Co rpo rate pre se ntatio n August 2018 Cautio nar y state me nts - PowerPoint PPT Presentation

Co rpo rate pre se ntatio n August 2018

Cautio nar y state me nts F o rwa rd-lo o king sta te me nts T he info rma tio n in this pre se nta tio n inc lude s “fo rwa rd-lo o king sta te me nts” within the me a ning o f Pla ns fo r the Pe rmia n Glo b a l Ac c e ss Pipe line a nd Ha yne sville Glo b a l Ac c e ss Pipe line pro je c ts Se c tio n 27A o f the Se c uritie s Ac t o f 1933, a s a me nde d, a nd Se c tio n 21E o f the Se c uritie s E xc ha ng e disc usse d he re in a re in the e a rly sta g e s o f de ve lo pme nt a nd nume ro us a spe c ts o f the pro je c ts, Ac t o f 1934, a s a me nde d. All sta te me nts o the r tha n sta te me nts o f histo ric a l fa c t a re fo rwa rd-lo o king suc h a s de ta ile d e ng ine e ring a nd pe rmitting , ha ve no t c o mme nc e d. Ac c o rding ly, the na ture , sta te me nts. T he wo rds “a ntic ipa te ,” “a ssume ,” “b e lie ve ,” “b udg e t,” “e stima te ,” “e xpe c t,” timing , sc o pe a nd b e ne fits o f tho se pro je c ts ma y va ry sig nific a ntly fro m o ur c urre nt pla ns due to a “fo re c a st,” “initia l,” “inte nd,” “ma y,” “mo de l,” “pla n,” “po te ntia l,” “pro je c t,” “sho uld,” “will,” wide va rie ty o f fa c to rs, inc luding future c ha ng e s to the pro po sa ls. Altho ug h the Driftwo o d pipe line “wo uld,” a nd simila r e xpre ssio ns a re inte nde d to ide ntify fo rwa rd-lo o king sta te me nts. T he fo rwa rd- pro je c t is sig nific a ntly mo re a dva nc e d in te rms o f e ng ine e ring , pe rmitting a nd o the r fa c to rs, its lo o king sta te me nts in this pre se nta tio n re la te to , a mo ng o the r thing s, future c o ntra c ts a nd c o ntra c t c o nstruc tio n, b udg e t a nd timing a re a lso sub je c t to sig nific a nt risks a nd unc e rta intie s. te rms, ma rg ins, re turns a nd pa yb a c k pe rio ds, future c a sh flo ws a nd pro duc tio n, e stima te d ultima te re c o ve rie s, we ll pe rfo rma nc e a nd de live ry o f L NG, future c o sts, pric e s, fina nc ia l re sults, ne t a sse t Pro je c te d future c a sh flo ws a s se t fo rth he re in ma y diffe r fro m c a sh flo ws de te rmine d in va lue s, ra te s o f re turn, liq uidity a nd fina nc ing , re g ula to ry a nd pe rmitting de ve lo pme nts, c o nstruc tio n a c c o rda nc e with GAAP. a nd pe rmitting o f pipe line s a nd o the r fa c ilitie s, future de ma nd a nd supply a ffe c ting L NG a nd g e ne ra l e ne rg y ma rke ts a nd o the r a spe c ts o f o ur b usine ss a nd o ur pro spe c ts a nd tho se o f o the r T he info rma tio n o n slide s 7, 12, 13, 14, 15 a nd 16 is me a nt fo r illustra tive purpo se s o nly a nd do e s no t industry pa rtic ipa nts. purpo rt to sho w e stima te s o f a c tua l future fina nc ia l pe rfo rma nc e . T he info rma tio n o n tho se slide s a ssume s the c o mple tio n o f c e rta in a c q uisitio n, fina nc ing a nd o the r tra nsa c tio ns. Suc h tra nsa c tio ns Our fo rwa rd-lo o king sta te me nts a re b a se d o n a ssumptio ns a nd a na lyse s ma de b y us in lig ht o f o ur ma y no t b e c o mple te d o n the a ssume d te rms o r a t a ll. NAV a nd o the r e stima te s o f future e q uity e xpe rie nc e a nd o ur pe rc e ptio n o f histo ric a l tre nds, c urre nt c o nditio ns, e xpe c te d future va lue s a re pre se nte d fo r illustra tive purpo se s a nd do no t purpo rt to sho w future tra ding va lue s o f de ve lo pme nts, a nd o the r fa c to rs tha t we b e lie ve a re a ppro pria te unde r the c irc umsta nc e s. T he se a ny se c uritie s. sta te me nts a re sub je c t to nume ro us kno wn a nd unkno wn risks a nd unc e rta intie s whic h ma y c a use a c tua l re sults to b e ma te ria lly diffe re nt fro m a ny future re sults o r pe rfo rma nc e e xpre sse d o r implie d T he fo rwa rd-lo o king sta te me nts ma de in o r in c o nne c tio n with this pre se nta tio n spe a k o nly a s o f the b y the fo rwa rd-lo o king sta te me nts. T he se risks a nd unc e rta intie s inc lude tho se de sc rib e d in the “Risk da te he re o f. Altho ug h we ma y fro m time to time vo lunta rily upda te o ur prio r fo rwa rd-lo o king F a c to rs” se c tio n o f o ur Annua l Re po rt o n F o rm 10-K fo r the fisc a l ye a r e nde d De c e mb e r 31, 2017 sta te me nts, we disc la im a ny c o mmitme nt to do so e xc e pt a s re q uire d b y se c uritie s la ws. file d with the Se c uritie s a nd E xc ha ng e Co mmissio n (the “SE C”) o n Ma rc h 15, 2018 a nd o the r filing s with the SE C, whic h a re inc o rpo ra te d b y re fe re nc e in this pre se nta tio n. Ma ny o f the fo rwa rd-lo o king Re se rve s a nd re so urc e s sta te me nts in this pre se nta tio n re la te to e ve nts o r de ve lo pme nts a ntic ipa te d to o c c ur nume ro us ye a rs in the future , whic h inc re a se s the like liho o d tha t a c tua l re sults will diffe r ma te ria lly fro m tho se indic a te d in suc h fo rwa rd-lo o king sta te me nts. E stima te s o f no n-pro ve d re se rve s a nd re so urc e s a re b a se d o n mo re limite d info rma tio n, a nd a re sub je c t to sig nific a ntly g re a te r risk o f no t b e ing pro duc e d, tha n a re e stima te s o f pro ve d re se rve s. 2 Disc la ime r

Glo bal c all o n U.S. natur al gas U.S. supply push… … and global de mand pull Output fro m se le c te d sha le b a sins (1) Glo b a l L NG pro duc tio n c a pa c ity T ake away Supply infr astr uc tur e 221 infr astr uc tur e 150 127 Re q uire d 101 Re q uire d (3) Unde r 46 49 Unde r Othe r c o nstruc tio n c o nstruc tio n 49 U.S. 565 532 382 mtpa mtpa 344 (2) 2017 2025 Gro wth 2017 2025 Ne w c a pa c ity Bc f/ d 51 71 20 Bc f/ d 46 75 29 So urc e : Wo o d Ma c ke nzie , T e lluria n Re se a rc h. No te s: (1) Inc lude s the Pe rmia n, Ha yne sville , Utic a , Ma rc e llus, Ana da rko , E a g le F o rd. (2) Ba se d o n a de ma nd g ro wth e stima te o f 4.5% po st-2020. (3) Ca pa c ity re q uire d to me e t de ma nd g ro wth po st-2020. 3 F und a me nta ls

Glo bal c o mmo dity r e quir e s lo w-c o st so lutio ns 902 L NG Stor age - 2017 Ja pa n + K o re a te rmina ls: 633 Bc f 751 Bc f o f L NG L NG ve sse ls: 751 Bc f sto ra g e 609 507 # o f L NG ve sse ls 2017 2020 # o f 17 c a rg o e s 13 lo a de d pe r da y 2017 2020 L e ge nd L NG c a rrie r – la d e n L NG c a rrie r – unla d e n So urc e s: Kple r, Ma ra n Ga s, IHS, Wo o d Ma c ke nzie . No te s: L NG sto ra g e a ssume s ha lf o f fle e t is in b a lla st, 2.9 Bc f c a pa c ity pe r ve sse l. Ave ra g e c a rg o size ~2.9 Bc f, a ssuming 150,000 m 3 ship. In 2017, a ppro xima te ly a third o f a ll L NG c a rg o e s a re e stima te d to b e spo t vo lume s. Ba se d o n line o f sig ht supply thro ug h 2020. 4 F und a me nta ls

Managing thr e e r isks Co nstruc tio n Ba sin Ba sis Ade q ua te na tura l g a s supply Re lia b le a c c e ss to pipe line s Site se le c tio n a nd e xe c utio n Suc c e ssful pr oje c ts r e quir e a sophistic ate d str ate gy to manage c omple x r isks 5 Busine ss mo d e l

Building a lo w-c o st glo bal gas busine ss Dr iftwood Holdings par tne r ship – inte gr ate d, low- c ost 11,620 a c re s in the Ha yne sville with 1.4 T c f re so urc e Upstre a m ~$7 b illio n (1) o f pipe line infra struc ture pro je c ts in de ve lo pme nt Pipe line L iq ue fa c tio n ~$15 b illio n o f liq ue fa c tio n infra struc ture in de ve lo pme nt Ma rke ting I nte rna tio na l de live ry o f L NG c a rg o e s sta rte d in 2017 No te : (1) HGAP a nd PGAP pro je c ts a re in e a rly sta g e s a nd re ma in unde r re vie w. 6 Busine ss mo d e l Busine ss mo d e l

Busine ss mo de l Na sda q : T E L L  T e lluria n will o ffe r e q uity inte re sts in Driftwo o d Ho lding s Custome r/ Pa rtne r  Driftwo o d Ho lding s will c o nsist o f a Pro duc tio n Co mpa ny, a Pipe line Ne two rk a nd a n L NG ~60% ~40% 100% E quity owne r ship T e rmina l (~27.6 mtpa )  E quity will c ost ~$1,500 pe r tonne Driftwood Holding s  Custo me r/ Pa rtne r will re c e ive e q uity L NG a t ta ilg a te o f Driftwo o d L NG te rmina l a t c o st  Va ria ble a nd ope ra ting c osts e xpe c te d to b e ~12 OB (inc luding ma inte na nc e ) ~$3.00/ mmBtu F mtpa Produc tion Pipe line L NG T e lluria n Compa ny Ne twork T e rmina l Ma rke ting ~16 mtpa  T e lluria n will re ta in ~12 mtpa a nd ~40% of the a sse ts Custome rs  e lluria n (1) E stima te d ~$2 billion a nnua l c a sh flow to T No te : (1) Se e slide 16 fo r le ve l o f a nnua l T e lluria n c a sh flo w a t va rio us a ssume d U.S. Gulf Co a st ne tb a c k pric e s a nd ma rg in le ve ls. 7 Busine ss mo d e l