Cautionary Statement Regarding Forward-Looking Statements This presentation includes certain forward-looking statements and projections of EP Energy LLC (“EP Energy” or the “Company”). EP Energy has made every reasonable effort to ensure that the information and assumptions on which these statements and projections are based are current, reasonable, and complete. However, a variety of factors could cause actual results to differ materially from the projections, anticipated results or other expectations expressed, including, without limitation, the volatility of and current sustained low oil, natural gas, and NGL prices; the supply and demand for oil, natural gas and NGLs; changes in commodity prices and basis differentials for oil and natural gas; EP Energy’s ability to meet production volume targets; the uncertainty of estimating proved reserves and unproved resources; the future level of service and capital costs; the availability and cost of financing to fund future exploration and production operations; the success of drilling programs with regard to proved undeveloped reserves and unproved resources; EP Energy’s ability to comply with the covenants in various financing documents; EP Energy’s ability to obtain necessary governmental approvals for proposed E&P projects and to successfully construct and operate such projects; actions by the credit rating agencies; credit and performance risks of EP Energy’s lenders, trading counterparties, customers, vendors, suppliers, and third party operators; general economic and weather conditions in geographic regions or markets served by EP Energy, or where operations of EP Energy are located, including the risk of a global recession and negative impact on oil and natural gas demand; the uncertainties associated with governmental regulation, including any potential changes in federal and state tax laws and regulation; competition; and other risk factors described below and in EP Energy’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. EP Energy has significant debt and debt service obligations, which requires it to dedicate a substantial portion of its cash flow from operations to debt service payments, thereby reducing the availability of cash for working capital, capital expenditures, acquisitions or general corporate purposes. In addition, the debt levels exposes it to more liquidity, breach of covenants and default risks, especially during times of financial volatility and reduced commodity prices, and could reduce its flexibility to compete on future acquisitions. EP Energy has made and may continue to make acquisitions, however, suitable acquisition candidates may not continue to be available on terms and conditions EP Energy finds acceptable or at all. Any acquisition, including any completed or future acquisition, involves potential risks that could significantly impair EP Energy’s ability to manage its business, complete or effectively integrate acquisitions and may have a material adverse effect on our business, results of operations and financial condition. The proposed transaction and the new term loans could be subject to bankruptcy related risks. For example, in any bankruptcy proceeding with respect to the borrower or the guarantors, it is possible that parties could assert that the new term loans are under-collateralized and the claims in the bankruptcy proceeding with respect to such term loans would be bifurcated between a secured claim and an unsecured claim based on the value of the collateral, and the unsecured claim would not be entitled to the benefits of security in the collateral. In addition, a court could void the liens securing the new term loans under fraudulent transfer laws and any future pledge of collateral might be avoidable in bankruptcy. While EP Energy makes these statements and projections in good faith, neither EP Energy nor its management can guarantee that anticipated future results will be achieved. Reference must be made to those filings for additional important factors that may affect actual results. EP Energy assumes no obligation to publicly update or revise any forward-looking statements made herein or any other forward-looking statements made by EP Energy, whether as a result of new information, future events, or otherwise. This presentation presents certain production and reserves-related information on an "equivalency" basis. Equivalent volumes are computed with natural gas converted to barrels at a ratio of six Mcf to one Bbl. These conversions are based on energy equivalency conversion methods primarily applicable at the burner tip and do not represent value equivalencies at the wellhead. Although these conversion factors are industry accepted norms, they are not reflective of price or market value differentials between product types.
