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Utica and Marcellus Production and Takeaway Capacity Paul Weissgarber Senior Vice President, Ohio River Valley Platts Pipeline and Development Conference September 17, 2013
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Forward-Looking Statements
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 Crosstex Energy, L.P. and its affiliates (collectively known as “Crosstex”) may differ materially from those expressed in the forward-looking statements contained throughout this presentation and in documents filed with the SEC. Many of the factors that will determine these results are beyond Crosstex’s ability to control or predict. These statements are necessarily based upon various assumptions involving judgments with respect to the future, including, among others, the ability to achieve synergies and revenue growth; national, international, regional and local economic, competitive and regulatory conditions and developments; technological developments; capital markets conditions; inflation rates; interest rates; the political and economic stability of oil producing nations; energy markets; weather conditions; business and regulatory or legal decisions; the pace of deregulation of retail natural gas and electricity; the timing and success of business development efforts; and other uncertainties. You are cautioned not to put undue reliance on any forward looking statement. Crosstex has no obligation to publicly update or revise any forward looking statement, whether as a result of new information, future events or otherwise.
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Crosstex Midstream Services Today
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The Midstream Value Chain A critical part of energy infrastructure responsible for moving product from well-head to consumption
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PERMIAN BASIN
EAGLE FORD
BARNETT SHALE
HAYNESVILLE & COTTON VALLEY AUSTIN CHALK
TUSCALOOSA MARINE SHALE
MIOCENE/WILCOX
UTICA
MARCELLUS
OHIO RIVER VALLEY
Pennsylvania Ohio
West Virginia
Texas
Oklahoma
Louisiana
Arkansas
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Processing Plants
Fractionators
Pipelines
Crude/Brine Truck Stations
Brine Disposal Wells
Rail Terminal
Barge Terminal
Condensate Stabilization Stations
X Well Positioned in 6 of the Top Shale / Resource Plays in the U.S.
The Right Platform: Diverse Base of Assets
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Ohio River Valley Assets: A Great Platform for Growth
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Killbuck
Black Run
Sego
Lowell
Bells Run & Eureka Nutter
Brooksville
Stockley
Ohio Pennsylvania
West Virginia
Ohio River Valley Crude Pipeline
Crude & Brine Truck Stations
Brine Disposal Wells
Black Run Rail Terminal
Bells Run Barge Terminal
E2 Condensate Stabilization Stations
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Ohio River Valley Assets: A Great Platform for Growth
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Hess/CNX’s Athens A 1H-24 well (Harrison County): Tested at a peak rate of 1,056 Bbl/d of condensate, 1,803 Bbl/d of NGL and 10.2 MMcf/d of natural gas
Rex Energy’s Guernsey 2H well (Guernsey County): Tested at a peak rate of 560 Bbl/d of condensate, 1,213 Bbl/d of NGL and 8.0 MMcf/d of natural gas
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Antero’s Yontz 1H well (Monroe County): Tested at a peak rate of 52 Bbl/d of condensate, 3,177 Bbl/d of NGL and 38.9 MMcf/d of natural gas
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Antero Utica Well Initial Production Data
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Source: Antero Resources
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Condensate Differs Greatly from Crude
Condensate Facts • Higher gravity oil (>45-50°
API) considered condensate
• Condensate often has methane, ethane and propane components (NGL’s)
• The natural gasoline (C5/C6 stream) produced from natural gas liquids fractionation plants is sometimes referred to as plant condensate
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0%10%20%30%40%50%60%70%80%90%
100%
Condensate Louisiana LightSweet
West TXIntermediate
Resid Vac Gas Oil Distillate Naphtha
Distillation Comparison (Percent of Volume)
Note for chart: missing fraction is light ends Source for chart: IHS Purvin & Gertz
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Condensate Differs Throughout the Region
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46
54
62
70
78
86
0 5 10 15 20
API Gravity
Reid Vapor Pressure (RVP)
Source: Crosstex analysis of Ohio River Valley condensate
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Condensate Volumes Will Exceed Local Demand
Utica Condensate Market • Local refineries currently have
capacity to serve ~190 wells (38,000 boepd) condensate supply; expanding to be able to serve ~265 wells (53,000 boepd)
• As volumes ramp up in near term, any additional volumes over this amount will have to leave the region
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** Source: Crosstex research
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Opportunities & Solutions in the Utica
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Opportunities • Utica condensate production forecasts are
bullish, local market will absorb initially • Natural gasoline and condensate will
compete, spillover will leave Ohio • Trucking, rail, and condensate logistics to
start, pipeline to follow when volumes support
• Long term market for purity NGL’s is NOT the Appalachian market
• NGL export solutions will be required • The US Gulf Coast is a logical target market
Solutions • Leverage existing rail, storage, trucking and
barge assets to clear the liquids market • Provide condensate stabilization services • Become a receiver of Utica NGL export
volumes by rail in south Louisiana • Develop liquids gathering and processing
solutions leveraging position in Ohio • Upgrade pricing by installing and operating
condensate splitter
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Delivering a Full Range of Solutions
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Condensate Solutions
Field Gathering
Splitting
Marketing
Transporting
Stabilizing
• 110+ truck fleet • 10 pipeline injection stations with storage • Experienced drivers trained in handling condensate
• Proven, engineered solution for Marcellus/Utica condensate
• 16K+ BPD stabilization • Additional 7K BPD stabilization with leading producer • Further plans underway
• Engineering work underway for facilities tuned to Marcellus/Utica condensate
• Exploring JV opportunities • Developing markets for splitter products
• Existing 200+ mile pipeline • 20-spot, 24K BPD rail loading facility • Ohio River barge terminal with storage
• Expanded rail market outlet at Black Run terminal • Expanded storage capacity to support market outlets • Optimized barge facility • Developing rail market outlet at Eureka facility
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Questions/Inquiries: [email protected] 214-721-9613
