1. 1 JOINT MINERALS, BUSINESS AND ECONOMIC DEVELOPMENT COMMITTEE December 5, 2005

2. 2 Proposed Legislative Changes Increase WPA bonding capacity from $1 billion to $3 billion Expand State Treasurer’s investment authority to invest in WPA bonds from funds other than just the Permanent Wyoming Mineral Trust Fund. Authorize a $50 million State loan to the WPA to provide for credit security required to procure pipeline capacity in WPA’s name. Change name from “Wyoming Natural Gas Pipeline Authority” to the “Wyoming Pipeline Authority”.

3. 3 Market Assessment Production of Rockies gas is expected to increase There is insufficient pipeline capacity to export this increasing supply Increased LNG deliveries to the West Coast and Gulf Coast will compete with the Rockies The highest premium-priced market for gas is the Northeast Large basis differentials exist between the Rockies and the East Coast At the end of the day – a substantial amount of Wyoming revenue is a function of natural gas production and price!

4. 4 Production

5. 5

6. 6

7. 7 Rockies Production

8. 8 Reserves - 2003 U.S. Total Proved Reserves: 189 Tcf Wyoming21.7 Tcf Colorado15.4 Tcf Utah 3.5 Tcf Total Rockies40.6 Tcf Proven Probable/Possible exceeds an additional 200 Tcf! Source : EIA

9. 9 Reserve Base Supports New Infrastructure Huntsman

10. 10 Pricing

11. 11

12. 12 Basis Spreads Support New Pipeline Basis differential versus Henry Hub Source: Historical Prices – GasDat, Forward Prices – Sempra Commodities Oct 05 Curve

13. 13

14. 14 What’s In It for Wyoming 4.3 Bcfd Annual Revenue - $millions Price $/MMBtu Severance Tax (6%) Ad Valorem Tax (6%) State Royalty (12% on 7%) State Share of Fed Royalty (50% of 12.5% Royalty on 67% of Minerals) Total ** $2$188 $26$131$534 $5$471 $66$329$1,336 $7$659 $92$460$1,950 $9$848 $119$592$2,405 $11$1,036 $145$723$2,940 ** Approx average Wyoming Price - 2002

15. 15 Making Sure Prices and Production Stay in Sync

16. Rockies Express Pipeline Proposed Route 8

17. 17 Project Overview Entrega Pipeline. 330 miles of 36 and 42 inch, 126,000 Hp, from Meeker to Wamsutter to Cheyenne. New certificate and construction of 42 inch or larger, 1350 mile pipeline from Cheyenne to Clarington, Ohio with 2 Bcfd transport capacity 15 compresor stations with up to 455,000 HP Over 20 interconnections with interstate pipelines Phased construction will enable access to mid-continent delivery points in Dec. 2007; access to Tuscola or Lebanon delivery points in Dec. 2008 and access to eastern Ohio, delivery points in July 2009 Final design based on Open Season to be held in Nov - Dec ’05 Expected rates of about $1 plus fuel of about 2% to 3%

18. 18 Route follows over 90% of existing pipeline or utility ROW corridors Detailed engineering, environmental, and ROW studies due Nov. 15 th Proposing 3 phase FERC filing process and construction schedule to maintain 4Q07 in-service date to mid-continent (ANR) –Phase I route follows Kinder´s Trailblazer and Terasen’s Platte Valley pipelines –Existing Trailblazer and Platte ROW and project records help accelerate permitting Discussions with FERC yielded positive feedback on staged development Development Status

19. 19 Significant Developments Kinder & Sempra Joint Development –Kinder 2/3 equity and Sempra 1/3 equity –Sempra Affiliate committing to 200,000 Dth/d of FT Wyoming Natural Gas Pipeline Authority MOU EnCana & Entrega Support –500,000 Dth/d of firm long haul commitment –Incorporation of Entrega into the project Exclusivity Agreements with End-Use Markets

20. 20 WNGPA MOU Provides for 90 period of exclusive negotiations Subjects of negotiations include: –WNGPA providing competitive financing –WNGPA facilitating extension of Project to Opal Hub –A conditional capacity commitment of up to 200 mmcfd under the proposed Aggregation Services –Potential interim financing through 2008 or beyond for the Project’s acquisition and/or construction of assets upstream of Cheyenne Any transportation commitment will be subject to Board approval by January 31, 2006

21. 21 Next Steps Negotiate and execute shipper precedent agreements Start NEPA Pre-filing in late October, 2005 Conduct binding open season in Nov. – Dec, 2005 Shipper Board approval required by Jan. 31, 2006 A minimum of 1,500,000 Dth/d is needed Determine economic viability by February, 2006

22. Which Brings Us Full Circle to………. Proposed Legislative Changes

23. 23 Increasing Bonding Authority to $3 billion Pipe and pipelining costs have increased since $1 billion bonding authority added to legislation. Scope of Kinder/Sempra project significantly bigger than 36 inch, 1,000 mile line to Chicago. Pipeline companies want single debt issuer to economize on costs. If WPA is successful in financing Kinder project, additional capabilities necessary to finance CO2 lines, crude oil, coal derivative and natural gas products lines – all currently being contemplated in state. Note: WPA bonds are non-recourse to State and underwritten by contractual commitments to capacity on pipeline.

24. 24 Expand Treasurers Investment Authority Treasurer has requested. Allows for diversity across portfolio of funds managed. Increases ability to invest in greater amount of WPA bonds. Decreases bond concentration in any one particular portfolio of managed funds. Note: This should also be considered for Wyoming Infrastructure Authority.

25. 25 Authorize $50 million Loan to Authority for Transportation Procurement If Authority doesn’t step up to the plate for transportation on Rockies Express pipeline, sufficient capacity may not be procured by other shippers to get the project built. Loan would be repaid through price spread between Ohio and Wyoming as well as through fees collected from other shippers utilizing capacity. Provides capacity for producers in State who may not have “rated” debt in public marketplace or who may not be able to meet Kinder/Sempra credit requirements. Provides price support for Wyoming natural gas value currently received from severance and ad valorem taxes as well as from State and Federal royalties.

26. 26 Name Change Wyoming Pipeline Authority better reflects future scope of work we will conduct. CO2, NGL, crude oil and coal derivative products lines will be needed in the State in the very near future.

27. 27 Contact Information Bryan Hassler - Executive Director E-mail – uep1@comcast.netuep1@comcast.net Office (303) 748-6473 Fax (303) 948-1428 Carla Hubbard – Administrator E-mail – wyomingpipelinea@qwest.netwyomingpipelinea@qwest.net Website – www.wyopipeline.comwww.wyopipeline.com 152 N. Durbin Street – Suite 230 Casper, Wyoming 82601 Office (307) 237-5009