Rocky Mountain Crude Oil Market Dynamics

Tad True, Belle Fourche & Bridger Pipelines

Platts Pipeline Development & Expansion

September 24, 2010

Agenda & Introduction

• Logistical Constraints for Rockies’ Production (North Dakota):

•Inter-Region Constraints: Getting Barrels out of the Rockies

•Intra-Region Constraints: Getting Barrels out of the Williston Basin

•Lease Constraints: Getting Barrels off the Lease

• Baker 300

INTER-REGION CONSTRAINTS

Getting Barrels out of the Rockies

Reno Jct., WY

Clearbrook, MN

Guernsey, WY

Casper, WYSinclair 22,500

Salt Lake City, UTBig West 25,000ChevronTexaco 45,000Holly Corp 25,000Silver Eagle Refining 12,500Tesoro 60,000

Rawlins, WYSinclair 72,000

Denver, COSuncor 88,000

Mandan, NDTesoro 58,000Billings, MT

ConocoPhillips 58,000ExxonMobil 60,000Cenex 56,000 St. Paul, MN

Flint Hills Resources 298,000MarathonAshland 70,000

Hardisty, AB

Cushing, OK

Cheyenne, WYFrontier 52,000

Regina, SK

Newcastle, WYWyoming Refining 12,500

Great Falls, MTMontana Refining 8,200

Chicago, ILExxonMobil 238,000BP PLC 399,000CITGO 159,000

Wood River, ILConocoPhillips 306,000

McPherson, KSNCRA 79,000

El Dorado, KSFrontier 110,000

Rocky Mountain Crude Complex

-100,000

100,000

300,000

500,000

700,000

900,000

1,100,000

1,300,000

Enbridge Platte White Cliffs

Reno Jct., WY

Clearbrook, MN

Guernsey, WY

Casper, WYSinclair 22,500

Rawlins, WYSinclair 72,000

Denver, COSuncor 88,000

Mandan, NDTesoro 58,000Billings, MT

ConocoPhillips 58,000ExxonMobil 60,000Cenex 56,000 St. Paul, MN

Flint Hills Resources 298,000MarathonAshland 70,000

Hardisty, AB

Cheyenne, WYFrontier 52,000

Regina, SK

Newcastle, WYWyoming Refining 12,500

Great Falls, MTMontana Refining 8,200

Chicago, ILExxonMobil 238,000BP PLC 399,000CITGO 159,000

Rocky Mountain Crude ComplexPipeline Export Capacity

-100,000

100,000

300,000

500,000

700,000

900,000

1,100,000

1,300,000

Enbridge Platte White Cliffs Refinery Consumption TRADITIONAL TAKE AWAY CAPACITY

Reno Jct., WY

Clearbrook, MN

Guernsey, WY

Casper, WYSinclair 22,500

Rawlins, WYSinclair 72,000

Denver, COSuncor 88,000

Mandan, NDTesoro 58,000Billings, MT

ConocoPhillips 58,000ExxonMobil 60,000Cenex 56,000 St. Paul, MN

Flint Hills Resources 298,000MarathonAshland 70,000

Hardisty, AB

Cheyenne, WYFrontier 52,000

Regina, SK

Newcastle, WYWyoming Refining 12,500

Great Falls, MTMontana Refining 8,200

Chicago, ILExxonMobil 238,000BP PLC 399,000CITGO 159,000

Rocky Mountain Crude ComplexPipeline Export Capacity + Refinery Consumption

Material Balance with Traditional Takeaway Options

(100,000)

100,000

300,000

500,000

700,000

900,000

1,100,000

1,300,000

Jan

-03

Ju

l-03

Jan

-04

Ju

l-04

Jan

-05

Ju

l-05

Jan

-06

Ju

l-06

Jan

-07

Ju

l-07

Jan

-08

Ju

l-08

Jan

-09

Ju

l-09

Jan

-10

Rocky Mountain Production Imports TRADITIONAL TAKE AWAY CAPACITY

Imports

Rocky Mountain Production

Non-Traditional Crude Takeaway Options

Rail

Material Balance with Non-Traditional Takeaway Options

-100,000

100,000

300,000

500,000

700,000

900,000

1,100,000

1,300,000

(100,000)

100,000

300,000

500,000

700,000

900,000

1,100,000

1,300,000

Rocky Mountain Production Imports TRADITIONAL TAKE AWAY CAPACITY NON-TRADITIONAL TAKE AWAY CAPACITY

Wh

ite C

liffs

1stN

D R

ail Facility

Mo

re R

ail

Enb

ridge

Ph

ase V

I

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

-

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

Rocky Mountain Production Imports TRADITIONAL TAKE AWAY CAPACITY NON-TRADITIONAL TAKE AWAY CAPACITY

Material Balance with Non-Traditional Take-Away Options

Keysto

ne

Effect

Bu

tte K

eyston

e

XL C

on

ne

ction

New

Rail Facilitie

s

Inter-Region Constraints

• After Planned Pipeline Export Options in

addition to Non-Traditional Facilities,

Rockies has sufficient, but inefficient

takeaway capacity.

• Continuing Concerns

– Non-Traditional Options are expensive

– Intra-Regional Transportation Constraints

– Lease Transportation Constraints

INTRA-REGIONAL CONSTRAINTS

Moving Barrels Out of the Williston Basin

Rocky Mountain Crude

Complex Intra-Regional Constraints

161,000

LEASE CONSTRAINTS

Moving Barrels off the lease

PICTURE OF MOUNTRAIL,

DUNN AND MCKENZIE

McKenzie

Dunn

Mountrail

Mountrail, Dunn & McKenzie Counties

-

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

200,000 Jan-0

0

Jul-00

Jan-0

1

Jul-01

Jan-0

2

Jul-02

Jan-0

3

Jul-03

Jan-0

4

Jul-04

Jan-0

5

Jul-05

Jan-0

6

Jul-06

Jan-0

7

Jul-07

Jan-0

8

Jul-08

Jan-0

9

Jul-09

Jan-1

0

MOUNTRAIL

DUNN

McKENZIE

TODAY

~$6~$2

Transportation CostsTotal Est. Cost To Guernsey: ~$8

Four Bears~$1.5

~$2.60

Transportation CostsTotal Est. Cost To Guernsey: ~$4.10

BAKER 300

Solutions

Powder River

Ft. Laramie/ Guernsey

Alzada

Baker

Poplar

Richey

Wyoming

Montana

North Dakota

South Dakota

Nebraska

Raymond

Alexander

Reno Jct.

Billings

Mandan

Rawlins

Cheyenne

Newcastle

Casper

Osage

Mush Creek

Glendive

Fisher Hwy 201

Stanley

Fryburg

Bridger

Pars

hall

Gath

ering300,000

BPD

INTO

BAKER

300,000

BPD

OUT OF

BAKER

Overview

Powder River

Ft. Laramie/ Guernsey

Alzada

Baker

Poplar

Richey

Wyoming

Montana

North Dakota

South Dakota

Nebraska

Raymond

Alexander

Reno Jct.

Billings

Mandan

Rawlins

Cheyenne

Newcastle

Casper

Osage

Mush Creek

Glendive

Fisher Hwy 201

Stanley

Fryburg

Bridger

Pars

hall

Gath

ering

INTO Baker1) Little Bear

Details

Tariff Use existing rates

and contracted Four

Bears rates

Space Allocation Pending Shipper

Comments

Required

SupportComplete

Current Capacity 33,000 bpd

Expanded

Capacity60,000bpd

Estimated DRA

Capacity80,000bpd

Powder River

Ft. Laramie/ Guernsey

Alzada

Baker

Poplar

Richey

Wyoming

Montana

North Dakota

South Dakota

Nebraska

Raymond

Alexander

Reno Jct.

Billings

Mandan

Rawlins

Cheyenne

Newcastle

Casper

Osage

Mush Creek

Glendive

Fisher Hwy 201

Stanley

Fryburg

Bridger

Pars

hall

Gath

ering

Details

Tariff or

SurchargeUse Existing Rates

Space Allocation Pending Shipper

Comments

Required

Support

Pending Shipper

Comments

Current Capacity 30,000 bpd (ex Fisher)

40,000 bpd (ex Richey)

Expanded

Capacity60,000bpd

Estimated DRA

Capacity80,000bpd

INTO Baker 2) Poplar Expansion

Powder River

Ft. Laramie/ Guernsey

Alzada

Baker

Poplar

Richey

Wyoming

Montana

North Dakota

South Dakota

Nebraska

Raymond

Alexander

Reno Jct.

Billings

Mandan

Rawlins

Cheyenne

Newcastle

Casper

Osage

Mush Creek

Glendive

Fisher Hwy 201

Stanley

Fryburg

Bridger

Pars

hall

Gath

ering

Details

Tariff Add as new origin to

Four Bears Tariff

Space Allocation Pending Shipper

Comments

Required

Support

Throughput and

Deficiency Agreements

for 30,000bpd

Expanded

Capacity60,000bpd

Estimated DRA

Capacity80,000bpd

INTO Baker 3) Belle Fourche Reversal

Powder River

Ft. Laramie/ Guernsey

Alzada

Baker

Poplar

Richey

Wyoming

Montana

North Dakota

South Dakota

Nebraska

Raymond

Alexander

Reno Jct.

Billings

Mandan

Rawlins

Cheyenne

Newcastle

Casper

Osage

Glendive

Fisher Hwy 201

Stanley

Fryburg

Bridger

Pars

hall

Gath

ering

Details

Tariff or Surcharge Increase current 8 cent DRA

surcharge to 25 cents on all

barrels (assumes use of

existing apportionment rules).

Other options being

considered.

Space Allocation Pending Shipper Comments

Required Support Pending Shipper Comments

Current Capacity 118,000 bpd

Expanded

Capacityest. 150,000bpd

OUT OF Baker 1) Baker 150

Powder River

Alzada

Baker

Poplar

Richey

Wyoming

Montana

North Dakota

South Dakota

Nebraska

Raymond

Alexander

Reno

Billings

Mandan

Rawlins

Cheyenne

Newcastle

Casper

Glendive

Fisher Hwy 201

Stanley

Fryburg

Bridger

Pars

hall

Gath

ering

Details

Tariff or

Surcharge

New Rate of

approximately $1.25-

$1.50/bbl to Guernsey

and Reno

Space Allocation Pending Shipper

Comments

Required

Support

Transportation Service

Agreements for

60,000bpd

Capacity 60,000bpd (out of

Baker)

~40,000bpd to Guernsey

~20,000bpd to Reno

OUT OF Baker 2) Baker 200 – ThunderBird & Donkey Creek

Ft. Laramie/ Guernsey

Powder River

Ft. Laramie/ Guernsey

Alzada

Baker

Poplar

Richey

Wyoming

Montana

North Dakota

South Dakota

Nebraska

Raymond

Alexander

Reno Jct.

Billings

Mandan

Rawlins

Cheyenne

Newcastle

Casper

Osage

Glendive

Fisher Hwy 201

Stanley

Fryburg

Bridger

Pars

hall

Gath

ering

Details

Space Allocation Pending Shipper

Comments

Required

Support

Pending Shipper

Comments

Capacity 50-100,000bpd

OUT OF Baker 3) Baker 300 –KXL Connection

Powder River

Ft. Laramie/ Guernsey

Alzada

Baker

Poplar

Richey

Wyoming

Montana

North Dakota

South Dakota

Nebraska

Raymond

Alexander

Reno Jct.

Billings

Mandan

Rawlins

Cheyenne

Newcastle

Casper

Osage

Glendive

Fisher Hwy 201

Stanley

Fryburg

Bridger

Pars

hall

Gath

ering

Rocky Mountain Crude Oil Market Dynamics

Tad True, Belle Fourche & Bridger Pipelines

Platts Pipeline Development & Expansion

September 24, 2010