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Kinder Morgan Energy (KMP) Updates 2010 Guidance

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November 24, 2009 6:57 AM EST

Kinder Morgan Energy Partners, L.P. (NYSE: KMP) today announced its preliminary projections for next year, stating that it expects KMP to declare cash distributions of $4.40 per unit for 2010, a 4.8 percent increase over its 2009 budget target of $4.20 per unit. The company also reiterated it remains confident that it will achieve its 2009 targeted distribution per unit, which represents a 4.5 percent increase over 2008.

KMP's expectations assume an average West Texas Intermediate (WTI) crude oil price of approximately $84 per barrel in 2010, which approximates the current forward curve for next year. The overwhelming majority of cash generated by KMP's assets is fee based and is not sensitive to commodity prices. In its CO2 segment, the company hedges the majority of its oil production but does have exposure to unhedged volumes, a significant portion of which are natural gas liquids. For 2010, every $1 change in the average WTI crude oil price per barrel is expected to impact the CO2 segment by approximately $6 million (or less than 0.2 percent of our combined business segments' anticipated segment earnings before DD&A).

Chairman and CEO Richard D. Kinder said, "Kinder Morgan's stable and diversified assets continue to grow and increase cash flow, even during the recent recession and ongoing weak economic times. In 2010, we anticipate that our business segments will generate almost $3.4 billion in segment earnings before DD&A, an increase of more than $400 million over the 2009 forecast. We expect to distribute approximately $1.35 billion for 2010 to our limited partners." Kinder noted that management anticipates investing approximately $1.5 billion at KMP in expansions and small acquisitions in 2010 to further grow the company.