questar 2 2010 final
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A Natural Gas-Focused Energy Company
Credit Suisse Energy Summit 2010
Vail, Colorado February 3-4, 2010
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62%
11%
9%
10%
8%
2
Questar Exploration &Production
Wexpro
(Exploration & Production)
Questar Gas Management(Gathering and Processing)
Questar Pipeline
(Interstate Gas Transmission)
Questar Gas(Distribution)
EBITDA contributionTTM September 2009
$9.8 Billion Enterprise Value
Market
Resources82%
TTM 9/09 EBITDA $1.65B
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Questar E&P 2009 estimated production growth 7-9%,despite voluntary curtailments and deferred completions
Increased Haynesville acreage 39% to 43,000 net acres incore of the play
Continued success in Haynesville development drilling
Over 95 new producing wells at Pinedale in 2009
New growth opportunities in Woodford Shale, Granite Wash,
and Bakken Visible 12-15% production growth potential for 2010 and
beyond
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0
400
800
1,200
1,600
2,000
2,400
1998 00 02 04 06 08 2010
50
70
90
110
130
150
170
190
210
230
4
Proved YE reserves (Bcfe)*10-year (1999-2008) CAGR: 14%
Production (Bcfe)*10-year (1999-2008) CAGR: 10%
*excludes Wexpro reserves and production
2009E183-186
2010E210-215
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Questar E&P EBITDA($ millions)
317.1
452.3
638.9749.8
1,107.11,010.1
2004 2005 2006 2007 2008 TTM 9/09
5
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$0.00
$2.00
$4.00
$6.00
$8.00
3Q09 production cash cost structureversus 40 E&P peers
(LOE + production taxes + G&A + interest)
6
Source: Company data and Credit-Suisse E&P Stat Sort, December 8, 2009
Average$2.99/Mcfe
Questar E&P$1.67/Mcfe
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2009 CAPEX Forecast$1.50 Billion
2010 CAPEX Forecast$1.58 Billion
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Questar E&P*$1,088
Wexpro$100
Updated October 28, 2009
Wexpro$120
Gas Management$90
Questar E&P*$895
QuestarGas$84
Pipeline$114
Gas Management$290
Pipeline
$161
QuestarGas$129
*Includes exploration expense.
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Growth driven by two world-class assets
- Pinedale and Haynesville
Additional growth from emerging resource plays
- Bakken, Granite Wash, Woodford / Cana
2010 production guidance 210-215 Bcfe
- Over 70% hedged and up 15% vs. 2009
2010 EBITDA guidance $1.48-$1.58 billion
Five-year Questar E&P production growth rate 12-15%
High-quality, repeatable resource plays
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10
6 MilesUpdated October 20, 2009
TX LA
Reported initialproduction (IP) ratesfor Haynesville wells
(MMcfd)
Questar E&Pdrilling / completing
Questar E&P leasehold(Haynesville or deeper)
5
>5-10
>10-15>15-20
>20
7 Questar E&P-operated rigs in 2010
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Reported initialproduction (IP) ratesfor Haynesville wells
(MMcfd)
Questar E&Pdrilling / completing
5 >15-20
>5-10 >20
>10-15
Questar E&P leasehold(Haynesville or deeper)
6 Miles
Only operated locations are shown for WOC and drilling wells
Updated October 20, 2009
Initial Production Rates (MMcfd)
1. 24.8 14. WOC 27. Drilling
2. 17.7 15. 24.4 28. Drilling
3. 18 16. 22.1 29. Drilling
4. 12.2 17. 22.6 30. 11
5. WOC 18. 23.7 31. 13.96. 15.9 19. 21.7 32. 16.8
7. 20.1 20. 20.9
8. Drilling 21. WOC
9. 25.2 22. Drilling
10. 23.9 23. Drilling
11. 21.5 24. Completing
12. 25.1 25. Drilling
13. WOC 26. Drilling
23
12
3
4
5
6
7
8
9
10
11
17
12
13
15 16
21
18 19 2022
2425
26
27
28
29
3031
32
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Concentrated asset
Questar operated
Proven play
Low F&D and LOE
Downspacing potential
Developed infrastructure
Gathering and processing
QMR leasehold17,872 gross acres
PinedaleField
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* As of December 31, 2008
Questar E&P net proved reserves: 1.16 Tcfe *
Additional net probable reserves: 2.1 Tcfe
Up to 1,400 remaining well locations oncombination of 5- and 10-acre density
10-acre density wells likely recover< 50% of OGIP
417 producing wells at 11/3/09
400 Questar E&P PUDs booked oncombination of 5-,10- and 20-acre density *
Anticipate 95-100 new well completions in2009
6 Questar-operated rigs in 2010
CurrentEconomic
Limit
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Updated October 19, 2009
IPs MMcfd/bcd
1. IP: 21/570
2. IP: 25/1,900
3. IP: 21/1,230
4. IP: 21/0
5. IP: 20/0 *
6. Drilling *(QEP 1st
operated HZ well)
7. IP: 14/1,375 *
8. IP: 12/280 *
1
23
45*
0
10
20
30
40
Jan-04
Jul-04
Jan-05
Jul-05
Jan-06
Jul-06
Jan-07
Jul-07
Jan-08
Jul-08
Jan-09
Jul-09
Questar E&P Net production fromGranite Wash/Atoka
MMcfed
Currently drilling first Questar E&Poperated horizontal well
$4.8 to $8.0 MM well cost
EUR 3.5 to 6.0 Bcfe / well
49,401 gross / 21,634 net acres
2 Questar E&P-operated rigs in 2010
6*
7*
* Questar E&Pworking interest
8*
6 Miles
Questar E&P leasehold
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Recent Questar E&P Operated WellsInitial Production Rates:
1. Leck 4-28H, IP: 4,900 Mcfd, 3 bcd
2. Austin 1-23-H, IP: 7,615 Mcfd, 42 bcd
3. White 1-24H, Drilling
Updated October 12, 2009
Woodford wells completed
Woodford wells drilling & WOC
6 Miles
Questar E&P non-operated leasehold(Woodford or deeper)
Questar E&P-operated leasehold(Woodford or deeper)
Approx. 22,000 net acres in200 sections
Over 700 horizontal locations
17.35% avg. Questar E&Pworking interest (WI)
11 WI wells drilling or WOC
(1 QEP-operated rig) 45 WI wells completed (6 QEP-
operated)
Gross cost: $7 to $8 MM per well
Est. gross avg. EUR 5 Bcfe / well
1 Questar E&P-operated rig in 2010
1
2
3
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Questar E&P leases or minerals
Drilling wells other operators
Lake Sakakawea
USGS Eastern Expulsion Trend
6 Miles
80,000 net acres
5,000+ horizontal laterals
$5.5 to $6.5 MM well cost
IPs from 500-3,000+ bod
0.35 to 0.75 MMboe/well
3rd Questar E&P-operated well
currently drilling
1 Questar E&P-operated rig in 2010
0-500
501-1000
1001-2000
Reported initial production (IP)rates for Bakken wells (BOED):
2001-3000
3001-5000
Questar E&PMHA 1-18H
IP: 960 boed(4100 ft lateral)
Questar E&PMHA 1-08H
IP: 841 boed(4500 ft lateral)
Parshall/Sanish FieldIPs: 750-3,000 bod
EURs: 400-1,000 Mbo
Bailey Field AreaIPs: 500-1,000 bod
Questar E&P
MHA 13-14HDrilling
(9300 ft lateral)
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CO
UT
WY
Pinedale340 locations*
Moxa Arch/Labarge Platform450 locations
Vermillion/Powder Wash264 locations
Uinta Basin148 locations
Over 1,300 identified unrisked locations
Over $1.4 B identified risked net CAPEX
Successful-well costs added to investmentbase, dry holes excluded
Investment base depreciated on units-of-
production basis
19-20% after-tax return on investmentbase
Operating costs fully reimbursed
Future development provides competitivecost-of-service gas supply for Questar Gas
* based on 5 and 10-acre development
QMR leasehold
Gas fields
Oil fields
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Net Income($ millions)
35.3
43.750.0
59.2
73.977.7
2004 2005 2006 2007 2008 TTM9/09
Investment Base($ millions)
182.8206.3
260.6
300.4
410.6 419.5
2004 2005 2006 2007 2008 9/09
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21.0
35.742.6
55.3
81.5
64.2
2004 2005 2006 2007 2008 TTM9/09
Questar Gas ManagementNet Income ($ millions)
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COUT
WY
W. Green River Basin HubCurrent processing/blending: 580 MMcfd
QGM gathering: 650 milesRendezvous gathering: 325 milesRendezvous transmission: 20 milesQGM Operating income share: 64%Interstate pipeline connections: 6
2010 projects include the addition of a 350MMcfd cryogenic processing plant
Vermillion BasinCurrent processing/blending: 80 MMcfdGathering: 600 milesQGM Operating income share: 10%Interstate pipeline connections: 1
Uinta Basin HubCurrent processing/blending: 380 MMcfdQGM gathering: 900 milesUBFS gathering: 80 milesThree Rivers gathering: 50 milesQGM Operating income share: 26%Interstate pipeline connections: 4
2010 projects include the addition of a 150
MMcfd cryogenic processing plant
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2004 2005 2006 2007 2008 2009E 2010E
Actual and Forecast EBITDA$ Billions
$0.66
$1.76
$1.25
$1.09
$0.86
$1.58-$1.63
$1.48-$1.58
22
2010 guidance effective 10/28/09
EBITDA $1.48B-$1.58B
>75% of estimated productionhedged
Assumptions for unhedgedproduction:
- Gas: $5.50-$6.50/MMBtu NYMEX
- Oil: $75-$85/bbl NYMEX
- Rockies basis: $1.25-$0.50/MMBtu
- Midcontinent basis: $0.75-$0.30/MMBtu
210-215 Bcfe production
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$2,441 $2,628
$3,273
$3,961
$5,800 $5,582
2004 2005 2006 2007 2008 9/09
Capitalization including short-term debt($ millions)
Equity % Total Debt %
23
41%
59%
41%
59%
33%
67%
35%
65%
41%
59%
39%
61%
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This presentation contains forward-looking statements within the meaning of the federal
securities laws. Such statements are based on management's current expectations, estimates
and projections, which are subject to a wide range of uncertainties and business risks. Factors
that could cause actual results to differ from those anticipated are discussed in the company's
periodic filings with the Securities and Exchange Commission, including its annual report on
Form 10-K for the year ended December 31, 2008. Questar undertakes no obligation to publicly
correct or update the forward-looking statements in this presentation to reflect future events or
circumstances. All such statements are expressly qualified by this cautionary statement.
Management defines EBITDA as Net Income before mark-to-market gains and losses on basis-only swaps,gains and losses on asset sales, interest and other income, interest expense, DD&A, abandonments,
impairments, exploration expense and income taxes.
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Gas and oil hedges as of 10/22/09(Volumes and net-to-well prices)
2010
2011
2012
4 Bcfe oil collars$47.60-$105.15 / bbl5 Bcfe oil
$60.66 / bbl
102 Bcf gas$4.91 / Mcf
37 Bcf gas
$5.92 / Mcf4 Bcfe oil collars$47.60-$96.10 / bbl
151Bcf gas$5.26 / Mcf
21 Bcf gas collars$4.22-$6.51 / Mcf
7 Bcf gas collars$4.65-$6.51 / Mcf
Hedged Gas Hedged Oil Unhedged
Gas Collar Oil Collar
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Hedge discipline added $465 MM pre-tax income YTD 9/30/2009
from cash settlements
Focused CAPEX on higher-margin Pinedale and Haynesville plays
De-risking Granite Wash, Bakken, Woodford/Cana
Questar E&P forecast 2009 production growth 7-9%
Businesses excluding Questar E&P likely generate $240 MM net
income, $630 MM EBITDA in 2009
Strong balance sheet & liquidity / demonstrated access to capital
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Total system: 2,533 miles
Total daily capacity: 4,155 Mdth
Storage capacity: 53.1 Bcf
Rate base (1/1/09): $866 MM
27.634.8*
45.4 45.0
58.0 57.8
2004 2005 2006 2007 2008 TTM9/09
* before $10.4 MM Southern Trails writedown
Net Income ($ millions)2008 growth due to expansion
projectsOverthrust Pipeline
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Opal
Roberson Creek
Blacks Fork
Kanda
Rock SpringsCompression
Point of RocksCompression
WamsutterRoberson
Compression
Cabin 31
Ruby
REX
REX
WIC
Overthrust Loop
ExpansionFacilities: 44 miles 36 pipeCapacity: 600 Mdth/dInvestment: $100 millionIn-service: 3/1/2011
Overthrust Compression
ExpansionFacilities: 32,000 hpCapacity: 300 Mdth/dInvestment: $42 millionIn-service: 2/15/2010
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31.5
36.0 37.037.4
40.242.1
2004 2005 2006 2007 2008 TTM9/09
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Cities served: 277
Customers (+ 1.7%): 888,000
2008 deliveries: 176 MMdth
Rate base (1/1/09): $845 MM
Net Income ($ millions)
Questar Gas
Major cities served
Questar Pipeline
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Return on capital
Efficiency
Overall ratesCustomer growth
Revenue decoupling
Test year
Weather normalization
Market penetrationGas cost pass-through
Bad debt expense
Earned allowed return past 4 years
Ranks 3rd of 73 in O&M / customer
Among lowest in U.S.Above U.S. average
Pilot program in effect
Future test year now allowed
In place since 1995
> 95%Covered in rates
Gas cost portion covered in rates
Key Metrics
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$0.35 $0.36$0.39
$0.43 $0.45$0.47 $0.49
$0.49 $0.51
2001 2002 2003 2004 2005 2006 2007 2008 2009
Quarterly dividend$0.13 per share
36 increases in 37 years
$0.52 annualized dividend
1.2% yield on ~$43.00stock price *
Dividends / payout ratio / yield
PAYOUT RATIO 36% 39% 37% 31% 23% 18% 17% 13% 21%
YIELD 2.9% 2.7% 2.3% 1.7% 1.2% 1.1% 0.9% 1.5% 1.2%
* As of January 28 2010
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