36
CO 2 Jim Wuerth President CO 2 Group
CO2
Jim Wuerth
President CO2 Group
Kinder Morgan CO2 Asset Map
2
Historical Long-term Outlook The best is yet to come
$-
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
$1,800
$2,000
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
20142013201220112010200920082007
CO2 segment outlook has continued to grow over past 5 years Higher CO2 volumes and prices
— Increased demand, improved contract terms
Higher ultimate recoveries being achieved
— Improved operating practices, new areas to exploit
3
Historical DCF Projections ($MM)
History of CO2 Group and Looking Forward Track Record – Consistently very close to budget despite inherent volatility Shell CO2 formed in 1998, KM share 20% Acquired remaining 80% in April 2000 Acquired SACROC interests June 2000 Acquired Yates interests in 2001 and 2003 Ramped up developments at SACROC 2003+
— Constructed Centerline pipeline in 2003 — Constructed power plant in 2005 — Increased oil production 3X+
Acquired Wink pipeline in 2004 Acquired Katz field 2006 Increased SW Colorado CO2 capacity 30% 2008 Katz CO2 project: CO2 injection commenced Dec-
2010 2013 - Acquired Goldsmith Landreth San Andres
(GLSAU), Drilled Residual Oil Zone (ROZ) appraisal wells and completed Doe Canyon expansion
4
DCF ($MM) (a)
$-
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
CO2 S&T CO2 Flood Properties Plan for Each Year
Our assets, resources and technologies provide us with growth opportunities
— Strong growth in CO2 demand – new developments are underway — Continued developments at SACROC, Yates, Katz, and GLSAU — Emerging oil and gas opportunities
__________________________ (a) CO2 Sales and Transportation includes Yates Oil Gathering System (YOGS), CO2 sales profit on own use has not been eliminated
2013 Performance Recap
2013 DCF:
$1,389MM plan (b)
$1,418MM actual
SACROC (a) DCF $758MM vs. $744MM plan Oil: 30,655 Bbl/d vs. 30,251 Bbl/d NGLs: 19,520 Bbl/d vs. 19,229 Bbl/d
S&T DCF $391MM vs. $379MM plan CO2Production: 1,218 MMcf/d vs 1,275 MMcf/d
Yates DCF $247MM vs. $236MM plan 20,360 Bbl/d vs. 20,102 Bbl/d
Katz DCF $19MM vs $22MM plan 2,691 Bbl/d vs 2,850 Bbl/d
GLSAU DCF $3MM vs $9.3MM plan 1,278 Bbl/d vs 1,434 Bbl/d Acquisition of GLSAU added $3MM DCF
Capex Capex $675MM actual vs. $660MM plan (c)
5
__________________________ (a) Including SACROC Services and remaining oil and gas assets (b) Annual budget adjusted for 7 months of GLSAU (c) Plan includes $28MM for GLSAU acquisition
2013 and 2014 DCF by Asset Group (a)
6 __________________________ (a) Segments shown without elimination
S&T30%
Yates13%
SACROC Complex
51%
Katz4%
GLSAU2%
2013 DCF = $1,418 MM 2014 DCF = $1,526 MM
S&T 27%
Yates 18%
SACROC Complex
54%
Katz 1%
GLSAU
2014 Expansion Capital Budget - $1,076 Million
7
S&T51%
SACROC 25%
Yates3%
GLSAU6%
ROZ7%
Katz8%
S&T47%
SACROC16%
Yates2%
GLSAU2%
ROZ7%
Katz4%
Staff OVHD6%
CO2 Purchases
16%
CO2 purchases and staff overhead - aggregated
CO2 purchases and staff overhead – allocated to assets
S&T – $548MM Capex (includes $39MM Cap OH & Cap CO2) $453MM DCF Drill 3 new wells and acquire 3D seismic at McElmo Dome / Doe Canyon Yellow Jacket booster compression Cow Canyon development St Johns unit and Lobos pipeline development CO2 recapture and new E&P developments
SACROC Complex – $272MM Capex (b,c) (includes $102MM Cap OH & Cap CO2) $756MM Activate 22 patterns Continue Infill, Harvest and Bypass Oil efforts Initiate work for Platform 4 Purchase 157 MMcf/d CO2, Produce 30.9 MBbl/d oil, 19.3 MBbl/d NGL
Yates – $34MM Capex (c) (includes $13MM Cap OH & Cap CO2) $231MM Drill 50 wells (two 20 Well East Side HDH Programs and 10 gel wells) Purchase 95 MMscf/d CO2 Produce 20.2 MBbl/d oil (19.9 MMBbl/d YFU, 0.3 MMBbl/d Deep)
Katz – $86MM Capex (includes $40MM Cap OH & Cap CO2) $65MM Activate 7 patterns Purchase 73 MMcf/d CO2, Produce 4,650 Bbl/d oil
GLSAU - $58MM Capex (includes $38MM Cap OH & Cap CO2) $21MM Drill 14 Wells Install additional Compression Activate 8 Patterns in Phase III
ROZ - $78MM Capex (includes $6MM Cap OH & Cap CO2) - Drill 29 Wells for CO2 Pilot Construct Production Facilities Activate 9 Injection Patterns
Total $1,076MM Capex (a) Total $1,526MM DCF
8
__________________________ (a) Included in $1,076 million total capex program are overhead and CO2 purchases, in the aggregate, of approximately $238 million (b) Includes minor properties, unallocated costs (c) Includes secondary objectives
2014 Executive Summary Capex Program $1,076MM (a)
Impact of Oil Price / Volume Variance on 2014 DCF
2014 Budget: Volume +/- 1,000 Bbl/d SACROC / Katz / GLSAU Yates CO2 Volume +/- 50 MMcf/d Oil Price +/- $1/Bbl WTI NGL CO2
Crude NGL Price +/- $1/Bbl
$1,526 $28.0 $14.9 $9.8 $7.0 $2.0 $2.1 $2.9 $3.9
9
($ in millions)
__________________________ Notes: Unhedged WTI price presumed to average $96.15/b; WTI-WTS spread = $2.00/Bbl / Midland-Cushing spread = $1.51 NGL price presumed to be $45.22 (47% WTI)
McElmo Dome & Doe
Canyon
Bravo Dome
Sheep Mtn.
Other
-
200
400
600
800
1,000
1,200
1,400
1,600
1,800
1985 1992 1999 2006 2013
MMcf/d
CO2 Source & Transportation Growing Business Opportunities
Permian Basin 2013 supplies were at capacity, customers
were being pro-rated at times Permian Basin demand is growing via new
projects, extensions of existing projects, and ROZ projects
Increased opportunities in the Permian Residual Oil Zone (ROZ)
Domestic EOR CO2 Industry EOR activity is increasing Naturally occurring sources are being
expanded to ultimate capacity Several regions have potential
— Gulf Coast, California, Mid-continent, Canada
10
Permian Basin CO2 Deliveries
Domestic CO2 Deliveries
Permian Basin
Wyoming
Mississippi
North Dakota
-
400
800
1,200
1,600
2,000
2,400
2,800
3,200
1985 1992 1999 2006 2013
MMcf/d
__________________________ Sources: KM estimates, Oil and Gas Journal, EIA, XOM, Dakota Gasification, DRI
CO2 Entitlement Volumes Produced and Sold to our Customers
0
100
200
300
400
500
600
700
800
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
MMcf/dSignificant growth since 2005: CAGR: volumes +5.76%, price +14.18% 2014 vs 2013: volumes +12.74%, price
+9.36% As a reminder: Although our customer deliveries often have
and will exceed our entitlement, sales revenues are based on our working interest entitlement and not deliveries
KM share of EOR demand consumes ~43% of our entitled production in 2014
Elimination: consolidation results in eliminating profit on sales to ourselves, however we view our S&T and O&G businesses independently, and price sales to ourselves at market prices
11
CO2 KM-share
Demand Growth and Regeneration 5-year Contracted CO2 Volumes
-
200
400
600
800
1,000
1 2 3 4 5
2006 2014MMcf/d
Year
High oil prices have increased long-term demand for CO2
— Weighted average contract life
with 3rd parties is 10 years
12
CO2 Daily Contract Quantities
Current Production 1,300 MMcf/d*
(MMcf/d) ($MM) ($MM) New
Volumes Total Cost
Already Approved Current Status
New Sources
Yellow Jacket Boosters 90 $214 $ 214 In execution Cow Canyon 200 $ 380 $ 56 Pending Final Approval St. Johns 300 $ 982 $73 Pending Final Approval Additional 4 Corners Area Expansions 60 $ 184 $11 Appraisal in progress Recapture Projects 78 $ 96 $ 16 Under Development Total 728 $ 1,856 $ 370
Additional Market
Third Party Share McElmo/Doe 160 N/A ROZ North 3 Sections 200 $ 451 $ 103 Phase I in Development ROZ South 3 Sections 200 $ 451 Under evaluation ROZ North 5 Additional Sections 50 $746 Under evaluation New Third Party Sales 200 N/A Contracting Underway Add’l SACROC, Yates, Katz , GLSAU 200 $400 Pending new CO2
Total 1,010 $ 2,048 $ 103M
Additional ROZ 300 $ 3,100 Negotiations in Progress
Cortez Pipeline Expansion 630 $ 327 Pending Approval
*Completion of Doe Canyon expansion added 90 MMcf/d and eliminated curtailments in 4Q 2013
13
Expanded Supply, New Markets Status of CO2 Supply Expansions
-
200
400
600
800
1,000
1,200
1,400
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
-
200
400
600
800
1,000
1,200
1,400
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
KM TP Contract DCQs KM TP Contract RolloversSacroc YatesGLSAU KatzROZ Net Entitlements w St. Johns & Cow CanyonNet Entitlements w/o St. Johns & Cow Canyon 14
KM CO2 Anticipated Demand (MMcf/d)
Includes GLSAU acquisition volumes
Last Year
Current Outlook
Doe Canyon Field Expansion $255 MM, 95 MMcf/d CO2 Increase
200 MMcf/d (from 105 MMcf/d) — Beating 170 MMcf/d target — Adds 750 Bcf reserves — Beating expected returns
Completed : 4th Quarter 2013 — 4 months ahead of schedule — Parallel & booster compression
at projected cost target — 6 new wells - higher than
expected performance — Successful 3D seismic program
Signed helium extraction deal with Air Products 10/2013
— Q2 2015 plant completion — No cost to Kinder Morgan
15
Projected Production Forecast (MMcf/d)
McElmo Dome Field Expansion Yellow Jacket Area – Booster Compression Project
Target Rate of 1.2 Bcf/d — Yellow Jacket first step in adding field
compression — Adds 1.7 Tcf reserves
Yellow Jacket project On-track for 4Q 2014 completion
Yellow Jacket project costs $214MM — Compression $141MM — Facilities $ 68MM — Engineering $ 5MM
Next phases for other plants in planning
16
Incremental Production w/ Booster Compression (Bcf/d)
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
1982 1992 2002 2012 2022 2032 2042
Gas
Rat
e (B
CFD
)
Time (Date)
Base Decline
Booster Compression
McElmo Dome Field Expansion Cow Canyon Development
17
Projected Production Forecast (Bcf/d)
Additional 200 MMcf/d Opportunity — 1.3 Tcf reserves potential — Known area from past drilling
Pre-development phase underway — 2 appraisal wells, 3D seismic
Targeting mid-2015 1st production
Project Costs $344MM — Pre-development investment — 14 development wells — Compression & gathering facilities
Proposed to Partners in 4Q 2013
Project delivers attractive returns based on current market prices
Cow Canyon
Seismic Boundary
Well Clusters
Appraisal Wells
Plant
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
1982 1992 2002 2012 2022 2032 2042
Gas
Rat
e (B
CFD
)
Time (Date)
Cow Canyon
Base Decline
Compression
Kinder Morgan will spend an additional $909MM over 18 years to develop the St. Johns CO2 field • About 450 sq. mile unitized Area, 300 sq. mile in
development • NRI 83.5%
Reserves • 1.3+ Tcf Recoverable
Production • 2016-25 300 MMscf/d • 2025-30 decline from 250 MMscf/d to 90 MMscf/d
First production mid-2016 Integrated greenfield project
• 156 Wells + 160-mile gathering and flow system • 51,000 HP CO2 treatment and compression plant • 216-mile Lobos Pipeline with interconnect to Cortez
Economics: • DCF about $160 MM/Yr 2016–2021 • Declines with production and price 2022–2030
Full-project investment $982MM (including expenditures to date)
216 mi Lobos CO2 Pipeline
Pump Stations
Cortez CO2 Pipeline
St. Johns Field
AZ
NM
18
St. Johns Development Project KM CO2’s first greenfield CO2 development will kick-start new Permian EOR
Cortez Pipeline Expansion Project Expansion enables significant growth in CO2 supply to the Permian
19
Increases current capacity from 1.3 Bcf/d to nearly 2.0 Bcf/d
$327MM (100%-share) planned investment
64-mile loop, 50,000 additional horsepower
Cortez Partnership will finance 100% of expansion
Additional CO2 Development Underway As we meet Permian need, focus shifts to new sources and new markets
20
New source fields being evaluated across the region
CO2 recapture projects identified or under development with initial recapture of 78 MMcf/d of CO2 off amine units
New CO2 markets under
development will expand customer base and provide more optionality to KM CO2 supply portfolio
Potential New Markets
Oil and Gas Segment Production and DCF
Original Oil in Place (Billion Bbls) SACROC 2.8 Yates 5.0 Katz 0.23 GLSAU 0.48
Gross Production (Bbl/d) (b) 2013 2014 SACROC oil 30,655 30,939 SGP NGLs 19,520 19,296 Yates 20,360 19,890 Katz 2,691 4,646 GLSAU 1,278 1,934
DCF (b) ($MM, without Elimination) 2013 2014 SACROC Group (a,b) $758 $756 Yates (b) $247 $231 Katz $19 $65 GLSAU $3 $21
21
0
10
20
30
40
50
60
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Gas Processing
GLSAU
Katz
Yates
SACROC
Net Hydrocarbon Production (MBoe/d)
__________________________ Notes: Yates DCF does not include contribution from MKM BOE: Oil and NGL =1:1, Residue gas sales = 6:1 Gas Processing includes net Boe attributable to our plant interests and processing agreements but excluded from reserve report (a) Includes other minor oil and gas properties near SACROC and SGP (b) Includes Secondary Objectives
$0
$200
$400
$600
$800
$1,000
$1,200
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Katz
GLSAU
Yates
SACROC Group
DCF ($MM)
$-
$20
$40
$60
$80
$100
2007 2008 2009 2010 2011 2012 2013 2014 Plan
Power Labor Other
Workover Exp CO2 Expense TOTI
DD&A Hedged Revenue Unhedged Revenue
O&G cost structure has strong correlation to energy prices Power is tied to gas prices
High activity levels have increased
staffing and other service costs
Well-work and rig contracts now being tied to oil prices
Purchased CO2 and TOTI (b) are strongly correlated to oil prices
22
Oil & Gas All-in Cost Structure (a) ($/Net Boe)
__________________________ (a) Costs and Revenue per net Boe, including hedges where applicable; includes acquisition and all development costs (b) Taxes other than income taxes
Oil & Gas Margins and Cost Structure
Oil and Gas Segment Over past 5 years, capex 7% below plan, oil production 0.5% below plan
23
Capex ($MM) Net Oil Production (MBbl/d)
-
5
10
15
20
25
30
35
40
2009 2010 2011 2012 2013
Budget Actual
$-
$50
$100
$150
$200
$250
$300
$350
$400
$450
$500
2009 2010 2011 2012 2013
Budget Actual
__________________________ Note: Capex includes CO2 purchases and capitalized overhead
0
5
10
15
20
25
30
35
40
1Q03 1Q05 1Q07 1Q09 1Q11 1Q13
Actual Budget
SACROC Production & Operations Highlights 2013 – Review Oil production 1.3% above plan
— Harvest better than expected — Good results from infill program — Platform 2 and 3 meeting oil expectations — GOR under control
NGL production 1.5% above plan — Strong yields despite declining HC gas — Record year for SACROC
Costs — Opex/sustaining capex: $4MM below plan — Expansion capex: $56MM above plan
• Acceleration of P3 capex due to permit issues 2014 – Focus Continue in-fill program Evaluate bypass pay opportunity with
horizontal injectors Add Platform 3 patterns at the right pace –
manage gas volumes
24
Oil Production 2003-2014 (MBbl/d)
NGL Production 2007-2014 (MBbl/d)
0
5
10
15
20
25
Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14
Actual Budget
SACROC Unit Harvest Project: 2,500 Bbl/d of incremental oil & ~54 MMcf of additional recycled CO2 to inject
25
2-12-22-4
2-6
3-13-23-3
3-4
3-5 3-6 3-7 3-8
4-14-3
5-1
6-1
7-1
8-1
8-2
8-3
8-4
8-5
8-6
8-7
8-8
8-9
9-1
9-10
9-11
9-12
9-13
9-14
9-15
9-2 9-3
9-4
9-5 9-69-79-8
9-9
10-1
10-1010-11
10-12 10-1310-14 10-1510-16
10-2
10-3
10-410-5
10-610-7 10-8
10-9
11-1
11-1011-11
11-11A
11-12
11-13
11-14
11-15
11-2
11-3
11-4
11-511-5 ST11-611-711-8
11-9
12-10
12-12
12-13
12-15
12-18
12-19
12-20
12-4
12-5
12-6
12A-1 12A-11
12A-14
12A-2
12A-21
12A-22A
12A-23
12A-3 12A-7
12A-8
12A-9
13-16
13-17
14-3
14-4
14-5
15-1
15-10
15-11
15-12
15-2
15-415-515-6 15-7
15-8
15-9
16-1
16-10
16-2
16-3
16-3 ST
16-4
16-5
16-6
16-7
16-8
16-9
17-10
17-5 17-617-7
17-8
17A-1
17A-1117A-11A17A-12
17A-13
17A-217A-3
17A-4
17A-9
18-1
18-10 18-11
18-12
18-13
18-14
18-2
18-3
18-4
18-5
18-618-7
18-8
18-9
19-1
19-1019-11
19-1219-2
19-3
19-419-5
19-619-7
19-8
19-9
20-1
20-1020-11
20-1220-13
20-14
20-15
20-1620-17
20-220-3
20-4
20-520-6
20-7
20-8
20-9
21-1
21-2
21-3
21-421-5
21-6
22-5
22-6
23-1
23-2
24-1
24-2
24-3
24-4
24-524-5A
24-6 24-7
24-8
25-1
25-225-2A25-3
25-4
25-5 25-6
26-1
26-10
26-11
26-12
26-13
26-14
26-1A26-2
26-2A
26-326-3A
26-426-4A
26-5
26-6
26-7
26-7A26-8
26-9
27-1
27-10
27-1127-12
27-13
27-14
27-15
27-15A27-16
27-17
27-1827-19
27-1A
27-2
27-2A
27-3
27-3A27-4
27-5
27-5A27-6
27-6A27-727-7A
27-8
27-9
28-1
28-10
28-11
28-12
28-13
28-14
28-15
28-16
28-17
28-18
28-1A
28-228-2_ST
28-2A
28-328-3A
28-428-5
28-5A
28-6
28-6A
28-7
28-8
28-928-9A
29-1
29-2
29-3 29-4
29-5 29-6
29-7
29-8
29-9
30-1
30-11
30-12
30-13
30-18
30-2
30-20
30-6 30-8
31-13
32-14
32-16
32-17
32-21
32-22
32-23
32-24
32-25
32-2632-27
32-2832-29
32-3
32-30
32-3132-31_ST
32-4
32-5
32-9
33-1
33-10
33-1133-12
33-13
33-14
33-15
33-16
33-233-2A
33-3 33-4
33-5 33-7 33-9
34-1034-11
34-12
34-12A
34-13 34-14
34-15
34-5
34-6
34-6A
34-7
34-7A34-8
34-934-9A
35-1
35-235-2A
35-335-3A 35-4
35-5
35-6
36-536-6
36-7 36-8
36-A136-B2
36-B2A
36-C3
36-C3A
36-D436-D4A
37-1
37-10
37-1137-2
37-2A
37-3
37-3A
37-4
37-5
37-6
37-7 37-8
37-9
38-138-1A38-2
38-338-3A38-4
38-538-6
39-139-239-2A
39-3
39-3A39-4
39-5 39-6
39-7
39-8
39-940-1
40-10 40-11
40-12
40-13 40-14
40-1A40-2
40-3
40-3A
40-4
40-4A
40-5
40-6
40-7
40-8
40-9
41-1
41-2
41-4
42-1
42-2
42-3
43-1
44-144-244-3
44-4
45-145-2
45-3
45A-1
45A-2
46-1
46-10
46-11
46-1346-13_ST
46-14
46-15
46-1646-2A
46-2B
46-3
46-446-5
46-6
46-7
46-8
46-9
48-1
48-1 ST48-1A
48-2
48-3
48-4
48-549-1
49-1_ST
49-11
49-12
49-1349-14
49-15
49-1649-17
49-2
49-2A49-3
49-3A
49-449-4A
49-5
49-5A
49-6
49-6A
49-7
49-8
49-9
50-1
50-1_ST
50-2
50-2_ST_No-150-2_ST_No-250-2A
50-3
50-4
50-5
50-5A
50-6
51-151-1A
51-2
51-2_ST
51-3
51-4
51-4A
51-5
51-6
51-7
51-8
52-152-1_ST
52-2
52-2A
52-3
52-4
53-153-1_ST
53-2
53-2A
53-3 53-3A
53-4
54-1A
54-1A ST_1
54-1A_ST_2
54-2
54-354-4
54-5
54-6
54-7
55-155-1A
55-255-2A
55-3
55-3A
55-455-4A
55-555-6
55-7
55-8
56-1
56-10
56-10A56-11
56-12
56-13
56-14
56-15
56-1656-1756-18
56-19
56-1A56-2
56-20
56-20A
56-21
56-2256-22A
56-23
56-24
56-25 56-26
56-27
56-2A
56-356-3A
56-456-4_ST
56-4A
56-556-5A
56-6
56-6_ST56-6A
56-7
56-7A
56-856-8A
56-9
56-9A
57-157-257-2A
57-357-3_ST57-4
57-5
57-6
57-7
57-8
57-9
58-1
58-1A
58-258-2A
58-358-4
59-159-1A
59-259-2_ST
59-2A
59-359-3A
59-4
59-5
60-1
60-10
60-2
60-3
60-3A
60-4
60-4A
60-6
60-6_ST
60-7
60-8
60-9
61-1
61-261-2_ST
61-3
61-4
61-561-6
61-7 61-8
61-9
62-1
62-10
62-1162-12
62-13
62-1A
62-2
62-362-3A
62-5
62-6
62-6A
62-7
62-8
62-9
63-1
63-2 63-3
63-4
63-5
63-6
64-3
64-4 64-5
64-864-9
65-1
65-1065-11
65-12
65-13
65-14
65-15
65-16
65-265-2A
65-3
65-465-4A
65-5
65-6
65-7
65-8
65-9
67-1
67-10 67-11
67-12
67-13
67-1A
67-2
67-3
67-3A
67-467-4A
67-5
67-5A
67-667-7
67-8
67-9
68-1
68-1068-11
68-1268-2
68-3 68-4
68-5 68-6
68-7
68-8
68-9
69-1
69-10
69-1A69-2
69-369-3A 69-469-4A
69-5
69-6
69-7
69-8
69-9
70-1
70-2
70-370-3A
70-4
70-5
70-6
70-7
70-8
70-9
71-171-2
71-371-4
71-5
71-6
71-7
71-8
71-9
72-1
72-2
72-3
72-4
72-5
72-672-7
72-8
72A-5
72A-6
72A-7
73-1
73-273-2_ST
73-373-4
73-5
73-5_Sidetrack73-8
74-1
74-10
74-11
74-12
74-13
74-2
74-374-3_ST74-4
74-5
74-5 ST_174-5 ST_2
74-6
74-774-8
74-9
75-1
75-10
75-11
75-12
75-13
75-14
75-15
75-16
75-17
75-18
75-2
75-375-4
75-5
75-6 75-6_ST
75-7
75-8
75-9
75-9_ST
76-1
76-2
76-3
76-4
77-1
77-1_ST
77-10
77-277-2_ST
77-377-3_ST
77-4
77-5
77-6
77-7
77-8
77-9
78-1
78-1A
79-179-11 79-2
79-3
79-4
79-5
79-6
79-6_ST79-7
79-8
80-1
81-181-2
81-381-4
81A-1
82-1
82-2
83-184-1
84-2
84-385-1
85-10
85-11
85-12
85-13
85-14
85-2
85-3 85-4
85-5 85-6
85-7
85-885-9
86-1
86-1_Sidetrack86-10
86-11
86-12
86-13
86-14
86-1586-15A
86-16
86-17
86-2
86-3
86-3A
86-4
86-5
86-5A
86-6
86-8
86-9
86-9A
87-187-1A
87-2
87-387-4
88-1
88-2
88-3
89-189-1A
89-2
89-3
90-3
90-490-4A
90-5
90-6
90-7
90-8
91-1
91-10
91-11
91-1291-13
91-1491-15
91-1A
91-2
91-3
91-491-4_ST
91-591-5_ST1
91-5_ST2
91-6
91-791-7A
91-8
91-9
92-1
92-10
92-1192-12
92-1A 92-2
92-3
92-3A92-4
92-592-6
92-792-8
92-9
93-193-1A93-2
93-393-4
94-1 94-2
94-3 94-4
94-5
95-1
96-1
97-1
98-1
99-3
99-499A-1
99B-1
99B-2A
100-1100-2
101-1
101-2
102-1
102-2
102-3
102-4
102-5
103-1
104-1
104-2104-3
104-4
104A-1
104A-2
104A-3
104A-4104B-1
105-1
105-2
106-1106-2
106-3 106-4
107-1
107-2107A-1
108-1
109-1
109-1 ST
109-1A
109-2
109-3109-3A109-4
109-5109-6
109-7
109-8
110-1110-2
110-3110-4
110-4A
111-1111-2
111-3111-4
111-5 111-6
111-7
112-1 112-2
112-3112-4
112-5
113-1
113-2
113-3
113-3A
114-1
114-2114-3
115-1115-1B
115-2115-3
115-4
115-5
116-1116-2116-2A
116-3
116-3_Sidetrack
116-4
116-5
116-6
116-7
116-8
117-1
117-2117-3
117-4
117-5117-6
117-7
118-1
118-10
118-11
118-12
118-12 Side 1
118-12_ST 2
118-13
118-14 118-15
118-16
118-17
118-18
118-19
118-2
118-20118-21
118-22 118-23
118-24 118-25
118-26
118-27118-28
118-3
118-4118-4A
118-5118-6
118-7
118-7_ST
118-8
118-9
119-1
119-1_ST
119-2120-1
120-2
120-3
120-4
121-1
121-10121-11
121-2
121-3
121-4
121-5
121-6 121-7
121-8
121-9
122-1122-2
122-3
122-4
122-5
122-6
123-1123-2
123-3
123-4
123-5123-6
123-7123-8
123-9124-1
124-10124-11
124-12
124-13
124-14
124-15
124-16
124-17124-2
124-3
124-4
124-5
124-6
124-7
124-8
124-9
125-1
125-2
125-3125-4
125-5
126-1
126A-2
127-1
127-2
127-3
127-4
127-5
128-1
128-2
128-3
128-4
129-1
129-2
129-2 ST
129-3
129-4A
129-5
130-1
130-2
131-1A
131-2A
132-1 132-2
132-3
133-1
133-2
133-3
134-1
134-2
135-1
136-10
136-3136-4136-4A
136-5
136-6
136-7
136-8
136-9
137-1
137-2
137-3
137-4
138-1
138-10
138-11138-12
138-13
138-2
138-3
138-4
138-5
138-5_ST
138-6138-6A
138-7138-7A
138-8
138-9
139-1
139-2
139-2A
139-3 139-4139-5
139-6
140-1 140-2 140-3140-4
140-5
140-6
141-1
141-2 141-3
141-4
141-5
141-6
141-7
141-8
142-1
142-1_ST_1142-1_ST_2
142-10
142-2
142-3
142-4142-5
142-6142-6A
142-7
142-8142-9
143-1
143-1_ST
143-2
143-3
143-4
143-5
144-1
144-2
144-3
144-4
144-5
145-1145-1A
145-2
145-2_ST
145-3
145-4
145-5
146-1
146-2
146-3
146-4
146-5
146-6
146-7 146-8
147-1
147-10147-11
147-12147-13
147-2
147-3
147-4
147-5147-6
147-7
147-7_ST
147-8
147-9
147-9 ST
147-9A
148-1
148-10_ST
148-11
148-2148-3
148-4
148-5
148-6
148-7
148-8
148-9
149-1
150-1
150-2
150-3
150-4
150-5
151-1
151-2
151-2A
151-3
151-4
152-1
152-1_ST152-2
152-3
152-3A
152-4
152-5
152-6
153-1
153-10
153-11
153-12
153-13
153-14
153-2
153-3
153-4
153-5
153-6
153-7
153-8
153-9154-1
154-1_ST
154-2 154-3
155-1
155-10
155-11
155-12
155-13
155-15
155-16155-17
155-2155-2_ST
155-3
155-4
155-5
155-6
155-7
155-8155-9
156-1
156-1A
156-2156-3
156-4
156-5
156-6
156-7
157-1157-2
157-3157-4157-4A
157-5
157-6
158-1158-2
158-3158-4
158-5
159-1 159-2
159-3 159-4
159-4A
159-5
160-1160-10
160-11
160-2
160-3
160-4
160-5
160-6
160-7
160-9
161-1B161-2B
161-3B
161A-2161A-3
161B-1
162-1
162-2
162-3
162-4
162-5
163-1
163-2
163-3
164-1164-2164-3
165-1165-2165-3
166-1
166-10
166-10A
166-11
166-12
166-13
166-14
166-15
166-16
166-17166-18
166-19
166-2
166-20
166-21
166-3
166-4
166-5
166-6
166-7
166-8
166-9A 167-10
167-4167-5
167-6
167-7
167-8
167-8_ST
167-9
168-1 168-2 168-3
168-4168-5
169-1
169-2
169-3
169-4 169-5
169-6
169-7 169-8
169-9
170-1
170-2
170-3
170-4
170-5
170-6
171-1
171-2
171-3
171-4
171-5
171-6
171-7
172-1
172-2
172-3
172-3_ST
172-4
172-5
172-6172-7
172-8
173-1
173-10
173-11
173-12
173-13
173-2
173-3
173-4
173-5
173-5A
173-6
173-7
173-8
173-9 174-1
174-2174-3
174-4
174-5
174-6 174-7
175-1
175-1A
175-2
175-3
175-4
176-1176-1A
176-2 176-3
176-4
176-5176-6
176-7
176-8
176-9
177-1177-2
177-3
177-4
177-4A 177-5
177-6
177-7
177-8
177-9
178-1178-2
178-3 178-4
178-4_ST
178-5
178-6 178-7
178-8
178-9
179-1179-2
179-3179-4
179-5
179-6
180-1
180-2
180-3
180-4
180-5
180-6 181-1
181-2
181-3
181-4182-1
182-2
183-1
183-1 ST
183-2
184-1185-1
186-1187-1
188-1
188-2
188-3
188-4
188-5
188-6
189-1189-2
190-1190-2
190-3
191-2
192-1193-1194-2
195-1
196-1
197-1198-1
198-6
198-7
199-1 199-2
199-3199-4
199-5199-6
199-7
200-1
200-2200-3
200-4
200-5
201-1
201-2
202-1
203-1 203-2203-2A
203-3
203-3_ST 203-4
203-5203-6
203-7
203-8
203-9
204-1
204-2
204-2_ST204-3
204-4
204-5
204-6
204-7
205-1
205-2
206-1
206-2206-3
206-4
206-5
206-6
206-7
206A-7
206A-8
206A-9
207-1
207-1_ST
207-2 207-3
207-4
207-5
207-6
207-7
208-1
208-2
208-3
208-4
208-5209-1
209-2
210-1 210-2
210-3
210-4
210-4_ST
210-5
210-6
210-7 210-8
210-9
211-1
211-2
212-1 212-2
212-3
212-4 212-5
213-1213-1A
213-2
213-2A
213-3
213-4
213-5
214-1
214-2214-2A
214-3
215-1 215-2
215-3215-4
215-5
215-6215-7
216-1
216-2
216-2_ST
216-3
216-3 ST
216-4
216-5216-6
216-7
216-8
217-1
217-2
217-3
217-4
217-5
217-6
217-7
217-8
217-9
218-2
219-1
220-1
220-2
220-3
220-3A
220-4
220-5
220-6
220-7
220-8
220-9
221-1
221-1_ST
221-2221-3
221-4
221-5
222-1
223-1
223-2
223-3
224-1
224-2
225-1
225-10
225-11
225-2
225-3225-3A
225-4
225-5
225-6
225-7
225-8
225-9
227-1227-2
227-3227-4
227-5
228-1
228-10
228-2
228-3228-3A
228-4
228-4_ST
228-5
228-6
228-7
228-8
228-9
229-1
229-2229-2A
229-3
229-4
230-1
230-2
230-3
230-4
231-1
232-1
232-2
232-3
232-4
233-1 233-2
233-3234-1
235-1235-2
235-3 235-4
235A-1
236-1
236-2
237-1
237-2
238-1238-2
238-3238-4
239-1
239-2A
239-3
239-4
239-5
239-6239-7
239-8
240-1240-2
240-3240-4
240-5
241-1 241-2
241-3241-4
241-5 241-6
241-7
241-8
242-2
242-3
243-1243-1A
243-2
243-3
243-4
243-5
243-6
243-7
244-1
244-2
245-1
245-2
245-3245-4
245-5
246-1
246-2246-3
246-4
247-1247-2
247-3 247-4
248-1248-2
248-3248-4
248-5
248-6
249-1
249-2
250-1
250-2
250-3
251-1
251-12251-13
251-2
251-4
251-6
251A-10251A-11
251A-3
251A-5 251A-7
251A-8
251A-9
252-1 252-2252-4
252-5
252-6252-7252-8
253-1 253-2 253-3253-4
254-1
254-2
254-3
254-4
255-1 255-2
255-3
255-4255-5
256-1
256-2
256-3
256-4
257-1
257-2 257-3
257-4
258-1 259-1
259-2
259-3259-4
259-5
260-1
260-2
260-2A260-3
260-3A
260-4
260-5
261-1
261-10
261-1A
261-2261-3
261-4261-5261-6 261-7
261-8
261-9
262-3262-4262-4A
262-5
262-5A
262-6
262-6A
262-7
262A-1
262A-1A
262A-2
262A-2A
262A-7
262A-8
262A-8A
262A-9
263-1263-1A
263-2
263-3
263-4
263-4_ST263-5
263-6
263-7263-8
263-9
264-1
265-1265-2265-2A
265-3
266-1
266-1A266-2
267-1
267-1A
267-2
267-2A
267-3
267-4
268-1
268-2268-2A
268-3
268-4
269-1269-1A
269-2
269-2A
269-3269-4
269-5269-6
270-1 270-2
270-3270-4
271-1
271-1A
271-2271-2A
271-3
271-3A
271-4
271-5
272-1 272-2
272-3
272-3A 272-4
273-1
273-1A273-2
273-2A
273-3
273-3A273-4
273-5
274-1
274-2 274-3
274-4
274A-1
274A-2
275-1
276-1
277-1A
277-2A
277-3
278-2
278-3
279-1
280-1 280-2
280-3280-5280-4
281-1
281-2
281-3
282-1
283-1
283-1A
283-2
283-2A
283-3
283-4
284-1
284-2
284-2A
284-3
284-3A284-4
285-1
285-10 285-11
285-12
285-2
285-3285-4
285-5285-6
285-7
285-8
285-8A 285-9
285A-1
285A-2
286-1
286A-1286B-1
287-1
287-2
288-1
288-2288-3
289-1
289-2
290-1
290-2
290-3
291-1291-2
291-3
291-4291-5
292-1
293-1
293-2
293-3
293-3A
293-4
294-1
295-1
295-2
295-3
295-4
295-5295-9
296-1296-2
296-3
296-4
297-4
298-1
298-2
298-3298-4298-6
299-1
299-10
299-1A
299-2
299-3299-4299-5
299-6299-7299-8
299-9
300-5
300-6
300-7300-8
301-1301-2
301-3 301-4
302-1
302-2302-3
302-4
302-5
302A-3
303-1
303-10
303-11
303-12
303-13303-14
303-15303-16
303-17
303-18
303-2303-3303-4
303-5303-6
303-7
303-8
303-9304-1
304-10
304-2
304-3
304-4 304-5 304-6
304-7304-8
304-9
305-1
305-2
305-3
305-4
305-5305-6
305-7305-8
305-9
306-1
306-2
306-3306-4
307-1307-2
307-3 307-4
309-1
309-2
309-3309-4
309-5309-6
309-7
320-1
320-2 320-3 320-4320-5
320-6320-7320-8
320-9321-1
321-2
321-3
321-4
322-1 322-2
322-3 322-4
323-1
323-2 323-3
323-4
323-4A
323-5
323-6
324-1
324-2
325-1
325-1A
325-2
325-3
325-4
325-5
325-6
325-7
326-1
327-1327-2
327-3327-4
327A-1
327A-2
327A-3
327A-4
328-1
328-2328-3
328-4
329-1
329-3
329-4
329-6
343-1
343-3 344-1 344-2 344-3
73-WW-1
73-WW-2
74-WW-1
75-WW-1
75-WW-2
75-WW-3
1BW2BW
WS1
WS1WS1
WS1WS1A
WS1
WS1A
2A
WS1
WS1WS2
WS1
WS1
WS1WS2
WS1
3 WSW
WS1
WS2
WS1
300-1
SACROC Unit
Area Teams
Project Phases
FEET
0 2,335 4,670 7,005
WELL SYMBOLSLocation Only
Oil Well
Shut-In Producer
Injection Well
Pre CO2 Injector
CO2-Water Injector
Shut-In CO2-Water Well
Water Injection Well
Shut-In Water Injector
Temporarily Abandoned
P&A'ed Producer
Plugged and Abandoned
P&A'ed CO2-Water Well
P&A'ed Water Injector
H2O Injection or Observation Well
TA Disposal Well
Plugged Disposal Well
Sidetracked Original Borehole
Service Well
Dry Hole
Brackish Water Supply Well
P&A Brackish Water Supply Well
Brine Supply Well
Fresh Water Well
By: Brian Bernal
September 28, 2010
PETRA 9/28/2010 10:35:42 AM
Harvest Production – older projects
— Pump upsizes and reactivations
CR 1, CR 2 and GI primary areas of well-work
— Opportunities exist in other areas
SACROC Unit: All Harvest Projects – Allocated Daily Volumes
BP
D
Middle Canyon re-development (CR 1 and 2)
— > 90 MMBbls of oil in place — Typically very low processing rate — Exploit with horizontal injectors (30 candidates
identified) — Platform test well performing as expected — Drill first CR1 well in February
• 7,200’ lateral proposed • Flood 4 pattern area
— Potential to expand to SW Bank Area
26
SACROC Unit – Bypassed Pay Opportunity
Changes from 2013 plan
— Platform 5 area (5 patterns) — 30 bypass pay horizontal well
candidates — 2 additional harvest areas — 16 pattern West Shore project
27
0
5000
10000
15000
20000
25000
30000
35000
SACROC Oil Production LRP
Bbl/d_Actual
Bbl/d_2014Plan
Bbl/d_2013Plan
SACROC Unit – Long Range Plan
Yates Production Steady
28
2013 Oil Production (Bbl/d)
0
5,000
10,000
15,000
20,000
25,000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Plan Actual
Oil Production 0.8% above plan Slowing oil column thinning; 0.5’ vs. 0.8’ in 2012
(currently 16.9’) New, improved membranes increase NGLs Continued success in targeted East Side drilling
— Focus deeper completions to minimize gas West Side water-flood success
— Phase I above budgeted volumes — Phase II early, but oil already beyond expectation
Strategies to add long-term reserves include: Continuing strategy of raising reservoir pressure,
increasing oil swelling and drainage Continue Deep East Side horizontal drilling in
targeted areas Expanding water-flooding of West Side Hydrocarbon miscible pilot 2014 (HCM) Utilize seismic to develop shallow/deep horizons 0
200
400
600
800
1,000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Plan Actual
2013 NGL Production (Bbl/d)
Katz CO2 Project The Third Year - Improving
Investment $242MM project total, $179MM thru 2013
Oil Response Oil rate up from 1,806 to 3,605 Bbl/d
(Dec to Dec) 2013 Plan 2,850 vs. Actual 2,691 Bbl/d Phase 1 improving but below target 30 Bbl/d Success from re-perf/stim/upsize producers
Recent Operational Challenges Scale, pump failures, corrosion, 95 Bbl/d hurt Opex up 50% for well failures and chemical
2014 Expected Production – 4,646 Bbl/d Phase 2 & 3 response on track Increase pattern activations by 21% (33-40) Steady CO2 purchases 73 MMcf/d
29
0
1000
2000
3000
4000
5000
6000
7000
1/1/2011 1/1/2012 1/1/2013 1/1/2014 1/1/2015
Actuals 2013 Budget 2014 Budget
Bbl/d
Goldsmith Landreth San Andres Unit (GLSAU)
30
CO2 Pilot Area
(2009-2010) 4 Pats
Phase 1 Area (2010-
2011) 16 Pats
Phase 2 Area (2011-2014)
22 Pats
Phase 3 Area (2014) 7 Pats
OOIP = 477 MMSTBO
57 MMSTBO recoverable reserves
WI/NRI = 99.01%/86.68%
39 active injectors
95 producers
103 total patterns for complete development
Field Data
8 pattern activations for 2014
$33.6MM in capex
14 new wells
2 workovers
3.25 MMSTBO recoverable reserves
30 MMcf/d of additional recompression
2014 Capital Program
Residual Oil Zone
31
MPZ
TZ
ROZ
MPZ
TZ
ROZ
MPZ
TZ
ROZ
MPZ
TZ
ROZ
MPZ So = 80% ROZ So = 30-40%
MPZ So = ROZ So = 30-40%
San Andres ROZ oil saturation similar to water-flooded main pay San Andres
— ROZ has undergone “Mother-Nature’s Waterflood”
Several significant San Andres ROZ
projects underway in San Andres
13.9 MMSTBO recoverable reserves per section at an Average Phi-H (a) of 35ft
Many large ROZ targets in the basin
KM is strategically positioned given CO2 availability & experience
Pre-Waterflood So Post-Waterflood So
__________________________ (a) Phi = Reservoir Porosity, H = Reservoir Thickness
KM ROZ Phase I Project
32
180 developed acres; 9-20 acre inverted 5-spots
4.7 MMSTBO recoverable reserves
Continuous, well-connected, high-quality pay interval based on core, oil saturations, and pressure data
Phi-H(a) better then average in Phase I area 45ft
$91.9MM capex (excluding capitalized CO2)
Attractive economics at conservative recovery factor
7,127 acres leased by KM in Phase I area
KM ROZ Phase I Production Forecast
__________________________ (a) Phi = Reservoir Porosity, H = Reservoir Thickness
KM ROZ Phase 1 Well Layout
1-Section ROZ Development Forecast
33
San Andres Dimensionless Curves 1-Section Oil Production Forecast
ROZ performance expected to be like MPZ performance
— Same rock – both San Andres — Same saturation – water-flooded
Significant upside for ROZ in Permian
12% recovery IRR - 20.8%
18% recovery IRR - 30.4%
50% Sor (a) recovery IRR - 69.2%
__________________________ (a) Sor = Remaining Oil Saturation After Natural Water Flood
Oil and Gas Segment Production Forecasts Production expectations tend to grow over time
We have replaced 132% of our Hydrocarbon production (net BOE) with new proved reserves this year (R/P increase from 5.9 to 7.8) We expect production to exceed our reserve report over the long-term Higher recoveries and additional targets added
to inventory at SACROC and Katz New Technologies at Yates
Current challenge: slow the decline More efficient operations New opportunities Improve Opex at Katz and GLSAU
34
-
10
20
30
40
50
60
SACROC Yates Katz GLSAU Total2010 2011 2012 2013 2014
Evolution of Forecasted 2014 Production (a) over Time (MBbl/d, 8/8ths)
Proved Reserves Production Forecast (MBbl/d, 8/8ths)
__________________________ (a) Forecasts based on independent consultant Reserve Report. Excludes minor properties
0
20
40
60
80
2014 2015 2016 2017
GLSAU (a)
Katz (a)
Yates (a)
SACROC (a)
KM Fcst
Oil & Gas, and Business Unit IRR All-in O&G IRR (2000-2023) ~22.7% Required disclosures in 10-K plus proved
reserves cash flows: 17.1% — With unhedged prices, IRR would have
been 47.1% Adding in Gas Processing excluded from
disclosures increases IRR to 18.6% Adding in reserves discounted to P2 and using
planned development costs increases return to 22.7%
Total business IRR (2000-2023) ~29.2% Includes S&T assuming volumes increase with
higher capacity, valued at market prices As of 12/31/13, CO2 Segment cumulative free cash flow is $3.0B+ (net of cumulative invested capital) As of 12/31/14 expect cumulative FCF of $3.5B
35 __________________________ Note: Segments shown without elimination
0%
5%
10%
15%
20%
25%
30%
35%
10-K
+ R
eser
ve R
epor
t
Gas
Pro
cess
ing
P2's
, Dev
elop
men
t Cos
ts
S&T
Tota
l
KM CO2 Current Outlook
SACROC Group Forecast — Continue platform development plan; production forecast
is based on existing recovery expectations — Initiate Bypass Pay development in CR area — Forecast assumes deteriorating inlet gas quality
impacting NGL production volumes
Yates Group — Continue HDH programs and gravity drainage depletion
plan; no upside potential included from infill or surfactant — Initiate HCM pilot
Katz — Continue development plans at Katz
GLSAU — Two of six phases developed — Phases 1 & 2 responding
ROZ — Additional leasing underway (11+ currently leased) — Additional ROZ prospects underway
CO2 S&T — Increase capacity in existing source fields (McElmo and
Doe Canyon) — Develop St. John’s Field — Find and develop new source fields and develop new
markets
36
__________________________ (a) Net BOE = Net Crude plus Net NGLs plus Net Residue Gas sold divided by 6. (b) 2014 = Budget, 2015+ at $95/Bbl; cost metrics based on 2012 run rate; development plans may change in different price scenarios (c) CO2 profits not eliminated from S&T
Development Plans 2014-2023
DCF ($MM) (b)
S&T (c)
Yates
SACROC Complex
$- $200 $400 $600 $800
$1,000 $1,200 $1,400 $1,600 $1,800 $2,000 $2,200 ROZKatz Goldsmith
