The RIO System - Amazon S3...• Crude oil & frac sand transloading Construction • Construction...

$: The RIO System - Amazon S3...• Crude oil & frac sand transloading Construction • Construction has commenced • In-service October 2014 Market Development • Negotiating contracts$
The RIO System

Creating Value Through Transportation

Christopher W. Keene

President & CEO

Rangeland Energy

DUG Permian • May 20, 2014

Rangeland Energy is a midstream

energy company focused on

developing, owning and operating

midstream assets.

• Backed with private equity

commitments from

EnCap Flatrock Midstream

• Experienced management team:

Over 150 years of midstream

experience (crude oil, natural gas,

NGLs & refined products)

Rangeland Energy: Our Purpose

Moving Tomorrow’s Energy Today | rangelandenergy.com | 2

Initial Focus

• Crude oil infrastructure in

North Dakota’s Bakken Shale

Current Focus

• Transportation, storage and

distribution of crude oil,

condensate and frac sand

• Delaware Basin (New Mexico

and West Texas)

Strong Customer Alignment

• Maximize customers’ market

options

• Fee-for-service (do not compete

with our customers)

Rangeland Energy: Our Strategic Focus


Rangeland’s COLT Terminal

Truck Station

Tank Farm

Pipeline to

Ramberg/Beaver Lodge BNSF Mainline

Rail Loading

COLT’s integrated network of railcar, pipeline and storage facilities

created a “point of liquidity” & optionality for crude oil customers in the Bakken Shale.

Assets sold to Inergy (Crestwood) in December 2012..


Gathering Pipeline

Connections

Why Delaware Basin & Loving, NM?

75 Mile Radius

Delaware Basin

• Production growth

• Lack of

infrastructure

• Future wellhead

price differentials

Loving, NM

• Heart of horizontal

production

• Rail access

• Paved road/highway

access

• Pipeline activity and

opportunity


The RIO System

RIO Hub

Cen

turi

on

Pip

elin

e

RIO State Line Terminal

TEXAS

NEW MEXICO

Midland

RIO Pipeline

RIO Target Gathering Area

Strategy Maximize value & flexibility for crude oil

producers and buyers through cost competitive

pipeline and rail options:

• Hub: Large scale crude oil, condensate and

frac sand terminal/market hub.

• Pipeline: Crude oil access to Midland

pipeline hub.

• Gathering: Pipeline gathering with access to

pipeline and rail transmission options.

Carlsbad

Loving

RIO Midland Terminal


Frac Sand Storage &

Truck Loading

RIO Hub: Unit Train Facility Design

Transloading &

Car Storage

Tank Farm Frac Sand Storage &

Truck Loading

Crude Oil Truck

Unloading

Crude Oil Unit

Train Loading.

• Storage, Staging & Blending: Crude oil tankage & sand silos

• Truck Loading & Unloading: Truck racks for crude oil & frac sand

• Pipeline Connectivity: Inbound and outbound connectivity

• Rail Access: Load/unload unit trains or manifest cars

(crude, condensate & sand)


RIO Hub: Sand Value Proposition

Establish the Footprint • Early sand, followed by

crude oil

Demand Growth • Doubling in next 10 years

• 20-30 yr drilling programs

Infrastructure Opportunities • Terminal development

• Consolidation/acquisitions

Scale (unit trains) provides

logistics & cost efficiencies • Rail fees

• Fleet management

• Storage & handling


$-

$10.00

$20.00

$30.00

$40.00

$50.00

$60.00

$70.00

$80.00

Transloading Unit Train

Demurrage

Terminal

Railcar

Freight

Transportation from Sand Source to Distribution Terminal

RIO Hub: Oil Value Proposition

$(50)

$(40)

$(30)

$(20)

$(10)

$-

$10

$20

Brent

St.JamesBakken

WTI-MidlandWesternCanada

Crude Oil Price Differentials to WTI ($/bbl)


RIO Hub: Oil Value Proposition (cont.)

• Rail options out of the Delaware have been profitable

• Rangeland believes differentials will continue to widen:

Increased crude supply to Cushing & Gulf Coast

Crude stream will be saturated with light-sweet crude/condensate

Net Rail Cost to Los Angeles, CA Net Rail Cost to New Orleans, LA

Gulf Coast West Coast

LLS Premium to Midland WTI ANS Premium to Midland WTI

Note: Includes $1.50/barrel of avoided transportation cost from Delaware Basin to Midland, TX


Board Approval for Phase I

• Crude oil & frac sand transloading

Construction

• Construction has commenced

• In-service October 2014

Market Development

• Negotiating contracts with crude

oil and frac sand customers

RIO Hub: Status


RIO Pipeline: Access to Midland Hub

RIO State Line

Terminal

RIO Hub Terminal

RIO 12” Pipeline

RIO

Midland

Terminal

• Scope: 30 miles of 10”, 104 miles of 12”, capacity = 85 MBD

• Status: land & environmental surveys complete, customer negotiations

• Midland Terminal: site secured, connection agreements in process

• State Line Terminal: site identified


Conclusions

• Rangeland Energy understands that crude oil and condensate

producers, marketers and refiners need options to maximize the

value of their commodities.

• The Delaware Basin is one of the fastest growing areas in the

Permian.

• The RIO System is strategically located in the heart of this

production.

• Rangeland designed the RIO System to meet customer needs by

providing multiple options:

Inbound Sand,

Outbound Crude Oil & Condensate via Pipeline & Rail

Terminal Services (ex. Blending)


Rangeland Energy is led by a

proven team and well capitalized

to meet the needs of our

customers.

Christopher W. Keene

President & CEO

Rangeland Energy

14100 Southwest Freeway,

Suite 550

Sugar Land, Texas 77478

www.rangelandenergy.com

Thank You


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