YIELD plus GROWTH The Best of Both Worlds Jim Bertram, President - PowerPoint PPT Presentation

YIELD plus GROWTH – The Best of Both Worlds Jim Bertram, President & CEO National Bank Conference, Montreal, April 5, 2011

Forward Looking Information This presentation contains forward-looking information that involves known and unknown risks and uncertainties, many of which are beyond Keyera’s control. The forward-looking information is based on management’s current expectations and assumptions relating to Keyera’s business and the environment in which it operates Keyera s business and the environment in which it operates. As the results or events As the results or events predicted or implied in the forward-looking information depend upon future events, actual results or events may differ materially from those predicted. Some of the factors which could cause actual results or events to differ materially include the ability of Keyera to successfully implement strategic initiatives, whether such initiatives yield the expected benefits, operating and other costs, future operating results and the components of those results, fluctuations in the demand for natural gas, NGLs and crude oil, the activities of producers, competitors and others, the weather, overall economic conditions and other known or unknown factors. There can be no assurance that the results or developments anticipated by Keyera will be realized or that they will have the expected consequences for or effects on Keyera. Keyera’s dividend or that they will have the expected consequences for or effects on Keyera. Keyera s dividend policy is based on the continuation of favourable growth parameters for current and future projects (including Keyera’s ability to finance such projects on favourable terms) and continued sustainable results of all Keyera’s business segments. Keyera’s disclosure with respect to its conversion plans also assumes there will be no change in the rules governing conversion in the interim. These assumptions may be affected by any or all of the factors i i h i i Th i b ff d b ll f h f listed above. For additional information on these and other factors, see Keyera’s Annual Information Form and other public filings on www.sedar.com. Unless otherwise required by applicable laws, p g q y pp , Keyera does not intend to publicly update or revise forward-looking information, whether as a result of new information, future events or otherwise. 2

Strong Track Record of Growth Addi Adding to our Existing Network of Facilities t E i ti N t k f F iliti • Eight dividend increases 1 Share Performance KEY vs. Other Indices • 7 5% CAGR 2 in dividends • 7.5% CAGR in dividends 250 225 KEY per share 1 200 S&P/TSX S&P/TSX O&G Producers 175 S&P/TSX Pipelines & Storage • 22.5% compound annual p 150 S&P/TSX Utilities 125 total return per share 1 100 75 • Focused strategy; 50 25 disciplined approach 0 -25 • Positioned to benefit from -50 May-05 May-06 May-07 May-08 May-09 May-10 future natural gas and oil future natural gas and oil sands growth 1 Since inception in 2003 2 Compound Annual Growth Rate Providing Investors with Income and Growth 3

Strong Track Record of Growth Growth in Distributable Cash Flow per Share 1 Growth in Distributable Cash Flow per Share 1 Payout Ratio (%) Payout Ratio (%) 14.7% 15.0% 110% Median: 5.4% 10.0% 100% 6.6% 6.5% 6.2% 4.6% 90% 5.0% 0 7% 0.7% 80% 0.0% 70% -5.0% -3.1% 60% -10.0% -10.3% 50% 50% -15.0% 2003 2004 2005 2006 2007 2008 2009 2010 Infrastructure Peer Group KEY Dividends Since Inception hare per 17 Growth in Dividends per Share 2 10.0% 9.2% 6.8% 15 5.0% 3.6% Median: 3.3% 3.0% 5.0% 5 0% h month Cents per sh 13 0.0% 11 -5.0% -5.0% -5.0% 9 -10.0% -11.3% 7 -15.0% Infrastructure Peer Group KEY Source: Company reports, NBF Publications 1 Six-year compound annual growth rate (2004 - 2010) 2 2004 to current dividends per share Growing Dividends While Decreasing Payout Ratio 4

Investment Profile $ Canadian $ C di • Market value 1 • Market value $2 8 billion $2.8 billion • Enterprise value 1 $3.2 billion • Share price 1 • Share price $39 32 $39.32 • Current yield 1 4.9% • Dividends • Dividends $0 16 per share $0.16 per share per month • Trading volume • Trading volume 230 000 shares 230,000 shares per day (Q1 2011) 1 Closing price of $39.32 (KEY), $313.00 (KEY.DB) and $204.59 (KEY.DB.A) on March 31, 2011 Stable Business Supports Attractive Metrics 5

Who is Keyera? O One of the Largest Midstream Operators in Canada f th L t Mid t O t i C d • Natural gas and natural gas liquids (“NGLs”) midstream operator • Franchise type gas plants with • Franchise type gas plants with large capture areas in the Foothills, Deep Basin and West Central Alberta regions • Well-positioned NGL facilities in the Edmonton / Fort the Edmonton / Fort Saskatchewan energy hub Key Service Provider to Oil & Gas Producers 6

Integrated Energy Infrastructure Revenue Stream Gathering Raw Gas Processing and Sales gas to market Fee-for-service cash flow Processing Waste products Raw Gas (47% of total removed from gas contribution*) Fractionation, Storage, NGL Mix Pipelines, Terminals Pi li T i l F Fee-for-service f i cash flow NGL Facilities (23% of total contribution*) Liquids B Business i Unit Ethane Margin based Propane Marketing cash flow Butane (30% of total contribution*) Condensate * Percentage of 2010 Contribution. See Keyera’s 2010 MD&A for a definition of Contribution. Creating Value All Along the Value Chain 7

Gathering and Processing Weak Commodity Environment Presents Challenges Weak Commodity Environment Presents Challenges Requirement Solution • Plays with large resources & • The west side of the WCSB, where repeatability t bilit K Keyera’s plants are located, contains ’ l t l t d t i multiple “stacked” geological zones containing large reserves • Wells with high initial production rates • Wells with high initial production rates • Horizontal drilling and multi-stage • Horizontal drilling and multi stage to drive early payouts and positive completion techniques significantly economics changing the economics of tight gas reservoirs • Play types with high liquids (NGL) • 99% of Keyera’s processing capacity content to enhance economics has the ability to extract NGLs from the raw gas stream • Availability of existing infrastructure to • Keyera has extensive gathering enable quick tie-in of production systems and available plant processing capacity Keyera Well Positioned to Meet Customers’ Needs 8

Keyera Gathering and Processing O One of the Largest Gas Processors in Canada f th L t G P i C d • Large flexible processing plants • Operate 16 of 18 gas plants • Operate 16 of 18 gas plants • Licensed capacity of 2.6 billion cubic feet per day • Natural gas liquids (NGL) extraction • Sweet and sour gas processing capability • Extensive gathering systems • 3,400 km of gathering systems • Large capture areas create franchise regions g p g • Long-life assets • Technology has increased the recoverability of reserves • Positioned for growth in “unconventional” • Positioned for growth in unconventional resource developments • Fee-for-service revenues Franchise Facilities in a Key Natural Gas Basin 9

WCSB 1 – A Significant Gas Prone Basin T Technology Driving Producer Activity h l D i i P d A ti it • The WCSB contains significant gas reserves, primarily on the west side of the basin th t id f th b i • “Stacked” geological horizons offer multi-zone potential • Horizontal drilling and multi-stage completions g g revitalizating existing reservoirs and opening up new tight reservoirs • High value of NGLs resulting in focus on liquids-rich gas • Changes to Alberta regulatory regime (royalties, co- mingling of zones) enhancing economics 1 Western Canada Sedimentary Basin Significant Gas Reserves Remaining to be Produced 10

Competitive within North America WCSB G WCSB Gas Plays Provide Attractive Economics Pl P id Att ti E i • Many WCSB gas plays can be produced with economics as attractive as any in North America • Positive economics at less than $4.00/Mcf , in large part due to liquids (NGL) content • Gas containing higher amounts of NGLs can reduce break-even pricing even lower North American Natural Gas Plays Break-Even Price, Half Cycle Economics $5.00 $6.00 EX $US/Mcf $4.00 $5.00 C$/Mcf $3.00 $4.00 $4 00 NYME $2.00 $3.00 $1.00 $2.00 $0.00 SOURCE: Peters & Co. North American Energy Overview Winter 2011 Positive Economics at Less Than $4.00/Mcf 11

NGLs Drive Gas Economics Liquids-Rich Gas Enhances Producer Netbacks Li id Ri h G E h P d N tb k Methane Ethane Eth Propane Natural Gas Butane Butane Li Liquids id Condensate Liquids-Rich Gas is the WCSB’s Competitive Advantage 12