective affiliates (collectively known as “EnLink Midstream”) may differ materially from those expressed in the forward-looking statements contained throughout this presentation and in documents filed with the Securities and Exchange Commission (“SEC”). Many of the factors that will determine these results are beyond EnLink Midstream’s ability to control or predict. These statements are necessarily based upon various assumptions involving judgments with respect to the future, including, among others, drilling levels; the dependence on Devon Energy Corporation for a substantial portion of the natural gas that we gather, process and transport; the risk that EnLink Midstream will not be integrated successfully or that such integration will take longer than anticipated; the possibility that expected synergies will not be realized, or will not be realized within the expected timeframe; EnLink Midstream’s lack of asset diversification; EnLink Midstream’s vulnerability to having a significant portion of its operations concentrated in the Barnett Shale; the amount of hydrocarbons transported in EnLink Midstream’s gathering and transmission lines and the level of its processing and fractionation operations; fluctuations in oil, natural gas and NGL prices; construction risks in our major development projects; our ability to consummate future acquisitions, successfully integrate any acquired businesses, realize any cost savings and other synergies from any acquisition; changes in the availability and cost of capital; competitive conditions in EnLink Midstream’s industry and their impact on its ability to connect hydrocarbon supplies to its assets; operating hazards, natural disasters, weather-related delays, casualty losses and other matters beyond our control; and the effects of existing and future laws and governmental regulations, including environmental and climate change requirements and

• ther uncertainties and other factors discussed in EnLink Midstream’s Annual Reports on Form 10-K for the year ended December

31, 2013, in EnLink Midstream, LLC’s Registration Statement on Form S-4 and in EnLink Midstream’s other filings with the SEC. You are cautioned not to put undue reliance on any forward-looking statement. EnLink Midstream has no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. 2

Non Non-GAAP AAP Fi Fina nanc ncia ial Inf nformati rmation

• n

This presentation also contains non-generally accepted accounting principle financial measures that EnLink Midstream refers to as adjusted EBITDA, gross operating margin, growth capital expenditures and maintenance capital expenditures. Adjusted EBITDA is defined as net income (loss) plus interest expense, provision for income taxes, depreciation and amortization expense, impairments, stock-based compensation, (gain) loss on non-cash derivatives, transaction costs associated with successful transactions, distribution from a limited liability company and non-controlling interest; less (gain) loss on sale of property and equity in income (loss) of a limited liability company. Gross operating margin is defined as revenue less the cost of purchased gas, NGLs and crude oil. The amounts included in the calculation of these measures are computed in accordance with generally accepted accounting principles (GAAP) with the exception of maintenance capital expenditures. Growth capital expenditures are defined as all construction-related direct labor and material costs, as well as indirect construction costs including general engineering costs and the costs of funds used in construction. Maintenance capital expenditures are capital expenditures made to replace partially or fully depreciated assets in order to maintain the existing operating capacity of the assets and to extend their useful lives. EnLink Midstream believes these measures are useful to investors because they may provide users of this financial information with meaningful comparisons between current results and prior-reported results and a meaningful measure of EnLink Midstream’s cash flow after it has satisfied the capital and related requirements of its operations. Adjusted EBITDA, gross operating margin, growth capital expenditures and maintenance capital expenditures, as defined above, are not measures of financial performance or liquidity under GAAP. They should not be considered in isolation or as an indicator of EnLink Midstream’s performance. Furthermore, they should not be seen as measures of liquidity or a substitute for metrics prepared in accordance with GAAP. 3

Int ntroduc

• ducti

tion

• n to EnL

nLin ink Mid idstrea eam

• EnLink Midstream is positioned as one of the largest and most stable midstream

companies

• Conservative financial policy targeting <3.5x debt/adjusted EBITDA at EnLink LP and

investment grade quality balance sheet

• DVNM assets underpinned by 10-year contracts with five-year minimum volume

commitments, providing stable cash flows and volume stability

• EnLink Midstream 2014 consolidated gross operating margin contribution is expected to

be ~95% fee-based

• Significant growth potential from drop down opportunities, backlog of organic growth

projects and opportunities to serve Devon Energy in growth areas and M&A

Background EnLink Midstream Investment Attributes

4

• Devon Energy Corporation (“Devon” or “DVN”), Crosstex Energy, Inc. (“XTXI”) and

Crosstex Energy, L.P. (“XTEX”, and together with XTXI, “Crosstex”) closed on contribution and merger agreements involving Crosstex’s assets and Devon’s U.S. midstream operations (“DVNM”)

• Devon now directly owns ~70% of EnLink Midstream, LLC (“EnLink GP”) and ~53% of

EnLink Midstream Partners, LP (“EnLink LP”), and has majority board representation in the companies (together, “EnLink Midstream”)

• DVN and Crosstex have a deep, long-standing commercial relationship established over

the past decade

– Joint acquisition of Chief Barnett Shale assets in 2006 – Strategic relationship across large scale Barnett Shale development

Note: Adjusted EBITDA and gross operating margin are non-GAAP financial measures and are explained on page 3.

Orga gani nizat ation ional al Structure ucture

EnLink LP

$1 billion Sr. Unsecured RCF NYSE: ENLK

EnLink GP

$250 million Sr. Secured RCF NYSE: ENLC

Public Unitholders

~70% ~30% ~1% GP ~7% LP GP + 50% LP

EnLink Midstream Holdings

(formerly Devon Midstream Holdings) ~53% LP ~39% LP 50% LP

Devon Energy Corp.

(BBB+ / Baa1) 5

• EnLink GP owns a

50% interest in the assets contributed by Devon

• Drop down to

EnLink LP expected to start in the beginning

• f 2015

Strategic ategically lly Located ted and d Comp mpleme lementar tary Asset sets Stro rong Balan lance Sheet eet and d Cred edit t Profile file Prov

• ven

Managem agement t Trac ack Rec ecor

• rd

d & Long- Standin ding Relati lations

• nship

ip Significan ificant Sponsor sor Suppor

• rt

t From

• m Devo

von Ener ergy Corpor

• ration

tion Substan stantia ial l Scale ale and d Scope

• pe

Diver verse, e, Fee-Base Based Cash sh Flow

• ws

EnLin ink Mid idstrea eam m Inves estmen ment t Consid ider erati tions

• ns

6

Grow

• wth

h Oppor

• rtu

tunitie ties from

• m

Organ anic ic Proje jects, s, Other er Customer tomers, s, M&A

Strateg egica icall lly y Loca cated ed & & Compleme mplementa tary y Asset ets

7

AUSTIN CHALK EAGLE FORD PERMIAN BASIN CANA-WOODFORD ARKOMA- WOODFORD BARNETT SHALE HAYNESVILLE & COTTON VALLEY UTICA MARCELLUS LA TX OK OH WV PA Gathering System Processing Plant Fractionation Facility North Texas Systems LIG System PNGL System Cajun-Sibon Expansion Howard Energy Ohio River Valley Pipeline Storage Crude & Brine Truck Station Brine Disposal Well Barge Terminal Rail Terminal Condensate Stabilizers

Gas Gatheri ering g and Transpor sporta tation ion

• ~7,300 miles of gathering and

transmission lines

Gas Processin ssing

• 12 plants with 3.3 Bcf/d of total net inlet

capacity

• 1 plant with 60 MMcf/d of net inlet

capacity under construction

NGL Transpor sportat ation ion, , Fraction ionat ation ion and Storage age

• ~570 miles of liquids transport line
• 6 fractionation facilities with 180,000

Bbls/d of total net capacity(1)

• 3 MMBbls of underground NGL storage

Crude, e, Conde densat sate e and Brine e Handli ling

• 200 miles of crude oil pipeline
• Barge and rail terminals
• 500,000 Bbls of above ground storage
• 100 vehicle trucking fleet
• 8 Brine disposal wells

(1) Increasing to 7 facilities with 252,000 Bbls/d of total net capacity upon completion of the Cajun-Sibon phase II expansion expected in the second half of 2014.

Gas Gathering hering & Proces essing ing Barge e and Rail l Logistic istics Condens densat ate e Stab abiliz ilizat ation ion NGL Tran anspor

• rtat

tation ion, , Frac acti tionation

• nation and

Storage torage Crude de & Condens densat ate e Gathe thering ring Gas Trans nspor

• rta

tati tion

• n

Div iver erse, e, Fee ee-Bas ased ed Cas ash Fl Flows ws

Upstr trea eam m Producer

• ducers

Tran ansp spor

• rter

ters End Markets

EnLink nk Midstream am Services es Span n the Energy y Value ue Chain

8

Div iver erse, e, Fee ee-Bas ased ed Cas ash Fl Flows ws

• Devon will be EnLink Midstream’s largest customer (>50% of consolidated 2014E adjusted EBITDA*)
• EnLink Midstream’s growth projects focused on crude/NGL services and rich gas processing
• Strong emphasis on fee-based contracts

94% 6%

By Contract Type 2014E EnLink LP Gross Operating Margin *

50% DVNM Contribution

2014E EnLink Midstream Consolidated Gross Operating Margin *

100% DVNM Contribution

95% 5%

By Contract Type

Liquids uids Driv iven en

46% 3% 11% 19% 11% 11%

By Region

53% 2% 8% 13% 8% 16%

By Region

Dry Gas Fee-Bas ased ed Commodit

• dity

Sensit itiv ive

39% 61%

By Contributor

Other Devon

• n

56% 44%

By Contributor

Devon

• n

Other Fee-Bas ased ed Commodit

• dity

Sensit itiv ive

* Gross operating margin and adjusted EBITDA percentage estimates are provided for illustrative purposes and reflect period following transaction closing (2Q-4Q 2014) Note: Adjusted EBITDA and gross operating margin are non-GAAP financial measures and are explained on page 3. North TX North TX Louis. Gas West TX Gulf Coast Liquids Ohio Okla. West TX Louis. Gas Okla. Gulf Coast Liquids Ohio

9

Sig igni nific ican ant t Spo pons nsor r Sup uppo port t from

• m Devon
• n

Devon’s Upstream Portfolio & Remaini ning Mids dstrea tream Assets ets

10

• Devon will have dedicated ~800,000

net acres to EnLink Midstream

• Devon will account for >50% of EnLink

Midstream’s 2014 cash flows

• Long-term contracts to stabilize future

cash flows

• 10-year fixed-fee contracts with rate

escalators

• 5-year minimum gathering

commitments (>1.3 BCFD)

• 5-year minimum processing

commitments (>1.0 BCFD)

• Development of Devon’s upstream

portfolio provides organic growth

• pportunities
• Potential to acquire additional Devon

midstream assets

Pr Proven en Man anag agem emen ent t Trac ack k Rec ecor

• rd

Managem gemen ent t Team Experience rience

Barry rry Davis is President & CEO

Barry Davis is President and Chief Executive Officer of EnLink Midstream. Mr. Davis led the founding of Crosstex Energy in 1996 prior to the initial public offerings of Crosstex Energy, L.P. in 2002 and Crosstex Energy, Inc. in 2004. Under his leadership, Crosstex and the predecessor companies evolved into a significant service provider in the energy industry’s midstream business sector.

McMil illan (Mac) c) Hummel el EVP & President of NGL and Crude Oil Business Joe e Davis is EVP & General Counsel Mich chael el Garb rberd rding ing EVP & CFO

Joe Davis is Executive Vice President and General Counsel of EnLink Midstream. Mr. Davis joined Crosstex Energy in 2005 after serving as a partner at Hunton & Williams, an international law firm, where he also was a member of the executive committee. Mr. Davis began his legal career at Worsham Forsythe, which merged with Hunton & Williams in 2001. Michael Garberding is Executive Vice President and Chief Financial Officer of EnLink Midstream. Previously, Mr. Garberding has held various positions at Crosstex Energy, including Executive Vice President and Chief Financial Officer, and Senior Vice President of Business Development and Finance. Prior to joining Crosstex in 2008, Mr. Garberding was assistant treasurer at TXU Corp. where he focused

• n structured transactions such as project financing for coal plant development and the sale of TXU Gas

Company.

Stev eve e Hoppe ppe EVP & President of Gathering, Processing and Transportation Business

Steve Hoppe is Executive Vice President and president of the Gathering, Processing and Transportation Business of EnLink Midstream. Mr. Hoppe previously served as vice president of Midstream Operations for Devon Energy, which he joined in 2007. Prior to joining Devon, Mr. Hoppe spent eight years at Thunder Creek Gas Services, most recently serving as president.

EnLin ink k Midstre tream am manag agem ement team am is comp

• mpri

rised ed of forme rmer r Cross

• sstex

tex senior ior manag agemen ent and d other her exper erienc ienced ed midstre stream am lead ader ers

11

Mac Hummel is Executive Vice President and president of the Natural Gas Liquids and Crude Business

• f EnLink Midstream. Mr. Hummel previously served as Vice President of Commodity Services at

Williams Companies Inc. since 2013, and prior to that he served as Vice President, NGLs & Olefins at Williams from 2010 to 2012. Mr. Hummel worked at Williams Companies Inc. for 29 years.

EnL nLin ink Mid idstrea eam m Growth wth Strat ategy egy

• EnLink Midstream’s Four Avenues for Growth:
• Drop-Downs – E2 condensate stabilization facilities in Ohio; 50% of Devon Midstream

Holdings; the Access Pipeline system in Canada; other potential opportunities

• Serving Devon Energy – Devon has a strong financial incentive to contract future

midstream development projects with EnLink Midstream

• Organic Growth Opportunities – current backlog of growth projects at Crosstex’s legacy

assets; potential expansions for third-party volumes at Devon’s legacy midstream assets

• M&A Activity – strong financial foundation in place for acquisitions
• EnLink Midstream’s current development projects are focused on fee-based,

liquids-focused organic growth opportunities

• Cajun-Sibon II – NGL transportation and fractionation
• Bearkat – Permian rich gas gathering and processing
• Ohio River Valley – focus on condensate stabilizing and transporting
• Strong backlog of additional projects under consideration

12

EnLink k Mids dstre tream am is ideally y posi siti tioned ned for growth th

13

Adjusted EBITDA * 2014 Guidance

Combined Adjusted EBITDA for Q2-Q4 $525 MM Combined Adjusted EBITDA Annualized $700 MM MLP Adjusted EBITDA for Q2-Q4 $375 MM MLP Adjusted EBITDA Annualized $500 MM

Capital Expenditures (Capex)

MLP Growth Capex for Q2-Q4 * $300 MM MLP Maintenance Capex for Q2-Q4 * $50 MM Combined Maintenance Capex for Q2-Q4 * $80 MM

Annual Distributions

MLP Distributions Per Unit (ENLK) $1.47 GP Distributions Per Unit (ENLC) $0.80

• Projected Synergies:
• Financial: ≈$25 MM annually
• Operational: ≈$20 MM annually
• Long-term growth expectations of

high single digits for MLP and 20% or greater for new GP

• Strong Balance Sheet
• Devon assets contributed with no debt
• Investment grade quality balance sheet

provides low cost of capital

• Long-term commitment to investment

grade metrics (debt/adjusted EBITDA <3.5x)

• Potential to de-lever through equity-

financed drop-downs

* Adjusted EBITDA, growth capital expenditures and maintenance capital expenditures are non-GAAP financial measures and are explained on page 3.

2014 4 Gui uida danc nce e Out utlook look

Appendix: pendix: Additional Maps & Major Projects

14 14

Strateg egica icall lly y Loca cated ed & & Compleme mplementa tary y Asset ets

• In addition to substantial financing

and G&A savings, EnLink Midstream expects to realize significant

• perational savings
• Majority of operational savings will

arise from combination of complementary North Texas systems.

• Combined system has 3,900 miles of

pipeline and four processing plants with 1.2 Bcf/d of capacity

• Expected North Texas cost synergies

including the following:

• Compressor station consolidation
• Plant rationalization
• Flow reconfigurations to lower pressure

Slide 15

Signi nificant ficant cost t syne nergy rgy potent ntial al

15

Caj ajun un-Si Sibon bon Upda Update

16 Slide 16

AUSTIN CHALK TUSCALOOSA MARINE SHALE MIOCENE/WILCOX

Sabine Pass Blue Water Pelican Napoleonville Plaquemine Eunice

Processing Plants Fractionators PNGL Pipeline New Cajun-Sibon Pipelines NGL Storage Third Party Facility

Gibson Riverside Mont Belvieu

• ~139-mile pipeline from NGL supply hub in Mont Belvieu to NGL fractionation assets in South LA
• Supported by long-term, fee-based sales agreements with Dow Hydrocarbons and Williams companies
• Expected run-rate adjusted EBITDA contribution of Phase I and Phase II: $115-$130MM
• Phase I completed and ramping up to full capacity; Phase II projected complete in second half of 2014
• Phase I and II cost expected to be ~$750MM; execution risk on Phase II reduced by fixed-price, turn-key

contracts which comprise >50% of remaining project cost

Cajun-Sib Sibon n syste stem m is s expecte cted d to benefi fit t from the need to bring ng addi diti tiona nal NGLs to south th Louisia siana na to support pport ethylene ne plants nts and expansio nsions ns in the region. n.

Note: Adjusted EBITDA is a non-GAAP financial measure and is explained on page 3.

Mesquite Terminal Bearkat Gas Plant (in Development)

Bea eark rkat at Pr Project ject Upda Update

17

• Builds on success of Deadwood joint venture with Apache, which was on-

time, on budget and is near full capacity

• ~ $210MM investment for gas gathering and processing plant
• ~ 60 MMcf/d processing plant; ~65-mi. high pressure gathering system
• Supported by long-term, fee-based contracts
• Completion expected in the summer of 2014

Deadwood Gas Plant

Processing Plant Fractionator Apache Acreage Apache/Deadwood Gathering Mesquite Liquids Pipeline Chevron Liquids Pipeline Bearkat High Pressure Gathering

Access cess Pi Pipe pelin ine

• Access is a 50/50 JV with MEG Energy
• Currently operates two pipelines: a 16”, 214

mile line that originates in Edmonton and delivers diluent to operations near Conklin and a 24”, 183 mile line that transports diluted bitumen from Conklin to Edmonton, where it meets with other systems to be sent further downstream to markets

• A 42”, 186 mile line, called the Northeast

Expansion (“NEX”), which will transport blend from Conklin to Redwater, is currently under construction and is expected to be

• perational in 2014
• When NEX is complete, the 24” will go into

diluent service and the 16” will be vacant for future use

18

EnLink k Mids dstre tream am has a r right ght of first rst offer er with th respe pect ct to Devon’s interest in the Access Pipeline