Duke Energy Field Services

Print

Duke Energy Field Services gathers, treats, compresses, processes, transports, markets and stores natural gas; and produces, fractionates, transports, trades and markets natural gas liquids (NGL). DEFS is one of the largest natural gas gatherers in the United States, the largest NGL producer and one of the largest NGL marketers. DEFS owns or operates 54 plants and 56,000 miles of pipeline. It is a 50-50 joint venture between Duke Energy and ConocoPhillips.

Duke Energy Field Services (DEFS) is moving from a period of rapid growth to focus on selective growth and performance excellence — rigorously driving improvement in operations and in commercial and support activities. DEFS’ new master limited partnership, DCP Midstream Partners, will be an important growth vehicle, allowing for capital-efficient growth and solid cash flow. DEFS’ solid financial position provides options for deploying cash through reinvestment, debt repayment and dividends to its parent companies, Duke Energy and ConocoPhillips.

For 2006, ongoing equity earnings to Duke Energy are anticipated to be approximately $500 million, assuming an average crude oil price of $61 per barrel.

2005 Highlights

Strong commodity prices as well as operational and commercial improvements more than offset disruptions from the Gulf Coast hurricanes to net record earnings for DEFS, which contributed $291 million in ongoing segment EBIT for the first six months of 2005. For the second half of the year, DEFS contributed $214 million in ongoing equity earnings as a result of a change in ownership with ConocoPhillips.

It was a year to position DEFS for future success. In a restructuring move, Duke Energy sold nearly 20 percent of its ownership interest to DEFS partner ConocoPhillips, forming a 50/50 joint venture. DEFS’ natural gas gathering and processing assets in western Canada moved to Duke Energy Gas Transmission.

DEFS also sold the general partner of TEPPCO to Enterprise GP Holdings L.P. for more than $1.1 billion, and created a new master limited partnership (MLP), DCP Midstream Partners LP. DEFS owns the general partner of the new MLP and operates its assets in Texas and Louisiana.