Tim Bradley President CO Group - Kinder Morgan

ENERGY PARTNERS, L.P.CO 2Tim BradleyPresident CO 2 Group

ENERGY PARTNERS, L.P.History of CO 2 Group and Looking Forward• Shell CO 2 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 PL in 2003 Constructed Power Plant 2005 Increased oil production 3X+• Acquired Wink Pipeline in 2004• Acquired Claytonville and Katz interests 2005-0606• Increased SW Colorado CO 2 Capacity 30% 2008• Announced Katz CO 2 Project and ESPL 2009DCF - MM$$1,000$800$600$400$200$0'01 '02 '03 '04 '05 '06 '07 '08 '09 '10BudgetCO2 S&T CO2 Flood Properties Plan for Each YearOur footprint and technologies provide us with growth opportunitiesiesContinued developments at SACROC and YatesKatz field development and Eastern Shelf region opportunitiesFuture Carbon management/sequestration opportunities__________________________Note: CO 2 Sales and Transportation includes YOGS, CO 2 Sales profit on own use has not been eliminated2

2009 Performance Recap – Made PlanDespite extremely difficult conditionsENERGY PARTNERS, L.P.2009 DCF of $790.1MM vs. $790MMPlanCO 2Source and Transportation• $218 MM vs. $254 MM Plan• Price hurt, volumes closeYates• $212 MM vs. $209 MM Plan• 26,511 B/d vs. 26,500 B/d• Cost improvements offset price hurtSACROC*• $361 MM vs. $327 MM Plan• Oil: 30,149 B/d vs. 28,581 B/d• NGLs: 15,326 B/d vs. 16,868 B/d• Significant cost improvementsCAPEX• $329 MM actual vs. Plan $449 MMUnderperformedOutperformedOutperformedOutperformed__________________________Note: Distributable Cash Flow*Including SACROC Services and remaining oil and gas assets3

ENERGY PARTNERS, L.P.2009 Cost Reduction Efforts4003002001000500400300200100Opex, Sus. Capex Reductions, $MMBudgetActualExpansion Capex Reductions, $MMSus. CapexCO2LaborPowerSurfaceWellworkOutside Op.Purchased CO2Cap StaffESS&TYatesSacrocOPEX/Sustaining Capex• Achieved $52.8 MM reduction (15%)• Achieved $48 MM reduction in TOTIExpansion CAPEX• Achieved ~$120 MM reduction (27%)– 135 vendor letters, follow-up discussions– Bidding, Contract negotiations– Wellwork reductions ~ 25-30%– Surface materials, Services ~ 10-15%15%– SACROC capital program changed• Developed fewer, but richer patterns– Low ESP failure rate reduced rig count (1/2 rig)– Accelerated Yates compressors (less rental)– TOTI savings mostly from lower severance tax rates0BudgetActual4

ENERGY PARTNERS, L.P.2009 and 2010 DCF by Asset Group2009: $790 MMOther O&G2010: $989 MMOther O&G 1%SACROCComplex45%S&T 28%SACROCComplex46%S&T 28%Yates 27%Yates 25%5

ENERGY PARTNERS, L.P.SACROC and Yates Oil Production DCF80,00060,00040,00020,0000$700$600$500$400$300$200$100$0SACROC20022003SACROCOil ProductionYates200420052006DCFYates__________________________Note: Yates DCF does not include contribution from MKM2007200820092010200220032004200520062007200820092010Original Oil in Place, Billion Bbls• SACROC 2.8• Yates 5.02010 Production• SACROC oil29,800 B/d• SGP NGLs16,673 B/d• Yates26,150 B/d2010 DCF• SACROC Unit only$395 MM• Yates$245 MM6

Oil and Gas Margins Remain StrongNet of Hedged PricesENERGY PARTNERS, L.P.SACROC Cost StructureYates Cost Structure8080Net Realized Price60Net Realized Price60$/BOE40$/BOE 40202002004Actual2005Actual2006Actual2007Actual2008Actual2009Actual2010Budget02004Actual2005Actual2006Actual2007Actual2008Actual2009Actual2010BudgetLaborExpensed CO2Capitalized CO2TotiGas HandlingWell WorkOtherNet Realized PriceTotal OPEXCapitalized CO2Net Realized PriceExpensed CO2Toti7

ENERGY PARTNERS, L.P.SACROC Production & Operations HighlightsBOPD40,00035,00030,00025,00020,00015,00010,000Oil Production 2001-20102010ActualBudget2009 – ReviewOil production exceeded plan• Sub-Pump performance continued to improve• Compressor run-time improved from 91.5% to94.7%• High graded pattern selection• Injection rates higher than expected – curtailedpattern activations from 46 to 265,00000.90.80.70.60.50.40.30.20.10.0Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10Sub-pump ImprovementsFailure RateAverage Bbls off2007 2008 2009300025002000150010005000Costs below plan• Opex/Sustaining Capex: 31 MM$• Expansion Capex:89 MM$• Lower rig costs, goods and services• Cost reduction efforts• Lower activity level due to pattern selections2010 - Focus• Costs, Vendors beginning to push increases• Add patterns at the right pace, manage gasvolumes• Continue to increase run-timetime• Continue Conformance improvement projects8

ENERGY PARTNERS, L.P.SACROC Recent & Future Development PlansPlatform-P1 A & B2009, 2010Platform-P2 2011South Platform2008Gilligan’s Island2008Chiquita 2010Southwest Center Line2007, 20089

PETRA 12/17/2009 5:21:16 PM0.080.1330.0510.0440.50.1570.1150.0440.2040.0480.1PETRA 1/15/2009 4:59:30 PM0.20.4850.2040.4410.5320.3920.0760.3220.3930.0130.5820.0281.239REEF_OWC_CHEVRON - HCFT [RMR] - Hydrocarbon Ft = based on Porosity (PHIH) x 0.800.2180.3940.5130.2380.3030.150.4250.3030.9250.6310.8080.4260.6570.2210.4390.6070.3931.1660.010.0050.4640.2070.1760.4470.2050.1820.1670.044 0.0450.6570.1210.6250.2290.4360.2090.2880.2610.170.0420.0590.0750.3470.710.270.270.2760.3280.1130.1270.0670.0430.19 0.1310.357 0.0060.1320.1620.109000.0920.1120.1480.5780.310.4430.2740.3090.2330.16800.19600.6070.1340.6250.2020000.116000.38500.5830.301 0.3050.6370.330.4470.0790.2180.1010.7220.4750.0440.4030.0380.0990.051Oil WellShut-In ProducerInjection WellPre CO2 InjectorCO2-Water InjectorShut-In CO2-Water WellWater Injection WellShut-In Water InjectorTemporarily AbandonedP&A'ed ProducerPlugged and AbandonedP&A'ed CO2-Water WellP&A'ed Water InjectorSidetracked Original BoreholeService WellDry HoleDecember 17, 20090.0570.0720.2040.452030.029.028.027.026.025.024.023.022.021.020.019.018.017.016.015.014.013.012.011.010.09.08.00.2267.06.05.00 1,624FEETENERGY PARTNERS, L.P.SACROC Development Activities and Plans20-918-1218-1420-818-10 18-1116-920-620-520-420-1618-720-1318-420-1218-618-8 16-227-1927-102-627-1827-1324-324-126-126-2 26-2A 27-227-126-1A27-327-1A27-3A24-5A24-5 26-14 26-927-2A27-429-127-1227-1127-1627-927-15A24-424-826-3A26-326-527-527-7A27-1527-7 27-624-627-5A27-6A24-2 24-727-826-1129-227-1727-1425-125-426-626-1028-1229-926-4A26-4 28-1A28-2A28-3A28-128-2_ST28-730-128-325-5 25-6 26-1228-228-1728-1328-9A28-1528-928-1125-330-2025-2A26-7A25-2 26-828-428-5A26-728-6A28-526-1328-628-8 30-240-10 40-1128-1628-10 28-1828-1440-834-12A40-5 38-4 32-31_ST 32-3132-2938-3 38-3A34-534-13 34-1434-6A34-7A 34-1234-634-8 32-438-540-1238-634-1132-34-10 34-734-9 34-9A 34-1540-732-30 32-2240-435-540-4A38-2 38-1 38-1A35-135-2A35-2 35-3A 35-340-13 40-1439-735-6P1-A & P1-B36-636-736-540-640-3Evergreen39-440-3A39-3A36-A139-336-B2 36-C30 1,58136-C3A40-936-B2A39-5 39-6FEET39-837-737-837-5WELL SYMBOLSLocation Only40-240-1A40-139-139-2A 39-2 39-937-137-2A37-3A37-237-937-349-1737-1049-1637-649-1249-849-655-749-6A 49-4 49-4A49-149-1355-1 55-1A 55-358-1A49-1_ST58-159-149-1455-3A49-955-655-558-449-3A58-349-749-5A49-349-5 49-2A 55-2 55-2A49-1155-4 55-4A58-259-2A49-1549-255-859-253-3 53-3A59-2_ST20092010P1-AP6???P4P1-BP5P3P2• 2009 Budget – 46 PatternsFinish S Platform and GI – 10patterns Activate 21 P1A patterns and 15P1B patterns• 2009 Actual – 26 patternsFinished So. Plat. And GIactivations – 10 patternsActivated 7 P1A patterns (sunkcosts)Activated 9 P1B patterns(Accelerate infill test)• 2010 Plan – 39 patternsFinish P1 – 30 PatternsDevelop Chiquita – 9 of 14 patternsP1 patterns have greaterconformance risk10

ENERGY PARTNERS, L.P.Yates Field Production and Development01597 01738 02349 05430 04968 05516 088011265(1077)1270(1072)1275(1067)1280(1062)1285(1057)1290(1052)1295(1047)1300(1042)1305(1037)1310(1032)1315(1027)1320(1022)1325(1017)1330(1012)1335(1007)1340(1002)1345(997)1350(992)W27525022520017515012510075502501320(1074)1325(1069)1330(1064)1335(1059)1340(1054)1345(1049)1350(1044)1355(1039)1360(1034)1365(1029)1370(1024)1375(1019)1380(1014)1385(1009)1390(1004)1395(999)1400(994)1460(1076)1465(1071)1470(1066)1475(1061)1480(1056)1485(1051)1490(1046)1495(1041)1500(1036)1505(1031)1510(1026)1515(1021)1520(1016)1525(1011)1530(1006)1535(1001)1540(996)1545(991)HDH Production Results20092008200620070 50 100 150 200 250 300Dec ‘09 Oil Column Thickness1745(1073)1750(1068)1755(1063)1760(1058)1765(1053)1770(1048)1775(1043)1780(1038)1785(1033)1790(1028)1795(1023)1800(1018)1805(1013)1810(1008)1815(1003)1820(998)1825(993)GOC ‘08WOC ‘081565(1077)1570(1072)1575(1067)1580(1062)1585(1057)1590(1052)1595(1047)1600(1042)1605(1037)1610(1032)1615(1027)1620(1022)1625(1017)1630(1012)1635(1007)1640(1002)1645(997)1650(992)1855(1074)1860(1069)1865(1064)1870(1059)1875(1054)1880(1049)1885(1044)1890(1039)1895(1034)1900(1029)1905(1024)1910(1019)1915(1014)1920(1009)1925(1004)1930(999)1935(994)1530(1076)1535(1071)1540(1066)1545(1061)1550(1056)1555(1051)1560(1046)1565(1041)1570(1036)1575(1031)1580(1026)1585(1021)1590(1016)1595(1011)1600(1006)1605(1001)1610(996)1615(991)Oil column has thinned relative to 2008• Expect slightly lower oil production in 2010• Effectively capturing drained oilContinue Horizontal drilling program to capturedraining oil from CO 2 responseUpside potential on West Side-Infill drilling,reactivations, surfactant• 5 infill wells producing 250 b/d• ~100 additional infill locations12 345768Infill Drillinginitial test area61106105 103104626310231306465293233662891011 12136027261425151617 18242334 35 36 375967100101589957561177068118 122115 116119 120121 71976998159672Tract 17 Surfactant Pilot957322545574949353529290917551888986872150848576107112108201938 398210911011111311477838140497847468079494148454211434441

ENERGY PARTNERS, L.P.Eastern Shelf Pipeline & Katz CO 2 ProjectAcquired Katz Field April, 2006SACROCKATZSouth Central ES: 130MMCFDKatz Cluster: 135MMCFDClaytonville:45 MMCFDCompleted Detailed Geological & EngineeringReview of Katz• OOIP 206 MMB• Analog field results are encouraging: Expect 25 MMB,15.8% RecoveryStrategic Opportunity with Upside• Adding CO 2 demand – 65 MMCF/d, 226 BCF• Opening a new basin – up to 200 MMCF/d Over 1 Billion Bbl OOIP in region Additional prospects include Claytonville,Round Top, Burnett RanchEconomics (based on $60/b oil price):• ~$183 MM Capex Pipeline $36.3 MM Field Development $146.7 MM• 22.6% Unlevered IRR12

ENERGY PARTNERS, L.P.Eastern Shelf Pipeline & Katz CO 2 Project3025Profitability vs. Oil PriceKM Price Deck = 22.6% IRRKatz Project Details57 Patterns, First injection 1st qtr 2011PipelineIRR (%)20151020% IRR Threshold$56.75 Flat = 20% IRR• 10” 91 miles, $36.3 MMWellwork• CAPEX = $103.2 MM5030 35 40 45 50 55 60 65 70 75800070006000500040003000200010000Oil Price ($/bbl)Katz Project Oil Production/ CO 2PurchasesDec‐10Dec‐12Total CO 2Purchases= 226.2 BCFDec‐14Dec‐16Peak Production = 7,000 BOPDDec‐18OilDec‐20Dec‐22Dec‐24CO2 PurchaseTotal Production =25.1 MMBODec‐26Dec‐28Dec‐30Dec‐32160000140000120000100000800006000040000200000• 66% New Drills (Lower Chance of ProblemWells)• Drilling Rig Contract – Rate tied to oil price• Well tubulars purchased at discountFacilities/Misc.• CAPEX = $42.9 MM• Will Re-inject All Gas (HC & CO 2 ); No NGLRecoveryExecution Risks• More Remote Location (Schedule & Costs)• 5-Year Execution Plan (Costs)13

CO 2 Source and TransportationGrowing Business OpportunitiesENERGY PARTNERS, L.P.(MMcf/d)(MMcf/d)200015001000500030002500200015001000500Permian Basin CO 2Deliveries1984 1989 1994 1999 2004 20090OtherSheep MtnBravo DomeWyomingMcElmo Dome & Doe CanyonDomestic CO 2DeliveriesPermian BasinMississippiN. Dakota1985 1990 1995 2000 2005__________________________Sources: KM estimates, Oil and Gas Journal, EIA, XOM, Dakota Gasification, DRIPermian Basin• Supplies pro-rated rated on occasion, but oil pricedip in early 2009 paused many new EORproject developments• Permian Basin Demand expected to continueto remain stable or grow given existing projectexpansions plus known new project demandDomestic EOR• Industry CO 2 EOR activity is increasing• Naturally occurring sources are beingexpanded to ultimate capacity• Additional supplies existGasification, Ethylene, Ethylene Oxide,Steam-Methane Reformer, Ammonia &Ethanol facilities• Several regions have potential intersectionbetween supply and demandGulf Coast, California, Mid-continent,Canada14

ENERGY PARTNERS, L.P.CO 2 Delivered Volumes8007006005004003002001000150%125%KM Share MMCFD2005 2006 2007 2008 2009 2010% KM Share Under ContractSignificant growth since 2005CAGR: Volumes + 8.3%, Price + 14%2010 vs. 2009: Volumes Flat, Price + 30%KM share of EOR demand consumes 40% ofour entitled production in 2010100%75%50%25%0%2010 2011 2012 2013 2014Current NegotiationsSacroc / Yates and Katz Extensions% Entitlement Contracted__________________________2009 and 2010 Include interruptible, as-available commitments15

ENERGY PARTNERS, L.P.Strong Long Term Demand for CO 2Purchased CO 2 Demand vs. Oil Price (a)120Clean Coal and Sequestration may create newopportunities100• Sales and TransportTCF806040200$50.00 $80.00 $100.00OklahomaOther TXPermian Basin• EORHowever, economic and regulatory gaps are very large• The cost of capturing man-made made supplies isvery expensive• Carbon prices would need to be much higherthan currently being discussed$/tonne10080604020Capture Cost and affordabilityof Man-made CO 2 supplies (b)EOR Target Price @ $60-$80/bCost of CO2 AvoidedCost of CO2 Captured• Liability, public expectations and requirementsare still uncertainKMCO 2 is recognized as an industry leader• Active participant in industry studies• Active participant in several SequestrationPartnershipsWe remain engaged in new project development• Poised to respond to economic opportunities0NGCC PC Gasifier Target EORPrice__________________________(a) Source: Advance Resources International Study, 2008(b) Sources: NETL, IPCC, KM; NGCC is gas fired combined cycle; PC is Pulverized Coal; IGCC is integrated coal gasification. Cost is at plant gate and doesnot include transportation; EOR price is at oil field16

ENERGY PARTNERS, L.P.2010 Expansion Capital Budget - $415 MillionStaff OVHD7%Other0%SACROC Wells18%Eastern Shelf13%SACROC Field Fac.8%Source/Trans.9%Yates Wells, Facilities,Seismic and CO28%SACROC Gas Handling13%SACROC CO2 Inj 24%__________________________Note: Cost Metrics based on 2009 run rates, under spent 2009 budget by $120 MM17

ENERGY PARTNERS, L.P.Impact of Oil Price/Volume Variance on 2010 DCF2010 Budget: $989 MM+/- 1000 BOPDSACROC $23.7 MMYates $12.5 MM+/- 1 $/B WTI $6 MMCO 2$1 MMNGL$3 MMCrude$2 MM3 rdrd Party CO 2Deliveries+/- 50 MMCF/D $6.5 MM__________________________Note: Unhedged WTI price presumed to average $83.73/b, WTI-WTS spread = $3.1118

ENERGY PARTNERS, L.P.KM CO 2 Current OutlookDevelopment Plans 2010-201920191. SACROC Base Case Forecast• 81 MMBOE Net (a) , $1.2B KM Share Capex($366MM CO 2 )• Continue Platform development plan; Productionforecast is based on existing recoveryexpectations2. Yates Base Case• 42 MMBOE Net (a) , $294MM KM Share Capex($77MM CO 2 )• Continue HDH programs and gravity drainagedepletion plan; no upside potential included frominfill or surfactant3. Eastern Shelf• 14MMBOE Net (a) , $329MM KM Share Capex($194MM CO 2 )• Start construction and implement developmentplans at Katz Claytonville CO 2 project not included4. CO 2 S&T• $187MM KM Share Capex, 1.35 BCF/d capacity,Includes Eastern Shelf CO 2 Pipeline• Maintain aggressive CO 2 sales program and keepfacilities at capacity$1,200$1,000$800$600$400$200DCF, $MM/Yr$02007 2008 2009 2010 2011 2012 2013 2014 2015 20162010 = Budget, 2011 at forward curve, 2012+ at $80/bCost Metrics based on 2009 run rateDevelopment plans may change in different price scenarios__________________________(a) Net Beq = SACROC: Net Crude plus Wet HC Gas divided by 6; Yates: Net Crude and NGLs plus Residue Gas divided by 6, Eastern Shelf: Net Crude only(b) CO 2 profits not eliminated from S&TS&T (b)YatesSACROCE.Shelf19

ENERGY PARTNERS, L.P.Upside Opportunities Down the Road…Million Barrelsper DayCO 2 EOR forecast to be ~25% of domesticproduction by 2030 (a)76543210CO 2EOR2006 2011 2016 2021 2026EOR Projects will make up a larger amount of domesticoil production going forward• We have the footprint and managementexpertise to take advantage of thatSACROC and Yates have and will continue to provideoil production opportunities:• Big Fields get Bigger…Better Conformance at SACROC is a bigopportunityUsing latest technology to findresidual oil and better target CO 2injectionYates Infill drilling and SurfactantopportunitiesKMCO 2 may again have the opportunity to furthercapitalize on our large, low cost CO 2 supply in a CO 2short marketplace• Approved Eastern Shelf CO 2 PL and KatzProject; opening a large new region• Acquisitions near our operations can reversethe decline__________________________(a) AEO 200820